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Commons Chamber

Volume 424: debated on Wednesday 19 June 1946

House of Commons

Wednesday, June 19, 1946

The House met at Half past Two o'Clock

Prayers

[Mr. SPEAKER in the Chair ]

Private Business

Maidstone Corporation (Trolley Vehicles) Provisional Order Bill

Read a Second time, and committed.

Reading Corporation (Trolley Vehicles) Provisional Order Bill

Read a Second time, and committed.

Ipswich Corporation (Trolley Vehicles) Provisional Order Bill

Read a Second time, and committed.

Derby Corporation (Trolley Vehicles) Provisional Order Bill

Read a Second time, and committed.

Skegness Pier Provisional Order Bill

Read a Second time, and committed.

Oral Answers to Questions

Royal Air Force

Transport Command (Prague Service)

1 and 2.

asked the Under-Secretary of State for Air (1) the number of days on which Transport Command's daily service between London and Prague and Prague and London, respectively, has been cancelled during the first five months of 1946 and the reason for these cancellations;

(2) whether he will arrange for Transport Command in Prague to be signalled immediately the daily service between London and Prague is cancelled, so that passengers with reservations for the return journey from Prague to London can be informed accordingly.

The aircraft on the service from London to Prague and back are all based in this country, and a cancellation here always means that there will be one flight less from Prague. In 1946, up to the end of May, there have been 16 cancellations due to bad weather and six due to reasons connected with the aircraft. Normally, we send a signal at once to Prague when the service is cancelled. Unfortunately, they were not told of such a change in the schedule at the beginning of this month, and I much regret any inconvenience at Prague caused by this mistake.

Would it not be possible to keep a reserve plane in Prague, so that, when the service from here was cancelled, it would be possible for return flights to take place, and thereby avoid the necessity of travellers from Prague using Dutch airlines to get back to London, as is often the case?

I am afraid that would not be possible. We have already, under the general contraction of Transport Command and the R.A.F. generally, had to reduce the service from one a day to four a week.

Sawbridgeworth Airfield

asked the Under-Secretary of State for Air how long the five cottages belonging to Blunts Farm, Sawbridgeworth, Hertfordshire, at present under requisition by his Department, are to continue untenanted.

The Royal Air Force will be leaving Sawbridgeworth next month. The occupation of the cottages depends on the future use of the airfield, and we are now discussing that matter with the Ministry of Agriculture. I do not think it will be long before the cottages are occupied.

Does that mean that these cottages will still be kept in some form of Government requisition and that they will not be available for occupation by the people of Sawbridgeworth?

It depends on the use to which the airfield is put. If it is used for farming purposes, farm labourers will be put into these cottages.

Repatriation (21 P.T.C.)

asked the Under-Secretary of State for Air what steps he is taking to reduce the delays experienced by personnel awaiting repatriation at 21 P.T.C.

Although shipping difficulties caused some hold-up last winter, there has recently been no undue delay in sending men home from this centre. Individuals may occasionally be delayed for various reasons, and if the hon. Member has any particular case in mind, I will make further inquiries.

There have been occasions when the interval between sailings has been as much as 10 days, which I do not regard as undue. There are occasions when men arrive without proper documents or become ill while there.

Parachute Packing (German Prisoners)

asked the Under-Secretary of State for Air whether the use of German prisoners of war for the packing of parachutes is authorised by his Department.

May I ask the Under-Secretary whether he does not think that it is quite time we ceased using these people as slave labour in this country?

Demobilisation

asked the Under-Secretary of State for Air why only one group of Fitters II E are being demobilised between now and August, whereas three groups of the average trades of the R.A.F. are to be demobilised during this period; and whether, in order to speed up the release of fitters and riggers, he will retransfer from the Fleet Air Arm such tradesmen in later release groups.

This disparity in release for the fitter group of trades is due to accelerated release for the Service as a whole having out-distanced our training programme for fitters. It takes nearly six months for a recruit to qualify as a fitter II E, but we are doing all we can to in- crease our training effort. To bring fitters back from the Fleet Air Arm at this stage would prejudice the Naval release programme, would be extremely difficult to carry out, and would be of little help to us, since the numbers involved are not large.

Is the Minister quite satisfied that we could not get more fitters by seeing that those who are misemployed in buffets and canteens are brought back to the work for which they were originally mustered?

If the hon. Member will give particulars of such misemployment, I will of course look into it.

asked the Under-Secretary for Air, how many personnel of the R.A.F. accounts branch, in Group 29, await demobilisation; when demobilisation will be effected; and what is the cause of the delay.

There are 44 officers in the accountant branch in Group 29. I hope they will be released in September. We should have to release 131 officers to bring the level of this branch up to the average, and I am afraid it is impossible to do this. Our efforts to compensate for releases by commissioning airmen and the diversion of officers from other branches have been disappointing. We have called for recommendations from all trades for transfer to the accountant branch, and I hope the numbers may be forthcoming. I deeply regret the necessity for this hold-up in release and can assure the hon. Member that it will be eased at the earliest possible moment. The acceleration of the release programme has in itself imposed a heavy burden on the accountant branch, and that burden will be increased by the introduction of the new pay code on 1st July. We cannot risk a breakdown in the accounting system by releasing more accountant officers than are at present planned.

Is it not a fact that the delay in the release of these officers has been considerably increased owing to the introduction of the new pay code? Is it not unfair that officers who have served for a long period in the war should be retained in the Service for administrative changes that have taken place since? If the service of these men is so necessary, why should many of them have been put on to "square-bashing" for the Victory Parade?

The answer to the first part of the question is that it is true the new pay code does increase the work, but it is of advantage to the Service as a whole. The officers are in an unfortunate position, but we are doing what we can. I cannot promise to accelerate their release at the moment.

asked the Under-Secretary of State for Air what groups in the equipment branch will be released in July and August; and what are the release groups for other branches of the R.A.F. for the same period.

We shall be releasing Royal Air Force equipment officers in groups 29 and 30 in July, and in groups 31 to 33 in August. The general level of release for ground officers in those months is, group 37 and 39 respectively. Officers in the general duties branch are being released in groups 41 to 43 in July, and 44 to 46 in August. We are taking all possible steps to improve the release position for equipment officers, and I hope that further progress will be made after September.

Cannot the Under-Secretary give now a date when the disparity between releases in the equipment branch and other branches shall be brought to an end? There is very great dissatisfaction in the equipment branch, members of which feel they have had a rather raw deal.

L.A.C. Attwood (Annulment of Trial)

asked the Under-Secretary of State for Air if he will now make a full statement on the case of L.A.C. Attwood.

I have just been informed that the Air Officer Commanding-in-Chief has not confirmed the proceedings of the court martial, which means that the trial has been annulled. L.A.C. Attwood will be repatriated as soon as possible. As the rest of the answer is long, I will with my hon. Friend's permission, circulate it in HANSARD.

May I ask the Under-Secretary if this decision also applies to L.A.C. Noble, whose case was being considered at the same time?

In regard to the original answer, is it possible that this man will be subjected to a new trial?

It is of course in theory possible, but in fact it will not happen.

Following is the statement:

L.A.C. Atwood left his unit on 21st March for repatriation and demobilisation under Class "B." He arrived at Worli, the sea transit camp at Bombay, on 22nd March. On 9th April, while at Worli, he was formally charged under Section 7 of the Air Force Act and placed in close arrest. On the same day he was taken from Worli to the Army detention cell at Kalayan where he remained until 25th April. His trial on a charge of inciting airmen to disobey an order began on 2nd May. On 14th May he was released without prejudice pending confirmation by the Air Officer Commanding of a plea of condonation which the court had accepted. The Air Officer Commanding did not confirm the finding, and the trial was resumed. The trial was completed on 25th May since when the findings have been under consideration by the Air Officer Commanding-in-Chief.

Hon. Members have brought to my notice a number of complaints about the handling of L.A.C. Attwood's correspondence while he was under arrest. It has been impossible to ascertain exactly what happened to each letter or telegram referred to owing to the detailed nature of the inquiries necessary and the difficulty of obtaining accurate information from a command which is handicapped by vast distances and the continual alteration in staff, and at a station which is a transit camp and has, in consequence, a large transient population. However, I can assure the House that no incoming correspondence was withheld from him. In fact, because of the serious nature of the charge and because he was away from his parent unit, special steps were taken to see that letters did not go astray, and the station adjutant at Worli, the transit camp, was instructed to collect all L.A.C. Attwood's correspondence for special delivery to him.

There was delay in his outgoing mail which was due to the fact that the detention cell was under Army Control and that the Army N.C.O. in charge did not know the R.A.F. regulations. He therefore referred the matter to his superiors and they referred it to the Air Force authorities. The Air Force, of course, gave approval for him to send letters, but a regrettable delay of some days had already occurred. I can also assure the House that there was no censorship or any other interference with L.A.C. Attwood's correspondence. The fact remains that the delays in his mail must have caused him considerable anxiety, and this I much regret.

Corporal J. Stone (Court Martial Defence)

asked the Under-Secretary of State for Air why a telegram despatched on 14th May from London to Corporal J. Stone, R.A.F., advising him on his defence in the court martial which he is now awaiting at Worli, India, had not been delivered to him by 29th May; and if he will satisfy himself that no obstruction is being offered to the preparation of a full defence for this man.

Corporal Stone has still not received this telegram although he has received two others, and the R.A.F. postal authorities cannot trace its arrival in Bombay. Perhaps my hon. Friend will be good enough to confirm that it was correctly addressed. Meanwhile, I can assure him that this airman's correspondence has not been interfered with in any way and that he is suffering no obstruction in the preparation of his defence.

Will my hon. Friend consider reviewing this man's case before the court martial takes place, instead of subjecting him—

Aircrews (Medals)

asked the Under-Secretary of State for Air whether consideration has been given to the suita- bility of including members of aircrews who had completed their training by VJ-Day among recipients of the Defence Medal, irrespective of length of service in the R.A.F.

I am afraid that it would not be practicable to make this exception to the general conditions for the Defence Medal. There is, however, the new War Medal, and the flying badges of qualified aircrew are a mark of distinction in themselves.

Are we to understand then that these aircrews who finished their training before the end of the war, do automatically qualify for the new medal?

The condition is 28 days' embodied service, and that of course must obviously have happened to qualify for aircrews.

Watchfield Airfield

asked the Under-Secretary of State for Air what units or organisations are at present occupying Watchfield Aerodrome.

Watchfield is at present occupied by the Beam Approach School, the Airfield Controllers School, and the School of Flying Control.

Would it be possible to make a certain proportion of that airfield available to the original owners who wish to resume their civil occupations?

I do not think it is possible at the moment, because we hope to move entirely by the end of the year. As I said in reply to an earlier Question by the hon. Member, we will probably consider the use of the previous owners when we come to dispose of the airfield, but I cannot give any undertaking as to what is going to happen now.

Will the hon. Member bear this in mind when moving out, and allow the original owners to move in as soon as possible?

In view of the fact that a large number of very pleasant aerodromes are now declared as redundant, is it not very unpleasant that the people at Watchfield should have to stay when at places quite near them there are better conditions?

Meteorological Service

asked the Under-Secretary of State for Air what progress has been made with the proposal to form a national meteorological service.

The Meteorological Service is already organised on a national basis. The developments to which my predecessor referred in his reply of 3rd April did not involve any divorce of the Meteorological Office from the Air Ministry, but related to plans for its expansion and development. Owing to the release of wartime meteorologists, and to the time taken to train scientists as meteorologists, the service will have to be built up gradually. The service will eventually be far larger than it was before the war.

Will the Under-Secretary take steps to see that the policy of the service is improved? On Victory Day the public were completely misled, and it is getting worse every week. Something must be done about it.

Has the attention of the Under-Secretary been drawn to the suggestion that we should abandon all the paraphernalia of this expensive and apparently unreliable service and employ a few aged farmers with well-developed corns?

Tour of Duty, Middle East

asked the Under-Secretary of State for Air the present tour of duty for the R.A.F. in the Middle East; how many men have exceeded this time; and when is it expected that repatriation will be in accordance with the stated length of tour.

The tour of duty in the Middle East is now three years for both married and single officers and airmen, but there seems to be some misunderstanding of the position of single men. Their tour was reduced to three years as from 1st April, 1946, but in announcing this reduction my predecessor stated that it could not immediately become effective for all the men concerned, and would take until 1st October to complete. Thus, there are still single men in the Middle East who have served for more than three years, and who are waiting their turn for repatriation, but I have no reason to suppose that they will not all have left for home by 1st October.

Civil Aviation

Dyce Airport, Aberdeen

asked the Parliamentary Secretary to the Ministry of Civil Aviation why, when representatives of his Department paid a visit to Dyce airport, Aberdeen, on Thursday, 16th May, notice of such visit was not given to the owner and to the controlling air line company, Allied Airways Limited.

No control is exercised by Allied Airways Limited at Dyce Airport. The major part of the aerodrome is State owned, the small remaining part being held on requisition. On 15th May my Ministry's representative on the aerodrome tried unsuccessfully to get in touch with the representative of the company to notify him as a matter of courtesy of the proposed visit of officers of the Department. When the visiting party discovered on arrival at the aerodrome that Allied Airways Limited had not in fact been informed, the company's local representative was at once asked to telephone to the hon. Member. I regret that he was not informed earlier.

Will the Parliamentary Secretary give an undertaking that if representatives of his Ministry are paying a visit to an aerodrome, whether requisitioned or unrequisitioned, he will as a matter of courtesy notify the owner or the occupying tenant, if any?

I am nothing if not courteous, and will do my best to carry out the hon. Gentleman's request.

London—Prague

asked the Parliamentary Secretary to the Ministry of Civil Aviation when it is proposed to operate a civilian air service between London and Prague.

It is proposed to operate a civilian air service between London and Prague next month.

Great Britain—America

asked the Parliamentary Secretary to the Ministry of Civil Aviation how soon it is intended to put into operation the direct service from Great Britain to Canada and the U.S.A.; how frequent it will be; and from which airport it will depart.

A direct landplane service between the United Kingdom and the United States will be introduced on 1st July next. The service will operate twice weekly to start with and will be increased progressively to seven services a week. All services will operate from the London Airport, certain of them being routed via Prestwick. As regards Canada, the existing Liberator service between Prestwick and Montreal will continue in operation for the time being.

The Minister said that certain of the services to the United States would operate via Prestwick. Will he say how many these are to be?

Will the Parliamentary Secretary say what aircraft are to be used on the United States service?

Can we have an assurance that as we made immediate interim arrangements at Heathrow to accommodate American airlines, similar arrangements will be made in New York, if we wish it?

I understand that the arrangements will be equally satisfactory to the passengers, as La Guardia Airfield is very crowded and Idlewild is far from being completed.

Anglo-Italian Air Agreement

asked the Parliamentary Secretary to the Ministry of Civil Aviation whether he will give an undertaking that, in the proposed Anglo-Italian Air Agreement, this country will not accept a position of a minority shareholder.

The Agreement recently concluded between the Italian Government and the British Overseas Airways Corporation, subject to the passage of the necessary decree-law by the Italian Government, provides for the formation of an Italian airline to which Italy will subscribe 60 per cent., and the British Over- seas Airways Corporation 40 per cent., of the capital. The hon. and gallant Member's request would be incompatible with Resolution VIII of the Final Act of the Chicago Conference, which gives third countries the right to refuse a permit to an airline which is not substantially owned and supported by its own nationals.

Does the Parliamentary Secretary think that, whatever may have been done at the Chicago Conference, the country is satisfied that this country should continuously play second fiddle in all these trade agreements?

I think that is a misunderstanding. Our agreements for air services with other countries are based on complete reciprocity. But this is an Italian airline, in which it would be improper for the United Kingdom Corporation to have a majority holding.

How much British public money will be used to subsidise the Italian airline?

It is not a subsidy. The proposed capital of the company is to be £1 million and the British participation will amount to £400,000.

Arising out of the Minister's reply about reciprocity, will he see that there is complete reciprocity in the agreement with Aer Lingus, because there does not seem to be?

Glasgow—Belfast

asked the Parliamentary Secretary to the Ministry of Civil Aviation what further steps he is taking to improve the air service between Scotland and Belfast, in view of the long waiting list.

It is planned before the end of this month to increase the frequency of the air service between Glasgow and Belfast to four times daily in each direction. This will bring the total frequency of the services between Scotland and Belfast up to six daily in each direction.

Fish Transport (Aberdeen)

asked the Parliamentary Secretary to the Ministry of Civil Aviation if he will arrange, in conjunction with the Minister of Transport, for a commercial air service to carry fish quickly from Aberdeen to the big centres of consumption.

I regret I can add nothing to the reply I gave to my hon. Friend the Member for the Western Isles (Mr. M. MacMillan) on 5th June.

Is my hon. Friend aware that recently out of 4,300 tons of fish at Billingsgate 41 tons were wasted, and that fish is being wasted daily owing to inadequate and slow transport? Will he take immediate steps to see that the public get this food, which they require?

I would be very glad to enter into consultation with my hon. and learned Friend on this problem. It is one which we should study sympathetically, but there are many difficulties. Aircraft used for transporting fish cannot be used for any other purpose, and our prime consideration at the present time must be the carrying of passengers.

Aberdeen—London

asked the Parliamentary Secretary to the Ministry of Civil Aviation what is to be the terminal near London for the Aberdeen Air Service; and what will be the estimated time of travel from Union Street, Aberdeen, to Piccadilly Circus.

The London terminal on the London-Aberdeen service will be Northolt. The answer to the second part of the Question is about five hours.

Is the Parliamentary Secretary aware that this new service which he is to institute in the autumn will take just the same travelling time as the service in force in 1939? Can he not do better than that?

In due course I hope we shall do better, but for a beginning I think that five hours from door to door is a very good time.

Is the Parliamentary Secretary aware that the service was run in three and a half hours at a return fare of £10 10s. by North Eastern Airways?

Aberdeen Flying School

asked the Parliamentary Secretary to the Ministry of Civil Aviation whether he is aware that Aberdeen Flying School, Dyce, was ordered to cease instruction on 3rd September, 1939; that its hangar was requisitioned on 13th October, 1939, on the plea of national necessity; that these premises have not been returned to the school although they have been unoccupied for more than two years and that the school has now purchased four Tiger Moths from the Minister of Supply; and whether he will now derequisition the hangar and give permission for the school to resume flying instruction or indicate a date when it may do so.

Flying school activities could not until recently be permitted by the Air Ministry for operational reasons. The administration of the aerodrome was transferred to my Department at the end of May, and permission has now been given for the resumption of the flying school. The requisition of the premises is being maintained, but they can be used by the flying school subject to negotiation of suitable terms.

Is the Parliamentary Secretary aware that the premises referred to are owned by the Aberdeen Flying School, and that the Attorney-General, in Committee on the Civil Aviation Bill, on Tuesday, 28th May, gave an undertaking—

Renfrew Airport (Runways)

asked the Parliamentary Secretary to the Ministry of Civil Aviation if he is aware that the Clyde Trust, the Clyde Valley Power Company and other bodies are opposing the siting of the third runway at Renfrew on the ground that their claims for the area affected had previously received official sanction in whole or in part; and what action he intends to take in this matter.

No, Sir. The flightway of the proposed third runway at Renfrew does not affect the property controlled by the Clyde Navigation Trust and the Clyde Valley Power Company. Those and other bodies are, however, affected by the flightways of the existing first and second runways and discussions between them and my Department and the other Government Departments concerned are proceeding with a view to finding a solution which will be satisfactory to all the interests concerned.

May I take it that official sanction had not previously been given in whole or in part to any of the bodies named?

I do not know what official sanction would be necessary, but as soon as these plans were brought to the notice of my Department we pointed out that they would interfere with the development of Renfrew Aerodrome. Glasgow is fortunate in having an aerodrome right on the fringe of the town, and we want to make it a very good aerodrome.

Deputy Directors

asked the Parliamentary Secretary to the Ministry of Civil Aviation whether he will give an assurance that all applicants for the two deputy directorates to be filled under the Director of Control and Navigation at the Ministry of Civil Aviation will have suitable experience in civil aviation.

Such experience would of course be a consideration when such posts have to be filled.

Will the Parliamentary Secretary consider taking on two pilots who are too old to carry out their flying duties? Will he at least consider these men, who have experience, if there are other reasons for taking them on?

All applications will be carefully considered by the establishment side of my Ministry.

Questions

Colonial Service (Monthly Journal)

asked the Secretary of State for the Colonies if, in addition to the education schemes for officials contained inter alia in the Devonshire Committee's Report, he will consider the publication by his Department of a monthly journal for the use of officials at home and overseas which would be a continuous educative, political and administrative record of important developments in public life at home and in the Empire of great comparative and suggestive value to all concerned.

I am grateful to my hon. Friend for his suggestion with which I am entirely in sympathy. Similar ideas have been under my consideration; and I hope that before long it will be possible to give effect to them.

Malta (Governorship)

asked the Secretary of State for the Colonies, on what grounds he recommended the appointment of the hon. Member for North Battersea (Mr. Douglas) as Governor and Commander-in-Chief of Malta.

I recommended the appointment of the then hon. Member for Battersea as Governor of Malta because in all the circumstances I hold him to be the most suitable man for the post.

Without in any way wanting to make a personal attack on that hon. Gentleman, are not the facts of the matter that the only outstanding qualification he has for this appointment was that he is a Socialist; and is it not a fact that if the Government wish to go out of their way to give the impression that they are not to be trusted in matters of Empire, they cannot do better than make appointments of this nature?

No, Sir. The fact that he was a Socialist was one of his many qualifications.

Does the right hon. Gentleman mean to tell us that after five years of war there are no officers of sufficient distinction of the Army, Navy or the Air Force—[HON. MEMBERS: "Why officers?"]—to occupy the position of Commander-in-Chief and Governor of this island fortress?

I am not casting any disparaging reflections upon any members of the three Services, but there are many problems with which Malta is confronted at the present time to deal with which it was regarded as necessary to have a civilian Governor.

This matter looks likely to give rise to a certain amount of heat. I think we ought to go on to the next Question.

On a point of Order. Is the mere fact that the matter is debatable to be a reason for no further questions upon it?

For a long time I have been trying to get through Questions as quickly as we can. If there is anything which is controversial and likely to absorb time, I think the matter had far better be debated than be dealt with by Question and answer.

May I ask you, Sir, whether it is your intention to change the procedure in this House? It has already been admitted at Question time that it is important when Members put down their Questions that they should pursue their Questions and not be cut short.

Certainly not. I do not intend to change the procedure. I rather think the procedure which I advocate has the general support of the House. There may be a few hon. Members who always want to ask Questions and sometimes I have to check them.

Further to that point of Order, may I ask you, Sir, for direct guidance in this matter? Is it your intention by curtailing questions to prevent Members from pursuing the object for which their original Question was put down?

I do not want to stop the asking of Questions; I do want to prevent undue supplementaries.

Are there only certain hon. Members who should be allowed continually to put supplementaries? The hon. Member for Ipswich (Mr. Stokes) sometimes puts three or four supplementary questions.

Malaya

Claims Commission

asked the Secretary of State for the Colonies what is the present position with regard to the determination of claims for damage and loss of property sustained by persons in Malaya as a result of the Japanese invasion, and by what date he anticipates it will be possible to make some interim payments to those urgently in need.

The secretary of the Claims Commission will be leaving by air early in July to establish the necessary organisation in preparation for the arrival of the chairman who it is hoped will arrive in Malaya in September. I will ask the Malayan Governments to impress on the Commission the desiraability of making recommendations, as rapidly as possible, as to any categories of small claims which might reasonably be settled in advance of more general payments.

Penang (Status)

asked the Secretary of State for the Colonies what decision has been reached regarding the free port status of Penang.

It has been decided that Penang shall be a free port, and that the whole island shall be included in the free port area.

In view of the fact that the people of Penang will be relieved of certain taxation which other parts of the Malayan Union will have to pay, is it contemplated that any special taxes should be levied on Penang in order to recompense the other parts of the Union for the benefits Penang is getting?

That is another question and if the hon. Gentleman will put it down, I will see that a reply is given.

Civil Service Memorial

asked the Secretary of State for the Colonies what reply he has sent to the memorial of the Junior Civil Services Association of the Malayan Union, regarding back pay during the Japanese occupation; and why full pay for this period was given to four European government servants who were not interned during most of the occupation but was not given to Asiatic government servants.

In March, I received a memorial dated 8th February, 1946, from the "Government Junior Officers' Association, Malay States" and at that time I felt that the grants referred to in my reply to the hon. Member on the 20th March, were as far as I could go towards meeting the Association's representations. The Chief Civil Affairs Officer, British Military Administration, was asked to inform the above Association to that effect. In view, however, of further recent representations in the matter, I have suggested that the local governments should consider reviewing the whole question with unofficial assistance. As regards the last part of the Question, the position is that when, in the extreme pressure of work prevailing in all the departments concerned following on the unexpected collapse of Japan, full pay for the period of Japanese occupation was issued to all repatriated European officials, the possibility that a small number of them might not have been interned for varying periods was overlooked.

Will the Minister give the House an assurance that European officers will not be given any advantages which are denied to Asiatic officers?

The inquiry to which I referred in reply to the Question is one which will consider the position of the Asiatic officers. If it is not possible to deal with them in the way suggested by my hon. Friend, then, of course, consideration will have to be given to the question of the European officers refunding a portion of the money paid.

But surely the Minister can give a categorical assurance to the House that there will be no class or colour differentiation in a matter of this sort?

I have already pointed out that unless something can be done to meet the demands of the Asiatic officers, then something will be done to take from the European officers so that there will be the equality which the hon. Member requires.

Tanganyika

Land Settlement

asked the Secretary of State for the Colonies whether proposals made by the Tanganyika Land Settlement Board for settlement in the Oldeani, Ol Joro, Mufindi and Kilonbero, in Tanganyika, have been accepted by the Government of Tanganyika; and whether they will be submitted to him for his approval before they are put into operation.

Proposals for non-native settlement at the places named are still under investigation by the Government of Tanganyika. They will be submitted to me for approval.

asked the Secretary of State for the Colonies whether he will give details of the recommendations made by the Tanganyika Land Settlement Board for the creation of a separate executive organisation to deal with all matters connected with land settlement; whether this recommendation has been accepted by the Government of Tanganyika; and, if so, what will be the composition of this organisation.

On the recommendation of the Board a land settlement division of the Department of Lands and Mines has been established and the Land Settlement Officer has been transferred from the Department of Agriculture to this new division. The division will consist of a field section under the Land Settlement Officer and a legal and office section under an Assistant Land Officer.

Has the Minister considered the advisability of placing in the Library details of the recommendations of this Board so that hon. Members may have the opportunity of gaining further information about them?

I will consider that, but they merely suggest setting up two small committees, so I hardly think it would be worth while putting them in the Library.

If the Minister is contemplating putting these recommendations in the Library, will he be good enough to consider moving the Library out of the map room?

Selous Game Reserve

asked the Secretary of State for the Colonies if it is his intention to increase the size of the game reserves in Tanganyika territory.

A proposal to add an area of 8,640 square miles to the Selous Game Reserve in Tanganyika is under consideration. The former population of this area, which was sparse and scattered, have been evacuated as a measure of protection against sleeping sickness. No other additions to the reserves are at present contemplated.

Did the Minister give consideration to the fact that the farmers already think that the areas are too large at the moment, and that instead of increasing them, he should have been considering a reduction in these areas?

No complaint has been received in regard to this matter, and those who have to be transferred are transferred to land which is available and, I think, suitable.

Questions

North Borneo (Transfer to Crown)

asked the Secretary of State for the Colonies if he is yet in a position to make a statement regarding the future of British North Borneo.

Agreement has now been reached between the Government and the Directors of the company on the terms for the transfer of the North Borneo rights and assets to the Crown. These terms are embodied in a draft agreement which has been circulated to the shareholders of the company with the directors' recommendation for its acceptance. Under the draft agreement the compensation to be paid by the Crown to the company is to be determined by an arbitrator on the basis of ( a ) the net maintainable revenue, and ( b ) the number of years purchase which, in the opinion of the arbitrator, should be applied thereto. It is proposed to execute an agreement in the terms of this draft if the shareholders approve it at their meeting on 25th June, and I hope that it will be possible for the Borneo rights and assets to be transferred to the Crown on 15th July or shortly afterwards, as the Government cannot set up a civil administration in that territory, to replace the existing military administration, before the date of transfer.

It will be necessary to provide a grant-in-aid towards the cost of the administration of the territory, owing to the loss of revenue-earning capacity resulting from the Japanese occupation; provision must also be made for rehabilitation costs, for the compensation to be paid to the company, and for the cost of the arbitration tribunal. This expenditure will be included in supplementary estimates to be brought before Parliament in due course.

I should like to add that the Chief Civil Affairs Officer in North Borneo, who has had over thirty years' service in that territory as a civilian, has reported that there is no question but that all communities in North Borneo would welcome the proposed transfer. He went on to indicate that there was general recognition of the fairness and justice of chartered company rule, but that the general feeling was that the change would accelerate the development of the country and bring with it a consequent increase of prosperity.

Can the Minister say whether in future, then, British North Borneo will be a British Colony; and what will be its relations to the surrounding territories of Brunei, Labuan and Sarawak?

What arrangements are made to enable British North Borneo to share in the Colonial Development and Welfare Fund; and, in view of the fact that allocations have already been made to the territories, is there something out of reserve which can be made available to these new Colonies?

Will the four territories in British Borneo be federated in any way, or will they remain separate?

No, at the moment it is intended that two of them at any rate should be separate—that is, Sarawak and North Borneo.

One will be attached to Singapore and possibly the other will be attached either to Singapore or North Borneo.

Greek Electoral Lists (Revision)

asked the Secretary of State for Foreign Affairs what is the size of the Corps of Observers which will watch the revision of the Greek electoral lists; and whether their functions will include the observation of the plebiscite itself and of the conditions of law and order prevailing at the time of the plebiscite and during the months immediately preceding.

According to present plans, the revision of the Greek electoral lists will be supervised by about 45 British and 25 American observer teams. There will also be the appropriate headquarter staffs, including administrative officers and sampling experts. The present arrangements cover only the revison of the electoral lists. In the execution of their duties, the teams will, of course, observe the conditions of law and order which prevail in Greece, and will report thereon.

In view of the comparatively small size and the limited functions of the Observers Corps, can my right hon. Friend say what guarantee there is that the plebiscite will be a fair reflection of the will of the Greek people?

The task of these observers is to control the compilation of the electoral lists, of the register, and those who supervised the general election are satisfied that they can ensure that the register shall be properly and fairly compiled.

Is it not a fact that the plebiscite, like the election, is likely to be conducted under better conditions and showing a more fair result than any similar election which has ever been held in that country?

Can my right hon. Friend say why it is that whereas the French were represented at the election, they are not to be represented at the plebiscite?

I cannot give any reason except that the French Government desired not to take part.

National Day of Remembrance

asked the Prime Minister if he will now state what arrangements have been made for Remembrance Day this year; and if the dates 1939–1945 will be added to the Cenotaph in Whitehall.

Towards the end of last year my right hon. Friend the Home Secretary consulted a number of representative bodies to ascertain their opinion on the selection of a date on which a National Day of Remembrance could be celebrated for the wars of 1914–1918 and 1939–1945.

They were all agreed that the Sunday before the 11th November, unless the 11th or 12th November be a Sunday, should be known as Remembrance Sunday, should be observed as a National Day of Remembrance for the wars of 1914–18 and 1939–45 and should be associated with the National observance at the Cenotaph in Whitehall at 11 a.m. and the Two Minutes' Silence. The Government felt that this view would commend itself to all quarters in this country. I am glad to be able to say that it has now found general acceptance here and has been approved by The King.

The inscription which was placed upon the Cenotaph when it was erected in 1919 is "The Glorious Dead," and, in Roman notation, the dates 1914 and 1918. From inquiries which I have made it seems that we should command general approval if an inscription commemorating the late war were confined to the simple addition of the dates 1939 and 1945.

His Majesty has been pleased to intimate that he will take part in a ceremony at the Cenotaph on 10th November next, to be generally in the form which has been observed since 1919. The Cenotaph commemorates men and women of all faiths and therefore the ceremony performed by King George V in 1919 included a simple act of unveiling unaccompanied by a religious dedication. His Majesty will carry out a similar act of unveiling as part of the ceremony on 10th November next.

Food Supplies

Restaurants (Out of Door Meals)

asked the Minister of Food whether he will now instruct the food control committees to cease interfering with private caterers decisions as to whether meals should be served indoors or out of doors on their premises; and to abrogate all conditions attached to licences issued by them forbidding service of meals out of doors.

My right hon. Friend is not prepared to issue any general instructions on these lines, but I shall be glad to look into any particular case in which the hon. and gallant Member thinks that hardship is involved.

Will the hon. Lady tell us on what grounds her Department take unto themselves the right to interfere with the freedom of an individual who is given a catering licence to decide whether or not, and when, he shall serve meals out of doors or indoors?

As the hon. and gallant Gentleman knows, this matter is in the hands of the local food committee. If an individual is not satisfied, he can then appeal to the Divisional Food Office, but if the hon. and gallant Gentleman has in mind the case in Blackpool, I can assure him that we are looking into it again and I hope that the decision will be reversed.

Will the hon. Lady also bear in mind the case of the caterer who has no regard for the freedom of the citizen and refuses to serve a cup of tea without the citizen taking a meal, although he does not want a meal?

If the hon. Member can give me a specific case I will certainly look into it.

Will the hon. Lady indicate the kind of grounds upon which it is prescribed whether meals should be taken indoors or al fresco?

May I quote Blackpool? In Blackpool they feel that a man who has a licence for a shop should have another licence if he sells goods from the forecourt. I think perhaps they have been ruling in far too rigid a fashion.

Is the hon. Lady aware that the people in Blackpool say that it is not they who feel this, but the Ministry of Food, who decide this, and that there appears to be a good deal of "passing the buck" between the hon. Lady and the people in Blackpool? Will she look into that?

Elderly People

asked the Minister of Food whether he will consider the advisability of improving the diet of elderly people by allowing a larger allocation of milk and eggs.

Extra milk and eggs could only be given to elderly people at the expense of other sections of the community, and as our medical advisers do not consider a special concession of this kind necessary, my right hon. Friend would not feel justified in reducing anyone's allowance still further in order to provide more for elderly people.

Will my hon. Friend bear in mind that there is increasing difficulty on the part of the older people, especially old age pensioners, by virtue of the limitations imposed upon them, of standing in queues where they are at a great disadvantage, and could they not be compensated in some such way as I have suggested?

Would my hon. Friend bear in mind that there are 5,000,000 old people over 65 years of age and that we could not add them to the priority classes. Furthermore, he must remember that old age is not pathological and that digestive disturbances do not necessarily accompany it.

Irish Turkeys (Christmas Gifts)

asked the Minister of Food if he will now, or at a very early date, declare his policy on Christmas gifts of turkeys from Northern Ireland to residents in this country and not wait until a few days before Christmas, as was the case last year, in view of the fact that, because of the policy then adopted, many families were disappointed and were unable to make other suitable arrangements.

Last year's announcement was made nearly six weeks before Christmas, but my right hon. Friend will do his best to give longer notice this year.

Is the Parliamentary Secretary aware that this information has created very great disturbance in Ireland and dislocated business arrangements?

I am not aware that it has caused disturbance. We are only anxious that the turkeys available should be distributed equitably throughout the country.

Would the hon. Lady see, when allocating permits for the sending of turkeys, that people who obviously have no connection with the black market activities should be allowed reasonable facilities for sending presents to their friends in Great Britain?

It is very difficult to determine whether a man or woman is connected with black market activities or not, but if an individual comes to us and is obviously sincere we are prepared to give him one permit for a friend.

Strawberries (Imports)

asked the Minister of Food the weight and value of strawberries imported from Holland and France each week in the month preceding the new Maximum Prices Order and the comparable figures for the following weeks.

I regret that weekly figures showing the weight and value of strawberries imported from Holland and France are not available. Before the Imported Soft Fruit Order came into operation on 19th May, approximately 12,576 lbs. of strawberries were imported this year from France (value £2,615) and 68,619 lbs. from the Netherlands (value £32,206). Since then no further importations have been received.

Will the Minister give the House an assurance that our friends the French and the Dutch will not again be able to slip under, or rather over, the Maximum Prices Order which they did to their great advantage this time?

Poultry

asked the Minister of Food if he will increase the official killing price of hens from 1s. 4d. per lb. to 3s. per lb. in order to preserve the honesty of the poultry farmer who, owing to lack of foodstuffs, is now obliged to sacrifice laying hens at a loss of fully 10s. each, unless he resorts to the black market.

The maximum prices of hens and other table poultry are at present under review, but my right hon. Friend regrets that he cannot promise to concede the very substantial increase which the hon. Member suggests.

Would it not be much better to give the producer a fair and square price for the hen that he has got to get rid of rather than tempt him to go into the black market, not only to his own profit, but to the profit of somebody else? In view of this serious matter, will the Parliamentary Secretary ask her right hon. Friend to get it settled by 1st July and give the poultry farmer a fair price so that he can be an honest man?

We are anxious that the poultry farmer should be an honest man and to keep temptation from him. That is why we are not substantially increasing the price as, otherwise, the producer might be tempted to rear birds for the table rather than for egg production.

Is my hon. Friend aware that many of us feel that an increase of from 1s. 4d. to 3s. a pound is far too high a price to pay for a poultry keeper's honesty, and if the results are not satisfactory will she consider tightening up the price machinery?

asked the Minister of Food whether as the Ministry of Agriculture's order to reduce poultry feeding-stuffs has been issued after farmers have, at the Government's request, sown their land with spring wheat and cannot produce their own feedingstuffs, he will remove the controls on table poultry until the end of the year.

The price of table poultry is at present under consideration, but my hon. Friend has to consider the interests, not only of producers, but of the consuming public and the traders who handle the poultry. He is convinced that a temporary removal of all restrictions would not make for fair and equitable distribution.

Could not the hon. Lady consider the hardship which has been inflicted on these people by the conflicting orders from different parts of the Government, and cannot sympathetic consideration be given to the matter?

I have already told an hon. Member who put down a similar question that we must not encourage farmers to breed birds for the table at the expense of the egg production.

Could not the hon. Lady insist that the Government should not give conflicting instructions?

Potatoes (Returns)

asked the Minister of Food if he is aware that the potato and carrot division of his Department sent out Form G46/1/A to farmers at the beginning of June, requiring a return of potato crops, while the Ministry of Agriculture simultaneously sent out forms, to be completed in duplicate, requiring the same information; and if he will consult with the Minister of Agriculture with a view to avoiding this duplication.

Form G46/1/A, which is sent to potato growers does not duplicate the Ministry of Agriculture return. It asks for the acreage under each variety of potatoes in each county and the type of seed used: and the Ministry of Agriculture return asks for the acreage of all types of farm crops on each holding, the livestock and labour employed. The information about potatoes is limited to the extent of first earlies, on the one hand, and second earlies and maincrops on the other, without reference to variety or type of seed.

Would the Minister remember that farmers are busy people, and as there seems to be a good deal of common ground in the inquisitiveness of these two Departments, could they not put all their questions on one piece of paper?

Certainly, we are quite prepared to make this into a composite request, but then we should have to have in it triplicate.

Bread

asked the Minister of Food if he will take into consideration when preparing plans for the possible imposition of bread rationing, the position of the many rural households where bread is baked at home.

Yes, Sir. Provision would be made for flour to be purchased in place of bread.

asked the Minister of Food how many tons of wheat it is estimated are necessary to provide a daily ration of 12 ounces of bread for the population of the United Kingdom.

Milk

asked the Minister of Food how many retailers are not restricted by milk zoning; and why these exceptions were made.

As the reply is necessarily rather long, I would propose, subject to the hon. Member's agreement, to circulate it in the OFFICIAL REPORT.

Following is the reply:

Schemes of compulsory zoning of milk deliveries have been introduced only in towns of 10,000 or more inhabitants. Information as to the number of retailers in the unzoned towns and rural areas is not available. The policy of compulsory zoning was not applied to the following towns with populations of more than 10,000, namely, Portsmouth, Glossop, Stoke-on-Trent, Newcastle-under-Lyme, Skipton, Lytham St. Annes and Dalkeith. The dairymen in these towns failed to frame satisfactory schemes of zoning, and it was decided towards the end of the war that it was too late to apply compulsion. The number of retailers concerned was 491.

In addition, all Cooperative retail societies throughout the country were exempted from the zoning restrictions, except that where two or more Cooperative societies delivered in the same zoned area, they were required to adjust their arrangements so as to avoid overlapping deliveries among themselves. The reason for exempting Cooperative societies was the general unwillingness of their customers to be transferred to private traders and a corresponding unwillingness on the part of private traders' customers to be served by Cooperative societies. I have no figures of the numbers of Cooperative societies exempted from the restrictions.

Finally, a small number of distributors of designated milks were allowed exemption by specific provision made in certain zoning schemes, the reason being that they were the sole suppliers of particular kinds of milk in their area and it was felt that to apply the zoning restrictions in such cases would be to inflict unnecessary hardship both upon the dairymen affected and upon their customers.

asked the Minister of Food how many applications have been received for producer-retailers to sell certified tuberculin-tested milk; how many have been granted; and what procedure should be adopted by such applicants to obtain registered customers who formerly were unable to obtain certified tuberculin-tested milk.

During the 12 months ended 31st March, 1945, the latest period for which figures are available, 963 licences were issued to producers to sell this milk. Information is not readily available of the number of producer retailers licensed as distinct from other producers nor of the number of applications made by producer retailers. Producer retailers seeking new registered customers who desire to be supplied should make known to the local food office and the regional milk supply officer the fact that they have supplies of T.T. milk available. The local food office are empowered to transfer the registrations of customers desiring to be supplied with T.T. milk when their existing supplier is unable to supply them although this milk has been made available to him.

Is the hon. Lady aware that considerable difficulty has been experienced by retailers in the past in obtaining anybody as a registered customer because of the meticulous details which have to be given in order to justify the purchase of T.T. milk at all?

I am not aware that there has been great difficulty, but if the hon. Gentleman has any case in mind I shall be only too delighted to look into it, because I am particularly interested in this subject.

Prosecutions (Evidence)

asked the Minister of Food whether he is aware that the work of food control committees is being adversely affected by the refusal of many members of the public who submit legitimate complaints of malpractices to such committees to appear in court to give evidence substantiating such complaints; and what steps he proposes to take to bring home to the public the need for every citizen to cooperate fully with the authorities in prosecuting those guilty of food offences.

No doubt some members of the public who make legitimate complaints to food control committees about suspected food offences are reluctant to give evidence in court, but I am not aware that this reluctance is so prevalent as to handicap seriously the enforce-more work of the committees.

Will my hon. Friend bear in mind that there is no large food control committee in the country which could not produce several of these cases each week where consumers have submitted written or verbal complaints to the committee, but who, upon being told that a prosecution involves their appearance in court, refuse to appear as witnesses against the offenders?

Again I should like to hear of such cases. We sometimes hear rumours of that sort of thing, but we rarely hear of a definite case. If hon. Members would bring such cases forward I should be pleased to hear of them.

Questions

Imported Wines (Distribution)

asked the Minister of Food whether he will arrange for allocations of imported wines to be made available to ex-Servicemen setting up in business as wine merchants who were not in such business before the war.

My right hon. Friend does not think that the time has come to abandon the existing system of distribution. Until supply more nearly equals demands, the most equitable distribution of the limited supplies available will be ensured by continuing to use prewar channels.

Is not the Parliamentary Secretary aware that some of these ex-Servicemen were too young to be in this trade before the war, and will she not reconsider their cases even if it is necessary to be a little less tender than she has been towards monopoly capitalism and vested interest?

The hon. Gentleman must consider that there are other factors in the wine trade besides the youth of the ex-Servicemen. Even if the whole of our import programme is fulfilled, we shall only have 50 per cent. of the wine we had in prewar days.

Questions to Ministers

The following Question stood upon the Order Paper in the name of Sir JOHN MELLOR:

96. To ask the First Lord of the Admiralty whether he is aware of the damage done at Castle Hills Farm, Bickenhill, Warwickshire, by the R.A.F. in removing pieces of an aircraft which crashed on 3rd January; why his Department, notwithstanding repeated requests, failed to investigate the tenant's particulars of claim, dated 20th February and acknowledged on 1st March; and whether he will settle the claim forthwith.

On a point of Order, Mr. Speaker. May I invite your attention to Question 96 on the Order Paper? I addressed that Question to the Under-Secretary of State for Air. It was so accepted by the Table, and appeared in the Order Book in that form. Without my consent it was transferred by the Air Ministry to the Admiralty. That transfer, in effect, makes nonsense of the Question, because the second part of it asks:

"why his Department, notwithstanding repeated requests, failed to investigate the tenant's particulars of claims."

"His Department" of course, referred to the Air Ministry, and, appearing on the Paper in this form, it puts a false statement into my mouth. I consider that I have a personal responsibility for the accuracy of any statements implied in my Question. I, therefore, ask for your Ruling, Mr. Speaker, as to whether it is in Order for a Department to transfer a Question in that way without consulting me.

It has always been the practice of one Department, if a Question does not refer to them, to refer it to another Department. I can have no control over a matter of which I have no personal knowledge whatever. The hon. Member is responsible for the facts which are stated in the Question, and it appears to be in Order.

With great respect, my Question as addressed to the Air Ministry referred to "his Department" and, of course, was the concern of the Air Ministry. If it is transferred with those words left in, it is quite untrue so far as the Admiralty is concerned, and, therefore, I think I have a genuine complaint, being responsible for the accuracy of the state- ment implied in my Question. The Question has been transferred in a way which makes it completely inaccurate.

I would advise the hon. Baronet to see the answer and then he will know whether there is any substance in his complaint.

Further to that point of Order. Is it competent for a Government Department to alter the sense of a Question which it has received by transferring that Question to another Department?

Clothing Coupons (Increase)

The following Questions stood upon the Order Paper:

83.

,—To ask the President of the Board of Trade whether he is yet in a position to make a definite statement about the clothing ration for the next period.

85.

,—To ask the President of the Board of Trade whether he will now announce the increased number of clothing coupons that will be available in September.

I am grateful for this opportunity to make a statement in reply to Questions 83 and 85.

Yes, Sir. I have been in communication with my right hon. and learned Friend the President of the Board of Trade, and he has authorised me to announce that the ration for the next period will be 30 coupons, instead of 26 as originally forecast. This has been made possible by an improvement in the production of clothing for the home market. In order that the increase may be made available to the public as soon as possible, the next rationing period will start on 1st August, when the children's 10 was in any case to be available, instead of 1st September; it will end, as previously announced, on 28th February.

I am glad to say that it is also possible to announce improvements in the supplementary issues for children. Those aged between approximately 10½ and 16 on 1st August will automatically receive 20 coupons, whereas previously this concession was only available by reason of age alone, to children between approximately 13½ and 16. Younger children can still qualify for the extra 20 if because of height, weight or size of foot they require adult sizes. The extension of the concession down to 10½ will largely relieve the school teachers of the task of weighing and measuring great numbers of children. Children over 16 and under 18 will all receive an extra 10 coupons, a privilege which was enjoyed last year only by those between 16 and 16½. It will not be possible for the food offices to issue these extra supplements for children until 1st September and no application should be made before that date.

Is my hon. Friend able to make any concession to the class of persons referred to in Question 79?

"To ask the President of the Board of Trade, if, in view of the improved textile position, he is now able to announce any clothing coupon concessions, with particular reference to those classes of persons such as demobilised soldiers who have outgrown their pre-service civilian clothes, to whose difficulties his attention has been called."

Yes, Sir. The answer to Question 79, which the hon. Member will be receiving in the course of the day, I hope, will indicate that it is possible to make that concession.

Mufti of Jerusalem

The following Questions stood upon the Order Paper:

93.

,—To ask the Secretary of State for Foreign Affairs whether he will make a statement with regard to the movements of Amin el Husseni, the ex-Mufti; and what steps are being taken to prevent his return to Palestine.

94.

,—To ask the Secretary of State for Foreign Affairs what steps he proposes to take in relation to the return of the ex-Mufti of Jerusalem to the Middle East, in view of his actions against Britain and her Allies during the war.

With your permission, Sir, and with the permission of the House, I will answer Questions 93 and 94.

His Majesty's Government have received no confirmation of reports that the Mufti of Jerusalem has arrived in the Middle East, though it may, of course, be assumed probable that when he left Paris he was hoping to reach an Arab country. We are considering what steps should be taken, if this assumption proves to be correct. In any event, the Government will not allow the Mufti to return to Palestine.

May I ask the right hon. Gentleman whether he will reconsider the decision which was arrived at some time ago in relation to the extradition of the ex-Mufti in the event of him being found in any country at all, particularly in view of the fact that he was in the pay of this country or of the Palestinian administration at the time when he committed the treacherous acts of joining the forces against us, plotting against this country, and, in addition to that—

May I ask whether, in view of the additional fact that this country being the trustee of the Jewish National Home, he was treacherous in that he was one of the main parties against—

Of course, I admit the treachery of the ex-Mufti. Of course, we would be very glad to have him in our hands, and, of course, I will reconsider anything that my hon. Friend may ask me to.

May I ask whether the right hon. Gentleman's attention has been called to the statement reported in the Press to have been made by one of the American members of the Anglo-American Joint Committee on Palestine, to the effect that the British Government were cognisant of the escape of the ex-Mufti? Will he give a complete denial to such a charge?

I had, in fact, not heard of any such report, but I am very ready to deny it. It is without any foundation whatever.

Will the Prime Minister give a date for the discussion of the Palestinian situation in the near future?

I will consider that. Perhaps the right hon. Gentleman will ask the question tomorrow when we discuss Business.

May I ask why, in view of the intelligence service which is at the disposal of the Government, they are unable to keep track of this man?

Have any representations been made to the French Government on the subject of the departure of the ex-Mufti from France and if so, have we had any answer?

Yes, Sir. We have been in immediate contact with the French, who have expressed their great regret and grave concern at the escape of the ex-Mufti, and who are giving us every assistance in their power in trying to trace him.

Is not the reason that the Government have not been able to keep touch with him not a lack of intelligence service, but because he was wearing mufti?

Business of the House

In view of the Motion on the Paper for the suspension of the Rule, may I ask what are the Government's intentions in regard to Business for today?

We hope to make good progress with the Committee stage of the Finance Bill tonight. As the House is aware, this stage is exempted Business. We propose to suspend the Rule for the Ways and Means Resolution relating to Clause 24 of the Bill which it is desired to apply to Northern Ireland. There is an Amendment on the Paper in regard to this in the name of the Chancellor of the Exchequer. We shall also ask the House to agree to the Report stage of the Hill Farming Money Resolution.

Business of the House

Proceedings of the Committee of Ways and Means exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House).—[ The Prime Minister. ]

Orders of the Day

Finance (No. 2) (Compensation to Assessors)

Resolution reported:

"That for the purposes of any Act of the present Session relating to finance it is expedient to authorise the payment out of moneys provided by Parliament of annual allowances by way of compensation to any persons employed as assessors for the purposes of income tax and land tax immediately before the passing of the said Act whose appointments are terminated by that Act."

Resolution agreed to.

Finance (No. 2) Bill

Considered in Committee.

[Major MILNER in the Chair]

CLAUSE 1.—(Extension of key industry duty.)

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

3.42 p.m.

This is a rather important Clause. It gives considerable stimulus to manufacturers in regard to certain scientific instruments and wireless. It will be noticed that the Clause proposes that the Key Industry Duty is to be extended for another two years. I do not wish to move any Amendment, or to detain the Committee for any length of time on this point, but I would draw the attention of the Chancellor to some speeches which have been made advocating the extension of the time in this matter for three, four or five years to enable everyone concerned to know where they stood. In view of the vast amount of business we have to do and since the Chancellor is of opinion apparently that this is a good Clause, I merely ask whether that point will be given consideration between now and the Report stage. It may well be that there are other reasons for this proposal, such as changes in connection with the whole policy in this regard, but those are rather remote reasons, into which I need not go now.

On behalf of the Chancellor of the Exchequer, I can say that between now and the Report stage he will give the utmost consideration, as always, to what the hon. Member for Torquay (Mr. C. Williams) has said. I would, however, remind him and the Committee that it is essential we should lay down a period in regard to the extent to which the Clause applies, because, as the Committee knows, trade negotiations are shortly to take place with other countries, and with Governments in the Commonwealth. It is necessary, as will be appreciated, that we should not commit ourselves too far until those negotiations have been completed.

3.45 p.m.

I must say I find the explanation of the Financial Secretary extremely unsatisfactory. I am very grateful to the hon. Member for Torquay (Mr. C. Williams) for having raised this matter. Although I am unable to give the reason for the particularly short period which is now proposed, it never occurred to me that it was because it was wanted to keep open the question of continuing to impose duties upon these articles. This is surely a farce. These duties were imposed because of the great national interest involved in matters of defence. For 15 years it has been found necessary to have these duties upon these articles, in order that this very limited number of key articles may continue to be made in this country, and to be available in time of war. What on earth has any trade negotiation in the future to do with this? Surely it is not suggested that in a trade negotiation it is proposed to give away a duty which has been, and is still considered, necessary to keep in existence something which is needful for national defence. I was anxious to ask the hon. Gentleman why the period was limited to two years, instead of the ten years, which I think was accepted by all sides in 1936. I am disquieted to find that the reason is that the Government may want, within a period of two years, to barter away these vital duties in regard to some trade agreement.

The hon. Gentleman shakes his head. I submit that no other meaning could possibly be put upon the statement he has made. He said that because trade agreements were in the offing that must tie our hands. What does that mean? It can only mean that in relation to this particular trade agreement these particular subjects are to be brought into the bargaining field. I believe these are duties which should not be in the bargaining field. Although it is impossible for us to vote against a Clause which extends them for two years, in view of the explanation given today we hope that at some subsequent stage we may be able to move an Amendment giving a further extension, which would assure us that vital interests are not going to be bartered away, and would give the manufacturers of these articles some reassurance in regard to the long-term future.

I thank the Financial Secretary very sincerely for the courtesy of his reply. I appreciate that no Amendment was put down, and he might expect no one would rise on this point. But I would be neglecting my duty if I did not probe this matter, and I might be very severely reprimanded by the Leader of the House. That is why I appreciate the hon. Gentleman's courtesy. I rather suspected he would introduce the trade agreement into this matter. I agree with what my right hon. Friend the Member for West Bristol (Mr. Stanley) said, that if a good long period of ten years—and I say this to help the Chancellor in his agreements—were agreed to by the whole Committee, we should be in a very much stronger position to enter into these agreements. If this matter could be considered between now and the Report stage, with the friendship of all sides of the Committee helping the Chancellor, it would be an enormous advantage. We also have to consider the Dominions, and negotiations with them. As far as this Clause is concerned, I think the Chancellor would find very little difficulty in getting them to appreciate that this was one of the things done before the war, which had great value to us in enabling our manufacturers to keep ahead, and give us an immense advantage, which we lacked in the first world war.

I am sure I have the thorough approval of the right hon. Gentleman the Chancellor of the Exchequer in pushing this forward, and I shall resist very firmly the temptation to point out that everyone was not quite so sure in the days of 1921, 1926, and 1936, as we are to-day. I do appreciate however the action taken by the Financial Secretary, and I also appreciate the mellow consideration the Chancellor of the Exchequer has given to every one of the observations I have made, which, I feel sure, will be helpful to him.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

CLAUSE 2.—(Coffee and chicory extracts, etc.)

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

Some of my hon. and right hon. Friends raised the question of this Clause on the Report stage of the Budget Resolutions, and we were fortunate enough to have the assistance of both the hon. and learned Solicitor-General and the right hon. Gentleman the Chancellor of the Exchequer when we were debating the point; but though they both intervened several times, so Delphic were their answers that we are constrained to raise the matter again. What the Clause does is to remove the prohibition existing since 1876 on the imports of coffee and chicory essences, and to put a duty on such imports together with an Imperial Preference. As I understand it, the reason for the original prohibition of 1876 was the great difficulty in assessing tax fairly on an article like a coffee essence, because everything depended on the strength of the concentration of that essence. It was a technical problem which defeated the very excellent Tory Government in 1876, and all other Tory, Liberal and Labour Governments subsequently. Therefore, the first question to which I should like an answer is, how is it that this technical problem has now suddenly been solved in 1946 and to whose interest—and this is the point—to whose interest was it that it should be solved? That is the first question.

The next point is this. On the face of it, looking at this Bill, what we are doing is to remove this prohibition and to put on certain duties. But that is not the whole of the story, because in his Budget speech the right hon. Gentleman the Chancellor of the Exchequer said that he was removing this prohibition, but that, in fact, no import licences were to be granted for the present. We tried very hard on the Report stage to discover in what circumstances import licences would be granted, and the learned Solicitor-General, in a very well trained lawyer's answer, said it was quite easy to answer that question, because licences would be granted in appropriate circumstances. What are "appropriate circumstances"? I should like to suggest one or two circumstances which would not be appropriate. I think it would not be appropriate to allow imports of coffee and chicory essences while our manufacturers at home are restricted in their raw materials, because if that happens they will lose their goodwill and lose their trade, with no fair chance of any sort whatever to compete. I think it would not be appropriate to allow such imports, and to pay for them with good dollars and hard currency, when, in fact, we could probably save dollars and hard currency by importing the raw materials instead. I do hope we shall get a firm assurance from the Government that they will not consider the circumstances appropriate while our own manufacturers are not in a position to compete, and while we could, in fact, save dollars by importing raw materials instead of the finished coffee essence.

If we do not get that answer we shall be able to draw some rather curious conclusions. In foreign politics, at any rate, the Government's policy seems to be open disagreements openly arrived at; and in commercial policy what they really do is to have open agreements covertly discounted. That is what, I think, is going on in this case, and I, therefore, hope, for the good name of the House, that we shall get an absolutely clear answer as to what their intentions are.

Hon. Gentlemen opposite are, I think, unnecessarily suspicious about this removal of what is no more than an anachronism. Ever since 1876 this absurd restriction has existed on the Statute Book. There is no reason for it now. The only reason why it was introduced in the Act of 1876 was that our great-grandfathers found themselves rather baffled by problems which we now find comparatively easy. There are a great many things we find easier than they did, and this is one of them. We find it perfectly simple now to impose a tax which, as the hon. Gentleman has said, they found rather a puzzle. That really is what is behind this Clause. On the Statute Book there is something which, in modern times, is unnecessary and indefensible. All the Clause does is to remove it. Then, the hon. Gentleman, naturally, reminded me of what I said when we discussed this matter earlier, and asked me for a specific assurance. As he pointed out, British manufacturers are handicapped to a certain extent by the restrictions on raw materials, and he asked me for an assurance. In reply to his question I can say this on behalf of my right hon. Friend: it is highly unlikely that import licences for coffee extracts will be granted at any time while the home producer is still subject to restrictions. That statement I make advisedly, and I hope the hon. Gentleman will be satisfied with it.

I would summarise what I have said in this way. The Clause does nothing except clear the way for the importation of coffee extracts when that time is arrived. That time, as I have said, is not at present. It is highly unlikely, while there are still restrictions on raw materials, that any import licences will be granted. Meanwhile, there is no reason whatever why the state of law in this country—and hon. Gentlemen have repeatedly pressed that it should be brought up to date—in this particular respect should not be made to accord with modern outlook and modern conceptions. There is no reason why this anachronism should not be removed from the Statute Book. Therefore, I ask the Committee to agree we ought to be given this Clause, and that there is no reason to be suspicious about it. It is a removal which ought to have been accomplished, probably, 50 years ago.

I should like to support the representations made by my hon. Friend the Member for Flint (Mr. Birch). Despite the statement upon this matter by the Solicitor-General, we are still in considerable doubt on what is behind this unexpected change. In the Debate on the Budget Resolutions on 17th April he suggested, as, indeed, he has repeated now, that this is merely an attempt to tidy up an incongruous situation, and to bring our Excise regulations into line with modern thought. Yet, on that occasion, he did use these words, which he has not repeated today:

4.0 p.m.

There happens to be a business of this kind in my constituency. In this case the limitation of the amount of sugar works out at only 40 per cent. of the pre-war level. In general the trade as a whole is limited, I think, to some 60 per cent., but I need not go into the reasons why the firm is limited to 40 per cent. of the sugar allocation in prewar days. This firm made preparations for rebuilding and expanding its business after the war and engaging in some export trade of its own. With enormous difficulty all the building arrangements had been planned. The priority certificates had been obtained, but now my constituents are in this doubt that the Government appear to be making a free gift of this important business to the United States. Are our people justified in going ahead with the considerable expense involved in the expansions they had in mind? My hon. Friend the Member for Flint stressed the fact that it would be in the highest degree improper for the Government to allow imports to destroy businesses in this country. At the present time there is a gap between supply and demand, and because of this gap there is a unique opportunity for the United States or any other country to seize the market and on a large scale to dump on it produce of this kind.

We are partially reassured by the statement which has been made that licences will not be granted while some producers are still subject to restrictions, but the Solicitor-General will appreciate that when it comes to the question of planning ahead and expending money which in many cases is the money of shareholders of which the managers of these businesses are the trustees, it is impossible to be satisfied with a blunt assurance of this kind. Could not the Solicitor-General, on behalf of the Government, give us a definite undertaking that for 12 months after all the restrictions on the supply of raw materials have been removed from our own industry, in order to allow our businesses a chance to recover from the privations of war, there will be no import licences granted for coffee and chicory essences. I should regard that as a welcome reassurance to the Committee.

I take it that this Clause carries out in part the criticism which the Chancellor of the Exchequer levelled against the Budget in 1929. He criticised the Budget of 1929 because the Act of 1876 was kept in operation, and he said that it ought to have been removed long before. I do not know whether this is an attempt to carry that criticism into effect. If it is, so far, so good, but I regret that the right hon. Gentleman did not go further. He retains the duties imposed on coffee and coffee essences. The Chancellor criticised that earlier Budget quite rightly, but I regret to see that he has not had the courage to go the whole way and completely carry out in this Budget the criticisms he levelled against the 1929 Budget. The great scheme at that time was the abolition of the Tea Duty which stood at 4d. That was abolished by the right hon. Gentleman the Member for Woodford (Mr. Churchill) and the right hon. Gentleman opposite welcomed it. He went on to say that the abolition of the Tea Duty would involve a reduction of only .2 per cent. in the cost of living whereas had a reduction taken place in the case of the sugar duty the figure would have been 2 per cent. When we turn to this Finance Bill we find that these duties have been retained by the right hon. Gentleman notwithstanding his criticism. I always understood that the Labour Party stood for a free breakfast table, but when we come to this Finance Bill we find apparently they no longer stand for that. When the Chancellor of the Exchequer sits on the Opposition side he is the advocate of the free breakfast table; but when he sits on the Government side, he produces this Finance Bill.

It appears that the statements made by the Solicitor-General have proved too much. If this Clause is passed, it will not come into effect for some time, because circumstances are not likely to be thought appropriate for the issue of licences for a period. It would not be altogether unfair to say that they are unlikely to be appropriate for a year; therefore, why not leave the Clause over for another year? The Solicitor-General has given us a hint, and one would think from it that the Government are possessed with a passion for tidying up what used to be called anomalies—if you find an anomaly or an apparent anomaly you must remove it at once by legislation. No doubt in certain respects we are better technicians than our grandfathers, but it is unlikely that the technical difficulties experienced in 1876 are any less now. Whether that be so or not, the question arises why this Clause has been put in. So far we have not been given an answer. The excuse of the Solicitor-General was that this was a piece of law which required to be tidied up, but frankly I do not believe it.

It seems to me indefensible and rather ludicrous for the Chancellor of the Exchequer, who has described himself as engaging in "front line" legislation, to remove the prohibition on the imports of food and then to impose a duty on goods, which the Solicitor-General assures us will not be imported. Surely, the right and proper thing is for the Chancellor of the Exchequer to revert to those honest days, when he used to sit in Opposition, and support the free breakfast table. I have put down a new Clause, which may be accepted later on, with regard to tea.

But I ask the right hon. Gentleman to consider whether this Clause should not be removed from the Bill. What is the point of dealing with this matter of coffee extracts at the present time, when this House is being overworked with legislation, and when we have received an assurance that there is no intention of importing these goods? Surely, this is a matter that should, and could, be dealt with at the time when the import of these goods is possible and desirable, if that should be the case. I believe that there is much more behind this than the Committee has been told; otherwise why should overworked Parliamentary draftsmen have to spend time and ingenuity in framing this elaborate form of words, and working out the differences between Empire products and products that are not from the Empire, unless there is something more behind it? I appeal to the Chancellor of the Exchequer to treat this House with the frankness with which he addressed the Bournemouth Conference, and tell us what he has in mind.

The hon. Member for Handsworth (Mr. H. Roberts) referred to the removal of an anomaly. It may be, as the learned Solicitor-General has said, that the effect of this Clause is to remove an anomaly, which has remained on the Statute Book for a very long time. It appears to me that the value of removing an anomaly is in direct proportion to the value of what is put in its place. I feel apprehensive about what it is proposed to put in the place of this anomaly, for two reasons. The first is from the point of view of Imperial Preference, and the second is from the point of view of the interests of the home producers. We are told by the learned Solicitor-General that it is highly unlikely that any import licences will be given for some considerable time, but presumably it is intended to give them at some time, or else it would hardly be worth while introducing this Clause at all. I, therefore, assume that they are likely to be given, and I hoped that the right hon. Gentleman would have taken action to make a larger measure of differentiation in favour of Imperial Preference than he has so far done, because, when I refer to the Debate on this matter on the Report stage of the Budget Resolutions, I find that the right hon. Gentleman based himself very strongly on this aspect of Imperial Preference. He said:

4.15 p.m.

The second point to which I wish to refer is the interests of the home producer. The hon. Member for Mid-Bedford (Mr. Lennox-Boyd) has stated the hope, felt unanimously on this side of the Committee, that there will be no import licences granted until such time as restrictions and controls, which at present impede the home producer, are relaxed, or they have a chance of competing under favourable conditions against these foreign imports. May I ask that consideration be given to making certain that when these import licences are granted, if and when they are granted, any restrictions imposed at present by Statutory Rules and Orders upon the home trade will also include our foreign importations. I would refer, in particular, to the Food Standards Liquid Coffee Essence Order, 1945, which is Statutory Rule and Order No. 389.

I apologise for referring to these Statutory Rules and Orders at this unaccustomed hour of the afternoon, because generally it is one's privilege to refer to them considerably later in the evening. There is also the Food (No. 2) Order, 1944, which is Statutory Rule and Order No. 1447. I understand that in the case of jam preserves it is, in fact, the case that the labelling restrictions imposed by the Statutory Rule and Order apply to home trade but not to foreign importations, and I think it would be piling Pelion upon Ossa, on the home producers if attention were not given to seeing that any such restrictions are applied to foreign imports when licences are in fact given.

The learned Solicitor-General referred to the lack of wisdom in this House in 1876. Although we may know better than our fathers, we do certainly worse in the matter of making things clear. The learned Solicitor-General says that it is highly unlikely that licences will be granted. "Highly unlikely" is just sowing suspicion. It does not clear up the matter at all. I am in favour of competition from abroad, as and when our home manufacturers have all the raw materials which they need to occupy their labour to full capacity in production. I do not fear American competition in the matter of these preserved foods. I believe that we can make them cheaper, but it is not fair competition if adequate raw materials are not available here to our manufacturers, who therefore, cannot supply the whole of the demand, and part of the market is, as it were, reserved. We want a further assurance that nothing will come in until our home manufacturers have got the raw materials which they need. We have had, in the last two or three days, an example which causes much suspicion. We are not to have foodstuffs for our cattle, but we are to buy dried milk from the United States.

I am afraid this may go on for a long time and it is a great waste of dollars. I do not believe that the Chancellor intends to waste dollars. I believe this is put in because the Department of Commerce in Washington wished to have this anomaly rubbed out, before entering into commercial negotiations. Why not be frank and say that we agree that we can fix a date, but that we do not intend to do it until our manufacturers have got as much raw materials as they can use? If the Chancellor can give us that firm assurance and not go on talking about "highly unlikely" then I think we might be a little more satisfied.

I want to reinforce what has been said by my hon. Friends. The Solicitor-General told us that it was highly unlikely that licences would be issued. I should like to ask what better way is there for creating suspicion than asking for powers and then saying that it is "highly unlikely" they will be used. Frankly, I cannot accept the statement that it is highly unlikely that licences will be granted. There must be some other purpose for which this is being removed. I listened to the explanation but I could not swallow it at all. It reminded me of a man going to another and asking for power to draw a cheque on his bank, adding that he did not intend to draw the cheque. If the Government are expert at anything they are certainly experts in creating suspicion and uncertainty, and they have created uncertainty in the minds of the traders in this industry. I beg of the Chancellor to give us something to wash out that suspicion and uncertainty. Let him take a proper statesmanlike view instead of putting forward the statement that though he is going to eradicate this provision as from a certain date, he does not want to use the power thus given. Let him tell us quite frankly that he is not going to use the power and it will settle the minds of the traders and of many people inside this House.

I rise to make an appeal to the Chancellor to put this comparatively minor matter on a more satisfactory basis. I listened to the Debate on the Budget Resolutions and again today, and I cannot help thinking of those suspicions which the Solicitor-General accused us of having. We are extremely sorry for the Solicitor-General. He is a sort of political niblick, which the Chancellor of the Exchequer uses when it is necessary—I will not say to get out of a bad lie because that would be unparliamentary—but to get out of the rough. He is put up to tell us that, suddenly, at the end of 70 years the Government have found a way of dealing with this product. If hon. Members will look at the Clause and particularly at Subsection (2) they will see the result of the marvellous discovery after 70 years. It starts off:

It has been admitted by the Solicitor-General that in view of the restrictions which have been put on the producers in this country today, it is not fair to allow them to meet outside competition such as the Government might have been prepared to let them meet in other days. For that reason we are given this half promise. In fact the licence is to be used to defeat the Clause which the Chan- cellor is now moving. Would it not be far simpler to put the horse before the cart, and wait until the manufacturers of this country are freed from these restrictions and are in a position to face the competition; to wait, in fact, until this Clause, if it is passed, is a reality and not a sham. The Solicitor-General has asked us to pass this Clause, and next he has given us a partial assurance that, when passed, it is not going to mean anything. In response to representations from interests abroad it has been decided that this matter should take this form and at the same time an assurance was given that, by means of the licensing system, no more imports are to be allowed. By such methods the Government are deceiving the people to whose representations they are pretending to lend an ear. Would it not be far more satisfactory if this Clause were withdrawn, and reintroduced when conditions are more nearly normal? If it is passed and allowed to operate it will take with one hand, what it is supposed to give with the other. If the Chancellor, for some reason which we cannot understand, wants to have an inoperative Clause on the Statute Book at any rate he should give us a positive assurance that it will not be allowed to operate until restrictions—which today, I think he will admit, make fair competition by produceirs in this country impossible—are removed.

Would it make any difference to the argument of the right hon. Gentleman if the manufacturers to whom he referred and who may be foreigners, and the importers or persons in this country who also would be the manufacturers, were the same persons? Might it not mean that these persons were interested in protecting themselves? They might be the people here at home who would send postcards to the Chancellor and not our constituents.

I am not sure who they are, but, in fact, I have not asked for any protection. What I am concerned with is that this manufacture in this country shall go on and continue to give employment whether the ownership rests here or abroad.

4.30 p.m.

I think the Committee is quite right in the view that these proposals should be scrutinised in regard to all their possibilities. At the same time I do not think there is any reason for apprehension regarding this Clause. I am speaking without reserving anything when I say that this matter was thought about even in the dim and distant past referred to by one of the remnant of the Liberal Party. He quoted something that was said in 1929 which I have not looked up, but I should not be unduly disturbed by any inconsistency in what was said over so long a period. The years roll away and so does the Liberal Party. It would not worry me if there was anything inconsistent. Having gone back to distant days, let us consider the years when a Conservative Administration was in power in this country. This question of import prohibitions was examined on a number of occasions. It was felt by most Governments of importing countries at that time, including the Conservative Government of this country, that these import prohibitions were somewhat clumsy and out of date. The Conservative Government of that time went so far as to propose a general convention for international adherence, under which these prohibitions would be removed, and replaced by schemes of import duties. We were not then thinking in terms of import licences, but simply of import duties. But that failed to be carried out in 1928–29, because not sufficient ratifications were obtained from other Governments in the world. His Majesty's Government, however, were prepared to play their part in removing these prohibitions. In the period we are now entering they are a somewhat clumsy device, and we have developed since those days, as a result of war needs and experience, a more elastic system of import licensing. I am very anxious that no trader in this country should feel threatened as a result of the apprehensions which have been expressed.

The hon. Member for Mid-Bedford (Mr. Lennox-Boyd) raised the question of a firm in his constituency. I can assure him that they have no grounds for perturbation, and I will put that statement on the basis of this general consideration: our balance of payments will need taking care of for years to come. Our exports are going up well but, even so, we shall need for some time to look carefully at all imports into this country. It is now the policy of the Government to license with caution, and only admit quantities of imports—particularly if we can make them ourselves—which are really strictly necessary in order to assure to our people a sufficient supply of the means of life. The hon. Member was correct when he said that there was no present intention of allowing licences for imports of coffee essences and so on. That is our present intention. The whole operation of import licences is under check by this House, and my right hon. and learned Friend the President of the Board of Trade will not suddenly issue import licences without due consultation as to their bearing on the general balance of payments. Certainly, my own prejudice and that of my colleagues will be in favour of maintaining import licensing, in a strict form, on the whole range of imports into this country until such time as our balance of payments is entering on a period of equilibrium—and that is some distance ahead. There need be no apprehension.

As regards the question of the preferential margin, raised by the hon. Member for Hertford (Mr. D. Walker-Smith), it is 9d. diminished by one-sixth, that is 1½d., to 7½d. That, I am advised, is the standard rate of Imperial Preference which we have adopted in a large number of other cases. I am prepared to have a look at it in consultation with my advisers, to see whether there is any case, on the ground of what is done in other instances, for a wider preferential margin. I have always favoured Imperial Preference; in fact, I gave a rebellious vote in favour of it soon after I entered the House, in the days when the late Lord Snowden was Chancellor of the Exchequer. I am not one of those who go about nibbling away Imperial Preference; on the contrary, I am in favour of it. I will see whether this is in line with what we have done in other cases. I think it is. For many years past it was felt that these import prohibitions were out of date. We are devising more elastic machinery for dealing with these problems of importation. There is no intention of giving licences for importation of these articles, nor will licences be granted except after careful consideration of how the balance of trade will be affected, and how the interests of those industries in this country which make these articles are affected. That being so, I hope the suspicions of the Opposition have now been been laid at rest.

I had intended to ask my hon. Friends to divide on this Clause, on the ground that I was suspicious of the right hon. Gentleman's intentions. I shall now ask them to divide in order to mark our disapproval of what appears to me to be the complete inanity of this proposal. It is true that in the old days people may have argued whether complete prohibition, represented by the old method, was more clumsy than the duties represented by the new method, but the right hon. Gentleman assured us that he does not intend to allow the new method to work, and that complete prohibition will continue. All we are asked to do now is to exchange complete prohibition by Statute for complete prohibition by the President of the Board of Trade, and of the two I prefer the former.

There is one question which has been repeatedly put by Members from this side to the Chancellor but has not been answered by him. Will he tell the Committee who are the people who have made representations to the Government on this matter?

I was about to ask the right hon. Gentleman a question on the same point, but in a different way. Have representations been made by foreign commercial interests that the 1876 law should be amended?

In order to give the Chancellor time to think of an answer

to these points, I intervene to say that I quite recognise, from the important speech which was delivered last week at Bournemouth, how lacking the Government are in preparation of these matters. I agree with the right hon. Gentleman that we must encourage the local manufacturer of goods in any way possible. That is a good, sound, Tory principle. When I see the Chancellor straying into Toryism I think he should have his meed of praise. I have never thought that the licensing system was as good as a definite tariff. If you have a licensing system under an order it is apt to be brought before the House late at night, and to be the subject of a Prayer. That is a bad system, because it is hard on the supporters of the Government to have to sit up late. For that reason, I shall have great pleasure in discouraging the Chancellor from putting unnecessary burdens on his back benchers and I shall do so by voting against this Clause. The right hon. Gentleman can answer these questions, and the Committee is entitled to an answer. When we see the Chancellor refusing to answer, I feel that there is something which he is trying to hide—a position which, in words which have been used here before, is "highly unsatisfactory."

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

The Committee divided: Ayes, 237; Noes, 118.

Division No. 193.]

AYES.

[4.40 p.m.

Adams, Richard (Balham)

Callaghan, James

Driberg, T. E. N.

Adams, W. T. (Hammersmith, South)

Castle, Mrs. B. A.

Durbin, E. F. M.

Allen, A. C. (Bosworth)

Chamberlain, R. A.

Ede, Rt. Hon. J. C.

Alpass, J. H.

Champion, A. J.

Edwards, A. (Middlesbrough, E.)

Attewell, H. C.

Chater, D.

Edwards, Rt. Hon. Sir C. (Bedwellty)

Austin, H. L.

Chetwynd, Capt. G. R.

Evans, E. (Lowestoft)

Awbery, S. S.

Clitherow, Dr. R.

Evans, John (Ogmore)

Ayles, W. H.

Cluse, W. S.

Evans, S. N. (Wednesbury)

Ayrton Gould, Mrs. B.

Cobb, F. A.

Farthing, W. J.

Bacon, Miss A.

Cocks, F. S.

Follick, M.

Balfour, A.

Collindridge, F.

Foot, M. M.

Barnes, Rt. Hon. A. J.

Collins, V. J.

Foster, W. (Wigan)

Barstow, P. G.

Colman, Miss G. M.

Gallacher, W.

Barton, C.

Corbet, Mrs. F. K. (Camb'well, N.W.)

Ganley, Mrs. C. S.

Battley, J. R.

Cove, W. G.

Gibbins, J.

Beattie, J. (Belfast, W.)

Crossman, R. H. S.

Gibson, C. W.

Bechervaise, A. E.

Daggar, G.

Gilzean, A.

Benson, G.

Daines, P.

Glanville, J. E. (Consett)

Binns, J.

Dalton, Rt. Hon. H.

Gordon-Walker, P. C.

Blyton, W. R.

Davies, Edward (Burslem)

Greenwood, Rt. Hon. A. (Wakefield)

Boardman, H.

Davies, Ernest (Enfield)

Greenwood, A. W. J. (Heywood)

Bottomley, A. G.

Davies, Harold (Leek)

Grenfell, D. R.

Bowden, Flg.-Offr. H. W.

Davies, Haydn (St. Pancras, S.W.)

Grey, C. F.

Bowles, F. G. (Nuneaton)

Davies, R. J. (Westhoughton)

Grierson, E.

Braddock, Mrs. E. M. (L'pl, Exch'ge)

Davies, S. O. (Merthyr)

Griffiths, D. (Rother Valley)

Brooks, T. J. (Rothwell)

Deer, G.

Griffiths, Capt. W. D. (Moss Side)

Bruce, Maj. D. W. T.

de Freitas, Geoffrey

Guest, Dr. L. Haden

Buchanan, G.

Diamond, J.

Gunter, Capt. R. J.

Butler, H. W. (Hackney, S.)

Dodds, N. N.

Guy, W. H.

Haire, Flt.-Lieut. J. (Wycombe)

Millington, Wing-Comdr. E. R.

Skeffington-Lodge, T. C.

Hall, W. G. (Colne Valley)

Mitchison, Maj. G. R.

Skinnard, F. W.

Hamilton, Lieut.-Col. R.

Monslow, W.

Smith, Capt. C. (Colchester)

Hannan, W. (Maryhill)

Morris, P. (Swansea, W.)

Smith, Ellis (Stoke)

Hardy, E. A.

Mort, D. L.

Smith, H. N. (Nottingham, S.)

Harrison, J.

Moyle, A.

Smith, S. H. (Hull, S.W.)

Henderson, Joseph (Ardwick)

Murray, J. D.

Snow, Capt. J. W.

Herbison, Miss M.

Nally, W.

Sorensen, R. W.

Hewitson, Capt. M.

Naylor, T. E.

Soskice, Maj. Sir F.

Hobson, C. R.

Neal, H. (Claycross)

Stamford, W.

Holman, P.

Nichol, Mrs. M. E. (Bradford, N.)

Steele, T.

Holmes, H. E. (Hemsworth)

Noel-Baker, Capt. F. E. (Brentford)

Stewart, Capt. Michael (Fulham, E.)

House, G.

Noel-Buxton, Lady

Stokes, R. R.

Hoy, J.

O'Brien, T.

Stross, Dr. B.

Hughes, Emrys (S. Ayr)

Oldfield, W. H.

Stubbs, A. E.

Hughes, Hector (Aberdeen, N.)

Paling, Will T. (Dewsbury)

Summerskill, Dr. Edith

Hutchinson, H. L. (Rusholme)

Parker, J.

Swingler, S.

Irving, W. J.

Paton, Mrs. F. (Rushcliffe)

Symonds, Maj. A. L.

Janner, B.

Paton, J. (Norwich)

Taylor, H. B. (Mansfield)

Jeger, G. (Winchester)

Peart, Capt. T. F.

Taylor, R. J. (Morpeth)

Jeger, Dr. S. W. (St. Pancras, S.E.)

Perrins, W.

Taylor, Dr. S. (Barnet)

Jones, D. T. (Hartlepools)

Piratin, P.

Thomas, George (Cardiff)

Keenan, W.

Poole, Major Cecil (Lichfield)

Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

Kenyon, C.

Popplewell, E.

Thurtle, E.

Kinley, J.

Porter, E. (Warrington)

Tiffany, S.

Kirkwood, D.

Porter, G. (Leeds)

Timmons, J.

Lang, G.

Price, M. Philips

Titterington, M. F.

Lavers, S.

Pritt, D. N.

Tolley, L.

Lee, Miss J. (Cannock)

Pryde, D. J.

Vernon, Maj. W. F.

Leslie, J. R.

Pursey, Cmdr. H.

Viant, S. P.

Lever, Fl. Off. N. H.

Randall, H. E.

Walkden, E.

Levy, B. W.

Ranger, J.

Walker, G. H.

Lewis, A. W. J. (Upton)

Rankin, J.

Wallace, G. D. (Chislehurst)

Lindgren, G. S.

Rees-Williams, D. R.

Wallace, H. W. (Walthamstow, E.)

Lyne, A. W.

Reeves, J.

Watson, W. M.

McAdam, W.

Reid, T. (Swindon)

Wells, W. T. (Walsall)

McAllister, G.

Rhodes, H.

Westwood, Rt. Hon. J.

McEntee, V. La T.

Richards, R.

White, H. (Derbyshire, N.E.)

McGhee, H. G.

Roberts, Goronwy (Caernarvonshire)

Whiteley, Rt. Hon. W.

McKay, J. (Wallsend)

Rogers, G. H. R.

Wilkes, Maj. L.

McKinlay, A. S.

Royle, C.

Wilkins, W. A.

Maclean, N. (Govan)

Sargood, R.

Willey, O. G. (Cleveland)

McLeavy, F.

Scott-Elliot, W.

Williamson, T.

Mainwaring, W. H.

Segal, Dr. S.

Willis, E.

Mallalieu, J. P. W.

Shackleton, Wing-Cdr. E. A. A.

Wills, Mrs. E. A.

Mann, Mrs. J.

Shawcross, C. N. (Widnes)

Wilson, J. H.

Manning, Mrs. L. (Epping)

Shurmer, P.

Wise, Major F. J.

Mathers, G.

Silverman, J. (Erdington)

Yates, V. F.

Mayhew, C. P.

Silverman, S. S. (Nelson)

Zilliacus, K.

Messer, F.

Simmons, C. J.

Middleton, Mrs. L.

Skeffington, A. M.

TELLERS FOR THE AYES

Mr. Pearson and Mr. Bing.

NOES.

Agnew, Cmdr. P. G.

Erroll, F. J.

Lloyd, Selwyn (Wirral)

Allen, Lt.-Col. Sir W. (Armagh)

Galbraith, Cmdr. T. D.

Low, Brig. A. R. W.

Assheton, Rt. Hon. R.

Gammans, L. D.

MacAndrew, Col. Sir C.

Astor, Hon. M.

George, Lady M. Lloyd (Anglesey)

Macdonald, Capt. Sir P. (I. of Wight)

Baldwin, A. E.

Gomme-Duncan, Col. A. G.

Mackeson, Lt.-Col. H. R.

Beechman, N. A.

Gridley, Sir A.

MacLeod, Capt. J.

Birch, Nigel

Gruffydd, Prof. W. J.

Macpherson, Maj. N. (Dumfries)

Boles, Lt.-Col. D. C. (Wells)

Hannon, Sir P. (Moseley)

Maitland, Comdr. J. W.

Boothby, R.

Hare, Lieut.-Col. Hn. J. H. (W'db'ge)

Marlowe, A. A. H.

Bower, N.

Harris, H. Wilson

Marples, A. E.

Boyd-Carpenter, J. A.

Harvey, Air-Comdre A. V.

Marshall, D. (Bodmin)

Braithwaite, Lt.-Comdr. J. G.

Haughton, S. G.

Medlicott, F.

Bromley-Davenport, Lt.-Col. W.

Headlam, Lieut.-Col. Rt. Hon. Sir C.

Mellor, Sir J.

Buchan-Hepburn, P. G. T.

Herbert, Sir A. P.

Morris, Hopkin (Carmarthen)

Butcher, H. W.

Hollis, M. C.

Morrison, Rt. Hon. W. S. (Cirencester)

Byers, Lt.-Col. F.

Holmes, Sir J. Stanley (Harwich)

Nicholson, G.

Challen, C.

Hulbert, Wing-Cdr. N. J.

Nield, B. (Chester)

Clarke, Col. R. S.

Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

Nutting, Anthony

Clifton-Brown, Lt.-Col. G.

Hutchison, Col. J. R. (Glasgow, C.)

O'Neill, Rt. Hon. Sir H.

Cole, T. L.

Jeffreys, General Sir G.

Orr-Ewing, I. L.

Conant, Maj. R. J. E.

Jennings, R.

Peake, Rt. Hon. O.

Crookshank, Capt. Rt. Hon. H. F. C.

Joynson-Hicks, Lt.-Cdr. Hon. L. W.

Peto, Brig. C. H. M.

Crosthwaite-Eyre, Col. O. E.

Keeling, E. H.

Ponsonby, Col. C. E.

Crowder, Capt. J. F. E.

Kingsmill, Lt.-Col. W. H.

Prescott, Stanley

Digby, Maj. S. W.

Lancaster, Col. C. G.

Price-White, Lt.-Col. D.

Dodds-Parker, A. D.

Langford-Holt, J.

Ramsay, Maj. S.

Donner, Sqn.-Ldr. P. W.

Legge-Bourke, Maj. E. A. H.

Reid, Rt. Hon. J. S. C. (Hillhead)

Dower, E. L. G. (Caithness)

Lennox-Boyd, A. T.

Roberts, Emrys (Merioneth)

Drayson, Capt. G. B.

Lindsay, M. (Solihull)

Roberts, H. (Handsworth)

Eccles, D. M.

Lipson, D. L.

Roberts, Maj. P. G. (Ecclesall)

Ross, Sir R.

Sutcliffe, H.

Ward, Hon. G. R.

Scott, Lord W.

Taylor, C. S. (Eastbourne)

White, J. B. (Canterbury)

Shepherd, W. S. (Bucklow)

Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

Williams, C. (Torquay)

Smiles, Lt.-Col. Sir W.

Thorneycroft, G. E. P. (Monmouth)

Willoughby de Eresby, Lord

Smith, E. P. (Ashford)

Thorp, Lt.-Col. R. A. F.

York, C.

Spearman, A. C. M.

Touche, G. C.

Young, Sir A. S. L. (Partick)

Spence, H. R.

Turton, R. H.

Stanley, Rt. Hon. O.

Vane, W. M. T.

TELLERS FOR THE NOES:

Stoddart-Scott, Col. M.

Wadsworth, G.

Mr. Drewe and Mr. Studholme.

Strauss, H. G. (English Universities)

Wakefield, Sir W. W.

Stuart, Rt. Hon. J. (Moray)

Walker-Smith, D.

Clause ordered to stand part of the Bill.

CLAUSE 3.—(Drawback on rock cocoa, etc., used in manufacture of theobromine.)

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

I do not know whether the Chancellor of the Exchequer proposes to say anything about this Clause. It was not discussed on the Budget Resolutions and there was only a short allusion to it in the Chancellor's Budget Statement where he said: out the unnecessary words in order to make a reasonably coherent sentence of it—in the preparation of which cocoa has been used, are delivered to or, oddly enough, are appropriated by, persons for use in the manufacture of theobromine, then a "like drawback" will be paid on the exportation of those goods as is laid down in the Act of 1911.

I am completely fogged by the use of the words contained in the Clause. I cannot understand what is meant by "appropriated by a person." I can understand that when something is being manufactured, raw material comes into the process and that that particular raw material is delivered, as stated in the Clause, to the factory for the purposes of manufacture. I must admit, however, that when it comes to a question of appropriation for the purpose of manufacture I am at a loss. There may be some legal explanation and perhaps the learned Solicitor-General will give us a reply. As I read the Clause, it means that where things have cocoa in them and they themselves are used to manufacture theobromine then, on export, there is—or at least one would think that there is—a drawback, because that is what normally happens if there is a duty on an article and it is exported or used for ships' stores. The normal law provides for a drawback on that. I understand that what is to happen in the present case is that there is to be a drawback at the point of manufacture and that if the cocoa, or goods in which there is cocoa, should go into the manufacture of theobromine, it is at that stage, and in this country, that the drawback comes into effect. Then there is the secondary provision that, this being so, there will be no drawback on export or use for ships' stores, presumably on the grounds that the drawback has already been given in the course of manufacture.

If that is the explanation of what is going to happen, it is a very clumsy way of doing it, and the Chancellor would have been much better advised to have redrafted this Section of the Act of 1911 which does not really seem to have any relevance at all to this particular topic except that it deals with cocoa. It would have been much simpler for the Chancellor to have put in what he really means instead of referring back to a Subsection of an Act and then saying that that Subsection itself largely will not apply. This is really a most complicated and tedious way of achieving his object. I ask the Chancellor to look at this between now and the Report stage, and if he can say that it will be possible to accept this suggestion, I am sure we on this side of the Committee and all those who are affected will be very much obliged to him. I do not know whether theobromine is a largely used drug or not—I have not the vaguest idea—but what I do not understand is how it is made from goods in which cocoa is an ingredient. I should have thought that that again was a very clumsy way of expressing the process, but perhaps the Solicitor-General will be good enough to give the Committee some explanation.

I feel we ought to have rather more explanation on the financial side of this Clause because I am bound to say that I was very suspicious when the Chancellor dealt with this matter at an earlier stage. It was not clear where the suggestion originated that coffee essences should be dealt with. We are entitled before we proceed to the financial matters to ask whether he thought of this all by himself or whether it was a matter in which he received representation, either from the manufacturers, the consumers, or people in a foreign country. Nevertheless, it is the financial aspect with which I really wish to deal because we have had no statement at all as to what is to be the effect on the revenue. The only observation we have is in the Financial Statement for 1946–47, presented by the hon. Gentleman the Financial Secretary to the Treasury, on page 18 of which, in Table X, "Estimated Effect of Change in Taxation," there is the item, "Cocoa theobromine, negligible." That is an astonishing word to appear in a tabular extract prepared by His Majesty's Treasury, who, after all, are so meticulous in all those matters. I made a payment of 4s. to His Majesty's Government a few days ago and I received a receipt. I received an additional receipt by post this morning, which I considered to be extraordinarily careful and indicative of great skill and care in accountancy.

Are we to understand that in this case "negligible" means so small that it cannot be expressed in terms of pounds, shillings and pence? We ought to know whether it is a tiny sum or whether it is just a Socialist method of dealing with several hundreds or thousands of pounds. The country has to be careful with its money at the present time in view of the way the present Government is behaving. I think we should be told what the word "negligible," as it appears in Table X against cocoa theobromine, really means, and I hope that whoever may reply on behalf of His Majesty's Government will not just brush it aside by saying that it is quite a negligible sum, but will let us have some careful and specific estimate in terms of pounds, shillings and pence.

This Clause is one which has been inserted in the Finance Bill as the result of representations. The representations have come from the British manufacturers of theobromine. May I explain roughly what the situation is? Theobromine is a drug. I cannot remember the formula quoted by the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank), but it is a drug with stimulant properties, made from the residue of cocoa beans. Rock cocoa is the residue of cocoa beans from which theobromine is made. As hon. Members know, cocoa is imported into this country under duty, that duty being 14s. a cwt. in the case of non-Empire cocoa and, I believe, 11s. 6d. in the case of Empire cocoa. The good qualities—the cocoa butter—are extracted from the cocoa and then this particular drug, theobromine, is made from the shell and the nib which remain.

5.0 p.m.

The position at present is that drawback is paid on this drug when it is exported from this country. It is paid on all material which includes cocoa as one of its ingredients, and, therefore, it includes theobromine. Before the war the cocoa residue was exported largely to the Continent where it was used for the purpose of manufacturing theobromine. During the war, however, owing to restrictions and so on, British manufacturers began to make theobromine in this country from cocoa residue. During the war their output was taken largely by the Ministry of Supply, but now the following position has arisen. They want to continue manufacturing theobromine from cocoa residue but they find themselves at a disadvantage compared with the foreign theobromine manufacturer, for this reason. The foreign theobromine manufacturer uses cocoa residue which has been exported from this country under drawback, that is to say, when he wants to manufacture his theobromine he can use cocoa residue which comes from this country and which he really gets duty free because drawback has been paid when it is exported from this country. The result is that British manufacturers are at a disadvantage because they have to use cocoa residue before the drawback has been paid on it. They have, therefore, asked that they should be put into the same position with regard to the manufacture of theobromine in this country as manufacturers abroad. In order to put them into the same position, the Government propose that the same drawback should be paid on cocoa residue in this country as would be paid on the same cocoa residue if it were exported from this country.

The way it will be done is that, when cocoa residue is deposited or appropriated to approved factories, the person who proposes to use it will be entitled to a drawback in respect of that deposited cocoa residue which will be the equivalent of the drawback he would get if he exported it. He will be placed in exactly the same position as the foreign manufacturer. Subsection (1) says in effect that the Finance Act, 1911, provides for a drawback on export, and we now say that the same drawback will be paid on cocoa residue used in this country. That is the way it is done. The rest of the provisions of the Clause are purely consequential and machinery.

A question was asked what that would mean in pounds, shillings and pence, and reference was made to the fact that it has been described as negligible. That is really the only description which can be given to the financial effect. If drawback is not given, cocoa residue which becomes available in this country will be exported so as to obtain the drawback on export. If we do not have this Clause all the cocoa residue which would be used by British manufacturers will clearly go abroad. Therefore, the effect on the financial resources of this country as a result of the introduction of this Clause will be as they have been described—negligible. I hope that with that explanation hon. Members on both sides of the Committee will feel they have had satisfaction. It is difficult to draft these Clauses, but I hope that the right hon. Gentleman the Member for West Bristol (Mr. Stanley) will agree, when he sees its purpose, that it is aptly worded to effect that purpose and that it would not be possible to bring about the same result by using very widely differing language.

The Solicitor-General has explained to us how the drawback being allowed on the kernel will permit the British manufacturer of theobromine to compete abroad with foreign manufacturers of theobromine. Will he explain what happens when theobromine is imported into this country? Is the manufacturer of theobromine in this country protected by a duty? I understand that theobromine is a drug greatly used in the treatment of high blood pressure.

I should like to thank the Solicitor-General for his explanation. We should encourage the continuation of such an industry which has been built up during the war. There are one or two points in the Clause about which I am not sure. The Clause refers to authority being given for the manufacture of this article. I hope that the Government, through their authorities, will not be difficult, but will enable the manufacturers to obtain the necessary licences quickly and easily. Some of us are experiencing great trouble today about licences for premises and other things, and I hope that the new industry will be encouraged through the licences being easily available. At the end of Subsection (2) there are the words: have to be paid. I am not sure that at times such as these it would not be better to adopt some means of keeping the stuff in this country for use here. I could quite understand that in rock cocoa there might be many things which we might use to great advantage. It is obviously not a manufactured article, but rather the waste after the manufacture of an article.

I urge, as a matter of practical policy, that when we have a raw material of this kind which might be of great value for feedingstuffs and so on, it should be used in this country. I ask the Chancellor to look at this with his usual courtesy and see what he can do in the matter. A question that has always puzzled me is, what happens to goods which are forfeited, as under Subsection (3)? That is a thing I have never heard explained. We are laying down a law that goods must be forfeited and it ought to be possible for us to know what is to happen to them. Are they to be sold, and does the money go to the Chancellor of the Exchequer? I hope that is what happens.

I congratulate the Chancellor on that. I congratulate him also upon not being as wasteful in this matter as he has been about other things. I hope that the points I have raised will be considered. For the rest, the Clause is not one that I should wish to oppose in the Division Lobby.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

CLAUSE 4.—(Imperial preference for sugar, etc.)

I beg to move, in page 3, line 28, to leave out "forty-eight", and to insert "fifty".

In this Clause, the Government recognise the principle of Imperial Preference. I hope this is an indication that the Socialist Party, as well as the Chancellor of the Exchequer, have been converted to that principle. And that those of us who have been for many years advocating Imperial Preference will no longer be branded by the party opposite as reactionary, diehard Imperialists. What concerns myself and my hon. Friends about this Clause is that, by inserting the year 1948, the Government have given the impression to sugar producers throughout the Empire that there is a possibility of the preference being abandoned after that date, or, at any rate, being placed in the melting pot. Great uncertainty is caused in the minds of producers, who have to plan years ahead. It takes several years to grow sugar cane. It is no use the producers growing the cane unless they are assured of a market for their sugar. We are asking the Government to extend the period therefore from 1948 to 1950.

In my tour of the West Indian islands last year I found the same questions being asked everywhere. People wanted to know whether the home Government, in addition to imposing social reforms upon the islands, would encourage and improve the conditions of exports. The Colonies had embarked upon large expenditure on social reforms and they wanted to know what their economic future was to be. They wanted to know the attitude of the home Government with regard to the future of the Colonial Welfare and Development Board, and of Imperial Preference. We were able to give assurances, so far as the Coalition Government were concerned, but now that there has been a change of Government, and a Socialist Government are in office, the same apprehensions are no doubt entertained. The people remember that in 1924, when a previous Socialist Government came into office, the Preference was reduced from 3s. 9d. to 1s. 3d. per cwt. That was a very severe blow inflicted upon the sugar-producing countries, and caused great hardship to them.

5.15 p.m.

What is the history of Imperial Preference in relation to sugar? Down to 1919 or 1920—which was the first full year of the preference—the Dominions sugar production was 32,278 tons. By 1938, the production of sugar in the Dominions had increased to 595,521 tons. That was a very remarkable increase. What of the Colonies? In 1920, sugar production in the Colonies was 265,145. By 1937, the production of sugar had increased to 752,517. In other words, production in the Empire as a whole had increased substantially from about 21 per cent. in 1920, to 58 per cent. in 1939. That was again a very remarkable increase in production and was entirely due to the fact that we had introduced Imperial Preference. From Australia in 1937, exports of raw sugar to the United Kingdom were 383,850 tons, as compared with nil in 1920. In the same year, sugar exports from South Africa to the United Kingdom were 189,400 tons. That figure for 1937 has to be compared with 9,500 in 1920. Exports from Mauritius during the same period rose from 139,200 tons to 286,500 tons, and from the British East Indies, including British Guiana, the increase was from 129,850 tons to 367,750 tons. Practically all the South African exports, as well as those from Mauritius and Australia, normally come to this country. A varying proportion of British West Indian sugar, anything from one third to two thirds, goes to Canada, as does a certain amount from Fiji.

While sugar is of increasing importance to the Dominions, it is the lifeblood of the main sugar growing Colonies, such as the British West Indies, British Guiana, Mauritius, and Fiji. We are pledged to social and political progress in those countries. We are encouraging them in every way to improve their social life. It is, however, useless to spend money upon political and social development in those Colonies unless economic development is encouraged as well. I therefore ask for assurances from the Chancellor of the Exchequer today, and from the Government as a whole, that Imperial Preference is not to be abandoned in 1948, and that it will not be frittered away for some miserable reason. There are countries which are only too anxious to see our Imperial Preference removed. The United States have entered into trade agreements with the Phillipines providing for the entry of sugar to the United States for a period varying from eight years to 20 years, and the duty payable will increase by 5 per cent. each year till it reaches the lowest duty on foreign sugar, which at present is the 75 cents per 100 lbs. on Cuban sugar. The amount of sugar to be admitted free, or upon preferential terms under the agreements, is 850,000 long tons. The United States have always given preference to Cuba. They have always recognised their own West Indian Colonies as one unit, and they have always encouraged them in every way they could.

It is therefore up to us to encourage our sugar producing Colonies and the sugar producers of the Dominions to carry on with their production. Therefore we must give them a long-term policy. A long-term policy cannot be planned on the assurance that preference is to exist for two years only. There must be planning further ahead than that. It takes four years to grow sugar canes; planting the sugar canes is a very costly business, and it is no use planting cane unless it is known that the profits from sugar will be assured. I urge the Government to accept the Amendment, and to give to the sugar producing Colonies the assurance which they desire. It may be argued by the Government that until 1947 all the sugar produced in the Empire will be given a guaranteed market and a guaranteed price which includes preference. That is not enough. It is not known what is to happen after 1947. That is why we are so concerned that the preference should be extended until 1950 at least, and that the Government should give us that assurance.

I support the Amendment. Our contention is that two years is not a long enough period to look ahead in the matter of Imperial sugar. The first aspect of this matter on which our outlook is based is that of this country. After the melancholy story that we heard from the Government Front Bench yesterday of the failure to look far enough ahead in making preparations for the adequate supply of foodstuffs for us from this country and from the Empire, I want to stress how essential it is that due provision should be made in the matter of sugar. The supply of Imperial sugar to this country comes from two sources. In the first place, in 1938 we obtained large supplies from the Dominions. Within two years from now, the Dominions, although they may be producing all the sugar we can consume, may not be prepared to take in exchange the goods we are likely to be producing in two years' time. I think the Chancellor of the Exchequer, who is still, I believe, looking after the affairs of the Board of Trade, realises, as does anybody who goes abroad at the present time, that there has never been a greater lack of consumer goods. That lack is likely to be filled within two years' time with goods produced, as far as the Dominions are concerned, very largely by industries that have grown up during the war. Therefore, although the Dominions may produce sugar for us, it may not be possible for us to provide goods in exchange for it.

As for the Colonial Empire—that part of the Commonwealth not having Dominion status—it is often forgotten in this country that we are responsible for the health, wealth, and happiness of some 60,000,000 people, and that there is a very considerable market which we might tap to our mutual benefit. I am not one of those who believe, as I understand the Socialists do, that a bargain, if helpful to one side, must be detrimental to the other side. This is one of the cases in which we can build up trade of great use to both sides. I believe there is a very great possibility of obtaining sugar in the Colonial Empire. In 1938, that part of the Colonial Empire produced a quarter of the sugar consumed in this country, and during the war has built up the production of sugar to an even greater figure, which should be available to this country. In exchange for the sugar, we shall be manufacturing goods which the Colonial Empire can use. I submit that we have in the Colonial Empire the possibility of building up a very considerable trade if we take a sufficiently longterm view.

Looking at the matter from the point of view of the Colonial Empire, I do not think it is sufficiently understood in this country that in backward areas, even more than in Britain, what people want is a steady price and a steady rise. In the early 'thirties, I was in the part of the world which was a primary producer, where the price of the primary product had fallen from £2 to 1s. 6d. a cwt. The disruption in life there was even greater than one would find here. What these countries want is the ability to make their plans far enough ahead in order to be able to produce and get an adequate return for their efforts.

The point of the Amendment is that three or four years are required for sugar canes to mature, and that the period of two years and two months which is at present given is not sufficient to allow the primary producers to plant their canes and to produce the sugar which we shall eat in 1948, 1949 and 1950. Four years must be the minimum time given to these people as a warning of the approximate price and our willingness to purchase. It is difficult even for a professor of the London School of Economics to foretell what the pound will be worth in four years' time, but I believe we can indicate our willingness to purchase, and I believe that, for economic reasons as well as for reasons of sentiment, those parts of the world will be only too willing to help us through if there is any acute failure in the next few months or years to maintain the purchasing value of the pound.

The last point I wish to make refers to the difficulty in these areas of switching from one product to another. It is difficult to do that in Britain, but it is even more difficult to do it in backward areas of the Colonial Empire, where there is not a vast system of training and retraining schools. In this country it has often been forgotten how skilled the agricultural worker is. That is even more the case, relatively, in the Colonial Empire, where these people have an inherent skill and knowledge of the growing of primary products, such as sugar. I ask the Chancellor to consider whether it would not be possible to make this four years period in some way permanent; that is to say, that there should be a standing order that we will purchase up to four years unless a warning is given that we want to cancel the order in that time.

5.30 p.m.

I support the plea put forward by my hon. and gallant Friend the Member for the Isle of Wight (Sir P. Macdonald), who was so ably supported by my hon. Friend the Member for Banbury (Mr. Dodds-Parker). We welcome this Clause of the Bill, but we want to improve it by extending the period for which the preference is granted for an additional two years, for the reasons that have already been given. I have a special interest in this matter because I had the privilege, just before the war, of spending a considerable amount of time in the West Indies as a member of the Royal Commission. At that time we visited more than 25 islands in the West Indies. There were Members from both sides of the House on the Royal Commission. Sir Walter Citrine and the late Mr. Morgan Jones, whom we all remember with such respect, were members of the Commission, and the report which was ultimately presented to the Government was unanimous. Therefore this matter is, fortunately, free from any party considerations whatever. It was a unanimous report which stressed the need for continuing assistance to the West Indies in the form of sugar preference. There were many other matters dealt with in the report, which was very voluminous, but that was an important matter and the one with which we are concerned this afternoon. There was one happy thing about the West Indies report: owing to the war it was not published until last year, and it was possible to publish that report together with an appendix showing what action had been taken upon it—a proof that this particular Commission's report had a much more happy experience than many other Royal Commissions of the past.

I would briefly remind the Committee of the background of the sugar position in the West Indies. In 1833 the then Colonial Secretary, Lord Stanley—the great-grandfather of my right hon. Friend the Member for West Bristol (Mr. Stanley)—had the courage to introduce into the House a Measure to abolish slavery in the West Indies and throughout the British Empire—a Measure which was opposed by Mr. Gladstone in a very long speech in this House. I presume it was prompted by filial piety, for his father was a large slave-owner in British Guiana, and he received £75,000 compensation for 1,609 slaves which he then had. That was a very noble Act, but it had all sorts of extraordinary consequences, and one of the most important was that shortly after that event there was introduced into the House a series of Measures to reduce or, in some cases, to abolish duties, and in 1848 Lord John Russell proposed to admit slave-grown sugar from Cuba and Brazil into this country at the same price as sugar grown in the West Indies where there were no longer slaves. The consequence of that, of course, was disastrous for the West Indian producer; he had to compete, with paid labour, in the markets of the world with slave-grown sugar. There was a very close vote in the House and the Government only got the Measure through by 15 votes. The parallel they drew to urge their case was that we were still admitting slave-grown cotton into this country from the United States of America, but it was a poor reason, and the results were disastrous for the West Indies. For many years the sugar industry was in a very serious condition, and it was not until after the last war that the preferential system was introduced, and the industry was once again given an opportunity to revive.

I want to impress upon the Committee the vital importance to the West Indies of sugar. If I may quote one set of figures, I think it will bring the matter home. There are several Colonies there—for example, British Guiana, Barbados, Antigua, St. Kitts and, to some extent, Jamaica and Trinidad—which depend almost on sugar for their prosperity. If we look at the prewar agricultural exports from those Colonies, we shall see that the exports of sugar products amounted to about £7 million, which far exceeded all the other products coming from those Colonies. It is important that the Committee should realise what happens in the case of both America and other countries. The United States of America gives free import to sugar coming from territories which it calls "non-contiguous territories," such as Puerto Rico, and the American Virgin Islands which are, in fact, treated as if they were part of the United States, and they are what we would call colonies. So they have the opportunity of free entry into the United States for their sugar. I observe that America has now undertaken, for the next eight years, to allow free entry of Phillipino sugar into the United States of America. I hope the Chancellor of the Exchequer and others will bear this in mind when they come to their negotiations regarding these matters in the near future.

Other countries, such as France, have also given very favourable treatment to their Colonial sugar producers. Both Martinique and Guadeloupe receive considerably higher prices, or did before the war, for their sugar than our West Indian producers, and it is up to us to see that we do not overlook the moral obligation which we have to our West Indian Colonies. Do not let us forget that we imported the negroes into the West Indies and that we imported the East Indians into the West Indies. We have a responsibility of a kind that is quite unequalled in any other part of the world, and I am quite certain that the right hon. Gentleman will not forget this but will make arrangements when the time comes to assure the position of our sugar Colonies. In talking of sugar, I do not wish to omit either Mauritius or Fiji, which are also large sugar producers. The whole future of the development of our policy in the West Indies depends on the recognition of their special position.

The House of Commons was glad to pass the Colonial Development and Welfare Act in 1940 and, at the instance of my right hon. Friend, to increase the amount which was made available in the year 1945. All that money and all that work will go for nought, as far as the sugar Colonies are concerned, unless we look after the economics of sugar production. I do not want to worry the Committee with any details of the arrangements for the sugar preference and the somewhat complicated adjustments which are made under the system of Colonial sugar certificates, but I hope the Chancellor will be able to give us some assurance that there will be a longer period of time for the extension of these preferences than 1948. He will certainly be able to point out the arrangements which have been made during wartime, and which are still being continued, for the production of sugar, but we must look further ahead than that. As my right hon. Friend pointed out, the production of sugar and the development of improved cane, and so on, requires a considerable amount of time, and the industry needs assurance for some time ahead. Four or five years is the very least period which will be satisfactory from their point of view. We are anxious, therefore, that the Chancellor will accept this Amendment and, in view of the fact that it is an entirely non-party and non-controversial matter, I hope he will be good enough to concede it.

I see something rather sinister in this Clause as it stands. It seems to me that this may be another example of the ineptitude which I think has characterised this Government in all international trade negotiations with which they have been connected since they came into power. Why not give this guarantee beyond 1948? It is quite obviously desirable on economic grounds to do so. The party opposite always prided itself on being a party of planning, a party that looked ahead, and when it came to agriculture they turned round to the British farmer and said to him, "We will do for you what the Conservatives have never done"—

The hon. Member must not pursue that line any further; it is out of Order.

I was only using it as an illustration, Mr. Beaumont. I hope I shall be in Order if I suggest that whilst the Government have, quite rightly, given a guarantee for home farming, it is even more necessary in connection with a crop like sugar in the West Indies that there should be a guarantee for at least as long a period. Four years is the period for which the West Indian cane farmer has to look ahead, and if the Committee passes this Clause as it now stands, the Government should, in all fairness, turn round to the West Indian cane farmer and say, "If you plant any sugar today or from now on, you may find no guarantee whatsoever of the price when that sugar comes to be reaped." I do not expect any cane farmers in the West Indies or anywhere else to undertake sugar production on those lines. We ought not to give a guarantee for four years ahead from now, but make it clear to them that we shall not remove this preference without giving notice of a period of at least four years.

I hope the Government will realise what will be the effect on West Indian economy if this Clause is passed in its present form. I need not reiterate what my right hon. Friend the Member for the City of London (Mr. Assheton) has just said, that the whole economy of the West Indies and other parts of the Colonial Empire depends entirely on sugar. It is not the slightest good the House voting them money under the Colonial Welfare and Development Act if, at the same time, we are going to take away their sole means of livelihood. When I said there was something sinister about this, I was wondering whether it is not connected with the negotiations which I understand the Chancellor of the Exchequer is about to undertake with the United States. If these two things are connected in any way whatever, to my mind they ought to be resisted from all sides. I do not think the Chancellor ought to go to Washington, but I presume he will have to go to Washington, and that Washington will not come to him. First, he should make it perfectly clear that there are some things about which we are not prepared to argue. This is one of them, and we ought not to put into the balance on one side the question of preference to West Indies or to any other part of the Empire.

The United States are not prepared to argue about preferences they are going to give either to their own Colonies or to the Philippines. When the question of British Imperial Preference had already been considered, and notice had already been given of these negotiations with which we are concerned, the United States has given preference to Philippine sugar for a period of eight years. If they are prepared to do that to a country which, from now on, is going to be independent, and for whose economy they have no responsibility whatever, surely we who are intimately responsible for the economy of the West Indies should not for one moment surrender our right to maintain these duties at whatever figure we consider to be right. I sincerely hope that the Committee will agree with what we are saying in regard to this Amendment, and support us in putting it to the Chancellor, so that not only for the benefit of the sugar producers in this country, but above all for the sake of sugar producers in the West Indies and other parts of the Colonial Empire, there may be that certainty without which they cannot be expected to grow sugar at all.

5.45 p.m.

I wish to support everything that has been said in regard to this Amendment. The Chancellor said this afternoon that he was an ardent supporter of Imperial Preference, but it appears that by limiting the extension of preference on sugar to two years, he has gone back on his advocacy of Imperial Preference. As has already been pointed out, two years is not sufficient to grow a sugar crop. With this great planning Socialist Government—we have not seen very much planning yet—it is reasonable to suppose that the Chancellor realises that the sugar producers in the Dominions and in the West Indies, and Mauritius also, like to be able to plan ahead. It is quite impossible for them to plan ahead for production of sugar when they only have a certainty of Imperial Preference for that production for the next two years. The Chancellor is looking after the Board of Trade at the same time to-day and he will realise that it is not only a question of Imperial Preference for sugar; it is a general question of Imperial Preference throughout the Empire, and of Imperial trade. The introduction of Imperial Preference on sugar had very remarkable results. The figures have already been given and I will not weary the Committee by repeating them. [ Laughter. ] I do not know that I shall not repeat them. I think I have changed my mind. It is just as well that the Committee should realise what the effect of Imperial Preference has been.

In 1920 the export from the Dominions and India was 13,278 tons, and in 1938 that had gone up to 595,521 tons—an enormous increase. From the Colonies in 1920, the first complete year for this Imperial Preference on sugar, the export was 265,145 tons, and in 1938 it was 603,153 tons, another enormous increase. As has been pointed out, in 1920 exports to this country were 21 per cent., whereas in 1937 they had risen to 58 per cent. The significance of that is not only that we were carrying out a policy of Imperial Preference for increasing the standard of living and helping the Dominions and Colonies, but we were also helping our own trade. If we did not buy the sugar from them, they would have far less to spend to buy our goods. There is no question that the Empire is our best market, and we are the best market for everybody else in the world. America is most anxious to obtain our market, and get in more of her goods by doing away with Imperial Preference. I agree with my hon. Friend the Member for Hornsey (Mr. Gammans). I think there is something very sinister about this. I think this question of the two years' extension has a great deal to do with America and her desire for abolition and with the Socialist Government's acceptance of the elimination of Imperial Preference under conditions, but there are no conditions which can take the place of Imperial Preference. This looks very much like the first step.

The whole of the export of sugar from Australia to this country was the direct effect of Imperial Preference. I give that figure again. It does no harm to the Socialist Party to realise what it means. In 1920 Australia exported no sugar to this country at all, but in 1937 she exported 383,850 tons. South Africa in 1920 only exported to this country 9,500 tons but in 1937 she exported 20 times as much, 189,400 tons. Mauritius she has doubled her export of sugar to this country, the West Indies have increased their export of sugar by nearly three times and British Guiana by five times. The immense importance of Imperial Preference to the Dominions must be quite obvious to the Committee. So far as the West Indies and Mauritius are concerned, it is practically their sole export and industry. We have a special responsibility for our Colonial Empire which no hon. Member of this Committee can deny. We have just passed an Act and are to spend a great deal of money in order to improve the standard of life and the whole of the conditions in the Colonial Empire. But sugar is the only crop which can be produced at present in some of these islands. No other crop has yet been found to take its place. These islands depend entirely on the production of sugar, and if they have only two years of certainty for a market for their sugar, what are they to do? They cannot plan ahead for the production of sugar. To eliminate Imperial Preference, I think the Chancellor will agree, would be absolute ruin for them.

What does the Chancellor propose to do at the end of two years? What is the alternative to Imperial Preference? There is no alternative. No arrangement can take the place of Imperial Preference. I cannot go into the question of the forthcoming conferenc with America, but they want to abolish Imperial Preference and we are told that some arrangement is to be come to which will be of advantage to everybody. That is all nonsense. There is nothing that can take the place of Imperial Preference. British Guiana, St. Kitts and Antigua depend on sugar entirely for their livelihood. In Trinidad and St. Lucia it is the main crop, and in Jamaica it is taking the place of the banana crop. The banana crop, as the Chancellor no doubt knows, has fallen from 26 million stems of bananas to some 6 million stems, and sugar production is taking its place. What is to happen in view of the uncertainty which will be in the minds of the whole of these sugar producers, if they only have a two years' extension of this Imperial Preference? There has already been a reference to the Philippines and Cuban sugar going into America free. Will America abandon that? Not a bit. There is not the slightest doubt that this question of the continuation of sugar production, in fact the increase of such production, is most important, particularly for the West Indian Islands and for Mauritius. We have a special obligation towards our Colonial Empire, and we should do everything possible to further the interests of that Colonial Empire. We did that by passing the Colonial Development and Welfare Act.

I repeat that the elimination or the reduction of Imperial Preference would not only mean a diminution in their purchasing power but would bring about their impoverishment and acute social distress which the Colonial Development and Welfare Act was introduced to prevent. I hope the Chancellor will give due consideration to this Amendment, and if he was really sincere in his advocacy of Imperial Preference this afternoon, I beg of him to alter this period of two years and accept the Amendment, which would increase it to four.

I am sorry that the right hon. Gentleman the Member for the City of London (Mr. Assheton) does not happen to be in his place at the moment.

It is only fair to convey to the Committee that my right hon. Friend apologised to the Chancellor for the fact that he had to go.

I realise that, and perhaps if I had been allowed to continue it would have been plain why I began with that observation. I was about to say that I was surprised he began by saying that he entirely approved of this Clause, and not only approved of it but desired to see it extended for another two years, because I remember very clearly that when we dealt with the Second Reading of this Bill, the party opposite, including, I take it, the right hon. Member for the City of London, apparently disliked the Bill in all its phases so much that they went into the Lobby against it. I do not know if he was rather overruled on that occasion by the right hon. Gentleman the Member for Bournemouth (Mr. Bracken), who perhaps took charge of the proceedings that night and led astray the more cautious of his colleagues. We must remember that the right hon. Gentleman spent a short time at the Board of Admiralty, where perhaps he became imbued with some of the spirit of Drake, who often went off into the blue and was never quite sure just where he would arrive.

As I think is now quite clear to the Committee from the speeches we have heard, this Amendment would extend to four years instead of two years the existing preference given to sugar imported from the Commonwealth countries. Listening to some of the speeches and the figures which were given—very interesting in their way without doubt—one almost began to wonder whether this Government and this Bill had not set out to abolish the preference altogether. Yet in fact, we are continuing the preference—

Have not the present Government agreed to the elimination of Imperial Preference, although there may be certain conditions about it?

6.0 p.m.

This Clause is to continue Imperial Preference, and I do not know why the hon. and gallant Gentleman should assume we want to abolish it. But to return to this Bill—we have included a Clause which will continue the increased preference on sugar for a further two years. There are good reasons why we are not continuing it for a longer period, and I will deal with these briefly in a moment.

The hon. Member for Hornsey (Mr. Gammans) talked of the ineptitude of this Clause and criticised the limiting of its operation to two years. He also saw something sinister in its content. No doubt he is a judge of what is or what is not sinister. Perhaps I should tell him that this subject has a history which goes back at least to 1919. During that period a Labour Government have certainly been in office on two occasions but only on two and both for very short periods. These duties were introduced, as has been said by more than one speaker, under the Finance Act of 1919, and in 1925 they were stabilised for a period of 10 years and that 10 years ran out in 1926.

I beg the hon. Gentleman's pardon. Thereafter, they were continued from year to year. If it is a sinister thing to provide for a period of only two years, it must be doubly sinister for a Tory Government to provide for a period of only one year. That is what actually took place. From about 1938 onwards—

Surely the difference is that whereas the Conservative Party have always been committed to the principle of Imperial Preference, the present Government have made it perfectly clear that they are prepared to surrender that principle.

I was simply answering the point made by the hon. Gentleman. It is a very minor point. The real core of the argument from hon. Gentlemen opposite is that we should give to the producers of sugar within the Commonwealth and Empire some idea of how long this preference is to continue. They want a sense of security over a period. That, I take it, is the point which hon. Members desire to bring out. It is a real point which I am anxious to meet. The Government realise it and are anxious to meet the position. I was simply pointing out in passing that there is nothing sinister in this. On the contrary, we have doubled, as indeed Governments did during the war, the period which has been laid down from time to time in Finance Acts. I do not think there is any need for me to deal with the Sugar Convention which, as the Committee know, owing to the coming of the war was never fully implemented. Perhaps it is sufficient to say that in 1940 these duties were continued for two years, in 1942 they were continued for another two years, in 1944 for another two years and now this Government desire to continue them for another two years. The question arises, as is suggested in the Amendment, whether we should not make it four years.

The answer to that is a simple one which was in fact given by the right hon. Gentleman the Member for the City of London earlier in this Debate. He mentioned that there is soon to be an Inter-Imperial Conference to deal with the question of preference. I think the Committee will agree with me that it would be inappropriate to tie our hands in advance with our own sister Dominions in this matter. I repeat that there is nothing sinister in this. We are simply carrying on what was done during the war in order that the producers should know, at any rate for a limited period, how they stand, and it will leave us, the Dominions and the Colonies, free to consider the matter as and when the time arises. I hope that that time is not long ahead.

Before the hon. Gentleman leaves that point, I wish to understand him and to be quite fair. He has mentioned the question of conferences with the Dominions and Colonies regarding sugar. I wonder if he would develop that line a little and tell the House how it is that a limitation today of two years will assist a conference of that sort, and how it is that the Dominions who have no responsibility whatever for the economic wellbeing of the West Indies, may come into it at all. I do not understand it.

I think on reflection the hon. Gentleman will understand. We are dealing with sugar here but obviously the Commonwealth Conference to which we have referred will not deal purely with sugar but will cover the whole field of trade both between Colonies and Dominions and between them and this country. If it is necessary when the time comes a Clause can be inserted in the Finance Bill of 1949 to extend the preference in accordance with the wishes of the House.

I conclude by saying that actually this Government, as is usual with this Government, has gone a good deal further and done a good deal more than provide a mere extension of two years by this Clause. The Government have already come to an agreement with the West Indies, whose plight loomed very largely in this Debate. The West Indian Committee have been informed that this Government is willing to give not only a preference on their output, or such of their output as may come to the Mother country but are willing to buy the whole Indies crop right up to the year 1949 at a fixed price. If that does not give the necessary assurance to go ahead and grow the sugar in the next three or four years, I do not know what assurances are necessary.

Yes. It includes not only the West Indies but the whole of the Dominions and Colonies who are interested in this matter. I hope the House in the circumstances will feel that the Government have done all they can. They have every wish to assist our Dominions and Colonies, who are interested as sugar growers, to see that their crops will be marketed at a proper price. The home country will help them in every possible way.

We naturally expect that the Financial Secretary to the Treasury should be loyal to the Chancellor's opinion. That is only right and proper, but I beg of him in future not to be too loyal to the Chancellor's joke. The Chancellor himself made the joke on Second Reading about voting against Imperial Preference. Although at that hour of the evening he provoked a polite guffaw or two from hon. Members behind him, it is not a jest which can stand repetition in the light of a summer's day. I am not blaming the Chancellor for the weather. The obscurity which he creates is in the mind and not in the eye. This, of course, is a very serious matter, and I think the hon. Gentleman realised, when he had done with his preliminary and prepared impromptus, that it was a matter in which hon. Members on all sides of the Committee were interested. All wish to see that the territories which depend upon this particular product shall have their future assured. I am not going to quote figures which have been given to us with great effect, but I was for three years at the Colonial Office and, frankly, I am going to speak more from the point of view of the Colonies than from that of the Dominions and India.

There are, as the Committee has been told, certain territories which are almost entirely dependent upon sugar for their livelihood. For a long time, people have been saying that a single-crop economy of that kind is a bad thing, and that we should, where possible, try to get a more diversified production. I entirely agree, but I must confess that, all the time I was at the Colonial Office—and I think my predecessors before me, and, I am sure, my successor today, would agree—I found that, with all our efforts and energies, although it might be possible, here and there, to increase their production, sugar still remained, in the vast majority of these cases, the main product on which they have to rely. When, therefore, we are talking about a preference on sugar for Mauritius, Fiji, or some West Indian island, it stands in an entirely different category from the question of Imperial Preference upon one of the many products which one of the Dominions or India may be prepared to export to the rest of the world.

Quite frankly, why we put down this Amendment, and why now, more than at any other time, we should like to see Imperial Preference secured on sugar for a longer period than has been customary in the past, is because of the negotiations which are soon to be undertaken, not in an inter-Imperial Conference, but the negotiations which are going to succeed the Imperial Conference—the negotiations at Washington. We understand that the position is that neither this Government nor the country stands in any way committed to abandon Imperial Preference or to reduce any particular preference on any particular goods. Though, on other matters dealing with commercial relationships, they have undertaken certain obligations in principle already, so far as Imperial Preference is concerned, there is no commitment, and everything depends upon getting what they consider to be some suitable recompense for the abandonment of Imperial Preference on our side.

In the particular case we have in mind, of course, we can only deal with sugar, although I am sure the right hon. Gentleman will agree with me that, regarding tobacco in Nyasaland and one or two other commodities of that kind, there is nothing which can be given to the Colonies which could recompense them for what they would lose if this Imperial Preference was withdrawn. There is no free admission by the rest of the world for some other things they may produce which could possibly make up for the economic damage which would be done to them if, through the loss of Imperial Preference, they lost their hold upon our market and returned to the condition in which they were just after the last war. It is because we want to mark this particular preference, as standing in a quite different category from any other Imperial Preferences dealing with Dominion or Indian products, that we want to see a date set sufficiently far ahead which makes it clear that the Government are not prepared to use this particular preference as a pawn in any commercial bargaining with the United States. If, in fact, it is not proposed to use this Imperial Preference on sugar as a bargaining counter, we cannot see why it is not possible to give this period of four years.

The right hon. Gentleman has told us that he now stands as the leader of a party of converts to Imperial Preference. We must congratulate ourselves on this side on the magnificent result of a long period of slow and painful education. That being so, the right hon. Gentleman should want this to continue, not only for two years, but for four, and he will agree that, from the point of view of the producer, there is a significance in four years that two years have not got. In four years, it is possible to plant and to get a maximum return from the crop, and a certainty of four years, therefore, does give the knowledge that one can plant this year and get some return before any change can be made. The period of two years gives no certainty at all. At the end of two years from the planting of sugar cane, one gets a negligible return.

6.15 p.m.

I now pass to the buying of the crop which the hon. Gentleman announced with an air as if it was something new which the Government were doing for the first time. Of course, we have been buying practically all the sugar crop of the Empire for the last six years, and I hope—

I am sorry to interrupt the right hon. Gentleman, but it may well be that it did appear that I announced it with a flourish, and I do not complain of that. What is new is that we are not now living under war conditions. Although we did buy the sugar crop in bulk during the war, there was no indication whatever that we should go on indefinitely doing it.

A purist might like to correct the statement of the hon. Gentleman from "We are not now living under war conditions" to "We are not now living at war." I think that would more accurately represent the conditions under which we are living. Of course, we did, during the war, buy up the crops, and we gave the producers guaranteed contracts for some time ahead. I think, as a matter of fact, the last contract made during the time of the late Government ran up to the end of 1947, and I am very delighted to hear that the contract has now, as I understand it, been extended to 1949.

I would like the right hon. Gentleman to give me an answer regarding a difficulty in which I, at any rate, find myself about these contracts for the purchase of sugar. How are they going to stand under the preliminary agreement which has already been signed by the Government for the Washington talks on commercial matters? It is true that the Government are not committed in principle even to the abolition of the preference. That awaits further bargaining, and could only be given in return for a quid pro quo. But, as I understand it, they are already pledged to abolish bulk purchasing at anything like a preferential rate. After an agreement, along the lines to which they have already subscribed, was signed, it would be impossible for them to continue a bulk purchase agreement for the purchase of Imperial sugar except at the lowest world price for sugar, and they could not, under that contract, give to the Colonies any preferential price. The effect of that would mean that they would have to pay to the Colonies the same price which is paid in the world for the small spill-over of the Cuban sugar which is not taken by the United States under the preferential agreement which they already have with Cuba. It is for that reason, with this Washington Conference looming ahead, that we believe that the certainty of the continuation of Imperial Preference, which gives a greater security to the producer, is even better than the continuation of a bulk purchase agreement, which, as I read it, once the Washington Agreement is arrived at, can no longer be preferential in its price. Because of that we see no reason why this extension of Imperial Preference, which the Chancellor has already agreed for two years, should not be extended for four years, and thereby give additional security to producers all over the world.

The speech to which we have just listened fully emphasises why this Amendment is really of far greater importance than would appear at first sight on the Order Paper. As the Committee has now discussed the matter for some time, I only propose to make one or two points which have not so far been made and to say why I regard, with great regret, the determination of the Government to limit the period of the extension of Imperial Preference to August, 1948, without any guarantee, whatsoever, as regards long term policy. Without a measure of stability and certainty beyond August, 1948, long term capital for the development of the sugar industry will not be attracted to the sugar-producing colonies. In that connection, I would remind the Committee of an argument with which, I think, both sides of the Committee will fully sympathise. By the very nature of long term capital, that capital in the colonial sphere is far kinder to labour than any other kind of capital. By its very nature it takes an interest in native welfare, housing and health, whereas short term capital, again by its very nature, is only interested in ephemeral market opportunities and in a single crop. Such capital as is attracted for development will be longsighted rather than shortsighted in proportion to the degree of the permanency of the markets which are secured to it.

Imperial Preference has achieved much in this connection. As many figures have already been quoted, I will not attempt to give any more, but available statistics are very revealing and underline the importance of Imperial Preference to many a dependency. My hon. and gallant Friend the Member for the Isle of Wight (Sir P. MacDonald) mentioned that two Dominions, Australia and South Africa, are not unaffected, and other hon. Members have drawn attention to the fact that Fiji is very considerably affected, and others, again, have drawn attention to the fact that, so far as the West Indian Islands, Mauritius and British Guiana are concerned, the continuation of Imperial Preference is a matter of existence itself. When we consider the great contribution which the people of the colonies have made to the war effort, and when we think of them as fellow citizens in the Empire, surely, they are entitled to look forward to the future with a sense of security, with hope and not misgiving and anxiety? Surely, it is not right to dangle an artificially created uncertainty, like a Sword of Damocles, over their heads. After all, they have some reasons, in spite of the Chancellor's belated expressions today of approval of the principle of Imperial Preference, for anxiety when we remember that a previous Labour Chancellor of the Exchequer, Philip Snowden, reduced the preference on sugar from 3s. 9d. to 1s. 8d. a cwt.

Hon. Members opposite are fond of making speeches about social security. But what sense of security can the peoples of the Colonial Empire have in their hearts and minds if they are wholly dependent on one crop, for which no alternative has yet been discovered, and are given no guarantee of stability whatsoever beyond August, 1948? The right hon. Member for the City of London (Mr. Assheton) and others have spoken of our moral obligations to the Colonies because we are trustees. Surely we should recognise our duty and our obligation to them as we have, indeed, done under the Colonial Development and Welfare Act. If it is possible today to remove the anxiety which is in their minds, it is our duty to do so, and that is what this Amendment seeks to do. We all know that it is the policy of His Majesty's Government to create uncertainty in many industries in the United Kingdom, but that can be no argument for extending similar uncertainty to the Colonial Empire as well. For some years we have listened to speeches and protestations by hon. Members opposite who say that they are as deeply and as closely interested in native welfare throughout the Colonial Empire as we are on this side of the Committee. Now is their opportunity to prove that they are sincere.

I wish to speak in this Debate from another angle, from that of the planter. I was a planter myself and have been through the slump and seen salaries and wages reduced and the terrible effect these things have had on conditions overseas. Then Imperial Preference was introduced and our hearts leapt up when we felt that we were going to have a stable market again. I will only give one example. I have seen the sugar factories in India, South Africa and the West Indies. I believe that the prosperity of South Africa is increasing so fast that, in the future, it will have very little sugar to export to this country. We do not know what part India will play in the future.

At Christmas, 1938, knowing there was a war coming, I went for a last trip abroad before we all had to stay at home. I went to Jamaica and the Governor said to me, "There is one thing here you should not miss—the opening of a new sugar factory." He sent me out to this factory about the first week in January and there I saw the engines start and the great rollers revolve for the first time. I saw the people at work ripping out the old sugar and planting new varieties of cane. This company, in which I am not financially interested at all, has spent over £1 million in the island. As hon. Members know, the population of Jamaica were originally slaves imported by us and, therefore, we are far more morally responsible for them than we are for any other part of the Empire. Before I went there, I well remember the captain of the ship saying to me, "I do not know what they are going to do in Jamaica; the population is increasing so fast that they will soon have to eat each other." This new sugar factory was started by a group of people in this country at that late date—1938—who thought fit to put £1 million into the island. It was a very great effort. They showed me the plans they had for improving the hospitals, the houses, water supply, and so forth, and, then, as we know, the war started in the next September. This company has been liable for Excess Profits Tax ever since then. It has not been able to put money away to improve hospitals and houses and to do the things it wished to do for its labour forces. We all know what is going on in Jamaica today. There is the trial of Mr. Bustamente and the ships are held up in Kingstown at the present moment because everybody is so excited over the trial. They take their politics very seriously indeed, and we know that, for the first time, they have just received adult suffrage.

We all expected that at this date, one year after the end of hostilities, we should have seen the end of austerity here, and we had hoped that we were going to be able to put two or three lumps of sugar, if we wanted to, into our cup. We did not expect to have this austerity-rationing trouble ahead of us for another two years. We all know that people make mistakes. I freely admit that at the present moment it is not possible to plan the world so very far ahead. Mistakes have been made by all sorts of people. But I would suggest that it would enable the people of Jamaica and of our Colonial Empire to plan ahead properly if this period were extended for another two years, and I speak as a planter—one of those who know where every point and furrow goes.

6.30 p.m.

May I recall to the Committee the speech made by the Financial Secretary? The question is: Two years or four years? The Government say two years, and the Amendment says four. What was the argument put forward by the Government spokesman? First of all, let me point out that a two-year period is a hangover from the two-year war period of renewal. As we were assured gratuitously that we were not now under war conditions, the two-year period cannot be defended on those grounds and must be defended on its merits. The Financial Secretary tried to do so. He said, "We have an Imperial conference coming on, and it would not be respectful to that conference if we were to tie up this industry and a group of Colonies and Dominions with a preference for four years. Two years, therefore, is quite long enough." That argument is rather thin, technical, and not very convincing, but not so bad as far as it goes. Unfortunately, the Financial Secretary could not leave it there and, in order to show the foresight of the present Government as compared with their unimaginative predecessors, he went on to say that although we are not under war conditions they had bought the total sugar crop for three years' ahead. If it is disrespectful to the Governments of Canada, New Zealand and the non-sugar producing Dominions to tie us up for more than two years in the matter of preference, what ought we to say of the action of the Government in tying us up for one additional year in bulk purchase?

The whole argument is fictitious. This is the second time this afternoon that I have heard an argument which was not the real reason. Why need we live in an atmosphere of fiction? Why not recognise that we are tied by the preliminary agreement made last December with the United States? Why not recognise that obviously the Government wished to keep Imperial Preference on a short lead so that they may throw it to the wolves at Washington? Why be mealy mouthed and pretend that we are keeping it on a short lead out of courtesy to our Dominions, and then contradict ourselves the next moment by saying that we have bought bulk purchases for a year later? I make no bones about saying that I do not trust the skill of this Government as negotiators at Washington.

I am not quite certain whether the hon. Gentleman agrees with me or not, but either way I welcome the remark. The truth is that, judging from what I have seen and taking people as I find them, the performances of the Government up to now in their negotiations with Washington have not been calculated to give me any great confidence in them. I wish it were otherwise. Therefore, just as I would keep firearms and knives out of the way of children so that they would not harm themselves, I ask the Government not to give away British Imperial interests.

I come to my final reason. The last time we had this fictitious argument, the matter could have been disposed of quite easily by the Chancellor answering one straightforward and simple question which I put to him. The fact that he did not answer the question which he was well able to answer with a plain "Yes" or "No," entitles me to place upon the situation the least favourable construction. When I find that economy of information in this House, which I have always been led to suppose was the master and not the servant of governments, for my part and as far as in me lies, I shall give the Government as little rope as I can in this matter.

I really must press the Solicitor-General for an answer which can be given in two words to the perfectly definite question put by me. The question is whether or not the bulk purchase arrangements which were started in about 1940, and which we now know have been extended to 1949, are consonant with the preliminary trade agreement which has been signed with the United States Government; or, if the agreement means that we are pledged to try to develop such a bulk purchase agreement which enables us to fix what we think is a fair price, even though it may be a higher price than we are prepared to give for sugar from other countries, whether such an agreement would not, ipso facto, become void?

It is very rarely that discourtesy pays in this House. The hon. and learned Gentleman has been asked a simple question on a matter of very great importance, namely, under what qualification this pledge has been given, so far as this Clause is concerned and also so far as this bulk purchase of sugar is concerned. It cannot in any circumstances be right that on a matter such as this, which affects not only other countries but our own people very closely, the Committee should be denied the information. I notice that the Patronage Secretary is present. He is what I regard as a House of Commons man, and I am sure that he fully realises that if one treats a Committee of this House in this way, one is doing something which will be resented outside the House as well as inside, and something which is very definitely wrong. In those circumstances, when the answer can be given perfectly easily and shortly, I say we have a right to demand that an answer should be given so that we can know where we are. I am sure that this is not a matter on which the Government have anything to hide, though they may have some things to hide. I believe it is one of those things which happens to inexperienced Members suddenly thrust into office, who think they can get away with it on this sort of occasion. I ask the hon. and learned Gentleman, to whom I have listened a great many times and who has over and over again tried to help in a very decent, orderly and civil way, as I believe he would do again, to be his own self on this occasion, and give us the information which I know he would like to give. If only he did so it would make the position much easier.

I had not intended intervening in this discussion and I do so only in order to come to the assistance and rescue of the learned Solicitor-General, for whom I have the greatest sympathy. My hon. Friend has pressed him, very properly, for a reply. Unless I am greatly mistaken the hon. and learned Gentleman is in this position, that he alone remains on the burning deck, from which the Chancellor and the Financial Secretary have fled, if only temporarily. It may be that the hon. and learned Gentleman is not in a position to give this reply. If so, I shall at least perform the useful function of providing the necessary time to send for the Chancellor or the Financial Secretary. Whatever else may be said, it is not very courteous to the Opposition that, when a matter of this importance is raised and pressed, neither the Minister in charge nor his understudy should be present. I do not intend to engage in any attack upon the hon. and learned Gentleman, because I have always found him particularly helpful. I do not know whether any of the "stooges" who sit on the benches opposite as Parliamentary Private Secretaries can be uprooted and sent for the Minister or the Financial Secretary. I see the Parliamentary Private Secretary to the Leader of the House, who at the moment is in charge of the Board of Trade and ought to be here listening to this Debate. With your permission, Mr. Beaumont, I would wish to move to report Progress for the purpose of securing the attendance either of the Chancellor of the Exchequer or the Financial Secretary to deal with this extremely important matter.

I feel this is a very important and a very serious step. Despite the smiles of hon. Members opposite, may I emphasise that it is a matter which concerns the livelihood of people engaged in the sugar industry in all parts of the world and may react for the good or ill of this country in years to come. A perfectly fair and reasonable question has been asked, and up to the moment there has been no attempt whatever to answer it. That is in the first place treating the Opposition with great discourtesy. Apart from that, however, this is a matter of great moment so far as these peoples throughout the world are concerned, and I feel we are entitled to ask the hon. and learned Gentleman, if he cannot answer, to stand up frankly and openly and say, "I am not in a position to answer this question." If he does not do that, I think he is treating the question with jocularity and contempt.

6.45 p.m.

Although I do not always agree with the hon. and learned Gentleman opposite on matters political, I can perhaps, from the judicial point of view, appreciate that the workings of the legal mind are very thorough and, consequently, may take time. Therefore, it is my desire to assist the hon. and learned Gentleman so far as lies in my power, and to enable him to have a full opportunity of consideration before he replies to the question which my right hon. Friend put to him, and which has been pressed. It is a matter of vital moment for this Parliament to consider. It is a question which affects many millions of people throughout the British Empire. It is a question on which it is our duty, as Members of the House of Commons, to satisfy ourselves, and we should have a full realisation of the meaning and import of the results of this action before we finally decide. Throughout the British Empire there is bound to be a certain amount of doubt in the minds of thinking people, in view of the attitude which the Government have already shown towards the Empire as a whole. We have seen the way in which they have treated Egypt and India. When it comes to the question of whether or not they are to continue upon that line of activity—

On a point of Order. Is it in Order for the hon. and gallant Gentleman to refer to Egypt?

My attention was diverted and I therefore did not hear what the hon. and gallant Member was saying. If he will proceed I will give close attention.

I can assure the hon. Member that I have not been all round the world yet. I submit, Mr. Beaumont, that had your attention not been diverted at that moment you would have seen that I was using an illustration, and coming back particularly to the point of the effect on the people throughout the British Empire. In order that you may have an opportunity of adjudicating upon the question, I would add that as a result of the activities of the Government in other Imperial matters, the peoples in our Colonies, where sugar is grown, are likely to be particularly apprehensive if, when matters of this character are discussed in the House of Commons of the Imperial Parliament, we are unable to receive any satisfactory answer on a subject which is of vital importance. In all seriousness, I ask that there should be a reply to the question asked by my right hon. Friend. My hon. Friend the Member for Hallam (Mr. Jennings) said we should have a straight answer "Yea" or "Nay" whether the hon. and learned Gentleman can reply. If the hon. and learned Gentleman is unable to give an answer, let him say so. The Financial Secretary has now resumed his seat, and I notice the smile of relief which comes across the hon. and learned Gentleman's face. While we on this side of the Committee are always glad to see the Financial Secretary on the Front Bench opposite, I fell sure his presence there has been received with even greater pleasure on this occasion by his colleagues on the same bench. Having given him an opportunity to consider the matter, and to obtain the legal advice which I feel sure he requires, I again ask that the question be answered.

I only rise for a moment to enable the Financial Secretary to have the advantage of some consultation with the learned Solicitor-General so that he may be fully apprised of the question put to him by my right hon. Friend. I should like to express to the Parliamentary Secretary to the Treasury—whom we are always so pleased to see, though we may fear that he is about to move the Closure—my appreciation of his having sent one of his understudies to bring the Financial Secretary here. I feel the consultation is now ended and perhaps it would be in accordance with the wishes of the Committee if I were to resume my seat.

I apologise to the Committee for the fact that I was not here when this point was raised. May I, however, be permitted to point out that I have been here since 2.30, and I took occasion to slip out for a cup of tea, something which is not unknown to most Members of this Committee? The short answer to the two questions as I understand them—I, unfortunately, was not here when they were put—whether these agreements for bulk purchase of sugar will interfere with the forthcoming Imperial Conference—

Perhaps I may repeat the question—whether the bulk purchase of sugar from the Colonies at a price which is fixed by us, is inconsistent with the object of the preliminary agreement which we have signed with the United States in regard to the Washington consultations?

Clearly, of course, the answer is that it cannot be inconsistent, otherwise we should not have done it. The bulk purchase by the Ministry of Food of the sugar crop of the Colonial and the Dominion sugar producing areas is a commonsense precaution in the light of the present world situation, and it continues, as the right hon. Gentleman said himself, a practice which, very properly grew up, during the war years. It is a commonsense business arrangement. It does not cut across any agreement. The Colonies could have sold, under other agreements, their crops to anyone, and the mere fact that they have sold their crop to the mother country at a fixed price does not alter those agreements or abrogate them. I hope that answers the right hon. Gentleman and satisfies the Committee.

I am afraid I have not made myself quite clear. I understand that in the preliminary agreement, to which we have set our name, we are agreeing with the United States that we should try at this Washington Conference to eliminate all preferential State buying. I have not a copy with me, but my recollection is that part of the preliminary agreement is that we shall go into the conference pledged to attempt to abolish any preferential bulk buying by one country from another. If that is so, is not this transaction—which is preferential bulk buying from the Dominions—exactly the sort of transaction which we shall enter the conference pledged to abolish?

But, surely, although we shall go into this conference with that on the agenda, it does not mean that any contract or arrangement entered into before the conference meets must be abrogated or changed or cancelled when that conference does meet. All I am say- ing now is that this country is free, within certain limits—I shall not go into them now—to carry through a transaction of this kind; and it is not in any way committed not to do so. It is perfectly true that the suggestion has been made that, in this international conference that will be held, one of the suggestions to be made is that bulk buying by one State from another should be looked into, and possibly some arrangement come to to stop it, or limit it, or deal with it in some way. But that time has not come yet. We do not know what the outcome will be. All I can say is that we have entered into this arrangement, which is a commonsense one, and which I am sure the country and the House will approve. So far, we are not abrogating any arrangement made with any country or any Dominion.

May I ask the hon. Gentleman to clear up one point? He has said that the fact that we are committed by the agreement entered into with the United States to abolish bulk purchases—[HON. MEMBERS: "No."]—or the fact that we have agreed that this is a desirable end to pursue—[HON. MEMBERS: "No."]

May I correct the hon. Gentleman? I am speaking from memory and I have not refreshed my memory of this for some while, but my recollection is the same as that of the right hon. Gentleman that this is simply a matter for discussion when this international conference meets. It has not gone much further than that. There is a general suggestion that bulk buying of this kind may be undesirable; but no country, so far as I can recollect, and I think I am right, has committed itself to one view or another, except that, perhaps, the United States may have indicated, on its part, that bulk buying may be undesirable.

My own recollection of that agreement is that there was a suggestion that bulk buying is preferential, or undesirable under the terms of the world trade organisation, and that discussions were to take place with a view to delimiting it where possible. But the Financial Secretary has told us that such a suggestion does not prevent us from entering into certain agreements to buy this sugar crop from the Colonies preferentially. If that is the case, and if we are not precluded from doing this, why do not the Government accept this Amendment? What substantial difference is there between accepting this Amendment and this agreement to purchase the crop in bulk? We believe that the

Colonies will have more security if this Amendment is accepted.

Question put, "That the word "forty-eight" stand part of the Clause."

The Committee divided: Ayes, 268; Noes, 127.

Division No. 194.]

AYES.

[7.0 p.m.

Adams, W. T. (Hammersmith, South)

Edwards, N. (Caerphilly)

McKay, J. (Wallsend)

Allen, A. C. (Bosworth)

Edwards, W. J. (Whitechapel)

Mackay, R. W. G. (Hull, N.W.)

Alpass, J. H.

Evans, E. (Lowestoft)

McKinlay, A. S.

Anderson, A. (Motherwell)

Evans, John (Ogmore)

Maclean, N. (Govan)

Anderson, F. (Whitehaven)

Fairhurst, F.

McLeavy, F.

Attewell, H. C.

Farthing, W. J.

Mainwaring, W. H.

Austin, H. L.

Fletcher, E. G. M. (Islington, E.)

Mallalieu, J. P. W.

Awbery, S. S.

Follick, M.

Mann, Mrs. J.

Ayles, W. H.

Foot, M. M.

Manning, Mrs. L. (Epping)

Ayrton Gould, Mrs. B.

Forman, J. C.

Marshall, F. (Brightside)

Bacon, Miss A.

Foster, W. (Wigan)

Mathers, G.

Balfour, A.

Gaitskell, H. T. N.

Mayhew, C. P.

Barnes, Rt. Hon. A. J.

Gallacher, W.

Messer, F.

Barstow, P. G.

Ganley, Mrs. C. S.

Middleton, Mrs. L.

Barton, C.

George, Lady M. Lloyd (Anglesey)

Mitchison, Maj. G. R.

Battley, J. R.

Gibbins, J.

Monslow, W.

Beattie, J. (Belfast, W.)

Gibson, C. W.

Montague, F.

Bechervaise, A. E.

Gilzean, A.

Morgan, Dr. H. B.

Benson, G.

Glanville, J. E. (Consett)

Morris, P. (Swansea, W.)

Bevan, Rt. Hon. A. (Ebbw Vale)

Goodrich, H. E.

Morris, Hopkin (Carmarthen)

Bing, G. H. C.

Gordon-Walker, P. C.

Mort, D. L.

Binns, J.

Grenfell, D. R.

Moyle, A.

Blenkinsop, Capt. A.

Grey, C. F.

Murray, J. D.

Blyton, W. R.

Grierson, E.

Nally, W.

Boardman, H.

Griffiths, D. (Rother Valley)

Naylor, T. E.

Bowden, Flg.-Offr. H. W.

Griffiths, Capt. W. D. (Moss Side)

Neal, H. (Claycross)

Bowles, F. G. (Nuneaton)

Gruffydd, Prof. W. J.

Nichol, Mrs. M. E. (Bradford, N.)

Braddock, Mrs. E. M. (L'pl, Exch'ge)

Guest, Dr. L. Haden

Noel-Baker, Capt. F. E. (Brentford)

Braddock, T. (Mitcham)

Gunter, Capt. R. J.

Noel-Buxton, Lady

Brooks, T. J. (Rothwell)

Guy, W. H.

O'Brien, T.

Brown, T. J. (Ince)

Hale, Leslie

Oldfield, W. H.

Bruce, Maj. D. W. T.

Hall, W. G. (Colne Valley)

Oliver, G. H.

Buchanan, G.

Hamilton, Lieut.-Col. R.

Paget, R. T.

Butler, H. W. (Hackney, S.)

Hardy, E. A.

Paling, Will T. (Dewsbury)

Byers, Lt.-Col. F.

Harris, H. Wilson

Palmer, A. M. F.

Callaghan, James

Harrison, J.

Parker, J.

Castle, Mrs. B. A.

Hastings, Dr. Somerville

Paton, Mrs. F. (Rushcliffe)

Champion, A. J.

Herbison, Miss M.

Paton, J. (Norwich)

Chater, D.

Hicks, G.

Pearson, A.

Chetwynd, Capt. G. R.

Hobson, C. R.

Peart, Capt. T. F.

Cluse, W. S.

Holman, P.

Perrins, W.

Cobb, F. A.

Holmes, H. E. (Hemsworth)

Poole, Major Cecil (Lichfield)

Cocks, F. S.

House, G.

Popplewell, E.

Collick, P.

Hoy, J.

Porter, E. (Warrington)

Collindridge, F.

Hughes, Emrys (S. Ayr)

Porter, G. (Leeds)

Collins, V. J.

Hughes, Hector (Aberdeen, N.)

Price, M. Philips

Colman, Miss G. M.

Hughes, Lt. H. D. (W'lverh'pton, W.)

Pritt, D. N.

Cooper, Wing-Comdr. G.

Hutchinson, H. L. (Rusholme)

Proctor, W. T.

Corbet, Mrs. F. K. (Camb'well, N.W.)

Irving, W. J.

Pryde, D. J.

Corvedale, Viscount

Janner, B.

Pursey, Cmdr. H.

Cove, W. G.

Jeger, G. (Winchester)

Randall, H. E.

Crossman, R. H. S.

Jeger, Dr. S. W. (St. Pancras, S.E.)

Ranger, J.

Daggar, G.

Jones, P. Asterley (Hitchin)

Rankin, J.

Daines, P.

Keenan, W.

Rees-Williams, D. R.

Dalton, Rt. Hon. H.

Key, C. W.

Reeves, J.

Davies, Edward (Burslem)

Kinley, J.

Reid, T. (Swindon)

Davies, Ernest (Enfield)

Kirby, B. V.

Rhodes, H.

Davies, Harold (Leek)

Kirkwood, D.

Richards, R.

Davies, Haydn (St. Pancras, S.W.)

Lang, G.

Roberts, Emrys (Merioneth)

Davies, R. J. (Westhoughton)

Lavers, S.

Roberts, Goronwy (Caernarvonshire)

Davies, S. O. (Merthyr)

Lawson, Rt. Hon. J. J.

Roberts, W. (Cumberland, N.)

Deer, G.

Lee, Miss J. (Cannock)

Rogers, G. H. R.

Delargy, Captain H. J.

Leonard, W.

Royle, C.

Diamond, J.

Leslie, J. R.

Sargood, R.

Dobbie, W.

Levy, B. W.

Scott-Elliot, W.

Dodds, N. N.

Lewis, A. W. J. (Upton)

Segal, Dr. S.

Driberg, T. E. N.

Lindgren, G. S.

Shackleton, Wing-Cdr. E. A. A.

Dugdale, J. (W. Bromwich)

Lyne, A. W.

Sharp, Lt.-Col. G. M.

Durbin, E. F. M.

McAdam, W.

Shurmer, P.

Ede, Rt. Hon. J. C.

McEntee, V. La T.

Silverman, J. (Erdington)

Edwards, A. (Middlesbrough, E.)

McGhee, H. G.

Silverman, S. S. (Nelson)

Edwards, Rt. Hon. Sir C. (Bedwellty)

McGovern, J.

Simmons, C. J.

Skeffington, A. M.

Taylor, Dr. S. (Barnet)

Whiteley, Rt. Hon. W.

Skeffington-Lodge, T. C.

Thomas, George (Cardiff)

Wilcock, Group-Capt. C. A. B.

Skinnard, F. W.

Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

Wilkes, Maj. L.

Smith, Capt. C. (Colchester)

Thorneycroft, H. (Clayton)

Wilkins, W. A.

Smith, Ellis (Stoke)

Tiffany, S.

Willey, O. G. (Cleveland)

Smith, H. N. (Nottingham, S.)

Timmons, J.

Williamson, T.

Smith, S. H. (Hull, S.W.)

Titterington, M. F.

Willis, E.

Snow, Capt. J. W.

Tolley, L.

Wills, Mrs. E. A.

Sorensen, R. W.

Turner-Samuels, M.

Wilson, J. H.

Soskice, Maj. Sir F.

Vernon, Maj. W. F.

Wise, Major F. J.

Stamford, W.

Viant, S. P.

Yates, V. F.

Steele, T.

Walker, G. H.

Young, Sir R. (Newton)

Stewart, Capt. Michael (Fulham, E.)

Wallace, G. D. (Chislehurst)

Younger, Hon. Kenneth

Stross, Dr. B.

Wallace, H. W. (Walthamstow, E.)

Zilliacus, K.

Stubbs, A. E.

Watson, W. M.

Swingler, S.

Webb, M. (Bradford, C.)

TELLERS FOR THE AYES:

Symonds, Maj. A. L.

Weitzman, D.

Mr. Joseph Henderson and Mr. Hannan

Taylor, H. B. (Mansfield)

Wells, W. T. (Walsall)

Taylor, R. J. (Morpeth)

White, H. (Derbyshire, N.E.)

NOES.

Agnew, Cmdr. P. G.

Hannon, Sir P. (Moseley)

Nield, B. (Chester)

Aitken, Hon. Max

Hare, Lieut.-Col. Hn. J. H. (W'db'ge)

O'Neill, Rt. Hon. Sir H.

Allen, Lt.-Col. Sir W. (Armagh)

Harvey, Air-Comdre, A. V.

Orr-Ewing, I. L.

Anderson, Rt. Hn. Sir J. (Scot. Univ.)

Haughton, S. G.

Peake, Rt. Hon. O.

Assheton, Rt. Hon. R.

Headlam, Lieut.-Col. Rt. Hon. Sir C.

Peto, Brig. C. H. M.

Baldwin, A. E.

Herbert, Sir A. P.

Pickthorn, K.

Barlow, Sir J.

Hinchingbrooke, Viscount

Ponsonby, Col. C. E.

Beechman, N. A.

Hogg, Hon. Q.

Price-White, Lt.-Col. D.

Birch, Nigel

Hollis, M. C.

Raikes, H. V.

Boles, Lt.-Col. D. C. (Wells)

Holmes, Sir J. Stanley (Harwich)

Reed, Sir S. (Aylesbury)

Boothby, R.

Hudson, Rt. Hon. R. S. (Southport)

Roberts, H. (Handsworth)

Bower, N.

Hurd, A.

Roberts, Maj. P. G. (Ecclesall)

Boyd-Carpenter, J. A.

Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

Ross, Sir R.

Bracken, Rt. Hon. Brendan

Hutchison, Col. J. R. (Glasgow, C.)

Scott, Lord W.

Braithwaite, Lt.-Comdr. J. G.

Jeffreys, General Sir G.

Shepherd, W. S. (Bucklow)

Buchan-Hepburn, P. G. T.

Jennings, R.

Smiles, Lt.-Col. Sir W.

Butcher, H. W.

Joynson-Hicks, Lt.-Cdr. Hon. L. W.

Spearman, A. C. M.

Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)

Keeling, E. H.

Spence, H. R.

Challen, C.

Kingsmill, Lt.-Col. W. H.

Stanley, Rt. Hon. O.

Clarke, Col. R. S.

Law, Rt. Hon. R. K.

Stewart, J. Henderson (Fife, E.)

Clifton-Brown, Lt.-Col. G.

Legge-Bourke, Maj. E. A. H.

Stoddart-Scott, Col. M.

Cole, T. L.

Lennox-Boyd, A. T.

Strauss, H. G. (English Universities)

Conant, Maj. R. J. E.

Lindsay, M. (Solihull)

Stuart, Rt. Hon. J. (Moray)

Cooper-Key, E. M.

Lipson, D. L.

Sutcliffe, H.

Crookshank, Capt. Rt. Hon. H. F. C.

Lloyd, Selwyn (Wirral)

Taylor, C. S. (Eastbourne)

Crowder, Capt. J. F. E.

Low, Brig. A. R. W.

Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

De la Bère, R.

Lucas-Tooth, Sir H.

Thorneycroft, G. E. P. (Monmouth)

Digby, Maj. S. W.

Lyttelton, Rt. Hon. O.

Thornton-Kemsley, C. N.

Dodds-Parker, A. D.

MacAndrew, Col. Sir C.

Thorp, Lt.-Col. R. A. F.

Donner, Sqn.-Ldr. P. W.

Macdonald, Capt. Sir P. (I. of Wight)

Touche, G. C.

Drayson, Capt. G. B.

Mackeson, Lt.-Col. H. R.

Turton, R. H.

Dugdale, Maj. Sir T. (Richmond)

MacLeod, Capt. J.

Vane, W. M. T.

Duthie, W. S.

Macmillan, Rt. Hon. Harold (Bromley)

Wakefield, Sir W. W.

Eccles, D. M.

Macpherson, Maj. N. (Dumfries)

Walker-Smith, D.

Erroll, F. J.

Maitland, Comdr. J. W.

Ward, Hon. G. R.

Foster, J. G. (Northwich)

Manningham-Buller, R. E.

White, J. B. (Canterbury)

Galbraith, Cmdr. T. D.

Marlowe, A. A. H.

Williams, C. (Torquay)

Gammans, L. D.

Marples, A. E.

Willoughby de Eresby, Lord

Glossop, C. W. H.

Marshall, D. (Bodmin)

Winterton, Rt. Hon. Earl.

Glyn, Sir R.

Mellor, Sir J.

York, C.

Gomme-Duncan, Col. A. G.

Morrison, Maj. J. G. (Salisbury)

Young, Sir A. S. L. (Partick)

Gridley, Sir A.

Morrison, Rt. Hon. W. S. (Cirencester)

Grimston, R. V.

Nicholson, G.

TELLERS FOR THE NOES:

Mr. Drewe and Mr. Studholme

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

7.0 p.m.

I have had an opportunity to look up the wording used in "The Proposals for Consideration by an International Conference on Trade and Employment, Cmd. Paper 6709," to which hon. Members were recently referring. The actual words under Section E, which is headed State Trading, are: Before we proceed to consider whether this Clause should or should not stand part of the Bill, it is important again to ask the Government whether in the light of these words they still adhere to their view that this bulk purchasing will not be an infringement of this Agreement. I understand they say that this bulk purchasing is as good as or better than Imperial Preference. That may well be, but I ask them to say whether, in the light of these words which I have read, my right hon. Friend the Member for West Bristol (Mr. Stanley) was not right when he said, however desirable it might be, it was not possible for this Government to bring in bulk purchasing and to go to the Conference which is to be held without having broken the spirit and the letter of this Agreement.

That is a very serious matter and it is one which the Government should face squarely. If the Financial Secretary to the Treasury thinks we are not bound by anything in this White Paper, that is another point of view, and he should get up and say so. I assume that the Government are bound by what they say here. There is a footnote at the end of the White Paper, which says—rather like little boys at school crossing their fingers:

The hon. Member may say that, but

"the Government of the United Kingdom is in full agreement on all important points in these proposals and accepts them."

If an agreement is accepted as a basis, one cannot then say "I am not in agreement, but I will discuss it." I, therefore, proceed on the assumption that the Government meant what they said when they supplied these words, and, on the face of it, the proposed bulk purchase in the Dominions and Colonies is a breach of this Clause.

The fact that we have had an intervention from the hon. Member for South Norfolk (Mr. Mayhew) is of some importance, because he is Parliamentary Private Secretary to the Leader of the House, and clearly, therefore, would not speak without some authority. I am amazed at the interpretation which he has put upon a document which we heard a great deal about last December. I should be very glad if the Chancellor of the Exchequer could make the position clear. My apprehension about the present position is not the fact that we have now entered into this bulk purchase agreement, but that we have signed an agreement with the United States that we will enter with them into negotiations for the express purpose of pursuing exactly the kind of bulk purchase agreement which we are now signing with the Colonies. Therefore, if the conference at Washington is going to succeed, and presumably it is expected to succeed, this type of agreement will become contrary to the commercial agreement, and we cannot look forward to preferential bulk buying of sugar from the Colonies as an alternative to the system of Imperial Preference.

7.15 p.m.

May I add one or two sentences to make the point clear? Strictly speaking, bulk purchase is not, at this stage, under discussion, but perhaps I may be allowed to say that this Clause, the Amendment having been rejected, determines whether Imperial Preference shall go on for two years. If the Opposition go to a Division on the Clause they will be voting against, and not for, Imperial preference. If the Opposition vote against this Clause, there is no possible dodging of the issue on their part which will prevent it being proved that they are voting against, and we are voting in favour of, Imperial preference on sugar. That is beyond dispute. With regard to the discussions that took place before November, I think that I shall just keep myself in Order by saying that we were discussing just now whether an arrangement which we have entered into to purchase for four years—1946, 1947, 1948, and 1949—the whole of the exportable sugar surplus of every part of the British Empire—the whole of it, 100 per cent. of it—is contrary now, or may later on become contrary, to some arrangement which we may enter into. I say that it is not contrary now. The principle is accepted that we buy the whole thing, and the price is now being amicably discussed. As to what will happen in the future is entirely a hypothetical question. The negotiations, which have not yet started, will go forward on a course which none of us can precisely predict, but the principle upon which we have entered into them will be that we shall make such arrangements as will be of general benefit to the whole British Commonwealth—and not to this island alone. What may emerge from them remains to be seen. The issue now is, Imperial Preference or not—that and nothing else—and the Government have gone beyond what was done under the Coalition Government. I am not making any Party point, but we have now gone forward with a four years' policy of purchasing the whole of the exportable surplus of sugar produced throughout the British Dominions, wherever the Union Jack flies, and I hope that hon. Gentlemen opposite will feel that we have done a good thing.

We are grateful to the Chancellor of the Exchequer for the clear explanation he has given. By this Clause we continue Imperial Preference until August, 1948, but, in addition, the sugar-producing Colonies will have the advantage of the bulk purchasing of 100 per cent. of the crop. In August, 1948, the preference, unless it is extended, will disappear, and, thereafter, the only support of the Colonies, unless some other method is produced, will be by the arrangement to which the Chancellor of the Exchequer has referred. I think we must accept the Clause as it is, and it is not one that I would vote against.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

CLAUSE 5.—(Relief from duty on imported legacies, etc.)

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

The point which I wish to raise on this Clause is rather interesting. It deals with the remission of the Purchase Tax on imported legacies. I do not see any mention of Purchase Tax in this Clause, but it may be within the remembrance of the Members of the Committee that the Chancellor mentioned it in his Budget speech of 9th April, when he said:

"It has been represented to me that the charge of Import Duty and Purchase Tax on legacies of personal effects—I am not now talk- ing of securities but of personal effects received from abroad—occasions hardship. I propose, therefore, to relieve such objects from these charges."—[OFFICIAL REPORT, 9th April, 1946; Vol. 421, c. 1827.]

The quandary in which I find myself is that this Clause deals with the relief from Customs Duty of imported legacies, but does not make any mention of Purchase Tax. As a matter of fact, of the two duties, Purchase Tax is much the heavier. A constituent of mine was left a legacy by a friend who died in Denmark some time ago and it arrived in this country after the end of the war. The legacy was a small one—a silver teapot and six silver spoons of about 20 years of age. She found that in addition to the Customs Duty of 30s., she had to pay no less than £4 17s. 6d. in Purchase Tax. I took the matter up with the Financial Secretary to the Treasury and it may possibly be that the representations I made to him bore fruit in the shape of the notice taken of the matter by the Chancellor in his Budget speech. The importance of the point I am making now is that whilst one is glad to see the Customs duty remitted it is the Purchase Tax which is the bigger item of the two, and I hope that it also is covered by this Clause. Should it not be so. I have put down an Amendment to the Third Schedule in order to include any article that might otherwise be subject to Purchase Tax, along the lines indicated by the Chancellor in his Budget speech.

There is only one question which I should like to raise and that is the question of the loss of revenue which is likely to result. The Solicitor-General will remember that I raised this point when we were dealing with Clause 3. He pointed out quite clearly, I think, that there was no loss at all, because the tax was either taken at the centre of manufacture, or at the port where it leaves the country for export. But when I refer to Table X I see that imported legacies are also marked as negative. Is there any counterfeit in this as there was in the other case? The loss may be small, but after all, many people derive legacies from overseas, and without in any way wishing to delay the Committee, which is making admirable progress, I think that we ought to have some estimate in terms of pounds, shillings and pence of what would be the likely loss in this matter. For example, it might be possible for the Minister, who replies on behalf of the Government, to indicate what was the amount in terms of legacy duty on such imported articles over a selected year.

If I may deal with the points raised in their order, the answer to the first question whether the Clause repealed Purchase Tax as well as import duty is "yes." That is in consequence of the provisions of Section 11 of the Finance Act of 1944 as amended by Section 14 of the Finance (No. 2) Act, 1945. The general effect of those two provisions is that unless there is an indication to imply the contrary, where you have a provision affecting import duty, it also has an effect with regard to Purchase Tax. So the answer to the first question is "yes." The question raised by the hon. Member for Holland with Boston (Mr. Butcher) is, I am afraid, rather more difficult. When introducing this Clause into the Bill naturally the Government wanted to be in a position to give some sort of an estimate of what it would cost the revenue. Attempts have been made to form an estimate, but the result of those attempts has been that nothing in the least reliable can be fixed as to what it will cost the Treasury. Therefore, the word "negligible" has been used. "Negligible" I think is a term which was constantly applied for years back by successive Governments, and indicates something small, which would not weigh very much in the balance. It is impossible to form any reliable estimate of how much it would be but those who are experts in these matters are quite confident that the word "negligible" is the correct one to apply. I am afraid that is the only answer which I can give the hon. Gentleman, and I hope that he will be satisfied with it.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

CLAUSE 6.—(Reduction of entertainments duty on certain games and sports, etc.)

I beg to move, in page 4, line 3, to leave out "vessels."

I am certain that the Chancellor will, if possible, like to help anything that would develop or tend to develop our seamanship and be sympathetic towards anything connected with it and, at the same time, give encouragement to those qualities which are inherent in our nation. If for a moment we turn to the words of the Clause we find in Subsection (2):

There is another point. Take the case of the launching of a great ship on the Clyde or on the Tyne. People are watching that launch, and some may, in fact, have paid for certain rights to a field, so that they can the better see the ship. The moment she goes down the river she is on trial. The vessel is not at that moment on a speed trial, otherwise certain other adventures would happen but all the same the vessel is on trial. The Chancellor would not mean that those people who are watching that vessel should pay tax. The other point which I should like to raise is simply that if this Amendment should be accepted by the Chancellor, then I can see a consequential Amendment will have to be made in paragraph 2, but no doubt we can proceed to that on the Report stage. I hope that these few words will make the Chancellor consider this matter in the light of seamanship, in the light of helping those particular qualities so important to our nation, as I am certain every Minister and hon. Member in this House would like to see these qualities helped and so agree to omit the word "vessels" in this Clause.

7.30 p.m.

I hope the Chancellor will cast a benevolent eye upon this Amendment. Its object is to make quite sure that the concessions with respect to Entertainments Duty which are contained in the Clause are definitely construed to include sailing boats at regattas. As I understand some of the complicated legislation by reference that is involved, the concession already covers boats where they are propelled, laboriously or otherwise, by the persons in them, but does not cover sailing boats. Upon the bosom of the silvery Thames on which, I understand, in his unregenerate youth, the right hon. Gentleman disported himself very frequently, one sees small boats, some perilously driven by sails at very acute angles, watched, not without amusement, hope and fear, by considerable numbers of people on the banks. As I understand the Clause—and if I am wrong I hope the right hon. Gentleman will correct me—the concession contained in it would not cover payment for seats by people watching regattas where the boats are propelled by sail. If that be so, I am certain that the Chancellor will agree that this Amendment is within the spirit of the Clause as he has drafted it. It would seem curious if this highly skilful sport were excluded from the concession whereas, on the other hand, menageries and travelling shows are included, although perhaps one can understand the sympathy of the Government Front Bench with wild animals in captivity. I hope the Chancellor will appreciate that it is the desire of this Amendment to include a wholesome and valuable sport within the ambit of his benevolence.

I am sympathetic to the idea behind the Amendment, and while it would be out of Order to discuss now a later Clause, I hope to be able later to accept a proposal which will be beneficial to those who own sailing vessels. I am, however, a little puzzled as to how this would work out. I have been going into it carefully with my advisers. We were not clear whether the hon. Member would anticipate that this exemption would be added to others. I am advised that, in practice, there are few occasions when Entertainments Duty is collected, or is legally due to be collected, at such sailing events as he contemplates, and I am, therefore, doubtful whether there is much in this. But I make this offer to him: if he will not press the Amendment now, I shall be prepared to talk it over with him and others who are interested, between now and the Report stage, to see whether, having regard to the Amendment we shall make later, he would still feel it worth while to urge this point.

I would like to thank the Chancellor sincerely for the position he has taken up. I, too, have been a little puzzled. There may be occasions where people have something in the nature of a stand for viewing events which in our view, and in the view of the Chancellor of the Exchequer, should be exempt. There may be a very large stand at one of the big yachting centres, for instance, at Torbay, for international events, to which something of this sort might possibly apply. I hope that the Chancellor will say that nothing will be done to discourage this sport.

In view of what the Chancellor has said, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

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

I have great sympathy with the Amendment, which has been so graciously disposed of by the Chancellor, but I did not think it worth while talking about it because it related to only one of the many anomalies and curiosities of this Clause. I am not opposing the Clause, because it is a genial gesture from the Chancellor, and it would be unpleasant and impolitic to be ungrateful to such a gesture from that necessarily frosty quarter. Nevertheless, I do not think it ought to stand part of the Bill, because, when the public learn what we are doing, we shall be the laughing stock of the country. In the original Act, the Finance Act of 1916, by which Entertainments Duty was first imposed as a temporary measure for the last war but one—and an undertaking was given by the Chancellor of that time that it would come to an end after the war—the only exemptions had relation to educational or, to use a word I do not like, "cultural," things. Those exemptions were mainly intended to protect such institutions as the Zoo, the learned and cultural associations, lecture societies, museums, and so on. In 1935, Parliament introduced exemption for the living theatre which was then, as it is now, and always will be, gravely menaced by films, especially American. All the exemptions were for mental entertainment, with the circus as perhaps a borderline case. By this Clause we are entirely abandoning that. I do not complain, because I hate this tax in whatever form it is, but let us realise that we are going right away from the original idea that the only entertainment which should be exempt from tax should be of an educational nature.

But let us see what a logical fog we are getting ourselves into. In the Act of 1935, to distinguish the living theatre from the film, Section 1 spoke of "a case where all the performers whose words and actions constitute the entertainment are actually present and performing." Those words, if any, seem to be the idea behind this Clause; for while oared boatraces are reduced to the lower rate, sailing races are not.

But sailing boats do not propel themselves. Further, I am not a great motor cycling racing fan—but it is a perfectly innocent but rather dangerous sport—and why should an ordinary bicycle race pay tax only at the rate of 42 per cent. on a 5s. ticket, while a motor cycle race should have to pay at the rate of 91 per cent. on a ticket of the same price?

I see that menageries are now to be liable at the reduced rate of 42 per cent. on a 5s. ticket. The definition of a menagerie, according to the dictionary, is "a collection of wild animals in cages or enclosures, especially kept for exhibition, as in zoological gardens." That is to say, at the reduced rate of tax, 42 per cent. on a 5s. ticket, but if you go to the Zoo, which I always thought was a menagerie, it is exempt and there is no tax at all. There seems to be no sense whatever in these distinctions. A profit-making commercial boxing contest is now to be classed with the intellectual theatre as a cultural entertainment and will pay the same rate as the theatre. I do not mind, but really we must realise what we are doing. Take the horse, the noble animal. The horse, if seen in the circus doing ignoble antics which I hate seeing it do, is taxed at 42 per cent. on a 5s. ticket; but if he is doing what he was designed by God to do, running very fast over the grass ridden by a fine rider, the tax is 91 per cent. What is the sense in that distinction? Boxing, you may say, is a noble sport; I agree, but what about billiards, the moral effect of which upon the young has been a byword for decades? Billiards the only game which is by law prohibited on licensed premises on Sundays, becomes an intellectual past-time to be taxed at the lower rate. I could go on for a long time like this. Take the hare. I can well understand why greyhound racing should not get any benefit from this Clause, because it would be difficult to pretend that the hare on the greyhound course is actually "present and performing," but what about coursing, what about the Lancashire whippet races and so on? They will have to pay the top rate.

All these things add up to the conclusion that there are so many anomalies that it is no good tinkering with this old kettle and it would be better to throw it away. I am not against cricket and football being relieved. I am not taking the intellectual line at all. Although I am not in the confidence of the cricket clubs, I should think their finances are in a pretty poor way at the present moment, especially in view of the weather—which, of course, the Government are responsible for, like everything else. But supposing the sun shines and matches continue, and people start coming back, what are they going to do? They have been losing; they have had to build up their blitzed stands and so on, they have had great expenses, and now they are to be charged a tax of 1s. 4d. on a 3s. 2d. ticket—42 per cent. While the clubs are trying to make up the loss they have sustained because of the weather, the Chancellor will still take these heavy sums. All these entertainments are not like businesses which sell hot water bottles, or thermos flasks, or something else for which there is a regular demand. They are enterprises subject to all sorts of hazards like the weather, Royal processions, and Heaven knows what besides. It is therefore wrong to lay such a heavy tax on turnover upon them with no regard to whether the business is making a profit or a loss.

Finally, the reason why I think this Clause ought to be rejected is that it is against the whole purpose for which we are here. What are we here for? In the old phrase, "life, liberty and the pursuit of happiness." We talk about work for all, but we do not mean work for all; much as we admire and glorify work, we mean such work for all as will enable them to have happy leisure—happy evenings and happy Sundays, and every kind of mental and physical refreshment. We mean all those things which go to make a rich life and draw people out of themselves, whether it is fine writing or fine singing, or fine riding on a fine horse. But whether the producers of these refreshments are making a profit or a loss, we put upon them this swingeing tax of 42 per cent. We are making this tax like a leaky old boat; the more you patch it the more it leaks and the uglier it looks, and from that point of view I am pleased with this new tinkering, because one day I think some wise Chancellor of the Exchequer will say, "Let us throw the whole thing away and get the same money by another tax"—a tax to which I had better not refer today.

7.45 p.m.

On the Second Reading of this Bill the Financial Secretary said that the Chancellor expected this reduction in the Entertainments Duty to be passed on to the spectators; otherwise he might modify this proposal. As the Government have put down no Amendment, I presume that at any rate the Football League and the Football Association have toed the line. The Government demand that the reduction be passed on may be justifiable in the case of a profit-making, dividend-paying club; on that I express no opinion. But my constituency is the home of "rugger"—

—and in Rugby Football Union clubs any profit made is always put back into the game. Surely the Chancellor's demand is not applicable to those clubs? Surely the non-profit-making club can be trusted to reduce the charge to the spectator if it can? It does not want to charge the spectators more than it need, but it will not always be possible for the reduced tax to be passed on. Expenses have increased enormously since before the war, for labour, upkeep, rates and taxes, and it is not reasonable to expect a club to reduce the price of admission if its finances do not allow it, especially as in most cases there has been no increase in the charge for admission since before the war.

Exactly the same consideration applies to cricket matches. The Financial Secretary said on the Second Reading that he understood that cricket clubs would pass on at least part of the concession to the general public. That is not universally so. I understand that the M.C.C. has left the matter to each county, and presumably to each other club, to decide for itself. Some counties have found it impossible to pass the remitted tax on. I have some figures here regarding the Somerset County Cricket Club. Expenses for ground and office staff, professionals, umpires, balls, printing, tents, etc., have increased by over £2,000 since 1939, and of course there are also increased costs for such things as railway fares. Even in 1939, when expenses were much lower, the Somerset Cricket Club made a loss. It is very difficult indeed for such clubs to cover their expenses today. In view of these facts I hope that the right hon. Gentleman will agree that clubs which can hardly survive unless they pocket this reduction in tax are thoroughly justified in pocketing it.

I am tempted to follow the grossly absurd observations of the hon. Member for Twickenham (Mr. Keeling) when he refers to his constituency as the home of "rugger." I see that my hon. Friend the Member for Merthyr (Mr. S. O. Davies) is in complete agreement. I only want to say one thing on this Clause. On the last occasion, when I raised the question of reliability trials in connection with motor cycles, my hon. Friend the Financial Secretary to the Treasury was good enough to say that he would look into it, and he has now indicated that reliability trials for motor cycles are to be excluded from the higher rate of duty. This is a concession for which the small men who take part in this sporting activity and many others will be very grateful to him.

I do not see it in the Clause, but I am quite happy to take an assurance from such a worthy and honourable man as my hon. Friend. It would be most tempting to follow the philosophical observations of the Junior Burgess for Oxford University (Sir A. Herbert) and I am quite sure that it would provide a happy evening's Debate at the University which he represents. But as I see it, there is no particular logic in what is being done except that the guiding line through the division between higher and lower seems to be whether one waves one's arms or kicks one's legs. If one does one or other of those two things, however, one will receive a little more relief than if one does not, and that does seem to me to be as logical a division as it is possible to obtain in these times.

I agree that it is a leaky boat and no one knows more about leaky boats than the Junior Burgess for Oxford University, but I am sure he will agree with me when I say that he has made them sail very frequently. I am sure that the Chancellor of the Exchequer, with his usual skill, will steer even this leaky boat through the difficult waters of the Committee. We should be grateful for the reliefs he has been able to give in this way at a rather difficult time in the nation's history, and I am quite sure that we shall receive more and more reliefs of this nature for entertainment and sport as the years go on. If the Junior Burgess for Oxford University forces us into a Division I shall be obliged to go into the Lobby against him.

I should like to draw the attention of the Chancellor of the Exchequer to the last three lines of Subsection (2) because that deals with the question of boats and regattas generally. I was very glad to hear what the right hon. Gentleman said earlier this afternoon about the question of perhaps revising the provisions for sailing dinghies and the general aspects of regattas, but I want to put to him the point that there is sometimes a calm day at a regatta when the only thing that can be done is to run an outboard race. We all know what an outboard race means—a lot of smells and a lot of noise. I have to confess that I race outboard skimmers on occasions, but I am mostly a dinghy sailor—when there is a wind. I hope that the Chancellor, in reconsidering this Clause, will take a broadminded view of what will happen at a regatta; otherwise, if the Clause goes as it stands, there will be a discrimination between motor propelled craft and those taking part in regattas in the shape of Entertainments Duty at a higher level. I hope that he will take this matter into consideration in reconsidering this Clause before it becomes law.

Before we part with this Clause I should like to take this last opportunity of thanking the right hon. Gentleman for the very considerable concessions it contains in the matter of Entertainments Duty on sport. It is a matter on which I spoke somewhat lengthily on the last occasion in the interim Budget. I shall be much briefer now, but there are two matters upon which either the right hon. Gentleman himself or the Financial Secretary might like to say a word before the Clause goes. If it should be the Financial Secretary, I hope he is not going to express surprise that I support this Clause after having voted against the Second Reading of the Finance Bill. The difficulty with His Majesty's Government is that when we let these Bills go on the Second Reading they express surprise if we put down Amendments on Committee stage. Of course, we vote against the Bill if the bulk of the Bill is bad; that is an ancient and honoured Parliamentary custom and no one knows it better than the right hon. Gentleman, despite his peroration.

There are two happenings in the world of sport in which these concessions have been made which have occurred since the introduction of the Budget, and it occurred to me that the right hon. Gentleman might take this oportunity of saying a word upon them. It is true that the Clause does not contain any reference to the passing on of this tax. I notice, however, that my hon. Friend was in Order in making a reference to it. Shortly after introducing the Budget the right hon. Gentleman said, with my full support, that he expected this benefit to be passed on to the spectator, the person who watches the matches, and I think that in the case of the great professional Association football clubs that was a perfectly reasonable request. I was glad to note that they saw wisdom the other day and that it is going to be done next season. Cricket, however, is in rather a different category. We are only 11 days from being half way through the cricket season and since the commencement of that season on 1st May the rain has descended with a persistence and vehemence upon all the county cricket grounds which can only be compared, I think, with that of the cuts made by His Majesty's Government in our means of sustenance and cleanliness. Great financial losses have been sustained. There was a little argument across the Committee just now as to where the home of Rugby football was to be found. Happily, no one will contend that Yorkshire's supremacy—

The hon. and gallant Member cannot proceed with that argument on the present Clause.

I always defer to your Rulings, Mr. Touche, but I was about to point out that at Bramwell Lane, which is situated in Yorkshire in the City of Sheffield—far removed from your own constituency, Mr. Touche—in the match between Yorkshire and Lancashire, which is the great opportunity for receiving gate money, no play at all was possible on Whit Monday, and at a rough estimate that probably represented some £2,000 in gate money. Nor was there any play at Trent Bridge in an inferior county called Nottinghamshire. I suggest to the Chancellor that in this matter he might temper justice with mercy and realise that these are cases which really have to be considered on their merit. Many of these clubs have had their grounds in military occupation during the war; much repair is required to the grandstands to make them safe for use and so on, and it is a disaster that the first post-war cricket season should have suffered from weather of this sort. I wondered if, before the Clause goes, either the right hon. Gentleman himself or his Financial Secretary could let us have a word on two on the matter.

I am glad that although the wording of the Clause is not such as to commend itself to masters of the English language, being motivated notably by the need to steer leaky boats through legal backwaters, which is what our advisers have to do, nonetheless the purpose of the Clause—

No. I shall have to amplify it in unconsidered language, as I admit. It is very difficult to find simple language which the lawyers will not make difficulties about later. That is why, although the principal purpose of this Clause is to relieve football and cricket and certain other outdoor sports, the language of the Clause at first sight seems rather remote from that intention. Nonetheless, this is how my legal advisers tell me that the purpose is best achieved and I must bow to their expert judgment. What I sought to do in making this concession was, on the one hand, to give some encouragement to outdoor sport and, on the other hand, not to throw away too much revenue, a consideration which I must always bear in mind particularly now that I have lost £48 million on beer, which I may have to bear in mind at later stages when resisting other proposals for tax relief. This concession will cost £1 million this year, and a little more—£1,250,000—in a full year.

8.0 p.m.

With regard to the passing on of the benefit to the public, I said that I hoped that there would be a passing on of the benefit in the case of football—not the whole benefit, but some reasonable part of the concession—to the spectator. There is nothing in the Clause about that—no provision whereby the relief can be revoked where it is not passed on. It would be possible to draft words to that effect, but I do not want to do it. I think it would be better to have agreements with the principal associations concerned. The Football League, after a moment of hesitation, did decide. Then one of my hon. Friends asked how things would be if they did not reduce the price, and I said I would have to think about it again. Then the Football League thought about it again and they have made a very sensible provision whereby, of the 5d. relief—I am talking about the 1s. 3d. to 1s. 6d. prices—3d. will go to the spectator, and they will have 2d. themselves. With regard to cricket clubs, my information is that for the most part they are passing on, at any rate, part of the reduction. I can well imagine that some clubs are in difficulties and others are not, and I am sorry about the weather, as we all are, but on the whole I think they are likely to play the game and pass on what they reasonably can to the spectator. I would like the spectator to get something, though not the full relief. With regard to regattas, I have promised that we will look into that matter in connection with the undertaking I have given arising out of the Amendment of the hon. Member for Bodmin (Mr. Douglas Marshall) and I will see whether there is any risk of regattas being levied at the higher scale. We will see, first of all, how it would be reasonable to interpret the Clause as it stands in relation to regattas, and if there is shown to be a case, we might consider some modification. That is covered by my earlier undertaking.

With regard to the suggestion that the Entertainments Duty as a whole should go, that must wait for more luscious days. I have given away just over a million pounds and I think I have done quite well. There are remunerative forms of entertainment from the Exchequer point of view which we are deliberately leaving where they are. I will not run over them, but hon. Members know what they are. I am doing three things—first of all, seeking to benefit a very large number of people, thinking in particular of the football crowds; second, seeking to give a bias for outdoor as against indoor forms of sports which are modes of spending time; and, third, doing this at a relatively small cost to the Exchequer. I hope I have succeeded. I am grateful to hon. Members who have given support to the Clause and I hope that hon. Members will not divide.

With reference to Association football, according to Press reports some clubs are suggesting that the popular side of the ground, which may hold 15,000 people, shall be reduced to hold 10,000 and that the price for the admission of the other 5,000 shall be increased. In other words, they are proposing to make a section of the football spectators pay more for their pleasure and they will thus not get any benefit from this concession. What is the Chancellor's intention for dealing with clubs who adopt those sharp practices?

I do not want to have to deal with them too much. I do not want to have a series of regulations and Orders in Council about prices for football matches. I have a report here of the meeting that was held. I take it from the "Daily Mail" and the heading is, "Chancellor's Threat to 1s. 3d. Seats." There is a statement by Mr. Coutts, who had a talk with me. I will not quote it but it seems rather harsh. He chose his language to indicate to those present that if they did not make the reduction to 1s. 3d. for a substantial part of the ground and a substantial number of spectators, he had reason to fear I would revoke the concession. I could have done that in a simple way—not by Orders in Council and regulations, which would be complicated, but by grading the tax in such a way that relief would fall only on seats at a certain level. As the passing on of the benefit has been accepted by the majority of clubs, I am inclined to leave it for the moment. This is not the end of the story, I have no doubt, but we shall see how things go on.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

CLAUSE 7.—(Entertainments duty on certain entertainments provided by bodies which are not profit making.)

I beg to move, in page 4, line 31, at the end, to insert "( i ) an Eisteddfod."

I anticipate that the Chancellor of the Exchequer, who was born in Wales, will accept my Amendment, as I am sure he ought to do. When we discussed the Budget Resolution I raised exactly the same point about including the word "Eisteddfod." The Financial Secretary to the Treasury was good enough then to make a promise that he would look kindly at the proposal and I understood him to say that he would accept it except for one reason. I have gathered since that there is some difficulty, that the wording of the Clause itself as it stands would automatically exempt an Eisteddfod from the duty. I should be glad if the Chancellor would look into this. The Clause specifies ballets, plays and concerts and I want "Eisteddfod" put in the same category. I shall not be very satisfied unless the Chancellor does that. Let me warn him. He was born in the town of Neath, and if he is as loyal to his native land as I am he will be very proud of being a Welshman. He has been invited to accept the freedom of the town of Neath next month. What will happen if he accepts my Amendment? There will be a brass band waiting at the station for him, and it will play "See the Conquering Hero Come" and the "March of the Men of Harlech"; all the bells of the town will be ringing and the people will be hailing that a proud son of the village—a giant of today, 1946—has come home. Indeed, the fatted calf will be roasted in the street for him. If, on the other hand, my right hon. Friend refuses to make the concession for which I am asking in my Amendment, I have no doubt that the brass band, although it will still wait for him at the station, will play the "Dead March in Saul" instead. I am strongly of the opinion that this word ought to be included, and I seriously and sincerely ask the Chancellor whether he cannot see his way to incorporate it in the Clause.

Is it not possible that an Eisteddfod is covered in the Clause under the word "menagerie"?

It may be that an Eisteddfod is a menagerie to the aliens who came to these islands after the Welsh. I trust that the Chancellor and the Government will look with favour upon my hon. Friend's Amendment. It is unfortunate that there is no adequate English translation of the Welsh word "Eisteddfod." At these festivals many, if not all, the items listed in Subsection (1) of the Clause are to be found. There are certainly performances of music, lectures and recitations. Probably also there will be exhibitions of artistic work. Those items do not cover the whole range of a Welsh Eisteddfod.

I hope the Government will not be afraid to include a Welsh word in their Measures on occasions, particularly when it is a word like "Eisteddfod," which means so much to the Welsh people. In fact, I say that unless this particular word is included in the Clause, the Welsh Eisteddfod will not be covered by the Clause at all. I do not want to start a controversy on this matter, but I hope I may be permitted to say that nothing expresses more fully than the Eisteddfod the peculiar genius of Wales. There is no gathering, no conscious organisation, among our English friends which expresses in the same manner what the Eisteddfod expresses in Wales. I therefore make a sincere appeal to the Chancellor and to the Government to include the word in the Bill.

I rise as I promised I would to support the Amendment which has been so well moved by the hon. Member for Westhoughton (Mr. Rhys Davies) who is a distinguished emigré from Wales. I speak as a representative of the small but determined band of Welsh Conservative Members in this House. Although I am not in a position either to threaten the Chancellor, as did the hon. Member, with what would happen if he failed to accept the Amendment, or to offer him black market delights if he does, I do most sincerely urge him to look on it with favour. I have been privileged to attend a number of such gatherings and I agree that the items set out in Subsection (1) do not provide a satisfactory definition of an Eisteddfod, which is far more cultural than any of them. There is a very strong reason why the Chancellor should accept the Amendment, and I ask him to give this matter his consideration.

8.15 p.m.

I am quite prepared to accept the Amendment. It would be very wrong of me to resist it, seeing that it has been revealed to the Committee that I was born on a Welsh hillside. My mother, though not my father, was of the Welsh nation and race. I have often been to the Eisteddfod in different parts of Wales and have been deeply moved. There is a part of me to which those celebrations make a great appeal on emotional grounds. There would be no reason for me to resist the Amendment, and I accept it, explaining at the same time that, in the opinion of my legal advisers, the Amendment is not necessary. I accept it none the less. My legal advisers say that the Eisteddfod is covered already and that there would be no danger of an Eisteddfod being charged at a higher rate. I give way, however, to the blandishments of my hon. Friend the Member for Westhoughton (Mr. Rhys Davies) in his description of what will happen when I go to my home town. I, therefore, accept the Amendment with joy against a slight background of fear as to what might happen if I did not.

May I ask whether my right hon. Friend will include festivities such as the Highland gatherings and the Mod?

Would not the Chancellor be willing to use the expression "folk festivals," which would cover not only the Eisteddfod but other gatherings whether they happen in Wales or in England?

I take it that the concession which the Chancellor has now made will cover the Cornish Gorsedd. We are all anxious to do as much as we can to retain the civilisation of these islands, as expressed in these festivals, and I do therefore ask him to make sure that the Cornish Gorsedd is covered.

I must say one word in support of West Cornwall. I noticed that there was a good deal of support for the hon. Member for Westhoughton (Mr. Rhys Davies), except from the less Celtic quarter, where there was an inclination to laugh at the word "Eisteddfod." I hope, on behalf of the whole Celtic race, that we shall be enabled to have some of our real old national words inserted in Budgets on occasions such as this. I agree with what has been said about the Cornish Gorsedd, which is a revival of education of a particular type, and is a great asset to musical people and those who love the old things. There is nothing whatever about it of party politics. The only people who really object to it are those who are sunk in the depths of reaction, like the Communist group. I hope that the Chancellor will accept the proposed word and also will put in other words which represent fine and beautiful things. I congratulate the hon. Member for Westhoughton on the way in which he was able to induce the Chancellor to accept his Amendment.

On the strength of a residence in Scotland and a number of Scotsmen in my constituency, I venture to ask the Chancellor whether he could not also include Scottish festivals which have the character of musical gatherings.

Amendment agreed to.

I beg to move, in page 4, line 36, at the end, to insert:

"Entertainments duty shall likewise not be charged on payments for admission to any such entertainment, where the Commissioners are satisfied that the entertainment is produced by a person, company, society, institution, or committee, whose object in producing the entertainment is partly educational, and that up to the date of such admission no profit has been made out of the entertainment by the producer: Provided that entertainments duty shall be charged on payments for admission after the date by which the Commissioners are satisfied that the excess of the total receipts over the total running costs of providing the entertainment is sufficient to recoup the initial production cost properly applicable to such entertainment."

In moving this simple, logical and beneficial Amendment, I must at once declare my interest, because if this Amendment had been the law, it would have benefited me much from time to time during the last 20 years, and it would benefit me if it became law now: but I hope the Committee will believe that I and my hon. Friend the Member for Ashford (Mr. E. P. Smith) are thinking of other things than that. Perhaps I had better explain why I must declare my interest. When the public paid £1,000 during a week to see a play, if an author was getting a royalty of two per cent.—

Whatever it was. The author used to get two per cent. on £1,000. Now, the two per cent. is on £1,000 less Entertainments Duty—say, two per cent. on £700. People may say that serves my hon. Friend or me right, but, nevertheless, it shows that the author—the creator and producer of everything, without whom there would be no entertainment—does pay this duty, as well as the public. Therefore, I have declared my interest for the benefit of those who think that the Entertainments Duty is paid by the public only. That, however, is not, of course, my main point. The Clause to which I am moving this Amendment has a side note

I have here some figures to show the Committee how very difficult it is even for a successful play to make money. The theatres are full, but everybody is not making a lot of money out of them. I have here the figures for two weeks of the Court Theatre, Liverpool. The play was not by some new upstart, not by some foreigner, but by the great Noel Coward himself, a very fine and, on the whole, successful musical show. In the first week the Liverpool public paid £3,698 to see this show; the Government took £1,044 by way of Entertainments Duty, and the producing manager lost £408. The next week the public paid £3,956; the Government took £1,119, and the manager lost £366. In those two weeks, with a good show—I am told a very successful show, "capacity business", as they say, with even the matinees full—the Government took, by way of duty, out of the till £2,163, and the manager lost £774. How can one possibly conduct any business on that sort of line?

I have made a very rapid arithmetical calculation; I would like my hon. Friend to check me if I am wrong. On the figures he gave for one week, if one deducts from the £4,000 taken during the week, £1,120 taken by the Government and a £360 loss sustained by the producing manager, that means to say that the theatre owner took no less than £2,520. Can that be correct?

I sympathise with my hon. Friend in some of the things he may have to say about the theatre, but this Clause does not deal with the people who own the theatres—it deals with those who produce the plays. I am sure the hon. Member has it wrong. Some people may say that the production I have mentioned was expensive. Let me take a more modest one in Glasgow. The public paid £2,063, the Government took £596 by way of Entertainments Duty, and the loss was £34. That was not an expensive production. The plays go round the Provinces. It is very difficult to make money in the Provinces nowadays, because very often one cannot pass on the Duty by raising the cost of the admission tickets. The plays struggle on. They come to London. They have still a terrific burden on the production bill to pay off; in addition, they have to make a profit on the running expenses each week.

What I propose is that no duty should be charged until the initial outlay, the production cost, has been paid off. It is a simple thing. A week after the show begins, the manager can produce his production account and show what he has spent on buying dresses and this, that and the other thing, on the producer's fee, and so on. That account can go to the Customs and Excise, they can examine it, they can, if they like, say it is too much and they cannot pass it, and thereafter, the account can be made. When the production cost has been paid off, the Entertainments Duty can be charged. The day after that the show may start making a loss, but I do not propose helping the producer any more then. I say he should be given a chance to make a profit before the Government take these huge sums of £1,000 a week. That is the proposition. My hon. Friend the Member for Eton and Slough (Mr. Benn Levy) may say that the rapacious bricks and mortar men take all the money. There may be things to be said about them, but if there is the problem must be dealt with in some other way. We are now talking about the producer, the creative manager, who takes the risk of putting these plays on the stage, and although he does not have the privilege of the people mentioned in the first part of the Clause, while he is not making a profit, he should have this benefit.

8.30 p.m.

I rise to support the Amendment which stands in the name of my hon. Friend the Junior Burgess for Oxford University (Sir A. Herbert). I think it is common knowledge that the Chancellor of the Exchequer has never produced a play; and I deduce from his genial good health—I am sorry to see he has gone away—and his cherubic, if slightly Pharaoh-like bonhomie, as well as his irrepressible optimism, even with the prospects of Carey Street facing him, that he has never written one. Nevertheless, the theatrical industry, which is so torturing to the author, so hazardous to the management, and often so bitterly disappointing to the players, does provide him with a revenue far beyond his Ministerial deserts, and indeed, far beyond the capacity of the industry in normal conditions—I emphasise, in normal conditions—to pay. Recently, at the urgent request of my trade union which is presided over so admirably by the hon. Member for Eton and Slough (Mr. Benn Levy)—I did not quite like the tone of his interruption just now to my hon. Friend the Junior Burgess for Oxford University but I would remind him we have a trade union meeting on Friday when I shall call him over the coals—at the request of my trade union, the Treasury relieved from Entertainments Duty any play produced by non-profit-making companies whose aims were mainly cultural. Now, what does this Amendment seek to do? It seeks to exempt any play of the living theatre from Entertainments Duty produced by any company operating for a profit until such part of the initial production costs as may be approved by the Board of Customs and Excise shall have been recouped. I definitely do not ask that the Board of Customs and Excise should give permission for excessive production expenditure. Nobody in his senses would approve of that; and, in my judgment, in no case should any such allowance exceed £5,000; and often it would be half of that or even less; but it would be a helping hand, which might turn a seeming failure into a success, and might achieve a greater measure of security for the players—I will not speak of the author—whose livelihood for a period hangs precariously upon the success of the venture.

My hon. Friend the Junior Burgess for Oxford University has treated the Committee to some figures. I would like to treat hon. Members to some rather simpler figures. Recently I had a play produced at one of London's smaller intimate theatres. Happily, it has been a moderate success and it has run for some months—

I am glad to elicit special approbation from my own Front Bench. I compute—and these are my own figures, as nearly accurate as I can get; I have not asked the management for them—that that play cost about £3,000 to produce and it has played to rather more than £100,000. Now the Entertainments Duty on a play in the West End of London roughly averages slightly less than one-third of the total receipts. Therefore, the Treasury have received £30,000 in tax in regard to this play, which is a great deal more than double the profits made by the management. Now I ask the Committee to consider the reverse point of view. Supposing that play had been a failure; supposing it had been a dead flop; what would have happened? The management, of course, would have lost their production money; the author and, much more important, the actors, would have been very quickly out of work, but the Chancellor of the Exchequer would have pocketed gaily—supposing it had run for three weeks and played to £1,500 gross—his £500 Entertainments Duty, because he wins on the losses as well as on the gains.

I have been delving into certain records and I compute that the little brain of the hon. Member for Ashford has enriched His Majesty's Treasury during the course of its working career in the shape of Entertainments Duty to the tune of £300,000; while the greater brain of the hon. Member the Junior Burgess for Oxford University has probably enriched His Majesty's Treasury in the shape of Entertainments Duty to the tune of half a million of money, and probably more. Therefore, we do not present ourselves before the Treasury today as necessitous mendicants praying for alms. We stand before the Treasury as important customers demanding a traders' rebate. Woe betide the Treasury if they do not listen to us, because we might put our fountain pens in our pockets, sit back, and fold our arms. We should not proclaim it, but we should be on strike. I notice that the Financial Secretary to the Treasury is changing colour. So I will end upon a less minatory note.

The thought which crossed my mind was that there were other playwrights crowding on behind, and if anyone changes colour, perhaps it would be the hon. Gentleman rather than myself.

I have not the slightest intention of changing colour by even the smallest shade or degree. There may be other playwrights crowding behind, but can the Financial Secretary be sure that he will get such milking results from them? He really must not look down his nose at his prize cattle.

I want to conclude upon a more serious note. The theatre is the one industry above all others which has the greatest ups and downs. It supports a large number of men and women—I am not talking about stars—who have a very hard and hazardous struggle to live. They are people by whose side uncertainty and anxiety as to the future always walk. We all know, as a symbol, the clown who laughs and dances and capers when his heart is breaking. That is a symbol; but it is true today to say of the men and women who are players that they rarely have a period free from anxiety through the whole of their lives—a tremendous anxiety as to their future which, if it is at all possible, should be made safer and more secure. Players, men and women alike, are gallant, gay, infallibly generous, eager to help any good or kindly cause. As my hon. and learned Friend the Member for Exeter (Mr. Maude) said so movingly in the House the other night, the theatrical profession is indeed an honourable occupation. What I am pleading for is that the Treasury should make it a little more safe, a little more secure. They have it in their power to do so.

I am very sorry to find myself opposing my two colleagues on this issue. I am sorrier still to be about to antagonise those interests upon whom I depend for my bread and butter, by opposing an Amendment which I have little doubt they will welcome. Before giving my reasons for doing so, I should like briefly to animadvert upon my own intervention, because it really was not quite an irrelevant one, although it was quite an erroneous one. I should never have taken upon myself the risk of mental arithmetic, for which I have no capacity at all. The figures I quoted were quite wrong, but it may well have been that the theatre in question was taking as its share a rental of £1,500. The reason why the point is not irrelevant is this. In times of theatre famine, when there is a shortage of theatres, there is quite naturally a tendency for theatre rents to rise. I know of one theatre in London which before the war would have been lucky to have been able to charge a flat-rate rental of £150 or £175 a week. It is now exacting 50 per cent. of the gross, and as the show is playing to about £1,800 a week, that means to say that instead of a weekly rent of £150 or £175, that theatre is taking £900 rent.

I make the point, not to attack theatre owners for behaving in a perfectly natural way, because it is, after all, perfectly reasonable, or at least it has to be accepted in a capitalist society, that people will exact what rents they can for their property. There is no reason why theatre owners should be more self-sacrificing in that respect than anybody else. We on this side of the Committee believe in a different system of society, but I am not singling out theatre owners and charging them with anti-social behaviour. The point is this. If the Entertainments Duty were removed, that theatre-owner, for example, might take a proportionate advantage of this exemption by seeing that the producing manager paid more, by exacting not 50 but 60 per cent. of the gross, so that the producing manager might not benefit at all in the long run.

Does the hon. Member suggest that if £5,000 maximum were allowed for production expenses any theatre owner could propose such preposterous terms?

It is not in the Amendment, and it is on the Amendment I am speaking. But I do not wish to labour the point.

The main grounds of my opposition to this Amendment are twofold. I do not speak from the point of view of the Treasury, because during the years they have successfully built up a reputation of being able to look after themselves quite nicely without any help from me. I ask whether there is any advantage to the theatre. Does it really help the theatre? Quite definitely, it would help the speculator. I cannot see that it would help the theatre to be more vital, or more vigorous, or to develop more freely or more experimentally. It would cut the losses, or rather it would reduce the prospect of losses to the investor, and I am certainly not against that. On the contrary, I favour a reduction of losses in the theatre provided, and this is important, that winnings in the theatre are kept inside the theatre. That is the effect of the Clause as it now stands without the Amendment. That is why it is such a particularly good Clause, because it links up the exemption of Entertainments Duty with the stipulation that no profits are taken out. That may have an enormously beneficial effect on the theatre in the long run, for instead of the theatre having to go cap in hand to the speculator and the City when money is wanted to produce plays, it will have an opportunity, through this Clause, of building up its funds and of being able to finance itself. In good times there is never any difficulty in finding capital for a play or a theatre, but in bad times, when money is really needed one finds that the speculator, like the Boojum, will softly and silently vanish away.

I ask my colleagues to consider well this further point: that the Clause and the Amendment, though theoretically not mutually exclusive, are in practice contradictory. The Amendment will torpedo the Clause to the detriment, and not to the benefit, of the theatre. It will torpedo the Clause for the simple reason that if people are given the alternative, which this Amendment would provide, and are told in effect that they can either not take any profits out of the theatre and obtain exemption from Entertainments Duty, or that they can obtain exemption from Entertainments Duty on their losses but still take profits out of the theatre, the net result can only be an enormous bias in favour of the second course. These are the reasons why I suggest to my hon. Friends that in the long run their Amendment will be detrimental to the theatre and will cut away completely all the potential benefits from this excellent Clause.

8.45 p.m.

I wish to speak as one who has written several plays none of which has been produced. But I have hopes of having one produced in the autumn, the leading character in which will represent the hon. Member for Dumbarton Burghs (Mr. Kirkwood). I am interested in several points which have been made in connection with this Amendment. I do not like the Entertainments Duty at all. I would prefer the theatre to be free from all taxation as well as from a lot of other things. I would accept the principle which was so ably put forward by the Junior Burgess for Oxford University (Sir A. Herbert) if he was prepared to make it a general principle. A person producing a play knows the commitments which he has to meet, including the rent of the theatre and the cost of the costumes. I have not produced a play but I have taken part in plays and I know that all the paraphernalia necessary for the decoration not only of the stage but of the actors has to be obtained. The producer also has to meet the liability of Entertainments Duty. If anyone is prepared to ensure that a play is put on without liability for rent, then I would be prepared to support that principle. The argument appears to be to apply the principle to Entertainments Duty but not to apply it so far as other things are concerned. I hope the Junior Burgess for Oxford University will have a talk with me later. We may be able to work out an idea which may free the theatre of a lot of liabilities and I may be able to get a play produced myself.

I feel much trepidation in following four such great ornaments of the theatre. I feel still more trepidation because, I fear, I must take on again a rather "niblick" quality. We cannot accept the Amendment. I say in all sincerity that I love the theatre. I am sure everybody in this Committee loves the theatre, but, much as we would like to help it, we can only approach this discussion from the point of view that Entertainments Duty must be retained in these comparatively un-luscious times. My right hon. Friend the Chancellor of the Exchequer said that a few moments ago, and, as I understood, the Junior Burgess for Oxford University (Sir A. Herbert) nodded his head and accepted the proposition. Therefore, we must consider the question on the basis that we must have an Entertainments Duty because we cannot afford to forgo it.

On that assumption, can a case be made out for this particular preference which is asked for on behalf of the theatre? Before I give my reasons for submitting to the Committee that no such case can be made out, may I repeat some of the arguments placed before the Committee by my hon. Friend the Member for Eton and Slough (Mr. Benn Levy)? My hon. Friend's argument was that, as the Clause stood, it was much more favourable to the true development of the theatre than if this Amendment were added to it, and, if I may, I would associate myself with what he said and adopt it as part of my argument. But, assuming that my hon. Friend was wrong, and that it would be in the interests of the theatre if the Clause included the Amendment, can a case really be made out for it? Assuming that we must have Entertainments Duty, is there any ground for singling out the theatre, and saying that it should be placed in this advantageous position, in comparison with all other enterprises that place entertainment before the public?

I think I know what the hon. Gentleman is going to say—that his Amendment is worded to relate to all entertainments.

I am going to submit that the position is quite satisfactory as it is, namely, that the theatre has already been singled out for certain preferential treatment.

Surely, the Solicitor-General will recognise that the theatre employs a far larger number of men and women, stage hands and so forth, than any other industry which is subject to the Entertainments Duty?

I am quite content that that may be so. I have not the data either to accept or reject that statement, but I accept what the hon. Member says. Other promoters of entertainments, like the theatres, have to forecast in advance what their liabilities will be and make provision for them, and they, just as do those who run the theatre, have to take account of the Entertainments Duty. It would be unfair if we were to take the theatre out of the category of ordinary entertainments and say, "Although you and other promoters of entertainments have a speculative and hazardous occupation, you shall, nevertheless, be placed in relation to them in a specially advantageous position." I ask the Committee to say that there are no grounds which would make it fair for us to make that differentiation between the theatre and other forms of entertainment. For that reason, if for no other, I ask the Committee to say that this Amendment ought to be negatived.

What will be the position if the Amendment is negatived? Already, the theatre, together with certain other forms of entertainment, is only taxed on a lower scale. That was done by the 1935 Act. The Clause in this Bill places theatre entertainments which are provided by non-profit making societies in the position in which they need pay no Entertainments Duty. That is a position which I ask the Committee to say is not unsatisfactory, but, quite apart from the merits, and assuming that there was a case to be made out for the view that the theatre should be specially singled out—and I ask the Committee to say that it is not so—it would, in the circumstances, be completely unworkable, as the Junior Burgess for Oxford University rather anticipated I would say. I do say that it would be completely unworkable on the basis suggested in the hon. Member's Amendment. The Amendment adds persons and companies to the categories of bodies which are singled out for preferential treatment. As the hon. Member well knows, these bodies are institutions, committees and societies, and his Amendment adds persons and companies. Then, in his Amendment, the hon. Member says that, until something in the nature of a profit return is made, no Duty should be paid. Then, as I understand his Amendment, the full Duty, and not a reduced one, is to be paid. I do not know whether the hon. Member wanted to alter that or not, but, in point of fact, the Amendment provides for full Duty to be paid in respect of the entertainment.

But then the real difficulty comes in. How on earth, as a matter of practical administration, is one going to seek to levy the tax? In practice, there would have to be somebody in every theatre representing the Inland Revenue authorities who would have to watch the actual incomings, day by day, and wait for the time when they balanced the outgoings and then say, "From this time onwards tax is to be charged." It would be quite impracticable, and would need an enormous staff to do that. It would be impossible to ensure any sort of accuracy in the collection of the tax.

It is different from ordinary trading where one waits till the end of the year and where one can see what the profit is by looking at books and invoices. But, in the case of the collection of Entertainments Duty, that would not apply because one would have to wait until the theoretical moment, when incomings balanced outgoings, and from that time onwards the tickets would have to incorporate the appropriate tax. As I have said, that would be quite an impossible position and would need an enormously increased staff on the part of the Commissioners to assess and collect the tax.

That would not make the slightest difference; it would mean an enormous amount of increased work. If there is an overall rule that Entertainment Tax is to be charged at a certain rate, then one knows it is charged as and when the prices are paid by the people who come to the entertainment, but if it is only one—

The Solicitor-General is making rather heavy weather about this point. All the Commissioners of Customs and Excise have to say is, "What is your production and will you tell us every week your gross takings?" Nothing could be simpler.

I do not think it is really so simple as the hon. Gentleman thinks, by a long shot. The outgoings would have to be sent in and there would have to be some kind of check, week by week, to see that the requisite amounts were tabled and sent in on the requisite sheets, and so on. If I have over-elaborated that difficulty, I will not press it any further, but it seems to me that it would be extremely difficult to collect and very nearly impracticable. I beg the Committee to reject this Amendment for the reason I gave in the earlier part of my argument—that there is no really sufficient case for singling out the theatre and altering the arrangements as they at present exist in the Finance Acts of 1916 and 1935, which already single out entertainments which deserve some preferential treatment, including the theatre, and place them, in relation to their preferential treatment, in their proper setting. For those reasons, I ask the Committee to say that no sufficient case has been made out, much as one would like to help the theatre, for accepting this Amendment and to reject it.

9.0 p.m.

I do not know, Mr. Deputy-Chairman, whether, when you were in a position of greater freedom and less responsibility, your experience was sometimes the same as that of some others of us. On entering the Committee rather late in the day, one is sometimes tempted to think that every other speaker is slightly mistaken, and I am bound to say that, on this occasion, I cannot resist the feeling that the Solicitor-General was precisely and completely mistaken on every line he took and on every point he made. However much one might agree, partially, with earlier speakers upon this Amendment, with him it was really not possible to agree at all.

If I understood him aright, he made two principal points. One was that there could be no reason to differentiate between the theatre and the cinema. He did not mention the cinema by name; he called it "other competing forms of entertainment," but I think by and large that can be taken to mean the cinema. His second point was that the Junior Burgess for Oxford University (Sir A. Herbert) was mistaken, that he was asking the Committee to do something ill-judged, in suggesting that persons and companies should be added to the societies and associations which at present have the benefit of preferential treatment. It seems to me that both those arguments are wholly wrong. Take the first argument. The cinema does sometimes, but very seldom, contribute some idea or method to the theatre. Not, I think, very often. It is not very often that the theatre desires to adapt the cinema script for its purposes. And it is not very often or for very long that the theatre desires to exploit for its purposes personalities which have been built up in the cinema. But the cinema is continually under obligation to the theatre, to the theatre of the last 2,000 years; and every month as the months go by it is again and again put under obligation to the theatre. It is from the theatre that the cinema gets ideas and suggestions and gets, in the main, persons. Therefore, if for no other reason, that in my submission would be quite sufficient cause for differentiating between the mechanical form of entertainment and the flesh-and-blood form of entertainment.

I come to the Solicitor-General's second argument, which was that you must not put persons and companies in the advantageous position in which societies, associations and schools and so on have already been put. I would ask the Committee to consider whether we really have lived long enough under this régime, by which one kind of entertainment or one kind of diffusion of ideas is encouraged by the State by differential taxation, to be sure that it is really a good system in the long run. All my prejudices would be in the opposite direction. I should always be prejudiced in favour of the theatrical entertainment which was instituted and put upon the boards by an individual because he thought that enough of the public would like it to enable him to make a profit; I would always prefer that and would encourage that rather than encourage the entertainment which is put upon the boards because a lot of elderly gentlemen and ladies think that the stuff which they were brought up to believe was improving would be good for the young.

That, in fact, is what is happening at present. At present there is not very much reaction against it, because people are still inclined to think well of the so-called progressive dramatists of the last 40 years the persons now in charge of affairs, and are still inclined to think that those people are on their side and are useful to them. But it requires very little historical knowledge or imagination to know that in a very few years there will be reaction against that. In a few years these people will become old bores and everybody will be sick of them and there is no reason why they should forever receive financial encouragement, because the British Council or the Society for the Uplift of Youth, or somebody or other, were told 30 years sooner that they were very good chaps. I do, therefore, suggest that the two arguments which the Solicitor-General has put forward on this matter ought to be rejected by the Committee.

It appears to me that while the Solicitor-General sought not to differentiate between the theatre and other forms of entertainment, the Clause itself does so. I think there is an objection to the Amendment moved by the Junior Burgess for Oxford University (Sir A. Herbert), and that objection is in the proviso to the Amendment. If the Amendment were incorporated, it would have the effect of changing the meaning of the Clause altogether. However much we may sympathise with what he intends to do, he introduces into the proviso a definition of profits, and the profits are described in the proviso as the surplus of the incomings over the outgoings. That would affect the whole of the Clause. This is to be incorporated and read as part of the Clause. Already included in the Clause are stage plays, ballet performances, performances of music, and the exhibition of cinematograph films and so on, including Eisteddfod. Whereas they are now totally exempted, although the Junior Burgess for Oxford University may desire to claim differently, if this Amendment is introduced what it would have the effect of doing is to deprive the stage plays and other categories of entertainment named here of the profits to which they are entitled, and make them subject to Entertainments Duty from which they are now free. The result would be that he would penalise the theatre in a way in which he does not intend. For that reason I hope the Committee will reject this Amendment, and keep the Clause as it is.

May I say a few words—I hope of clarification? Before the learned Solicitor-General spoke I was almost inclined to withdraw my Amendment. I entirely agree with my hon. Friend the Senior Burgess for Cambridge University (Mr. Pickthorn). No speech that I have ever heard has made me more determined to divide the Committee, if I can find anybody to go into the Lobby with me, than that of the learned Solicitor-General. He asked what would be the situation if this Amendment were passed. Let us consider what will be the situation if it is not passed. You will have these shows on one side of the street under this education rigmarole, about which something ought to be said on the Question that the Clause stand part. We are to have these theatres run by societies, institutions or committees which are "not conducted or established for profit," whatever that means, whose objects and activities are "partly educational," whatever that means. I understand from hon. Members opposite that the words "not conducted or established for profit" mean that the profits from one enterprise are dug into the next one. But, strangely enough, that has been precisely the practice of those low fellows, the commercial managers, for the last 500 years, those base fellows who are so impudent as to wish, not merely to give the public education, enlightenment and entertainment, but to provide new hats for their wives and to take their families to the seaside in August. Those are the people who will be on the other side of the street; the people who, whether they win or lose, pay a tax of 40 per cent. on more or less everything that goes into the till. On the other side of the street, paying no tax at all, there will be the people who provide no more education than people like Mr. Cochran, who is quite as able to produce educational plays as anybody who comes under this Clause.

This is a matter of injustice. It is ridiculous to say that any men who make profit out of the theatre are bad men. The point is, it is a bad thing to put a tax on turnover when people are making losses. That is the simple issue. I have not gone the whole way. All I am saying is that, until a man has got back his £5,000, or whatever the initial outlay is, there should be no tax. When the hon. and learned Gentleman talks this nonsense about impracticability and large staffs, he should go into the business a bit more, though I know he has many things to go into. Theatrical managers collect these taxes, these beastly outrageous taxes, every week and hand them in. Does he really suppose that if a benefit is to be given they will, not undertake to render a weekly return Nothing could be simpler. I am surprised at the way in which the Government have received this Amendment. I

do not wish to use words I might afterwards regret. I do hope that, even if—which I do not admit—this is not a practical device, the hon. and learned Gentleman will consider the principle, because it is a principle which must commend itself to any man of justice in this Committee, that people should not be taxed on turnover when making a loss.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 103; Noes, 275.

Division No. 195.]

AYES.

[9.12 p.m.

Agnew, Cmdr. P. G.

Hare, Lieut.-Col. Hn. J. H. (W'db'ge)

Peto, Brig. C. H. M.

Baldwin, A. E.

Haughton, S. G.

Pickthorn, K.

Beechman, N. A.

Headlam, Lieut.-Col. Rt. Hon. Sir C.

Poole, O. B. S. (Oswestry)

Boles, Lt.-Col. D. C. (Wells)

Henderson, John (Cathcart)

Raikes, H. V.

Boothby, R.

Hinchingbrooke, Viscount

Renton, D.

Bower, N.

Hogg, Hon. Q.

Roberts, H. (Handsworth)

Boyd-Carpenter, J. A.

Holmes, Sir J. Stanley (Harwich)

Ross, Sir R.

Braithwaite, Lt.-Comdr. J. G.

Hope, Lord J.

Sanderson, Sir F.

Buchan-Hepburn, P. G. T.

Hurd, A.

Scott, Lord W.

Butcher, H. W.

Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

Shepherd, W. S. (Bucklow)

Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)

Hutchison, Col. J. R. (Glasgow, C.)

Spearman, A. C. M.

Challen, C.

Jennings, R.

Spence, H. R.

Clarke, Col. R. S.

Joynson-Hicks, Lt.-Cdr. Hon. L. W.

Stanley, Rt. Hon. O.

Clifton-Brown, Lt.-Col. G.

Kingsmill, Lt.-Col. W. H.

Strauss, H. G. (English Universities)

Conant, Maj. R. J. E.

Lipson, D. L.

Studholme, H. G.

Corbett, Lieut.-Col. U. (Ludlow)

Lloyd, Maj. Guy (Renfrew E.)

Sutcliffe, H.

Crookshank, Capt. Rt. Hon. H. F. C.

Lloyd, Selwyn (Wirral)

Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

Crosthwaite-Eyre, Col. O. E.

Low, Brig. A. R. W.

Thomas, J. P. L. (Hereford)

Crowder, Capt. J. F. E.

Lucas-Tooth, Sir H.

Thorneycroft, G. E. P. (Monmouth)

Davidson, Viscountess

MacAndrew, Col. Sir C.

Thorp, Lt.-Col. R. A. F.

Digby, Maj. S. W.

Macdonald, Capt. Sir P. (I. of Wight)

Turton, R. H.

Dodds-Parker, A. D.

Mackeson, Lt.-Col. H. R.

Vane, W. M. T.

Donner, Sqn.-Ldr. P. W.

Macmillan, Rt. Hon. Harold (Bromley)

Wakefield, Sir W. W.

Drayson, Capt. G. B.

Macpherson, Maj. N. (Dumfries)

Walker-Smith, D.

Drewe, C.

Maitland, Comdr. J. W.

White, J. B. (Canterbury)

Dugdale, Maj. Sir T. (Richmond)

Manningham-Buller, R. E.

Williams, C. (Torquay)

Duthie, W. S.

Marlowe, A. A. H.

Williams, Gerald (Tonbridge)

Eccles, D. M.

Marples, A. E.

Willoughby de Eresby, Lord

Erroll, F. J.

Marshall, D. (Bodmin)

Winterton, Rt. Hon. Earl.

Foster, J. G. (Northwich)

Mellor, Sir J.

York, C.

Fox, Sqn.-Ldr. Sir G.

Morrison, Maj. J. G. (Salisbury)

Young, Sir A. S. L. (Partick)

Glossop, C. W. H.

Mott-Radclyffe, Maj. C. E.

Gomme-Duncan, Col. A. G.

Nield, B. (Chester)

TELLERS FOR THE AYES

Gridley, Sir A.

O'Neill, Rt. Hon. Sir H.

Sir Alan Herbert and Mr. E. P. Smith

Grimston, R. V.

Orr-Ewing, I. L.

Hannon, Sir P. (Moseley)

Peake, Rt. Hon. O.

NOES.

Adams, W. T. (Hammersmith, South)

Binns, J.

Collick, P.

Allen, A. C. (Bosworth)

Blackburn, A. R.

Collindridge, F.

Alpass, J. H.

Blenkinsop, Capt. A.

Collins, V. J.

Anderson, A. (Motherwell)

Blyton, W. R.

Colman, Miss G. M.

Anderson, F. (Whitehaven)

Boardman, H.

Comyns, Dr. L.

Attewell, H. C.

Bowden, Flg.-Offr. H. W.

Cooper, Wing-Comdr. G.

Austin, H. L.

Bowles, F. G. (Nuneaton)

Corbet, Mrs. F. K. (Camb'well, N.W.)

Awbery, S. S.

Braddock, Mrs. E. M. (L'pl, Exch'ge)

Corvedale, Viscount

Ayles, W. H.

Braddock, T. (Mitcham)

Cove, W. G.

Ayrton Gould, Mrs. B.

Brooks, T. J. (Rothwell)

Crossman, R. H. S.

Bacon, Miss A.

Brown, T. J. (Ince)

Daggar, G.

Baird, Capt. J.

Bruce, Maj. D. W. T.

Daines, P.

Balfour, A.

Buchanan, G.

Dalton, Rt. Hon. H.

Barnes, Rt. Hon. A. J.

Butler, H. W. (Hackney, S.)

Davies, Edward (Burslem)

Barstow, P. G.

Byers, Lt.-Col. F.

Davies, Ernest (Enfield)

Barton, C.

Callaghan, James

Davies, Harold (Leek)

Battley, J. R.

Champion, A. J.

Davies, Haydn (St. Pancras, S.W.)

Beattie, J. (Belfast, W.)

Chater, D.

Davies, R. J. (Westhoughton)

Bechervaise, A. E.

Chetwynd, Capt. G. R.

Davies, S. O. (Merthyr)

Belcher, J. W.

Clitherow, Dr. R.

Deer, G.

Benson, G.

Cluse, W. S.

Delargy, Captain H. J.

Bevan, Rt. Hon. A. (Ebbw Vale)

Cobb, F. A.

Diamond, J.

Bing, G. H. C.

Cocks, F. S.

Dobbie, W.

Dodds, N. N.

Lang, G.

Roberts, Emrys (Merioneth)

Driberg, T. E. N.

Lavers, S.

Roberts, Goronwy (Caernarvonshire)

Dugdale, J. (W. Bromwich)

Lee, Miss J. (Cannock)

Rogers, G. H. R.

Durbin, E. F. M.

Leonard, W.

Royle, C.

Ede, Rt. Hon. J. C.

Leslie, J. R.

Sargood, R.

Edwards, A. (Middlesbrough, E.)

Levy, B. W.

Scott-Elliot, W.

Edwards, Rt. Hon. Sir C. (Bedwellty)

Lewis, A. W. J. (Upton)

Shackleton, Wing-Cdr. E. A. A.

Edwards, N. (Caerphilly)

Lindgren, G. S.

Sharp, Lt.-Col. G. M.

Edwards, W. J. (Whitechapel)

Lyne, A. W.

Shawcross, C. N. (Widnes)

Evans, E. (Lowestoft)

McAdam, W.

Shurmer, P.

Evans, John (Ogmore)

McEntee, V. La T.

Silkin, Rt. Hon. L.

Fairhurst, F.

McGhee, H. G.

Silverman, J. (Erdington)

Farthing, W. J.

McGovern, J.

Silverman, S. S. (Nelson)

Fletcher, E. G. M. (Islington, E.)

McKay, J. (Wallsend)

Simmons, C. J.

Follick, M.

McKinlay, A. S.

Skeffington, A. M.

Foot, M. M.

Maclean, N. (Govan)

Skinnard, F. W.

Forman, J. C.

McLeavy, F.

Smith, Capt. C. (Colchester)

Foster, W. (Wigan)

Mainwaring, W. H.

Smith, Ellis (Stoke)

Fraser, T. (Hamilton)

Mallalieu, J. P. W.

Smith, H. N. (Nottingham, S.)

Gaitskell, H. T. N.

Mann, Mrs. J.

Smith, S. H. (Hull, S.W.)

Ganley, Mrs. C. S.

Manning, Mrs. L. (Epping)

Snow, Capt. J. W.

George, Lady M. Lloyd (Anglesey)

Marshall, F. (Brightside)

Sorensen, R. W.

Gibbins, J.

Mathers, G.

Soskice, Maj. Sir F.

Gibson, C. W.

Mayhew, C. P.

Stamford, W.

Gilzean, A.

Middleton, Mrs. L.

Steele, T.

Glanville, J. E. (Consett)

Millington, Wing-Comdr. E. R.

Stokes, R. R.

Goodrich, H. E.

Mitchison, Maj. G. R.

Stubbs, A. E.

Gordon-Walker, P. C.

Monslow, W.

Swingler, S.

Greenwood, Rt. Hon. A. (Wakefield)

Morgan, Dr. H. B.

Symonds, Maj. A. L.

Greenwood, A. W. J. (Heywood)

Morris, P. (Swansea, W.)

Taylor, H. B. (Mansfield)

Grenfell, D. R.

Morris, Hopkin (Carmarthen)

Taylor, R. J. (Morpeth)

Grey, C. F.

Mort, D. L.

Taylor, Dr. S. (Barnet)

Grierson, E.

Moyle, A.

Thomas, George (Cardiff)

Griffiths, D. (Rother Valley)

Murray, J. D.

Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

Griffiths, Capt. W. D. (Moss Side)

Nally, W.

Thorneycroft, H. (Clayton)

Guest, Dr. L. Haden

Naylor, T. E.

Tiffany, S.

Gunter, Capt. R. J.

Neal, H. (Claycross)

Timmons, J.

Guy, W. H.

Nichol, Mrs. M. E. (Bradford, N.)

Titterington, M. F.

Hale, Leslie

Nicholls, H. R. (Stratford)

Tolley, L.

Hall, W. G. (Colne Valley)

Noel-Baker, Capt. F. E. (Brentford)

Turner-Samuels, M.

Hamilton, Lieut.-Col. R.

Noel-Buxton, Lady

Vernon, Maj. W. F.

Hannan, W. (Maryhill)

O'Brien, T.

Viant, S. P.

Hardy, E. A.

Oldfield, W. H.

Walkden, E.

Harrison, J.

Oliver, G. H.

Walker, G. H.

Hastings, Dr. Somerville

Orbach, M.

Wallace, G. D. (Chislehurst)

Henderson, A. (Kingswinford)

Paget, R. T.

Wallace, H. W. (Walthamstow, E.)

Henderson, Joseph (Ardwick)

Paling, Rt. Hon. Wilfred (Wentworth)

Watson, W. M.

Herbison, Miss M.

Paling, Will T. (Dewsbury)

Weitzman, D.

Hicks, G.

Palmer, A. M. F.

Westwood, Rt. Hon. J.

Hobson, C. R.

Parker, J.

White, H. (Derbyshire, N.E.)

Holman, P.

Paton, Mrs. F. (Rushcliffe)

Whiteley, Rt. Hon. W.

Holmes, H. E. (Hemsworth)

Paton, J. (Norwich)

Wigg, Col. G. E.

House, G.

Pearson, A.

Wilkes, Maj. L.

Hoy, J.

Peart, Capt. T. F.

Wilkins, W. A.

Hughes, Emrys (S. Ayr)

Perrins, W.

Willey, O. G. (Cleveland)

Hughes, Hector (Aberdeen, N.)

Poole, Major Cecil (Lichfield)

Williams, Rt. Hon. T. (Don Valley)

Hughes, Lt. H. D. (W'lverh'pton, W.)

Porter, E. (Warrington)

Williamson, T.

Hutchinson, H. L. (Rusholme)

Porter, G. (Leeds)

Willis, E.

Hynd, H. (Hackney, C.)

Pritt, D. N.

Wills, Mrs. E. A.

Irving, W. J.

Proctor, W. T.

Wilson, J. H.

Isaacs, Rt. Hon. G. A.

Pryde, D. J.

Wise, Major F. J.

Janner, B.

Pursey, Cmdr. H.

Yates, V. F.

Jeger, G. (Winchester)

Randall, H. E.

Young, Sir R. (Newton)

Jeger, Dr. S. W. (St. Pancras, S.E.)

Ranger, J.

Younger, Hon. Kenneth

Jones, P. Asterley (Hitchin)

Rankin, J.

Zilliacus, K.

Keenan, W.

Rees-Williams, D. R.

Kinghorn, Sqn.-Ldr. E.

Reeves, J.

TELLERS FOR THE NOES:

Kinley, J.

Reid, T. (Swindon)

Captain Michael Stewart and Mr. Popplewell

Kirby, B. V.

Rhodes, H.

Kirkwood, D.

Richards, R.

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

May I ask the Financial Secretary if he can give an assurance that agricultural shows are exempted under this Clause? I am not so much concerned with the large agricultural shows, such as the Royal Show, as with the smaller local shows, which provide an opportunity for people in the district to get together. It would be very reassuring to hear from the Government that such forms of entertainment, so popular in the rural districts, are in fact exempt from Entertainments Duty, and perhaps the Financial Secretary would indicate, on behalf of the Government, whether such an exemption would come under paragraphs ( g ) or ( h ) or some other paragraph in this Clause.

Before the hon. Gentleman replies—and I see that he is taking some advice upon this point of whether agricultural shows come under paragraphs ( g ) or ( h ) as being either "an exhibition of artistic work" or "an industrial exhibition"—may I ask him to bring his mind to bear upon the point of my particular agricultural show, which, in addition to being an agricultural show, ends up with a pony race for children?

That would appear to be the case, and the racing of trial or speed of animals is subject to Entertainments Duty at the lower rate of duty under Clause 6 (1) of the Bill. We have here a mixed entertainment of this character, and it is clear that there will be great difficulty in deciding whether the lower rate of tax is payable under the Clause 6 or whether the show is entirely exempt under Clause 7. I hope the right hon. Gentleman will be able to clear up this point.

There are a few things I should like to ask before we leave the Clause, and certainly I should like some illumination on some of the practicalities of the Clause as it now stands. I refer to the phrase about an entertainment. "not conducted of established for profit." As I see the picture, a play is going to be produced, say, by our old friends the Buchmanites who, not content with their theatrical development, have entered the theatrical business and have now bought a theatre. When they are going to produce a play, as I understand it, they will go to the Commissioners of Customs and Excise, and ask for a certificate to relieve them of the liability of paying entertainment tax. The Commissioners must be satisfied that the show will not be conducted for profit and the society will be partly educational. I should like to know exactly what questions are the Commissioners going to put to the producers to satisfy themselves that the production is not to be run for profit. Secondly, there is the phrase "partly educational."

How "partly" must a society be educational before it gets a 100 per cent. exemption from the Entertainments Duty? If it is only 1 per cent. educational, will it get 100 per cent. exemption? I foresee great difficulties in the administra- tion of this Clause. Will there, or not, be some advisory committee, with people from the profession itself to keep an eye on things? I think it would be a good thing. With regard to what my hon. Friend the Member for Eton and Slough (Mr. Levy) said of the possible difficulties about the "bricks and mortar" men, when speaking on my Amendment, I would remind him that, if he is right, precisely the same thing applies on this Clause. I should like to be clear on what we are doing, and especially I should like to have a clear explanation of what are meant by the phrases "not established for profit" and "partly educational."

There is one point which is of considerable importance. As well as many agricultural shows throughout the countryside, there are a great number of small cottage gardens which organise horticultural shows. These do serve an educational purpose and I hope that they come under this exemption. It is not only small agricultural shows but there are international shows such as the Royal Horticultural Show, which is held quite close to this House, and which a large number of people attend. I have had a close association with it for a long time. These are shows which do a great amount of work. They charge a small fee for admission; sometimes they hardly charge anything and I hope the Chancellor, who always looks at me in a kindly way, will look kindly at this point and endeavour to bring these shows within the exemption class. I feel sure that somehow or other these will be dealt with between now and the Report stage. These horticultural and agricultural shows are of great interest to many throughout the countryside and provide amenities for the people which would not otherwise be provided, and for that reason I hope the Government will do their best to give every attention to this matter.

9.30 p.m.

It is not altogether easy to answer points which have been put suddenly when one has not had an opportunity of looking at them more carefully and, therefore, the answer I will give, I must give subject to that proviso. I was asked whether agricultural shows would be excluded under the terms of Clause 7, and I must say that it would appear to me that they are not excluded. I am, however, informed that under the Finance Act, 1924, they would be excluded, but I give that as my advice to the Committee without having verified it myself. [An HON. MEMBER: "Is it true?"] I mean exactly what I say, and I will repeat it. I was asked whether agricultural shows were excluded by Clause 7, and I said that in my opinion they were not but that I had been informed that there was a provision of the Finance Act, 1924, which would exclude them. I said that I had not had an opportunity of verifying that information myself, and that I would not, therefore, vouch for it. I hope that is perfectly clear.

The Junior Burgess for Oxford University (Sir A. Herbert) asked how we would determine whether an institution was a profit-making institution or partly educational. It is impossible to answer a question like that a priori. It must depend on the circumstances. The scheme, for the time being, will be administered by the Commissioners. It is thought that in any particular case it should not be too difficult, by an examination of the objects of the society and their takings, to determine whether that society fell within or outside the category. It is impossible to say in advance what questions would be asked; it would have to depend on the particular case. If it becomes difficult to classify societies as being within or without the division the matter must be looked at, and thought about, over again.

This would seem to be the appropriate arrangement to deal with an extremely difficult question. It has been found practically impossible to determine whether an entertainment is partly educational. This test has been substituted as one which will be much easier to administer. I think Members are in as good a position as I am to guess how easy or difficult it would be to administer that. It is not easy to say whether any particular body is partly educational or not, but if it appears that one can say, from a commonsense point of view, "This is partly educational," it would, no doubt, be classified as being within the definition. It would be much easier to say whether it was a non-profit making body or not. The object of the Clause is to substitute a test in regard to the body itself in place of the test with regard to the particular entertainment, and it is hoped and believed that that will work and that no real difficulty will be occasioned.

I am extremely grateful to the Solicitor-General for assisting us as he has done, and I appreciate that if I had been able to table an Amendment on this point it would have been to his advantage, and would have meant that he would probably have been able to give us a clearer explanation of what the law is at the present time. Agricultural shows are already exempt under the present Act and if they are not exempt under Clause 7 we should press for an assurance from the Government that between now and the Report stage they will take the necessary steps to amend the present law. It is not the large shows I have in mind, but the kind of show which I am quite sure the Government and hon. Members in all parts of the Committee desire to support, the local shows organised by responsible village committees, perhaps quite small in themselves but fulfilling a useful purpose in the rural life of the community. I am sure that the Committee would not wish—

I am sorry to interrupt the hon. Gentleman; he has not put an Amendment down, but he is now speaking on matters which are not within the Clause at present before the Committee.

I apologise if I am in any way transgressing beyond the content of the Clause, but I would with respect direct your attention to line 31, where the words "an industrial exhibition" appear. What I am seeking, before we part with this Clause—

I should have thought an agricultural show is not an industrial exhibition.

Yes, it is. I would point out, with the deepest respect to you, Major Milner, that we have frequently in this House referred to agriculture as our premier industry. On the other hand, I appreciate that legally it may be possible to refer to agriculture and industry, and I am, therefore, seeking the advice of the learned Solicitor-General as to whether the word industry is used here in the one context or the other. I speak with the greatest possible respect, and I feel sure that the Government would wish to give an assurance before we part with the Clause on this very important matter.

Perhaps it will save time if I give an assurance that the point shall be looked into before Report. If the Committee do not wish to part with the Clause, they will not part with the relief. If that were the issue it would be possible to take a Division on it and see what the feeling of the Committee is. But this is a question of interpretation of one particular item, and on that I undertake that we will make ourselves fully acquainted with the legal interpretation before the Report stage. I hope that will enable us to get the Clause now.

I must protest against the way in which the right hon. Gentleman has just spoken. A perfectly legitimate question has been asked with regard to the meaning of this Clause; the fact that it was a legitimate question is proved by the fact that the Chairman has just ruled that "an industrial exhibition," a phrase which we thought covered an agricultural show, does not cover it. Naturally, hon. Members are anxious to make sure that it should. We should have been only too grateful for the right hon. Gentleman's assurance that it would be looked into before the Report stage, but it was unnecessary for him to go on from that and say that because we were asking quite legitimate questions as to the meaning of the Clause we were trying to oppose a Clause which would bring relief. I know it is the right hon. Gentleman's desire to continue the steady, indeed excellent, progress that we have been making so far, but I cannot think that a speech of the character which he has just made is likely to conduce to that end.

I go a little further than my right hon. Friend the Member for West Bristol (Mr. Stanley). I think the Chancellor of the Exchequer, instead of crowing about this Clause as he has been doing, ought to be rather ashamed of it. He has left the Committee in the most unsatisfactory position. The last speech of the learned Solicitor-General left us hopelessly vague as to whether this Clause was any improvement on the arrangement that has hitherto been in force. He could not tell us what a show run not primarily for profit was, or how it would be judged, nor did he give us any indication as to how the Commissioners would decide when a show was partly educational or not. He said we should have to see how it worked out and how we got along.

On top of that my hon. Friend the Member for Torquay (Mr. Williams) asks a perfectly legitimate question as to whether agricultural shows are included, as I think must be the case, and we have the Chancellor getting up and saying, rather truculently, "Well, maybe. Anyway, we will consider it; we may tell you before the Report stage, we may not, but if you do not want this Clause you need not have it." I do not consider that that is the way to treat the Committee at all. I think this is a thoroughly badly drafted Clause, and I do not think the Government know what they are doing or how it is going to work. It is pretty certain to work out worse in the future than it has in the past, and that is saying a great deal.

I heard an hon. Member say that an agricultural show was not an industrial exhibition, but I want to say that an agricultural show is not always an agricultural show. I have attended many so-called agricultural shows and have never seen one that has not been a sort of horse fair with roundabouts, swings, and all the other accessories of an ordinary fair, with possibly some sheep and cattle thrown in. So far as agricultural products are concerned they are the things one never sees. It is merely a matter of horse trading, roundabouts and so on. That is the general make-up of any so-called agricultural show. I say therefore that in 99 cases out of 100 a so-called agricultural show is not an agricultural show at all.

The hon. Member for West Fife (Mr. Gallacher) will excuse me if I do not follow his line of argument. The Chancellor of the Exchequer has undertaken to consider this Clause again before the Report stage and when doing so I am sure the Committee would be obliged if he would examine how, in practice, it is working out at this moment. As I have been told by at least one of my constituents it now works something like this. If a succession of concerts, whist drives and so on, are held in a particular village in order to raise money for a village hall, or some other partly educational purpose—possibly a committee may be set up—every time a performance takes place the matter has to be submitted to the Inland Revenue. I submit that that is an unnecessary burden upon people who have no very great secretarial resources and who are trying to raise funds in order to fulfil the purposes I have mentioned. I am sure it would be greatly appreciated throughout the country if the Chancellor of the Exchequer would be so good as to consider on the Report stage the possibility of an authority covering a number of performances—say over a period of six months—all of which will have the same purpose.

I wish to raise only one point, because I realise that there will be some difficulty in deciding what is and what is not an agricultural show and other items of that nature. I listened to the learned Solicitor-General, who said, "We will see what the Commissioners decide and how they get along in making their decision." One matter which gives me rather grave concern is that if the Commissioners decide that it is an agricultural show are we to understand then, without any doubt at all, that it is an agricultural show and comes within this Clause, or is there a right of appeal? It seems to me a constitutional matter that there should be some right of appeal as to the question of fact. The Commissioners may decide themselves in rather an arbitrary way and I think there should be some right of appeal against a decision so that justice is done purely on the basis of fact.

9.45 p.m.

Although I welcome this Clause and expect very great benefits to accrue from it to the theatre, I should like to make one reservation or comment. I regret that the phrase "partly educational" has been retained from the last Finance Act and reappears here; because we may as well face it, that phrase means nothing or anything at all. It is quite beyond anybody's power to decide what play or what society is educational, partly educational or uneducational. It would be feasible to argue quite legitimately that all human experience is educational, and, therefore, no play nor any spectacle could reasonably be excluded. Nevertheless, I suggest that there is a very great difference between the use of this phrase in the present Bill and its use in the last Act, because of the difference of context and be- cause of what I hope will, therefore, be the mode of administration of this Bill. As it seems to me, if we look after the phrase "non-profit-making," the phrase "partly educational" will look after itself. It is absurd to expect the Excise and Customs Board to undertake the anomalous responsibility not only of levying taxes but of deciding what is or what is not educational. But there is a kind of rough and ready safeguard, if a company is non-profit making, because it can be legitimately presumed that if a man goes into the theatre and is prepared to put on plays and forgo the chance of profit, he is activated by the idea that he wants to put on good plays and do them as well as possible. In the theatre I am proud to say there are a great many people of that kind. I hope, therefore, that in the administration of the Clause, this guiding principle will be kept in mind.

I must resist the temptation to follow the hon. Member for Eton and Slough (Mr. Levy) in regard to that phrase and I hope he will not think I am rude for not carrying on his argument. The Chancellor of the Exchequer very kindly said he would look into the agricultural side of this Clause. Will that also cover the horticultural side?

I have got the right hon. Gentleman's assent. I thank him very much and I shall not pursue the matter any further.

Question put, and agreed to.

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

CLAUSE 8.—(Passenger aircraft licences for sale of intoxicating liquor and tobacco.)

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

This is not a bad little Clause. I am sorry the Solicitor-General is going out because I wanted to ask him one or two things. I wanted to ask him for one of his lengthily lucid expositions of the fifth provision in line 25, but apart from that I think it is not a bad thing that passenger aircraft in the future should be enabled to serve their passengers with drinks en route, even in this country. It may add a little bit to the national airways which the Government are bringing in under their Civil Aviation Bill, but I hope that there will be some B.O.A.C. bylaw which will prevent the serving of drinks to pilots en route. I was flying to and from Eire during the Whitsun Recess—on an airline in which B.O.A.C. has, I believe, a 40 per cent. interest—and I was horrified when cups of tea and cakes were taken by the trim hostess through to the pilots in the aircraft—(HON. MEMBERS: "Why?") One is not quite sure whether the eating and drinking of those refreshments would not conflict with the duties of the pilot—(HON. MEMBERS: "How?") In operating the numerous instruments, using the joy-stick and so on. However, nothing untoward occurred.

Nevertheless it would be a very great temptation if anything other than cups of tea were taken through in those circumstances. I would ask whoever is to reply to the Debate to tell us the estimated revenue under the Clause. Why is a sum of £1 to be charged for the aircraft licence? What is the basis of this tax? I understand that the purpose of the Clause is that air services shall be brought into the same position as railway and shipping services which are within the three-mile limit and also to provide licences in particular circumstances. I should like to know the basis of the tax and whether the £1 is per ship, per railway train, per railway company, or what it is?

I am particularly anxious to ascertain, in connection with the licence for the sale of intoxicating liquor, whether it is necessary for the aircraft to be airborne before the licence is operative. If drinks can be served while the aircraft is on the ground, an altogether new chapter in the history of our licensing laws may be opened, because drinks can then be served to passengers on days when the aircraft is not flying. Aircraft will be able to set passengers down in any place, and the passengers may continue to partake of alcoholic refreshment outside the normal licensing hours of the district. We should know whether the aircraft has to be airborne when the drinks are served. If not, it becomes practicable to invite passengers to take seats in an aircraft which never intends to become airborne, in order that they may have the benefits of the licence and take part in drinking outside the normal hours.

Yes, they might become airborne themselves. We have been made aware of many ingenious evasions of the licensing laws, in night clubs and in other ways, and we should not allow loopholes of this character to be created.

I am sure we do not grudge the Solicitor-General his effort to provide refreshment for the pilots of aircraft. I should welcome his advice upon one or two obscure matters in the wording of the Clause, and in particular provision 5 in Subsection (1). This item reads:

I am a little curious about two other matters arising from this Clause. The first is the timing of this decision. Is it entirely a coincidence that the sale of alcohol and tobacco on internal airlines coincides with the nationalisation of civil aviation? Is the purpose of this provision to soften the blow by removing the passengers' thoughts from the incompetence of the State-controlled transport which is carrying them? Or is there another explanation? It may be possible that no Government dared to introduce a proposal of this kind until the departure from our midst of the noble Lady who used to represent the Sutton Division of Plymouth. If such a proposal had been introduced in her time, it might have brought such a protest that the Finance Bill would not have been making the rapid progress which it is at the moment.

There is one other aspect ot the matter I would stress. Is this the moment to produce yet another drain upon our limited supplies of alcohol? My noble Friend the Member for South Dorset said that the object of this Clause was to place aircraft on the same basis as railway trains as far as alcoholic supplies are concerned. That would not be difficult. I cannot help recalling, however, that only last week, in my constituency, I visited Beverley cattle market where, for the first time within living memory, and I imagine far beyond living memory, no alcoholic supplies were obtainable in the town of Beverley on market day. There was a jingle piece of poetry in one of the public houses concerning His Majesty's Government which you, Major Milner, would rule me out of Order if I were to quote, and I will not do so. I only express the hope that the Minister of Civil Aviation will obtain from my constituency the necessary number of copies to be supplied to these aircraft. I am sure the Lord Advocate is now ready to give an explanation of Subsection (5), which seems to be a little obscure, and it would not be courteous of me to stand any longer between the Committee and the Lord Advocate.

10.0 p.m.

I can get rid of the very justifiable apprehensions of my hon. and gallant Friend the Member for Holderness (Lieut.-Commander Braithwaite) in one respect. He seems to have assumed that this Clause for the first time permits the sale of alcohol in aircraft. I appreciate the childlike innocence of the world which those observations disclosed, but I would point out to my hon. and gallant Friend that alcohol in substantial quantities was obtainable in practically every large civil aircraft for many years before the war, and indeed, was obtainable on order from an excellently printed wine list on the London-Paris service of the late lamented Imperial Airways. All that this Clause does is not to facilitate the sale of alcohol, but to impose a tax. It is, in fact, a new tax, and I hope we shall have from the Government some reasonable explanation of the necessity for the imposition of this new tax at this time. No doubt, after our experiences on the last Clause, such a hope is perhaps a triumph of hope over experience but, none the less, I do express the hope that in the normal constitutional way we shall be told why it is necessary to impose this new tax.

It seems to me just the worst sort of tax possible, a tax raising £1 at a time, small, irritating, expensive to collect; just the type of fussy, grandmotherly tax such as the old tax on armorial bearings, which is a waste of time for everybody and in particular for the Treasury. It is more especially a waste of time when one recollects that it will be mainly collected from State subsidised corporations when the Government's Civil Aviation Measure goes through. All that will happen is that this £1 will be taken from the official pocket of the noble Lord the Minister of Civil Aviation and transferred to the more influential pocket of the Chancellor of the Exchequer. Really, is it worth while having the usual tax collection arrangements for the sake of solemnly transferring this £1 from one side of the national balance sheet to the other? I hope we shall not be treated to any suggestion that this is the provision of a new facility. The Chancellor of the Exchequer in his Budget speech sought to suggest that. All that it is, is taking advantage of an existing facility to raise an additional tax.

There is one other aspect of the confused tedium which this type of taxation involves to which I would invite the attention of the Committee. That comes in the part of the Clause which defines the sort of aircraft which will have to pay this levy: reasonable mood at the moment—will have been convinced of the waste of energy in trying to grab these few pounds, and will say that he will give these licences free. Indeed, perhaps to make it more attractive, they might not only be free, but have attached to them a portrait of the right hon. Gentleman.

I do not think I need keep the Committee long in replying to the rather humorous and light hearted Debate which has so far taken place on this Clause. Perhaps it is a good thing that the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) did not speak earlier; otherwise he might have misled completely those who followed him, because I have rarely heard throughout the whole of my Parliamentary career a speech so full of inaccuracies delivered in so short a period of time. The hon. Gentleman said it was possible to sell liquor in aircraft now. Of course, it is possible, but it is not legal, and what we are proposing to do here—

Does the Financial Secretary dispute that, perfectly regularly and openly on every major civil airline before the war, liquor was sold; and is he suggesting that all those companies committed a crime day in day out, without any action being taken against them?

That may be so but it was not necessarily legal, otherwise we should not be including the Clause in this Bill. What is true is that intoxicating liquor in this country is sold under special limitations and—

To sell it legally requires a licence. That being so, it is quite possible, although I never saw it myself, that with a new form of transport, frequently owned by private individuals, a certain amount of liquor was taken aboard some aircraft and might have been consumed. I do not know. All I can say is that passenger carrying vehicles which charge a fare, if they did sell liquor, were contravening the law. What we are doing here, is to make it legal in future for a passenger carrying aircraft in this country to take out a licence and legitimately to sell liquor, of one kind and another, thereon. The same hon. Member made some play with a Subsection of this Clause where it indicates that the passenger carrying aircraft must return to this country. We can only legislate for aircraft which ply internally. Once they get outside the three mile limit, jurisdiction of this country ceases. I think the hon. Member is a member of the legal profession, and he should have known this fact.

Would the Financial Secretary be good enough to look at the Clause in his own Bill and see the limiting words "on the same day"?

That is quite true. The point is that it has to go and come the same day. We are dealing with home based aircraft. Aircraft which fly beyond the three mile limit and go, for instance, to India, can sell liquor now once they are outside the jurisdiction of the three mile limit. I was asked to explain Subsection (5) of the Clause. Those words, I agree, do appear on the face to need some explanation. They are words which in this shape or one very near it, have appeared in previous enactments. The licence refers to liquor sold or consumed in an aircraft. I take it that hon. Members are familiar with the fact that there are on and off licences, and when a licence is issued, it is issued for the consumption of the liquor, either on or away from the premises. The licence dealt with in this Clause is, however, the same as one issued for a railway restaurant car or a ship going to sea, and these words are taken from similar enactments applying to those forms of transport. They indicate that in this case the licence to sell intoxicating liquor and tobacco applies to the particular aircraft to which it relates, and the licence, incidentally, must be carried on the aircraft. That is the meaning of Subsection (5). It pins the licence and the drink to which it refers actually to the aircraft which has taken out the licence.

I was asked by an hon. Member if I would indicate what income will be obtained by the Revenue from these licences. So far as we can estimate the income will be negligible, but that does not mean that we should not legalise this kind of thing. I was also asked why £1 is to be charged. The answer is that that was thought to be the appropriate rate. It is the amount charged when a licence is taken out by a railway for a restaurant car. As hon. Members know, a licence for a ship costs £10, but it was thought that that was perhaps too much, and we have taken a restaurant car licence as the appropriate form of licence applicable to aircraft.

I was asked by the hon. Member for Altrincham (Mr. Enroll) whether it would be possible for passengers to consume liquor in the aircraft when it was on the ground. The answer is, Yes—on the aircraft, whether it is airborne or on the ground. I do not think that because of that we shall necessarily get abuse any more than we get abuse now when a railway restaurant car is standing in a station and is not on the move. We do not find that people foregather in those stationary restaurant cars to drink. Nor should they, in our view, in stationary air transport. We of course realise that the party opposite is a reactionary party and finds it difficult to take up new ideas. The assumption behind this Clause is that air transport has come to stay. There is no reason whatever why aircraft should not be allowed to have a licence and, if they provide meals, as they do and will continue to do, they should not be able to provide at the same time something more than tea or water. The Ministry of Civil Aviation made a request to the Treasury that this change should be made, and we are making it in this Bill. I ask the Committee to accept it.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clauses 9, 10 and 11 ordered to stand part of the Bill.

CLAUSE 12.—(Excise duty on mechanically propelled vehicles.)

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

10.15 p.m.

There is one point which requires a little clarification. I do not know whether I am right in assuming that this Clause provides a new definition in respect of vehicles between 12 and 16 cwts. Not being a lawyer I would like to have the advantage of the knowledge of right hon. Gentlemen on the Treasury Bench, or their legal advisers. This is I think a concession in the right direction and I hope the Government will be able to say that I have interpreted their Clause correctly. I feel sure that the Government can give me an answer. If I received an answer I should not have to go too much into detail on the Clause.

This appears again to be a matter of legal interpretation. In the brief absence of my learned friend the Solicitor-General, I will undertake to take his view on it, on his return.

On the assumption that these words involve a relief in taxation, can the Chancellor say how much he is going to lose as a result of the Clause?

I think the Committee should rather welcome this Clause. I am not too nimble and as a result of hurrying to get here in time to deal with this matter I am a little out of breath at the moment. Hon. Members will see that this Clause carries this matter one stage further. In the Finance (No. 2) Act of last year, instead of half-ton steps in the taxation of goods vehicles, my right hon. Friend the Chancellor made a reduction to steps of a quarter of a ton. That was generally welcomed by the industry but these alterations commenced from the unladen weight of one ton and no adjustment was made between the lower steps of 12 cwts, and one ton. Since then, representations have been made to me and I think a practical case has been made out with regard to light vans which are now a very important item in our export trade quite apart from the equity of the case. The lighter type of van, which is developed from the small passenger car chassis, was rather inequitably treated. In many cases it is difficult to keep it within the 12 cwt. unladen weight step. My right hon. Friend the Chancellor showed his usual flexibility in matters of this description by agreeing to meet this particular point so that now there will be a further step in this scale of taxation. There will be an intermediate step between 12 cwt. and one ton. This means a four cwt. step from 12 to 16 cwt. The net effect of this alteration is to halve the jump in taxation from £10 for the 12 cwt. vehicle to £15 for the one ton general goods vehicle. Although it applies to different grades—

The figure varies. If the Committee would like to have information regarding the effect on vehicles run by farmers and local authorities and on electrically propelled vehicles, the scale in each case can be given, but the same principle applies, namely that it is a half way step between the 12 cwt. step and the one ton step. With regard to its effect—

Could the right hon. Gentleman tell us how many local authorities have these "watering vehicles, not electrically propelled" to which the Clause refers?

No, I cannot give the total number. It would be unreasonable to ask for information of that kind, and the practical knowledge of every hon. Member of this Committee should convince them that, in dealing with a matter of this kind in taxation, one deals with the equity of the case and does not incur the expense of trying to investigate the number of vehicles which every local authority has. If that information is required, hon. Members have the usual opportunities of putting down a Question on that particular item. On the question of the sum involved I may say it is relatively small. Of course, this concession encourages the production of a heavier type of vehicle for the home market as well as for export purposes, and it is more than probable, in the long run, that the Exchequer may actually gain on the transaction. For the moment, the cost to the Exchequer is relatively light, and it is a very good change for industry generally, as it meets an equity point between the various types of vehicles. I hope the Committee will support this recommendation.

I should like to ask the Chancellor one question. Are there many "watering vehicles, not electrically propelled," used for drawing trailers? What watering vehicles are used for this purpose and is that the sort of thing this kind of taxation is designed to encourage—or to discourage?

What country buys these watering vehicles used for drawing trailers?

I would be discourteous if I did not thank the Minister of Transport for the very adequate answer he has given. I now appreciate that he has made a step from 12 to 16 and then to 20, instead of one step from 12 to 20. I thought the Minister of Transport would know all about it, and I thank him very sincerely for his answer.

I am equally certain that the hon. Member will clearly understand the import of this when he looks at the Second Schedule. With regard to the point about the export of watering vehicles, it is not involved. It is the light general goods vehicles which are involved for export, but, having decided to alter that category, one had to extend it to other classes of goods vehicles.

This has been a sudden switch over of our discussions from alcohol in aircraft to "watering vehicles, not electrically propelled," used for drawing trailers. We, who are particularly interested in the agricultural aspect of these matters, are grateful to the Minister for having given this concession, because it will help the farmer who has these smaller agricultural vehicles. It is a concession for which we have pressed on previous occasions, but we recognise that the Minister has now met us, in some respects—though not yet sufficiently—and I should like to say that we are grateful to him.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

CLAUSE 13.—(Cesser of charge and reduction of rates of purchase tax in respect of certain goods.)

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

This Clause gives the Government general power to reduce the Purchase Tax on a range of goods set out in the Schedule. I want to ask the Chancellor something about the principle of reducing the Purchase Tax at this moment. I am one, as the Chancellor knows, who rather doubts whether the Purchase Tax should be reduced on account of the danger of inflation. Much as I dislike purchase taxes, nonetheless they seem to be admirable weapons for mopping up surplus purchasing power. I read in some newspaper an account of what the right hon. Gentleman said at some meeting in the country last week to the effect that the danger of inflation was abating. I was, therefore, encouraged and determined to support my hon. Friends in the Amendments which they have put down to the Schedule on this matter. But, on Saturday evening, I turned on my wireless and heard the Financial Secretary state that it was necessary to go on saving at the maximum rate, because the danger of inflation was still with us. He painted a very gloomy picture, and my instinct is with the Financial Secretary and against the right hon. Gentleman. This is a very important point, and if the right hon. Gentleman will amplify what he was reported to have said elsewhere, we can then consider, with a great deal more wisdom, the Amendments put down to the Schedule. I have put down an Amendment to leave out a certain article; that was done with a real sense of austerity, but I will change my mind if the Chancellor will tell the Committee tonight that the danger of inflation is more or less over.

I think it was in the Second Reading Debate on the Bill that the Chancellor made a statement that he thought the Purchase Tax should be a long-term tax. I believe that the tax was necessary but only as a short-term measure, and I have joined issue with the right hon. Gentleman on this question of a long-term tax. I put down a question on one specific item, namely, television receivers, in order to prove to him that this tax was, first, a bad tax, and, secondly, that, in the long run, it had a bad effect on our export business. In discussing this tax from the point of view of exports my right hon. Friend the Chancellor rather reminded me of a passage in Tyndale's translation of the Bible which says "the Lord was with Joseph, and Joseph was a lucky fellow." It seems to me that, as regards the Purchase Tax, my right hon. Friend really feels, like Joseph, that he is a lucky fellow, but I think he ought to go more deeply into the matter. I ask him to consider the question of Purchase Tax on television receivers because they—

The hon. Gentleman cannot go into details of Purchase Tax on any particular article. That can be discussed later.

If I cannot discuss it now, will it be in Order to discuss it, at a later stage, on the Schedule?

My hon. Friend the Member for Chippenham (Mr. Eccles) has raised the most vital issue that is likely to be raised in this Debate. I feel that this Committee want some authoritative statement from the Chancellor, and it would be useful to know what his considered opinion is, on the question of inflation at the present time.

I do not think that that question arises. The sole object of this Clause, as I understand it, is to give a general authorisation in regard to reliefs in the Purchase Tax, and only that matter may be discussed in detail.

With all respect, Major Milner, I submit that, if that Ruling is correct, then the whole of my hon. Friend's speech was out of Order. It seems to me that the sole justification for the retention of the general Purchase Tax in this country at the present time is the danger of inflation. I agree with what my hon. Friend said—and I think the Chancellor will probably agree as well—that the greatest single deterrent to inflation is the Purchase Tax. Therefore, I submit that this is the only occasion we have for considering the Purchase Tax in general, and not in particular, item by item. The only argument which can properly be addressed to the Committee is on the general question of whether inflation is likely or not, and, therefore, whether the Purchase Tax covering the whole range of articles as it is at present being instituted is necessary. I would only say, in supporting my hon. Friend the Member for Chippenham, that it seems to me that the rise in prices in this country, although comparatively slow, is so steady as to be very alarming. I could not understand the speech of the Chancellor at Bournemouth—if he was correctly reported—in which he sought to allay the alarm which is rising in this country about inflation. I echo the request of my hon. Friend that we should have an authoritative statement from the Chancellor on one of the most vital questions confronting this country now.

10.30 p.m.

I would like to say a few words in support of the hon. Member for Chippenham (Mr. Eccles) and the hon. Member for East Aberdeen (Mr. Boothby). What the Chancellor was reported as having said the other day was that the danger of inflation "had largely passed away."

The hon. Member cannot now enter into a general discussion on the question of inflation.

All I was going to say was that the people of this country have had a great deal of experience in interpretating jargon, and that if a civil servant were to say that Queen Anne "had largely passed away," they would deduce that she was dead.

It is evident that I must proceed with great care so as to keep within your Ruling, Major Milner. I much appreciate the interest taken by hon. Gentlemen opposite in some observations of mine made elewhere. I did draw attention—and this will be in Order, I think—among other facts to the very encouraging increase in the output of goods for the home market. It is a very important fact and it has a bearing upon the Purchase Tax, because it is upon some items of the expanding output of goods for the home market that this particular tax is levied. I must not discuss inflation here tonight but, of course, it is evident that the more rapidly the output of these goods increases the more rapidly the danger of inflation proceeds. Indeed, as has often been said before, the greatest of all safeguards against inflation is increased production, and that we are getting. I must not stray further along that line of thought, however, or I shall be out of Order.

I would like to say only this regarding the Purchase Tax. There are some who think that we should go faster in making remissions or reductions of the Purchase Tax, and there are others, such as the hon. Member for Chippenham (Mr. Eccles) who thinks that perhaps we are going a little too quickly. I have tried here, as in other cases, to steer a middle path between extreme excessive prudence which might have the effect of depressing incentive by making it still more difficult for people to obtain what they might hope to buy with their incomes, and, on the other hand, going so fast as to stimulate an inflationary risk. I suggest that in this respect the Purchase Tax is not different from any other tax. All taxes mop up purchasing power from the taxpayer and transfer it to the Treasury, and that is no less true of the tax on beer—when we can get it—than it is of the tax on income—when we can get it—or the tax on any of the articles in this field. I do not, therefore, think that a discussion of inflation would be more appropriate in connection with the Purchase Tax than in connection with any other tax mentioned in the Bill. It would be equally related to any of them.

With regard to the Purchase Tax itself, I am asking the Committee to agree to certain remissions. The time will come to discuss these in detail later, but I have given careful thought to whether I can go any further than I have yet gone in regard to these remissions. The total remissions which I am suggesting—which are set out in the Schedule—would cost some £12,000,000 this year, and between £15,000,000 and £16,000,000 in a full year. That seemed to me in the earlier stages, a reasonable total of alleviation to give in this field of taxation. I also said—and the hon. Member for Elland (Mr. Cobb) commented not quite favourably upon this—that I thought it might well be the Purchase Tax would not turn out to be such a temporary affair as its orginators supposed, and that there might be a case for retaining it in the scheme of taxation, at any rate for some years to come, a fairly prolific source of revenue from the levying of taxes upon articles, exempting the various necessities from the tax, and gradually raising the level and the range of exemption. There may be, for several years to come, a good case to be made, not merely as an anti-inflationary means, but on other grounds as well, for keeping the Purchase Tax on an ever narrowing field as an important source of revenue in the future. I do not think we should be too doctrinaire in this matter, but I think there is an arguable case for keeping a Purchase Tax for some years to come as a source of revenue. I venture to say that if you give the ordinary, average man or woman the choice between having a reduction in their Income Tax, or complete relief from Income Tax if they are near the level of exemption, or having some remissions of tax on some articles which they buy by way of Purchase Tax, they would undoubtedly vote for a remission of Income Tax. I am quite certain that is the practical view of a great many people. Also we must not be too quick to throw away the Purchase Tax as a substantial source of revenue if it does mean we should go slower with the reduction of Income Tax, and I have followed that line in the general framing of the Budget.

I was saying that I thought that beyond the £12,000,000 this year we might reasonably consider certain reliefs. It is true that since then I have lost all the beer money and I have hesitated to be more generous in reliefs, but in looking through the Amendments on the Order Paper I have tried to find a few which would cost relatively little to the revenue, and would be appreciated by those who now pay. I do not want to reach a final conclusion until we have had discussions on the Schedule and arguments have been deployed for this or that reduction or remission, but it is my hope to make some further slight remissions, and perhaps to remit, in round figures, something of the order of £2,000,000. I do not think I ought to go further than that. This is only a machinery Clause, and does not touch the rates on any particular article. That will come when we reach the Schedule. I have tried within the limits of Order as defined by the Chairman to answer all the questions that were raised and perhaps at a later stage we may go into these very interesting questions more in detail. Meantime, I beg hon. Members to comfort themselves with the "Board of Trade Journal" for 8th June. This is a very valuable publication, very much better presented than it used to be in the old days. It is now very good and interesting reading, and things are going on about which hon. Members ought to read. Lots of interesting things are in this article of 8th June; there is a detailed discussion, with statistical particulars, of the increase in the supplies to the home market of a number of essential things as compared to a year ago. It is very encouraging, and well worth studying.

Would the right hon. Gentleman say whether, in considering reductions in Purchase Tax, he has regard to the advisability of assisting his colleague, the President of the Board of Trade, to stimulate exports by creating a demand at home for those goods which can be more cheaply produced for abroad, if the demand for the goods at home is stimulated?

The Purchase Tax, of course, does not depend upon exports at all. Therefore, in so far as the Purchase Tax is removed from any commodity, which can either be consumed at home or exported, the scale is turned a little bit against the export drive and in favour of the home market.

Yes. It depends on the rate of tax, and so on. Therefore, obviously one of the considerations to be borne in mind—I think this is what the hon. Gentleman is putting, if I understand him rightly—is that we should not do anything in remission or reduction of the Purchase Tax that would be a drag on the export drive. That, I think, is his suggestion, in view of the fact that so long as the Purchase Tax is retained that is, to some extent, an encouragement to export, from the point of view of the manufacturers, because they do not pay Purchase Tax on that part of the output which they export.

I would like to make myself clear. I meant precisely the converse. I meant that there are goods which could be produced reasonably cheaply for export, if mass production could be got going. Mass production cannot be got going at the moment because of the home demand being restricted by the Purchase Tax. Reduce the Purchase Tax and the export trade will be indirectly stimulated.

I think that is possible, but I am not sure that there are many cases today in which that would be practicable.

I do not wish to be ruled out of Order for making a detailed case, but surely the right hon. Gentleman must know that there are some more important items to which that would apply.

I am very grateful to my hon. Friend the Member for Chippenham (Mr. Eccles) for raising this point, although both the speech in which he raised it and the answer that was given have since been ruled out of Order. Nevertheless, while it is understood that none of the speakers, including the Chancellor, during the last 20 minutes have been discussing the subject of inflation, I got the impression from the Chancellor that he regards the present position as having improved. I am not sure that I agree with him and at a more appropriate time I should like to argue it. He would not regard hon. Members on this side of the Committee as lacking in any sense of responsibility if, in view of the improved position, we were to move Amendments of a reasonable character for exemptions from Purchase Tax. Indeed, he has told us he is prepared to accept some of these Amendments. If I may say so with respect, he has quite rightly said that he is not prepared to come to a decision on which Amendments he will accept until he has heard the Amendments moved and argued, and is able to make up his mind. It is in the light of that statement from the Chancellor of the Exchequer that I appeal to you, Major Milner, when the time comes to consider the selection of Amendments for discussion, to remember that, in a way, every mover of an Amendment has a field-marshal's baton in his knapsack. Any one of the over numerous Amendments which are down on the Schedule may, if it is argued well enough, catch the Chancellor's imagination, impress him with its sincerity and end by getting a concession. Therefore, we are hopeful that when you, Major Milner, exercise the discretion which is, of course, entirely yours in the selection of these Amendments, you will remember that unless the Chancellor hears the arguments for each specific Amendment, he will be unable to judge. It may be found that some Amendment which has not been called was just the one which, had it been argued, the Chancellor would have been prepared to accept.

10.45 p.m.

There is one small matter of principle which always puzzles me, and in a few sentences I should like to bring it to the attention of the Chancellor and the Committee. A certain proportion of the Purchase Tax is, in point of fact, paid by the Government to itself. I have never been able to see the sense of that. That is to say, Purchase Tax is still to some extent, although perhaps less now than in the past, charged on products that are either going to be subsidised by the Government, or are wholly, or partly, purchased by public authority. I can never see the advantage of that. The financial gain is nil, and there is in addition a certain financial loss through an unnecessary amount of work in bookkeeping. I recommend to the Chancellor that there should be a removal of Purchase Tax on such classes of goods.

I have been a little concerned with the remarks about Purchase Tax and its incidence on household commodities and household goods used in this country. In relation to the idea of balancing the Purchase Tax against Income Tax, there has been the suggestion that the right hon. Gentleman may handle it badly. But I am not suggesting this. If it is badly handled, it might have a harmful effect on the household and the housewife's purse and I wish the Chancellor would state clearly and specifically whether the Purchase Tax can be used as a balance and whether, if used in that respect, it will not be used on household commodities.

We are all indebted to the Chancellor for indicating that despite the loss in the revenue from beer, he has still a margin of about £2,000,000 which he will distribute in the relief of certain items now subject to Purchase Tax. I think the Committee would be greatly helped if the Chancellor would indicate the precise line on which his mind is working in these matters. I have examined the exemptions which he proposes himself in the Schedule, but I am bound to say I find some irregularities. I find signal lamps mixed up with insulating material—

We cannot discuss the Schedule at this stage. There will be an opportunity later for that.

I was only asking, Major Milner, for guidance on the general principle and an indication of how the Chancellor's mind is working, I cannot find, at the moment, the reason for this Clause which is under discussion. What I ask the Chancellor to say is whether it is his proposal to exempt from Purchase Tax items such as pots and pans, or alternatively to reclaim the Purchase Tax on those articles for which there is a ready demand overseas. Or he might remove Purchase Tax on articles sold at home and so reduce the cost of articles exported overseas. It might be his desire to exempt from tax those articles of necessity which are used by the poorest sections of the community. Or there might be a remission on outdoor sports equipment or tools used in gardening. But we are entitled to see exactly the direction in which the Chancellor's mind is working, so that we may move Amendments, if we wish, to the Schedule. If the right hon. Gentleman will indicate the direction in which he is endeavouring to guide the national finances in this matter, he would, I am sure, find willing cooperation on this side of the Committee.

When we come to the Schedule and the detailed proposals for reliefs under this heading of Purchase Tax it will be out of Order to make any general reference to the tax as such, and to its general incidence. Having listened to the hon. Member for Holland with Boston (Mr. Butcher) and others, I suggest that it may assist our deliberations when we get to the Schedules if the Chancellor will put on the Order Paper what I may describe as a "price list," giving the costs of the various concessions for which he is being asked. I notice a wide range of articles, from pails to mousetraps. It might assist us to know the cost of these exemptions, and it might help the Chair in the selection of Amendments. But before we part from the question of the general incidence of the Purchase Tax, I must say that I found myself in no small agreement with the hon. Member for Peterborough (Mr. Tiffany) about the Purchase Tax as a whole. I was depressed to hear the right hon. Gentleman repeat that he intends to retain it for a considerable number of years. Let us recall, the origin of it all. Lord Simon, in 1940, in his second war Budget, was anxious to do one thing above all others—to restrict public spending as a check against the fall in the value of our money. He was also anxious to obtain a source of revenue; but that was a secondary consideration. Now hostilities are over I have not been able to check this, but I have in my mind a figure of £150 million as the figure of Purchase Tax—

I am sorry to interrupt the hon. and gallant Gentleman, but this is not relevant to the Question.

Is it not relevant to this issue if we are to envisage reliefs? Is it not right to discover what object the right hon. Gentleman has in mind about the revenue from the tax? That was the point I was endeavouring to make.

The hon. and gallant Gentleman was going into the whole history of the imposition and extent of the tax, and we cannot do that now. We are concerned only with alterations in the existing tax.

I think it was within the purview of the remarks that fell from the Chancellor, with great respect; because the right hon. Gentleman said he intended to retain this for a number of years. Is it in Order to refer to that?

It is not in Order to discuss particular articles, or the general conditions and circumstances in which the Purchase Tax will be retained.

If I have interpreted the right hon. Gentleman wrongly, I apologise, but that was the impression he left with me. Should I be in Order in arguing about Purchase Tax this year, because I wish to make a point on that? The right hon. Gentleman has often talked about the cost of living subsidies and the Purchase Tax. I suggest that this is camouflage of the most obvious type. To reduce with one hand the cost of living, and with the other to raise a very large sum—I think it is £150 million he is going to get—is, I suggest, vicious. This Purchase Tax was imposed to restrict spending. I suggest that as we approach the end of this financial year we ought to have a situation which should tend to encourage spending. Indeed, in the home market we may be glad of it before the year is over. If only for that reason I hope the Chancellor's mind is not fixed in this particular respect. It is to me lamentable how often these temporary wartime taxes become a permanent feature of our fiscal system. [An HON. MEMBER: "Income Tax."] I am not going as far back as that. I should get into trouble with the Chair if I did. But it is not so long since we were discussing the Entertainments Duty, which was introduced as a wartime measure between 1914 and 1918 and is still with us. We see it over and over again. We see it also in the case of N.D.C. which is still with us. Now we have it in the Purchase Tax which was put on to meet wartime needs but is to be retained in a substantial form, not only this year but in future years. I suggest that the Chancellor of the Exchequer is laying a burden upon what I am going to call the lower income groups—because I object to the phrase "working classes." He is going to impose upon the lower income groups a grievous burden. It would be very much wiser to sweep it away and to live in a more normal and honest fashion, without camouflaging the cost of living.

In the Debate on the Budget Resolutions on 17th April the Chancellor of the Exchequer gave a most confused account, which he has repeated tonight, of the position in regard to this tax. Part of the right hon. Gentleman's mind seems to dislike the tax, and part of it seems to like the tax, because it mops up purchasing power. Part of his mind inclines towards the tax, because he regards it as a weapon in his social programme for soaking those whom he regards as the rich, and helping others. For all and any of these reasons he seems to be perfectly happy about retaining the tax. I suggest that we are entitled to something more than such muddled thinking and argument from the Chancellor of the Exchequer. Does he like the tax or not? Does he regard it as a temporary expedient to avoid inflation? I think he should tell the House where he stands, and where the Committee stands, in regard to an impost which is particularly vexatious. I am perfectly certain he knows—

The hon. Member cannot go into a general argument as to the future of the Purchase Tax. The only question here is whether certain reliefs should or should not be given.

The Chancellor of the Exchequer did touch upon the major issues involved. They are issues of vital importance and I hope we shall have an explanation.

Many Members, the Chancellor of the Exchequer among them, make general references but it is not in Order to go into particular details.

My hon. Friend, the Member for Holland with Boston (Mr. Butcher) asked the Chancellor of the Exchequer on what principle he was making the proposed remission in the Schedule. I should have thought that the Chancellor of the Exchequer would be prepared to reply, but in the absence of any reply I think my hon. Friends can take it that, as in other matters, so in this, the Chancellor is acting without any principle at all.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clause 14 ordered to stand part of the Bill.

CLAUSE 15.—(Purchase tax to be charged on goods resulting from chargeable processes.)

11.0 p.m.

I beg to move, in page 10, line 22, after "process," to insert:

Let me take another case. Certain old ladies have articles of jewellery, which they had in their youth, and which have now become out of date. They send them to a jeweller to be processed and made into more fashionable jewellery, which, I understand, is lighter in nature. Perhaps the hon. Lady the Member for Epping (Mrs. Manning) can tell us exactly what is done. These old ladies will have to pay a heavy tax, which will include the value of the jewellery, and the work done upon it.

I do not think old ladies ever bother to have their jewellery changed.

I had no intention of coupling the hon. Lady with the phrase I used about old ladies. I thought all ladies came into the possession of old jewellery. Sometimes, even wedding rings are cut down in size, when they become what is thought to be out of date. A young lady who has her ring altered in this way will, in future, if the Chancellor's misdrafted Clause remains unaltered, have to pay a double Purchase Tax upon it. Then there is the other case I have mentioned frequently of a man in my constituency who performs a very valuable job in catching moles. He went about catching the moles and when he had, I think, about 60, he decided to have them cured and made into a waistcoat for Sunday afternoons. This man, who is performing a highly useful job for agriculture and the world in general, will have to pay a heavy burden of Purchase Tax when he has his moleskins made up in this way. Finally, there is the man who shoots a fox—[HON. MEMBERS: 'Shame"]—and wants to use the skin as a fur for his wife or for any other purpose. He is going to be caught under this Bill by having to pay a tax, the cost of curing the fox skin, the value of the fox skin, and the cost of manufacture.

I would submit that this Clause is misconceived and misdrafted, and I think the Chancellor has realised himself that he made an error when he first drafted it because he makes an exception. He says, "In a certain case I am not going to charge a tax." What is this case? Is it where the skin—if we take the case of the rabbit skin—belongs to the curer? That, surely, is the wrong case. The Chancellor should, I submit, have taken the case where the skin belongs to the man who has contracted for it to be cured. That is the real hardship because if I send my skin to a curer—[ Laughter. ] I know hon. Gentlemen opposite would like that to happen, but I think it would be very wrong if, included in Death Duties, my heirs had to pay Purchase Tax.

I hope, therefore, that the Chancellor will accept the very minor alteration that I am suggesting, that the tax should in fact be charged only where there is a sale. In a case where a man is sending his own possession to be processed then he is exempt from tax if he gives a certificate that the resulting goods are for his own use and will not be offered for sale. Generally speaking I should have thought that the right way of dealing with the problem with which the Chancellor is faced would have been to have imposed the purchase tax when the skin was being sold by the skin merchant, and if the Chancellor did that then he would not be harming these small men whom he is harming as the tax is at present conceived. We shall have another opportunity, I hope, on the Fourth Schedule of dealing with the problem of the man who is selling rabbit skins in the trade where the business is less than £500. That is another matter, and I wanted to keep it quite distinct from the argument I am presenting to the Chancellor at the present time. I am merely saying that where there is no sale, and where a man is simply altering his own belongings for the use and benefit of himself, then it is wrong that the Exchequer should take this 100 per cent. levy on the cost of what he is doing. I appreciate that the Chancellor has made a reduction of tax in a certain case, but that again does not touch the point covered by my Amendment. I am dealing with cases where there is no sale, and I hope that in the interest of the small men and women who are affected by this present harsh tax the Chancellor will grant me the concession I am asking.

In supporting this Amendment, I should like to draw attention to another class of person who may be seriously affected by the Clause, if it goes through unamended. That is the considerable class of person who enjoy tinkering with motorcars. It is a very agreeable pastime for a number of people to purchase two or possibly three old motorcars, and have them made up into one reasonably serviceable vehicle for their own use. In many cases, the enthusiasm of these individuals outruns their ability. They start by trying to convert the vehicles themselves but they are unable to carry the job through. Then they go to a local garage and arrange for the conversion to be completed. This is not an academic matter. This practice was resorted to with enthusiasm before the war, and at the present time it is likely to be on a much larger scale in view of the number of surplus vehicles which are being disposed of at Government car sales throughout the country. A large number of people will be affected when having bought two old crocks and in the hope of making them into one serviceable vehicle, they find they are liable for Purchase Tax on the one serviceable vehicle whch they have created out of the two old crocks. I hope the Government will look upon the Amendment favourably.

I rise to bring to the notice of the Committee a grievance felt by certain of my constituents. It is having sympathetic consideration from the Financial Secretary to the Treasury whom I saw about it last night. In my Division there is a rabbit club, formed for the very proper purpose of breeding domestic rabbits to be eaten. The members of the club are apprehensive that the legislation will destroy the profit which they get from selling the pelts. That will be sufficient, in their judgment, to put them out of action and thereby will destroy what is really a very valuable food club. I appreciate the argument of the Treasury concerning the legal considerations of sale and purchase. There may be a case for stopping the purchase of a chassis and a body, and the assembly thereof by a person who has no contract of purchase and sale. There is thereby a considerable loss to the revenue in the tax which would accrue if one went to a motor shop, and bought a complete car. I appreciate the argument from the revenue point of view. The trouble is that when we begin to have legislation to make into a sale and purchase something, which is not sale and purchase, we involve ourselves in numerous complications. The people concerned here may not have stated quite accurately the effect of the law as it will be, but they will be hit in two ways— first, where they themselves wish to have the rabbit skins made up, or, second, in that the effect of this legislation generally may kill the trade of treating furs and pelts by destroying the demand. I think it is my duty to bring this matter to the notice of the Committee and to the notice of the Solicitor-General. This is a real grievance, and although this complaint emanates from a limited body in my constituency, I have no doubt that it is, a widespread grievance. We ought to be careful not to do anything which will adversely affect attempts to help the food situation generally. I hope, therefore, that the Chancellor, with the assistance of the Solicitor-General, will be able to deal with this grievance.

11.15 p.m.

I would like to stress the difficulties which will occur if this Clause is allowed to stand. We shall find in the country districts that the small man, in every walk of life, will be caught by having to pay extra money on these little skins that he now sends to be processed. The result will be that he will try to process them himself. This, of course, will produce a skin which will not last for any length of time, and, therefore, a completely unsuitable article will be sold. It will also be very hard on the small man in the country districts who does the processing. He depends largely on local people to bring in rabbit skins, moleskins, and a certain number of otter and fox skins. I ask the Minister seriously to reconsider this Clause, as it cannot bring him in a great deal more revenue.

There is one point I would like to raise on this Amendment. It is one which arose in my own constituency only a fortnight ago. A silver cup was given to the local golf club about 20 years ago. It was won this spring, and the secretary of the golf club took the cup to a jeweller to get the silver plate on it inscribed with the fortunate winner's name. When he got to the jeweller, the jeweller said, "Yes, I can put the plate on it. It will cost a guinea." The secretary, of course, was quite prepared to pay another guinea, 100 per cent. Purchase Tax, but the jeweller said, "That will not satisfy the Chancellor of the Exchequer. You must pay another £40 Purchase Tax on the value of the silver cup." This is a case that actually happened. I naturally wrote about it to the Board of Trade, and the matter is being inquired into at the moment. But, at any rate, that jeweller in Bangor, County Down, considers that he dare not put that plate on the cup without paying the value of the cup, namely £40. It certainly would be a relief to the people of a comparatively poor golf club if the Solicitor-General, out of his wisdom, could say that there is nothing in the jeweller's contention. A great number of people, especially ladies, have their jewellery refashioned from time to time, and I believe that if this Clause goes through without amendment, it will be the means of putting out of work a lot of hard-working jewellers who for years have relied upon this type of work for their living. I hope the Solicitor-General will accept the Amendment.

The arguments that have been addressed to the Committee in support of this Amendment divide themselves into two categories. On one side arguments were advanced on behalf of those who, in a small way, send skins, rabbit skins, to be cured, and on the other side the arguments were—or rather, one argument addressed by the last hon. Gentleman who spoke—centred around the charge of £40 made in respect of Purchase Tax on the value of a silver cup. May I address myself separately to these arguments? The Amendment is designed to bring about the position that if the person who acquires the article certifies he does not want to sell it, but wants it for his own use, he would not have to pay Purchase Tax upon it. That is how I understand the Amendment. That would not advantage the small people who send skins to be processed because they, quite obviously, do it because they want to dispose of them by way of sale. I should think that that was the category of persons referred to.

Perhaps I am wrong about that. They send the pelts to be processed, presumably with a view to disposing of them for profit. If, and in so far as that is the case, then the Amendment quite obviously will not help them at all. It will not affect them. That is what I would say with regard to the first class of argument. If there is a case to be made on behalf of these people it is not a case which can be made in support of the Amendment on the Order Paper. With regard to what was said by the hon. Member for Down (Sir W. Smiles), I would like to look into the case. I do not know whether this charge was said to be imposed under the terms of the provision we are discussing, which, as the hon. Member knows, will be effective from 1st June. That was possibly what they were relying upon. I gather that the case is already being looked into but I feel that, without further particulars, I cannot deal with it more fully at present.

With regard to the Amendment itself, in the form in which it is drafted, I would ask the Committee to reject it for the following reasons. The whole object of the Clause is to prevent just those transactions which, in large measure at any rate, would be dealt with by the Amendment. A number of people—and it was growing in volume and was becoming a quite serious thing—were acquiring valuable raw skins which were not liable to duty and were not liable to the tax, and were having them made into fur coats for their own use. By so dong they were enabled to avoid the payment of Purchase Tax. Now it is just those persons who were aimed at by the Clause. The Amendment if accepted, would mean these people would be taken out of the Clause, so the whole object of the Clause would be overthrown.

It can also apply to people who buy parts of motor cars and have them put together. These people generally want to use the car for their own purpose when it is put together, and these people, by buying the chassis and the body independently and having them made into one car, are enabled to avoid paying Purchase Tax upon the completed car. These people, in ninety-nine cases out of a hundred, would want to use the car for their own purpose. They are having it done for the express purpose of getting a car for themselves. Again, if the Amendment were accepted, it would take those people out of the ambit of the Clause. So it would unfortunately have the effect of destroying the whole object of the Clause.

The point about making up a chassis and engine in the example I quoted, is that the components are second-hand, and together they make a whole second-hand car, the whole of which was in existence prior to the existence of Purchase Tax. It was not a case of a new car made up of a new chassis and new engine.

I follow that, and I was going to deal with it. I was leading up to it by saying that the procedure which is struck at by this new Clause has been used, to a large extent, by people who have expensive new cars put together. By doing so they deprive the revenue of a substantial amount of money. The hon. Gentleman has in mind a cheap second-hand car, put together out of various components. That might or might not be within the terms of the Clause. The Clause is limited. The person who applies the chargeable process must be a person who does it in the course of and for the purpose of his business. I quite agree it might be that a person who puts second-hand parts together would come within that description, in which case the Clause would operate. However, prima facie it is intended to deal with the large number of cases in which expensive new cars are put together from component parts which do not themselves attract Purchase Tax, with the result that an expensive new car is acquired without the payment of Purchase Tax. It may be that there are other cases; I do not say there are not. I urge upon the Committee that the loss to the revenue is now sufficient to make it imperative that some provision of this sort should be introduced. There is not only the loss to the revenue, but the unfairness to traders who have to pay tax. They are placed at a considerable disadvantage in comparison with people who acquire these expensive cars and expensive fur coats, while avoiding Purchase Tax. I can inform the Committee that the various trade organisations are behind this Clause. They support it, and think that on the whole it would be fair to the general body of traders that some machinery should be introduced into the Finance Bill which would prevent this sort of tax evasion, which operates unfairly against the great body of traders.

I accept the argument that there may be hard cases. The hon. Gentleman mentioned one which may or may not be within the terms of the Bill. The person to whom he goes to have the parts put together and made into a car would have to be a person who applies a chargeable process for the purposes of his business; that is to say, it must be part of his regular business to put those parts together, otherwise it would not be within the Bill. That is one limitation which would exclude a number of hard cases. There is one other limitation of which I should remind the Committee, because it would exclude a number of cases, namely, the expression "applying a chargeable process." This refers to applying a process of manufacture which makes the goods which are specified in the Schedule. In other words, it is not a chargeable process unless it is a process which actually results in the making of the goods. I distinguish "making" from repairing, altering or something of that sort. The hon. Member for Thirsk and Malton (Mr. Turton) referred to the turning of coats. That would clearly not be within the scope of the Clause, because that would not be making a coat. It would be doing something to the coat, but it would not be bringing into existence a coat where there had not been a coat before. Unless that happens the Clause does not operate. I think it fair to point out the limitations in the Bill. In the first place, it has to be a chargeable process applied by a person who does it in the course of his business. Secondly, there is no chargeable process at all unless it results in the actual bringing into being of an article which was not in being before; in other words, merely repairing, altering, or anything of that sort would not be applying a chargeable process, and, therefore, would not come within the Clause. That would exclude a number of cases.

In regard to a case which I thought was a rather common one, namely, of an old-fashioned article of jewellery which starts as a ring or necklace, and is altered into something modernised, but is still, in fact, a ring or necklace, does that mean that because it has not resulted in the bringing into being or making of a ring but has only been an alteration that process will not be subject to this Clause?

It is sometimes a little difficult to draw a distinction between what is bringing into being a new article and what is not. For example, if a diamond which had hitherto formed part of an article of jewellery were made up into a pendant, or anything of that nature, that clearly would be bringing a pendant into being. The right hon. Gentleman mentioned the case of one type of jewellery being broken up and made into another type. I should have thought that would be bringing something into being; that is to say, it would be broken up, and converted into a new article of jewellery. I think that that would be within the ambit of the Clause. One has to draw a line between what is "a repair" and what is "making" within the clause.

What is the position with regard to an animal skin?

11.30 p.m.

If one looks at the Fourth Schedule one will find that para. 2 refers to dressed skins, and if one sends such a skin, one brings into being a dressed skin within the meaning of that paragraph. I think the Clause would then operate. There are certain safeguards, and what is simply a repair is not within the Bill. I ask the Committee to negative this Amendment. If it were accepted, it would be extremely difficult to see that the Treasury did not lose revenue which it ought to acquire. If a person certifies that he is going to acquire these goods for his own use, it is going to be extremely difficult to keep proper track of such cases. For example, take a person who acquires a fur coat, or a motor-car. It would be very difficult to say that what the person had stated was the truth. It might be that a person acquired such an article, saying it was for his own use, and then five minutes later, claimed that he had changed his mind. It would be extremely difficult to operate any exception such as that which the hon. Gentleman has in mind. If the Amendment is accepted, it will mean the frustration of the whole object of the Clause.

We are indebted to the Solicitor-General, but I think we shall have to look into the Bill again before the Bill finally leaves this House. We see some very real difficulties in the Clause as it stands. There are some points on which the hon. Gentleman did not touch very much, and one of those is the position of the jewellery trade. This may not only cause hardship to the owners of old objects of jewellery, but may also cause hardship in that trade. It is not possible for the jewellery trade to get its normal raw materials to make new jewel- lery, and a great many of such workmen as still survive—those who have not been called into essential employment—have been put into what one might call the remodelling trade, whether it is real or artificial jewellery. There is, it must be remembered, a great deal of artificial jewellery in this country. As I understand it, under this provision for the chargeable process, Purchase Tax will fall on the additional value created by the process as well as its original value. I wish the hon. Lady the Member for Epping (Mrs. Manning) had spoken; she would have been able to tell us more clearly these things—what, for instance, can be broken up and remodelled. I assume that a brooch, for instance, could be broken up and made into a couple of rings and a pair of earrings. If that were so, Purchase Tax would be charged not only on the additional value created by this process, but on the wholesale value of the remodelled article, even if it were in one's possession the whole time. It seems that here is something that ought to be looked into, because it may bring to a standstill the remodelling both of artificial and real jewellery. This is not an industry that anyone should overlook, because the Birmingham area, certainly, has for years past depended greatly, not only on its market in this country, but its markets overseas for imitation jewellery. Perhaps, the right hon. Gentleman will look at this again in the light of representations I know he has received; and we shall reserve our right to raise the matter again unless the Chancellor can find some way out of these difficulties at a further stage of the Bill.

Whatever may be the Chancellor's intentions regarding jewellery—and I was glad to see him nod his head at the suggestion to look at that matter again—I did not understand the Solicitor-General to give any promise of reconsideration with regard to rabbit skins. If that is to be the last word by the Government, it is a decision that will be received with the most bitter disappointment by the small breeders of rabbits. It was they, and not the ladies who hand in expensive furs to be made up, whom my hon. Friend who moved this Amendment had in mind. Do the Government realise that there is this extraordinary anomaly, that the small breeder of rabbits, who hands in a couple of pelts to be dressed and turned into a pair of gloves, will pay Purchase Tax on that single pair of gloves made up of two skins, that will be greater than the Purchase Tax which is payable on a full-length fur coat made up of 30 rabbit skins, which, because it happens to be a utility garment, attracts Purchase Tax at a much lower rate? I think the Committee should try to get some sort of promise from the Government that this question of rabbit skins will be looked into again, in addition to the question of jewellery.

I think it is clear that the hon. and learned Solicitor-General has drawn a bow at a venture and hit an enormous quantity of rabbits. That may be a worthy attainment on his part, but I have probably more rabbits in my constituency than anybody else.—[HON. MEMBERS: "And sheep."]—Vast numbers of owners of rabbits are very seriously affected, indeed, by this proposal. Before dealing faithfully with the rabbits, however, I want to make one or two comments on other matters which have been discussed by the hon. and learned Gentleman. On the question of motor cars he said that repairs would not be included in the definition of "chargeable processes". But surely it eventually comes down to the question, "When is a motor car not a motor car?" If you have a car which has been laid up indefinitely, and requires a substantial amount of new material and work put into it in order to bring it into operation, surely the person who is carrying out this "chargeable process" is bringing into being something which did not exist before. It certainly was not a taxable article before, whereas it will be when the process has been completed. I venture to think that the definition is very much wider in interpretation than the hon. and learned Gentleman intended it to be, and instead of taxing the person who is building up new cars out of new spare parts, he is going to hit a very much wider circle of people—a circle of people whom it is not intended to hit at all.

Then with regard to the question of clothes, I venture to challenge the hon. and learned Gentleman on his argument. I understood him to say that turning a suit was not bringing into being a new article. But a fur coat at any rate in being turned may well become a fur cape. The bad parts are cut away. Is a coat the same thing as a cape? I am quite sure the hon. Lady opposite will be able to advise the hon. and learned Gentleman, that a coat is a very different thing from a cape, and that a new article would have been produced in that case in lieu of an old one. The hon. and learned Gentleman would not require to do it; but if I were to send one of my suits to be turned by a tailor, I am quite sure that it would come back new and unrecognisable as compared with the one I am wearing at present, because it would have a lot of new material introduced in the way of linings and so on. The hon. and learned Gentleman admitted that it would be difficult to tell whether the line was to be drawn as to when a chargeable process introduced a new article. I venture to think that it would be quite impossible. If this Clause were to be brought into effect in its present form, there would be no end to the difficulties which would arise and the doubts which would be created. The learned Solicitor emphasised the administrative difficulty of collecting the tax when there was an exception as to the person for whose sole use the new article was created. Surely that does not arise in this tax which, we understand from the Chancellor of the Exchequer, is unlikely in general, at any rate, to be permanent. Or have I misunderstood the right hon. Gentleman? If it is for a limited period, what does it matter if a pair of gloves wears out or is disposed of? I do not think there is anything serious in the argument of the Solicitor-General.

One more word. To return to the rabbits—because rabbits are the most important item in the whole of this Clause—I do not believe that the hon. and learned Gentleman ever intended rabbits to be caught by this Clause at all. He indicated the person for whom the Clause was designed as a person acquiring a number of furs, and having them turned into a coat and so avoiding Purchase Tax. May I suggest that he considers the point of excluding from the operation of this Clause articles which are made out of home-produced furs.

There is no expensive home-produced fur at present and practically no silver foxes are being produced here. But many rabbits, moles and foxes are being produced, and if the Chancellor would exclude them from the operation of this Clause he would be doing great benefit to a very large number of people who are worthily endeavouring to supplement their minute and often negligible profit by producing home-grown rabbit meat. He would also assist materially in eliminating the possibility of the black market which would arise under the operation of this Clause.

11.45 p.m.

I think I can probably reassure hon. Members opposite in this way: they are apprehensive in regard to certain types of people whom they fear will be hardly dealt with by the operation of this Clause. By Clause 14, Subsection (2), they will see that the Treasury have power, by Order, to vary the Fourth Schedule either by adding to, or taking away from it, goods which are specified in the Schedule. As the Bill stands the Treasury have power to remove them from the scope of the schedule if it can be shown that any particular class of persons are hardly dealt with. The Clause operates only in relation to goods specified in the Schedule which my right hon. Friend authorises me to say that if a case can be made out on behalf of particular classes of persons, and it can be established that they are hardly dealt with, that is the sort of case he may feel disposed of to consider with a view to some sort of action being taken by the Treasury by Order. If hon. Members will give us the Clause as it stands it will not preclude any further action being taken to alleviate the lot of particular individuals.

I have an Amendment on the Order Paper to the Fourth Schedule which relates to rabbits and if the Chancellor can give us an assurance now that it will receive his full and sympathetic consideration it might enable us to abbreviate the proceedings at this late hour.

I do not think it is right for me to begin making promises of "Yes" or "No" about items in the Schedule, but when we reach the Schedule and the Amendment we shall by then have given careful consideration to what has been said and be ready to advise the Committee of our view.

In view of that assurance, I beg leave to ask to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

CLAUSE 16.—(Registration, etc., of persons who carry out chargeable processes.)

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

I do not want to detain the Committee, but I would point out that Subsection (3) of this Clause is extremely complicated. There are between 70 and 80 words, separated by only two commas, in it and I should be grateful for a brief explanation of its purport.

The answer to the hon. Gentleman's question is that the Commissioners are given power by the terms of the Subsection to refuse to give a certificate of registration in any particular case where they think it proper within the terms of the Subsection. It does not follow because they refuse to give a certificate of registration that the person in question has not to be registered. He has still to be registered in as much as a certificate of registration has certain consequences—it is valuable, and should not be lost, as it were—and can be refused. The Commissioners are given a certain discretion in suitable cases to refuse to give a certificate if they do not think it is really necessary.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clauses 17 and 18 ordered to stand part of the Bill.

CLAUSE 19.—(Remission of purchase tax on exported vehicles.)

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

I should like to ask the Chancellor of the Exchequer if he could give an explanation as to why a mechanically propelled vehicle has been included in this Clause and why this remission of Purchase Tax should be granted for these exported vehicles. What are the reasons for this and why cannot such reasons be applied to other chargeable goods? It does seem that there must be some very good reason for making this special distinction for mechanically propelled vehicles while excluding all other chargeable goods which could be exported in the same way. I should be grateful if I could have an answer on that point.

I think I can answer the hon. Gentleman's question best by quoting what my right hon. Friend the Chancellor of the Exchequer said during the Budget Debate, because the object of the Clause is to implement a statement which he made during the course of that discussion. He then said:

"I shall also provide, in the Finance Bill, that visitors to this country from abroad, including officials on leave from India and from the Colonies, may buy a British car for use here, free of Purchase Tax, provided they take it away with them when they leave. Visitors can now bring in a foreign car, free of Customs Duty and free of Purchase Tax; and I therefore propose to remove what I regard as an indefensible discrimination against British cars, and to put them on the same footing."—[OFFICIAL REPORT, 9th Apr, 1946; Vol. 421, c. 1827.]

The Clause is designed simply and solely to implement that. It is intended, in other words, merely to afford a facility which is peculiarly useful to visitors in the case of motor cars and inappropriate to other articles. As hon. Gentlemen know it has been done before. It is simply to enable people who are coming here, and particularly those coming back from the Colonies, to have the use of a motor car while they are here and to take it away when they go, and it merely fulfils the undertaking which the Chancellor gave.

Does it apply to the motor boats which were under discussion earlier? They might very well be provided for in these circumstances.

I should like to draw attention to one point. This is the only Clause in the Bill which makes any provision for the removal of Purchase Tax from motor cars. In connection with that I should like to say that Purchase Tax was imposed for two main reasons, first to provide a source of revenue for the Exchequer, and second to make people save money. I suggest to the Chancellor that one further class of car should be included in this Clause, and that is the car for the district nurse which is bought with public money.

The hon. Gentleman is out of Order in dealing with that subject.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

Chairman to report Progress, and ask leave to sit again.—[ Mr. Whiteley. ]

Committee report Progress; to sit again Tomorrow.

Ways and Means

Considered in Committee.

[Mr. HUBERT BEAUMONT in the Chair]

Resolved:

"That income tax shall be charged on benefit under any Act of Parliament of Northern Ireland relating to national insurance or any Act amending any such Act and on family allowances payable under the Family Allowances Act (Northern Ireland), 1945, or any Act amending that Act."—[ Mr. Dalton. ]

Resolution to be reported Tomorrow

Committee to sit again Tomorrow.

Hill Farming [Money]

Resolution reported:

"That, for the purposes of any Act of the present Session to make provision for promoting the rehabilitation of hill farming land; for the payment of subsidies in respect of hill sheep and hill cattle, and for purposes connected with the matters aforesaid (in this resolution referred to as "the Act"), it is expedient to authorise—

Resolution agreed to.

Aliens (Entry, United Kingdom)

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

11.57 p.m.

It is with great regret that I keep the House at this time of night. I feel I ought to on this important subject. With great regret I find it my duty to criticise the administration of the Home Secretary in relation to the immigration of people into this country. I do so with more regret because I am aware of the very fine reforms he is carrying out in other fields, notably that of prison reform. I wish I could offer him some congratulations in relation to his policy with regard to immigration. There are two aspects of the matter with which I want very briefly to deal. The first is the question of permitting husbands of British girls to enter the country, and the second question is related to the broader issue of the general entry of aliens and the broader aspect of the principle of the desirability of free movement of people between countries. As to the first issue, I think it is thoroughly bad that we should have what can only be described as sex discrimination. An Englishman who marries a foreign girl can bring her to live in this country immediately and without question. A British girl who marries a foreigner must either live here separated from her husband or join him in his own country. That seems to me, on all social grounds, to be thoroughly bad, and I put it to the Home Secretary that the policy of his administration should be so framed that normally where a British woman has married a foreigner, unless there are good grounds for keeping him out of the country, he should be permitted to enter. There are many fields in which I think State intervention is much better than private enterprise, but if there is a case for private enterprise it is certainly in the choice by a British girl of her husband. I warrant that she will choose someone better to bring into the country than the Home Secretary can.

There is the broader question. We in this country are short of manpower. The Home Office are acting on the assumption that we are still living in the 1930's. Let me read from one answer that I have had from the Home Office in relation to entry of foreigners: jobs. Our birth rate is not increasing in sufficient proportion to enable us to replace ourselves. Both sides of the House are agreed on the necessity for the Government to take steps to maintain full employment. We are turning away from the shores of this country eligible and desirable young men who could be adding to our strength and resources, as similar immigrants have done in the past, and I suggest that this policy is shortsighted in the extreme.

It may be revolutionary to suggest that we ought now to become a country where immigrants are welcomed, but that is really the logical development of our present position in the world. We should become a country to which immigrants are welcomed if they are prepared to come here, and there are men who are desirable citizens in every way who are prepared to come here. I put it to the Home Secretary as earnestly as I can that, in the interests of our own economic welfare, he should permit many of these young men to come in, unless there is an extraordinarily good reason for keeping them out. Even when one has fought the battle and got them into the country, one finds the most stupid restrictions placed upon their entry. I have recently been given permission for one young man to come here for three months. He is a skilled building trade operative—a Dutchman, who served on British merchant ships during the war. We were glad to have his services then. After a long fight we were able to bring him here for three months, on condition that he does no work—a skilled building trade operative. I know there are difficulties about this sort of thing, but is anyone going to try to convince me that we ought not to permit a man like that to help us build the Houses we need?

The Home Secretary must reverse his policy and take a different line. I put to him this broad general principle: Freedom of movement between countries is desirable. It should be encouraged. We should break away from this artificial segregation of nation from nation that has existed for so long. I see no signs in the Home Office at present that they want to do these things, even though the difficulties are there. We hear that our young people cannot go to Austria. Yesterday the story was that some French trade unionists cannot come here for a visit. The day before that it was a G.I. married to a British girl who could not come here. I should not be surprised one morning to read in "Isvestia" that Mr. Molotov is complaining that the Home Secretary is sealing up this country behind steel shutters where the mysterious inhabitants of this island, aloof and far removed from the rest of the world, are carrying on their occupation. That would, perhaps, have the same germ of truth in it as much of the nonsense talked about the Russians, but that it a different question.

On the broad general issue, it might lead to a tiny flame of sanity for a torn and distracted world. Do let us have this free movement of men. It is a good Liberal principle, it is in the Bible and it is a good Socialist principle. I do put it to the Home Secretary: Let us tear down these barriers, let the people come into the country again, subject to a quota—we cannot let everybody come here. Let me say a final word. At the moment there are only 144,000 aliens who have come here since 1930–144,000 out of a population of 47,000,000 and I know we have to absorb them. We have 350,000 prisoners of war who, I hope, will return to their own countries sometime, and that will be absorption for them. The whole of this problem will be solved if we are willing to permit 50,000 to 100,000 to come here and share our life and help us build up our standard of life. I hope the Home Secretary will do so. Ruskin said:

12.8 a.m.

I only desire to intervene for three minutes in the hope that this will not be regarded as entirely a party matter, because I would like to associate myself wholeheartedly with the eloquent appeal. It is wholly time the Home Secretary should declare his policy, and the policy of the Government, in this matter of immigration, and, for that matter, migration. There are a number of young men and women in this country who wish to migrate to the Dominions and Colonies, and that only makes the problem more serious from the point of view of the hon. Member for South Cardiff (Mr. Callaghan) because it leaves a bigger gap to fill by immigration into this country. It seems to me the policy of the Home Office is in a glorious muddle. We have had no coherent statement about migration. There was a scheme announced about six months ago for the entry into this country of certain selected classes from Germany and Austria, but it has never been widened, and we have not got any assurance that young men and women can come into this country.

I have two or three urgent cases in my constituency, but I have got nowhere at all. A United States' soldier who married an English girl, and who is assured of a good occupation here and resources in this country, is refused permission to come in, and a Belgian sailor who served in our Forces during the war is in like circumstances. Hon. Members on all sides must have many cases, and I do hope we shall have a comprehensive statement from the Government on this matter.

12.10 a.m.

I would like to add a word or two in support of what has been said so well by the hon. Gentleman the Member for South Cardiff (Mr. Callaghan). It is not only a bad system, but it is working with great harshness. I will give one short illustration. A Free-Frenchman, fighting for his country, came here when the rest of the Free-French came, and he fought for us. With every proper permission he married an English girl. At the end of the war he was told to go back to France. He has a job and a house waiting here for him. It was with the utmost difficulty that we were able to get him permission to come to England for a week or two on the birth of his child. Then he was sent back, leaving behind a wife, child, job and house. He fought for his own country, and he fought for us. If he had fought for the Nazis for most of the war and then joined the Polish Army after the war, we would have paid his fare to come.

12.11 a.m.

I will not add any more to the cases already given to the House. I know of 18 cases which I personally have vetted in my own constituency. As briefly and strongly as I can, I want to add to the criticism which has been made tonight of the outmoded and, in many ways, inhuman attitude taken by the Home Office. It is inhuman; it is breaking up families, and it is causing great personal distress. It is outmoded, as the hon. Gentleman the Member for South Cardiff (Mr. Callaghan) has shown the House so clearly. He is not the only one who has put that point clearly. Another is the Lord President of the Council himself who, speaking last night, stated that we had 20 million people available for labour, and those 20 million people were not enough. I put those words to the Home Office in order that they may think on what they mean. Finally, in this country we have a tradition of open-heartedness. That is a tradition from which I benefited myself as a Huguenot. I defy anybody to say that this country, particularly the West Riding of Yorkshire, has not benefited in turn from the Huguenots. A more liberal attitude by the Home Office is what we have a right to expect from a Socialist Government.

12.12 a.m.

I would ask my hon. Friend when he replies to say something about a category of men who, I believe, deserve extra consideration. Those men are the aliens demobilised from the British Forces. I hope to raise the whole question on another occasion. I draw his attention to the fact that many people in this country, many people in our own British Forces of British nationality, feel very strongly that men who came from all over the world to fight for us—many gave their lives—should not be treated as aliens and refused permission to stay in this country until they have fulfilled the necessary qualifications for obtaining British naturalisation. I urge my hon Friend to point out in his reply that it is the policy of the Home Office—in fact, I understand it is what is being done—to allow people in this class to remain in this country until they become eligible for naturalisation as British subjects. In regard to aliens demobilised from the British Forces in this country, who go to visit relatives and friends abroad but who want to come back to settle in this country, will my hon. Friend give an assurance that it is the policy of his Department to allow them re-entry into this country? Finally, would he say that his Department and the Ministry of Labour will do what they can to see that aliens demobilised from the British Forces, who are awaiting naturalisation in this country, will be treated as though they were already British subjects as far as getting jobs is concerned?

12.14 a.m.

In addition to the cases mentioned by my hon. Friend the Member for South Cardiff (Mr. Callaghan) in his, as I think, unanswerable as well as eloquent speech, there is the case of the ex-G.I.s who were not married to English girls but by whom, unfortunately, English girls had babies. Some of the fathers are now prepared to come back to this country and marry those girls, provided they can be sure of settling down and getting jobs. To my mind, the barring of the ex-G.I.s is the most inexplicable part of the whole rather barbaric and obsolete attitude of the Home Office. Mention has been made of the fact that we are bringing into the country 160,000 Poles. I am not arguing the merits of that at all at the moment. However, I think it would be generally agreed that between most of the Poles and most of the people of this country there are considerable differences, not only of language but of culture, and even political differences. That does not apply to these comparatively few Americans. They are highly trained and skilled ex-Servicemen, and if they came here they would be a tremendous asset.

This matter has been raised both on principle and from the point of view of expediency at Question time, and several hon. Members, including myself, have asked why it is that, when a young couple gets married, it is always the woman who has to be uprooted and leave her native land. The Home Secretary answered that he could not go into that argument at Question time, by question and answer. Now is his chance—or a chance for my hon. Friend who is going to reply—to explain the principle. Why must the woman always be uprooted from her native land? That is the point of principle; and, as a matter of expediency, I ask why we should bar technically qualified ex-Servicemen who would be an asset to this country.

12.16 a.m.

I will keep the House only for a few moments, because time is getting short, but I think this is one of the occa- sions when the Home Secretary should hear what the House has to say rather than that the House should hear what the Home Secretary has to say. This country had an honourable position of being known as having opened its doors to refugees. We did not suffer from that. We gained by it. I do not know why the whole tradition of this country has been torn up by the kind of thing we have been fighting against at such bloody cost for so many years. The Home Office had to be pressed and bullied and kicked from all sides before it made any announcement at all about displaced persons, but as far as my knowledge goes, not one displaced person in a single displaced persons' camp in Europe has benefited, and I should like to know why that is. I should also like to know if we are to see an end to the position which makes some people say that the British Home Office is the last stronghold of Fascism in Europe.

12.18 a.m.

I should just like to say that before the war many professions assumed a very restrictive policy. In the medical profession, it was insisted that highly qualified doctors should go through elementary tests in medicine before being allowed to go into practice. The result was, that when war came, we found such doctors tending, not our own wounded, but the wounded of our enemies. As a result during the war, the teaching standards of our universities rested largely on refugee economists, while other economists were called into government service. If we believe in full employment, it is on grounds of efficiency that these highly skilled and useful men should be allowed to come to this country. They are willing to come to help us, and it is on this that the case so ably stated by the hon. Member for South Cardiff (Mr. Callaghan) really rests.

12.19 a.m.

I feel I should like to add one word to this spontaneous and almost unanimous appeal to the Home Office. I had the opportunity five weeks ago of raising this matter at Question time in connection with a particular case, and the Home Secretary very kindly consented to reconsider that case because of the sympathy and enthusiasm shown to the case in all parts of the House. Five weeks have passed, and I still do not know the result of that reconsideration. I do feel—I did feel all along, as many of us felt—that the change of Government as the result of the General Election would bring about within the Home Office a more humanitarian outlook towards this question. Some of us at this moment are having to confess terrible disappointment. I just want, very briefly, to add my quota to this appeal, which, I am sure, raised in the manner that it has been raised tonight, must bring the right response.

12.21 a.m.

As the time left to me is very short, I think I ought to say at once that the observations that have been made tonight on this matter will be seriously considered, because the Home Office is quite satisfied that the House is concerned on this particular matter.

I agree with the hon. Gentleman the Member for Nelson and Colne (Mr. S. Silverman) that we should have the impressions of Members on this matter, so that consideration can be given to the observations made. The general policy which has been laid down with regard to this matter is that, with regard to members of the Allied Forces, it was arranged that, on the termination of hostilities, they should go back to their own countries under arrangements which were made by their own Governments, and be demobilised there. It is true that the United Kingdom was the focal point, the springboard, against the Axis Powers; and it is right to say, too, that the members of the Allied Forces, whilst fighting, were fighting not merely for the United Kingdom, but for the Allied cause generally, and, also, for the liberation of their own countries. But when that purpose had been fulfilled, it was right that they should go back to their own countries; that, when their services as members of the Allied Forces had been terminated, they might help to reconstruct their own countries.

May I ask a question about the hon. Gentleman's preceding remark? Does he mean to tell the House that it is his intention to purge the Home Office of the undesirable elements that are now in it?

I do not know to what the hon. Member refers when he speaks about undesirable people in the Home Office.

Therefore, it has been the policy—and it was accepted—that they should go back. But the fact that they have been here, the fact that foreigners came to this country purely through the exigencies of war, and have done war service in this country, is an entitlement for them to remain here or, if they are sent back, that they should return here, seems to me to be a policy which cannot be sustained. If that be true, it would be equally applicable to foreigners who were civilians who married British girls. It is just as well to understand the magnitude of the problem. I want to state the problem first; then we will analyse what has been said about the issue. We must not overlook the fact that, as far as we know, something like 75,000 to 80,000 foreigners have married British-born women. [HON. MEMBERS: "Why not?"] I would have thought that hon. Members would have liked me to tell the House first, and to see the magnitude of the problem. Then they could see to what extent the arguments of my hon. Friend the Member for South Cardiff (Mr. Callaghan) and other hon. Members who have spoken are applicable, because we must not overlook the fact that between 75,000 and 80,000 foreigners have married British women.

Just a moment. In addition to that there is a large number of civilians in a similar category. There is a large number of British women who have gone abroad with the Services who have also married foreigners. Therefore the problem is not as small as has been suggested.

Do not these figures include the women who have already gone abroad—women who have married G.I.s and have gone to America?

With regard to marriages to Americans and Frenchmen, it is rather difficult, because British women do not lose their nationality by marriage to American and French citizens. As a rule it is difficult to check up, because they have not to register as aliens, which is the means whereby we ascertain the precise number. Therefore it is right to say that the question is not as small as has been suggested. I turn at once to the problem which was posed by the hon. Member for South Cardiff. He said we are short of labour; but that is only partly true. We have today over 250,000 people unemployed. We have in South Wales a reservoir of unemploy- ment, in Scotland a large unemployment problem, and in Lancashire a large unemployment problem. Therefore, we have to consider this matter in the light of these facts. [HON. MEMBERS: "No."] It is not right to say—

It being half an hour after the conclusion of Business exempted from the provisions of the Standing Orders ( 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 16 th August.

Adjourned at Twenty-eight Minutes past Twelve o'Clock.