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Commons Chamber

Volume 424: debated on Tuesday 25 June 1946

House of Commons

Tuesday, June 25, 1946

The House met at Half past Two o'Clock

Prayers

[Mr. SPEAKER in the Chair ]

Private Business

Tees Conservancy Bill

As amended, considered; Standing Order 205 suspended; Bill to be read the Third time forthwith.—[ The Chairman of Ways and Means. ]—( King's Consent signified. )

Bill read the Third time, and passed.

Questions to Ministers

On a point of Order. In view of what happened yesterday, may I ask, with deep respect, Mr. Speaker, whether it is your intention that this is to be a Question day, a supplementary day or a "free-for-all"?

Oral Answers to Questions

Employment

Liverpool Cotton Exchange (Staff)

asked the Minister of Labour whether he will give an assurance that all ex-employees of the Liverpool Futures Market have been found employment on equitable conditions.

As I said in reply to the Question by the hon. Member for Wallasey (Mr. Marples) on 26th March, the great majority of the staff displaced by the closing of the Liverpool Cotton Exchange on 31st March, 1941, were placed in or found other work at the time. Every effort is being made to offer suitable alternative employment to any of these workers who have since become unemployed.

Will the Minister say when these men in fact received suitable employment, and when he is going to relieve the anxiety which is now felt?

If the hon. Member has any information of any case where there is anxiety, I would be glad to look into it, but I cannot find these men jobs until they ask for them.

Monmouth and Glamorgan

asked the Minister of Labour the number of young men and young women who have left the counties of Monmouth and Glamorgan, respectively, during the past 12 months to obtain employment through the medium of the employment exchanges; the number whose benefit has been stopped because of refusal to accept such employment; and similar particulars for persons other than those mentioned above.

Does that mean that none of this information, for which I have asked before, is available? Are the statistics up-to-date?

If my hon. Friend will see me and let me have particulars, I will try to do what I can, but we have no information about those who have gone to work elsewhere.

Reinstatement

asked the Minister of Labour how many cases there have been in which a trades union has threatened stoppage of work if former employees who were not members of that union were reinstated under the Reinstatement and Employment Act.

Has the attention of the right hon. Gentleman been called to a report of such an incident with Odham's Press which appeared in the evening Press on 3rd June?

With great respect, there was no such incident reported in line with the hon. Member's Question and in which a trade union threatened a stoppage of work. There is no case on record of a trade union having threatened a stoppage of work.

Electricians' Labourers

asked the Minister of Labour, how many electricians' labourers, wireman's mates, were unemployed at the latest convenient date in England, London and Middlesex, respectively; and what are the reasons for such unemployment.

At 11th March, 1946, the latest date for which figures are available by separate occupations, the numbers of unemployed electricians' labourers and wiremen's mates were—England 511, Administrative County of London 25, Middlesex 11. I am not aware of any special reason for unemployment amongst these workers, although there is some shortage of supplies which every effort is being made to overcome.

Building Industry

asked the Minister of Labour the number of the unemployed in the building industry at the latest date available.

At 13th May, there were 11,406 unemployed insured males classified as belonging to the building industry on the registers of employment exchanges in Great Britain.

Can the right hon. Gentleman say why there is this unemployment at the present time when there is such a great demand for houses?

Yes, Sir. From an investigation I made this morning, I find that a great number of these are short-term unemployed—men who come on for a week and go off, and who are constantly changing their jobs. There is a great deal of unemployment in the Liverpool area where efforts are being made to overcome the difficulty. It is in the Liverpool area where the biggest number exists—961—but it is mainly short-term unemployment, and some of them are the lads who follow on the regular craftsmen in the jobs.

Is the right hon. Gentleman aware that in the rural areas there are quite a number of these unemployed men who are not included in these figures?

They are included in the figures and, if the hon. Member desires it, I will show him the full list.

Is the Minister aware that if the Tories had been in power the amount of unemployment would have been double what it is at present?

Alien Domestic Workers

asked the Minister of Labour why no progress has been made with the scheme for facilitating the immigration of domestic servants to this country.

As regards the recruitment of hospital workers, the replies from foreign Governments so far received indicate very little possibility of any large scale recruitment as the countries approached appear themselves to be suffering from similar labour shortages. As regards private domestic work, nearly 500 permits have been issued since 14th May, and a number of applications are now under consideration.

Does the Minister really expect the housewives of this country to go over to the Continent and make their own arrangements, and does he not think that 500 is quite an inadequate number in relation to the urgent demand for domestic servants in this country?

The hon. Gentleman is missing the point. What we are trying to do is to get staffs for the hospitals. If we were to put everybody into domestic employment we should be short of staff for the hospitals, but we are giving every encouragement to get them to this country.

asked the Minister of Labour whether he has yet consulted with the trades unions concerned in regard to the employment of foreign domestic workers in hotels, boarding houses and other catering establishments and what has been decided in this matter.

In view of the overriding need for domestic staff for the hospitals, I do not propose for the time being to make arrangements for the admission of foreign domestic workers for hotels, boarding houses or other catering establishments.

Would the right hon. Gentleman mind answering my Question, which was whether he had consulted with the trade unions and what was the decision reached between his Department and the unions concerned? That is part of a letter which he wrote to me.

I am sorry if I have not dealt with the specific point raised by the hon. and gallant Gentleman. We have not consulted with the unions because we are not yet ready to put forward a scheme; we are concentrating on the hospital workers.

How does the Minister hope to revive the tourist traffic in this country without the necessary domestic servants?

asked the Minister of Labour how many applications for alien domestic servants to come to this country have been received under the scheme recently announced; and how many granted.

It is not possible to give figures of the number of applications for permits received in every office of the Department, but, up to 22nd June, the number of applications dealt with at headquarters was 510, of which 486 were granted.

May I ask the Minister if, in view of the urgent necessity for housewives to have this domestic assistance, he will give instructions to his officers operating this scheme to do everything possible to speed the arrival of these domestics?

I can assure the hon. Gentleman that that will be done. The idea of working out this scheme originated in my Ministry and we are anxious to see it become operative.

asked the Minister of Labour what provision is being made to safeguard the interests and welfare of alien girls coming to this country to take up domestic employment.

In the case of the official scheme of recruitment of Belgian women for work in London hospitals, comprehensive arrangements for welfare, covering both individual and collective welfare, are undertaken by my welfare officers in co-operation with matrons and the Belgian Embassy liaison officer. Similar arrangements will be made under any other official schemes of recruitment that may be put into operation. With regard to foreign workers admitted for domestic service in individual private households, it is a condition of the grant of the permits that the wages offered are not less favourable than those prevailing for British domestic workers. They are also eligible to benefit from the State services in the same way as Eire and British private domestic workers.

Disabled Persons

asked the Minister of Labour the number of persons who have registered to date as disabled under the Disabled Persons (Employment) Act, 1944, and give an indication of the disabilities from which they suffer and their origin.

On 20th May, 538,287 persons were registered as disabled. Of this number 265,522 were disabled from injuries received during service in His Majesty's Forces and from other war injuries, and 226,579 from accidents and diseases. Forty-six thousand one hundred and eighty-six have been disabled from birth or early childhood. I will circulate a detailed analysis of the register in the OFFICIAL REPORT. I should add that such an analysis appears monthly in the "Ministry of Labour Gazette."

Can the right hon. Gentleman inform us if any difficulty has been experienced in connection with the 2 per cent. quota, and what prospects there are of firms taking disabled persons when that percentage is increased?

One of the most pleasant things in relation to this Act of Parliament is to be able to record the very cordial cooperation which employers have given in absorbing the 2 per cent. and, on that basis, we anticipate no difficulty at all in maintaining that cooperation and in helping to absorb the others.

Will my right hon. Friend bear in mind that the number of unemployed rose sharply in May, and will he reconsider the question of raising the quota?

Is the right hon. Gentleman aware that since the lifting of the Essential Work Order many firms are dismissing their disabled men and drawing on the labour reserve now available, and will he get his inspectors to look into this matter in the regions?

DISABLED PERSONS REGISTER

20 th May, 1946 1946

A.—ANALYSIS BY ORIGIN OF DISABLEMENT.

Origin of Disablement.

During Service.

Other War Casualties.

Industrial Accidents and Diseases.

Other Accidents and Diseases.

Disablement from Birth or Childhood.

Total.

Ex-Service (1914–1918)

Men

97,262

18

274

305

97,859

Women

22

3

3

28

Other Ex-Service

Men

161,961

1,155

20,756

39,519

223,391

Women

1,434

16

32

356

1,838

Juveniles

23

1

3

27

Non-Ex-Service

Men

2,992

62,709

84,353

31,169

181,223

Women

595

2,404

14,261

12,407

29,667

Juveniles

44

200

1,400

2,610

4,254

Total

260,702

4,820

86,379

140,200

46,186

538,287

B.—ANALYSIS BY NATURE OF DISABLEMENT.

Nature of Disablement.

Ex-Service (1914–1918).

Other Ex-Service.

Non-Ex-Service.

Total

Amputations

16,955

12,833

21,533

51,321

Arthritis and rheumatism

1,113

10,577

6,861

18,551

Congenital malformations

65

451

6,735

7,251

Diseases of digestive system

1,284

24,803

10,251

36,338

Diseases of heart, etc.

4,078

11,255

9,758

25,091

Diseases of the lungs *

4,635

20,616

15,856

41,107

Ear defects

3,148

8,842

14,150

26,140

Eye defects

5,146

10,568

21,890

37,604

Injuries of head, face, neck, thorax, abdomen, pelvis and trunk

12,328

15,016

9,302

36,646

Injuries and diseases * of lower limb of lower limb

18,501

33,662

34,752

86,915

Injuries and diseases * of upper limb of upper limb

19,809

21,423

19,852

61,084

Injuries and diseases * of spine of spine

888

6,172

8,215

15,275

Nervous and mental disorders

4,304

22,800

12,161

39,265

Tuberculosis

2,117

10,714

10,213

23,044

Other diseases and disabilities

3,516

15,524

13,615

32,655

Total

97,887

225,256

215,144

538,287

* Except Tuberculosis Except Tuberculosis

asked the Minister of Labour the number of disabled men and women, respectively, in Hull; the number suitable and unsuitable for ordinary employment; what steps his Department are taking themselves, and

There may be isolated instances of that kind, but I can assure the House that I know of many large firms in this country who are employing 10 and even 15 per cent. of disabled persons on their staff.

Following is the analysis:

with industry, to find employment for these people; whether, in view of the number of disabled persons in the Hull area, he will consider setting up a special British factory in the city for their employment; and, if so, at what date.

The numbers of persons registered as disabled in Hull on 20th May last were 4,210 men and 252 women. Of these totals 605 men and 30 women were unemployed at that date and of these 294 men and seven women were classified as unsuitable for ordinary employment. Every effort is made by my Department both under the quota scheme and otherwise to find employment for these people. In regard to the last part of the Question, the Disabled Persons Employment Corporation proposes to set up a British Factory in Hull as soon as practicable, and has approved a site for this purpose.

Will the Minister consider the special case of cripples who are not ex-Servicemen, but of whom there is a comparatively large number in the Hull area?

Yes, Sir. They will all be taken into consideration, but I would remind the House that the Act places on the Minister the responsibility of giving priority to cases of ex-Servicemen.

Building Labourers (Training)

asked the Minister of Labour why ex-Servicemen who were employed as general labourers in the buiding trade before the war, are debarred from taking part in the Government Vocational Training Schemes to qualify themselves as skilled building operatives.

The hon. and gallant Member appears to have been misinformed. Applications from such men who are considered suitable for training are accepted, but preference in allocation to the centres is given to the younger ex-Servicemen who, because of their war service, were unable to start or complete their training for a skilled trade.

May I ask the Minister what he considers a younger ex-Serviceman and whether, in fact, it is not an intolerable burden on ex-Servicemen to be prevented from bettering themselves just because of some arbitrary age limit fixed by the Minister?

There is another side to that. If a man has a trade which he can carry on and there is a younger man who has not had the chance to be trained at all, and we have to decide who can get a livelihood, we obviously have to pass over the man who has a trade and take the man who has not.

Cardiff Training Centre

asked the Minister of Labour how many applicants are now awaiting accommodation at the training centres in Cardiff; and what steps are being taken to expedite their absorption.

In Cardiff, 261 applicants have been accepted and are awaiting allocation to training centres. The new permanent centre at Cardiff, with about 500 places, is now in full operation and, to expedite entry into training, accommodation is being sought for another centre in Cardiff. In addition, a new centre is shortly to be opened at Bridgend.

Miners and Agricultural Workers (Controls)

asked the Minister of Labour when he intends to restore to individuals in, respectively, the mining and agricultural industries, the right to choose their own vocation.

I am in consultation with my right hon. Friends about this matter. The situation in the coalmining and agricultural industries does not, at present, permit the abolition of all labour controls, and I am not in a position to make any announcement about future arrangements.

Dockers

asked the Minister of Labour how many dockers were unemployed or unable to obtain work, on an average, during the past four weeks for the last period for which figures are available, at the ports of London, Cardiff, Bristol and Liverpool

I am obtaining the information, and will communicate with my hon. Friend.

May I ask my right hon. Friend if he will instruct his port labour superintendents to offer the services of any unemployed dockers to the Ministry of Food in order to facilitate the delivery of the accumulated stocks of gift food parcels which are lying at our docks awaiting delivery, and failure to deliver which is causing dissatisfaction up and down the country?

I can make no observation on the latter part of the supplementary question, but if there is any possibility of putting these workers into a job elsewhere, we will do so.

Questions

National Service (Students)

asked the Minister of Labour the conditions of deferment for students at places of instruction such as the Architectural Association.

As these details are rather long, I would refer the hon. Member to the Memorandum for Guidance of Principals and Headmasters (Administrative Memorandum No. 160 dated 4th June, 1946) prepared in consultation with my right hon. Friends, the Minister of Education and the Secretary of State for Scotland, a copy of which is in the Library. Architectural students, including those at the Architectural Association, fall within the scope of the arrangements set out in the Memorandum.

Will the right hon. Gentleman interpret for me the relevant passage which I was hoping he would do?

If the hon. Gentleman had asked me that specific question, perhaps I might have had a go at it.

Can the Minister tell us anything about the lifting of the Control of Employment Order from the Civil Service?

Scottish Universities (Admissions)

asked the Minister of Labour the approximate number of students debarred entrance to the Scottish universities this year by the 10 per cent. formula; and whether emergency measures will be adopted to enable these students to continue their studies progressively.

The information asked for in the first part of the Question cannot become available until September. The provision of emergency measures for additional students is a matter for the universities themselves.

Is my right hon. Friend aware that the formula of 90 per cent. ex-Servicemen and 10 per cent. pupils is a uniform formula, not applicable to conditions which are not uniform, and that in Scotland pupils cannot possibly take their inter B.Sc. or the inter B.A., or their first year of medicine, unless they get entrance to the universities, whereas they can in England take these qualifications?

I can only say that in working out this scheme, we have had the advice of all university authorities, and adopted the course which appeared to us to be most suitable in the circumstances.

Scotland

Milk Herds, Perth (Feedingstuffs)

asked the Secretary of State for Scotland the number of tuberculin-tested and other milk herds in the county of Perth for which an additional allocation of feedingstuffs is being given as a result of the contamination of pastures by poison gas.

Only one application for a special issue of coupons to purchase feedingstuffs has been made in respect of a Perthshire herd which had been kept indoors on the instructions of the War Office authorities. This was granted.

Is the Secretary of State aware that over 100 attested cattle are affected in this herd, that they are still being kept indoors although six months have elapsed since they became visibly affected and that their rations are inadequate? What is being done to remove the cause of contamination, and to provide adequate rations?

The Agricultural Department, who advised the issuing of the special coupons because of the situation which had arisen, were advised that favourable consideration would be given to the issue of a limited quantity of feedingstuffs to overcome the difficulties which have arisen. As and when applications are made, I will certainly give them favourable consideration.

National Fire Service, Perthshire

asked the Secretary of State for Scotland the numbers and locations of fire brigades or fire service detachments effectively equipped and manned and available to deal with outbreaks of fire in those districts of the county of Perth in which ammunition and explosives are at present stored.

National Fire Service units are immediately available at Dunblane, Doune, Auchterarder, Crieff, Comrie, Callander, Aberfoyle, Balfron, Stirling and Bridge of Allan, with a total strength of 16 wholetime and 91 retained (parttime) firemen, 10 major pumps, 8 light trailer pumps and other equipment, to provide fire cover for this area of Perthshire. Ample reinforcements can also be sent, if necessary, from adjoining areas.

In view of the grave risk to life and property in this neighbourhood because of the great dumps of ammunition, is the Secretary of State satisfied that the fire fighting units are adequate in numbers to cope with the enormous area?

I know the dangers are great, but I am satisfied that with the equipment and personnel we have we can carry through the duties which may devolve upon us.

Cattle (Poison Gas Death Claims)

asked the Secretary of State for Scotland the numbers of cattle, sheep and other livestock in the counties of Perth and Stirling respectively, which since 30th September, 1945, have died, or have been destroyed, as a result of suspected or alleged poisoning or other disease due to the proximity of poison gas containers.

I understand from my right hon. Friend the Secretary of State for War that claims have been received by his Department in respect of 78 cattle and 15 stillborn calves in Perthshire, and of 133 cattle, 60 stillborn calves, 80 sheep and 374 stillborn lambs in Stirlingshire.

Can the right hon. Gentleman say if this question has been referred to any research institute in order to find out precisely the reasons for this contamination?

Yes, Sir, I am having full inquiries made, and the whole of the Departments that are affected and in- terested by this problem are concentrating their inquiries and their efforts with a view to finding out exactly what is the position.

Can the right hon. Gentleman say what is being done to prevent further outbreaks?

I cannot say until I have had the report from this expert body of individuals who are inquiring into the whole problem. The hon. Member can rest assured that as and when I get that report, speedy action will be taken upon the evidence in the report submitted to me.

Education (Senior Leaving Certificate)

asked the Secretary of State for Scotland if he is aware of the dissatisfaction following the announcement of the results of the Group Leaving Certificate examinations in Scotland; if he will give the percentage passes in relation to entries for 1944, 1945 and 1946, respectively; and whether there has been any alteration in assessing scholastic attainment during this period.

With regard to the first part of the Question, I am aware of the statements that have been made on this subject. As my reply to the other parts of the Question is rather long and contains a table of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Is my right hon. Friend aware that the prewar standard has been reimposed in the pass lists? Is it fair to reimpose a prewar standard, however desirable, when the conditions lack prewar advantages and facilities?

I cannot, in answer to a question, give the full details in connection with this problem. What has been established is an external examination on exactly the same lines as took place in 1939, and the only figures that could be comparable would be the figures in 1946 as compared with those for 1939.

Following is the reply:

Arts Policy

asked the Secretary of State for Scotland whether, in order to encourage the development of a distinctive arts policy in Scotland, he will arrange for the provision of a separate grant-in-aid under Class IV, Vote 10, of the Civil Estimates in place of the existing grant-in-aid to the Arts Council of Great Britain.

The organisation of the Arts Council of Great Britain includes a Scottish Committee, appointed in consultation with me, whose chairman is a member of the Council; and the Council has an office in Edinburgh. Under these arrangements Scottish interests are safeguarded, and I am not satisfied that the hon. Member's proposal would be to the advantage of Scotland.

Fishing Gear (Grants)

asked the Secretary of State for Scotland, whether he is aware that the majority of applications by ex-Service fishermen for grants or loans for nets are being rejected on account of the means test applied; that no allowance is made for the depreciation of nets which have been stored during the war; and what steps he is taking to remedy this situation.

The applications for grants for nets and gear are dealt with in accordance with the provisions of the Inshore Fishing Industry Act, 1945, and the Herring Industry Act, 1944. In the former case no applications have so far been refused in Scotland and in the latter case, 27 applications for grants have been refused because the applicants could reasonably be expected to provide their gear without assistance by grant. In 15 of these cases loans have been offered and in the remaining 12 no loan was requested.

As regards the second part of the Question, I am bound by the terms of the Acts to give assistance only where it is necessary for the provision of nets. Consequently if a man is in a position to provide the nets without a grant I cannot make allowance for any depreciation which he may have incurred on nets already in his possession.

Surely the depreciation on nets which have rotted during the war in the case of ex-Servicemen could be taken into account in assessing whether a man is in a position to purchase his own nets or not? Surely that is a factor which could be taken note of?

I am prepared to give consideration to that point, but I am pointing out that I am bound by the terms of the Act.

Teachers' Training (Selection)

asked the Secretary of State for Scotland whether he will arrange that in cases where an application for admission to training under the Emergency Training Scheme for Teachers has been rejected by the Central Selection Board there shall be a right of appeal to the Scottish Education Department.

No, Sir. The Central Selection Board, which includes representatives of wide educational interests, is appointed by the National Committee for the Training of Teachers, a body elected by the education authorities of Scotland. The Committee is charged with the entire responsibility for selecting and training suitable persons for service as teachers in Scottish Schools, and if they, or the selection board to whom they delegate their powers in this matter, decide that an applicant is unsuited for such training, I think that that decision should be accepted Normally, applicants under the emergency training scheme are interviewed and reported on by a provincial selection board before their cases are considered by the Central Board. On each board the Scottish Education Department is represented by officers acting in the capacity of assessors.

Brickworks, Inverkeithing (Machinery)

asked the Secretary of State for Scotland if he will explain the cause of the delay in having machinery installed in the new brickworks at Inverkeithing, Fife; and, in view of the need to increase the supply of bricks, if he will take steps to have this brickworks brought into production as soon as possible.

The delay in the installation of machinery in this brickworks, which had been partially completed at the outbreak of war, is due to the uncertainty of their future arising from the proposals in the Forth Road Bridge (Draft) Provisional Order, particularly the line of the approach road. The circumstances are most exceptional but the position is under review and I am hopeful of a compromise which will enable the brickworks to be brought into production. I shall keep my hon Friend fully informed.

Surely, in view of the fact that it will take a considerable number of years to get ahead with the Forth Road Bridge, they could have had these brickworks working and made preparation at the same time for transferring it several years ahead when necessary?

I am fully aware of that and I have been into the matter, but the fact is that the owners of the brickworks will not go on with their production until they are given very definite guarantees that the Forth Road Bridge will not interfere with their work.

Public Assistance (Family Allowances)

asked the Secretary of State for Scotland if he will make a statement giving guidance to Scottish local authorities as to whether family allowances should, or should not, be taken into account when assessing applicants for public assistance.

I would refer my hon. Friend to the answer given to the hon. Member for West Renfrew (Mr. Scollan) on 30th October last, of which I am sending him a copy.

Is my hon. Friend aware that there is a good deal of concern among Scottish local authorities about this matter and, failing a general directive, there is not likely to be any uniformity of practice? Will he not take his courage in his hands and direct the local authorities to ignore these allowances?

It is not so much a question of courage in this case as a question of fulfilling the law. I cannot give a direction in this instance without an alteration in the law.

Brick Production

asked the Secretary of State for Scotland what measures, additional to the importation of bricks from England, are being taken to meet the shortage of bricks in Scotland.

In addition to the special steps to expand brick production referred to in the reply which I gave my hon. Friend on 28th May, the Government have arranged, as a temporary measure, to import substantial numbers of building bricks from Belgium. A considerable proportion of these will be brought to Scotland and the first consignment is expected to arrive next week.

Can my hon. Friend say whether brick production in Scotland continues to increase and if and when it is likely to reach such a figure that these imports from outside Scotland will be unnecessary?

We get the figures at the last day of each month. Until the last day of May the figures had risen substantially each month, four or five million a month, but they are not yet up to the number that we require for our large building programme in Scotland.

British Army

Education

asked the Secretary of State for War if he will now make a detailed statement on his plans for education in the postwar Army.

I regret that it is not yet possible to add anything to the answer given to my hon. Friend on 21st May.

Is my hon. Friend aware that an early statement on this subject was promised and, in view of the vital importance of this in the development of the postwar Army, can he state when he expects to be able to make a statement?

No, Sir, not at the moment, except that I can say that the matter is being given careful consideration by the War Office. I have seen the projected plans but they have to have very careful consideration.

Is my hon. Friend satisfied that he has got the staff to deal with the very great mass of new conscripts?

I should not like to give a definite answer to that at the moment in view of the very ambitious plans that we have, but obviously this matter has to be considered in relation to the postwar Army, and the postwar Army is not there yet.

Austria (Newspapers)

asked the Secretary of State for War if he is aware that the only newspaper circulating amongst the troops in Austria is the "Eighth Army News" which gives little news of interest to the troops; and if he will consider supplies of national newspapers throughout the British zone.

Sunday papers from home have been supplied regularly to the troops in Austria for some time. But I am afraid there is no possibility of sending daily papers, owing to the difficulty of providing air transport and of maintaining regular deliveries. The "Eighth Army News" has been extremely popular with the troops: it has a good service of home news and was preferred to daily papers arriving a few days late. It has recently been superseded in Austria by a local edition of "Union Jack." The "Morning News" published and circulated by the British Element Allied Commission is also available in Austria.

Is the Minister aware that one can read the "Eighth Army News" in about five minutes? Has he tried the experiment of sending out the daily papers even though they may be a day or two old?

Yes, Sir. We have tried sending out the daily papers to Austria but it has not been satisfactory owing to the irregularity of air transport.

Are we to infer from what the Financial Secretary has said that not only are no daily newspapers circulated to the troops but also no daily newspapers are sent to Austria at all?

Daily newspapers do go to Austria but not under the auspices of the War Office. The newspapers that are circulated—the "Union Jack" and the "Morning News"—I have seen myself and they give quite a lot of information to the troops.

Is my hon. Friend aware that the "Eighth Army News" contains a lot more news and truth than some of the yellow gutter Tory rags?

Court Martial Centre, C.M.F

asked the Secretary of State for War for how many years the building used at 21 Court Martial and Holding Centre, Portici, C.M.F., has been occupied by British Forces; and on what date the necessary repairs to the washing and sanitary arrangements were put in hand.

The building was taken over by British Forces in December, 1943, and was first occupied by this particular unit in September, 1945. Repairs to the internal washing and sanitary arrangements were begun last month, as soon as sufficient water could be supplied to enable them to be put into use, thus justifying the expense of the repairs.

Is my hon. Friend aware that the reassuring reply previously given on this matter by his right hon. Friend does not altogether correspond with the facts, and will he look into it more thoroughly, as the position is very bad at this place?

asked the Secretary of State for War if he has considered the details submitted to him of soldiers who have been awaiting trial at 21 Court Martial and Holding Centre, Portici, C.M.F., for periods of from two to seven months, including five who were arrested last November and are still untried; and what steps he is taking to lessen the period of waiting.

I have looked into this case and I find that lengthy and complicated investigations have been necessary in connection with the charges, which involve several thousands of pounds of public money. There have also been difficulties in tracing all the accused. I agree, however, that the delay has been somewhat protracted and I am therefore glad to say that the accused were due for trial on 24th June.

Courts Martial (Defence Scheme)

asked the Secretary of State for War how many solicitors have responded to the recent invitation, issued by his Department and the Air Ministry, through the Council of the Law Society, to undertake defences before courts martial in Germany; and what reduction he anticipates therefrom in the time spent awaiting trial.

Seventy solicitors and 55 barristers have so far offered to undertake this type of work and applications are still being received. I hope that this scheme, when in full operation, will help to reduce the time spent awaiting trial, but I cannot at this early stage estimate its effect. Every effort is being made to avoid undue delay, whether due to this or other causes.

Stores, Barlow Depot (Destruction)

41 and 42.

asked the Secretary of State for War (1) whether he is aware that articles which are still sufficiently serviceable to meet the urgent needs of civilians are being destroyed as unserviceable at the R.A.O.C. depot at Barlow, Yorkshire and if he will institute an inquiry into this matter;

(2) whether he is aware that articles which are in great demand by the public are being destroyed at R.A.O.C. depots although many of the articles are sufficiently serviceable to meet the needs of civilians; and what steps he is taking to prevent such incidents.

I was aware of the allegations made in the case of the Barlow depot, and inquiries had already been carried out. Certain unserviceable articles which were destroyed or allocated for other uses in the Army might possibly have been made to serve a civilian purpose, but the great majority were quite unsuitable for civilian use. The destruction of unserviceable stores which might be of some use to the civil population is expressly forbidden and the instructions on this point have now been repeated to those concerned at all ordnance depots.

Is it not true that a large number of articles have been destroyed because they do not come up to Army standards, but they are very worth while for civilians who are desperately short of any of these stores?

No, Sir, that is not quite correct. Some of these articles were not considered by a civilian Department to be of service to the public. Certain of the articles, like sheets, for example, were torn and holed, and would not have been of any use to the civilian public and, therefore, they have been used as rags.

Personal Case

asked the Secretary of State for War why 10577903 Corporal J. Mitchell, R.A.O.C, India Command, was warned for overseas service on 17th October, 1945, has been in transit for seven months, and now finds he is shortly to return to this country for demobilisation.

This soldier returned from B.A.O.R. in November last, as available for drafting overseas. After 28 days' leave, and leave during Christmas, he was placed on draft for India by air, obtaining a passage on 6th February, and arriving in India three days later. The release dates for his age and service group have not yet been announced.

Is the hon. Gentleman aware that since last October this soldier has passed through 12 different units and has done practically no work at all? Surely things could be organised better?

I do not know about the latter part of the hon and gallant Member's supplementary, but I must inform the House that it is quite possible that soldiers do get posted to different units. After all, we are under pressure to release men, and as release takes place so units disappear, and, therefore, soldiers have to be used to the best possible advantage.

Germany (Telephone Facilities)

asked the Secretary of State for War if he will make arrangements for members of His Majesty's Forces serving in the British zone in Germany to telephone to the United Kingdom.

Yes, Sir A one-way telephone service, from Germany to the United Kingdom, will be opened on 1st July for the benefit of members of the Forces and Control Commission. I am giving full details in the OFFICIAL REPORT.

Would the Financial Secretary say whether the charge is within the pockets of "other ranks," and can he say how many telephones he proposes to install?

As far as B.A.O.R. is concerned, the charge will be 5s. for a three minute call. The hon. Gentleman can, therefore, assess whether it is within the pockets of "other ranks."

A service from B.A.O.R. to this country. Apparently, it is not yet possible to have a two-way service from this country to B.A.O.R.

Following are the details:

On 1st July, 1946, a Soldiers' Social Telephone Call Service from Germany will be opened for the benefit of members of the Occupation Forces, including members of the Control Commission. This service will be "one-way" only, that is, calls can only be made from Germany to the United Kingdom. Calls will be booked by the caller up to four days in advance at various canteens and clubs throughout the British Zone of Germany and Berlin and will be made from kiosks specially provided for the purpose. The cost of a call which will be paid by the caller to a kiosk attendant at the time of making the call will be 5s. 0d. for three minutes and each call will be limited to three minutes. The service will be available from 6.30 p.m. to 10.30 p.m. (B.S.T.) on weekdays and from 10 a.m. to 10.30 p.m. (B.S.T.) on Sundays; all the available circuits are in use for official purposes at other times.

The service has been arranged by the War Office in collaboration with the Post Office. Owing to the restricted number of circuits available in relation to the numbers in the Occupying Forces and the Control Commission, it will be necessary to limit the number of calls which can be made, and the standard of service which would be given in normal conditions should not be expected in the special conditions of this service.

It will be necessary rigidly to adhere to the time limit of three minutes so that the maximum number of people may derive benefit from the limited facilities available. The period of three minutes begins as soon as the called number answers, and it is, therefore, important that the required person should be called to the telephone as quickly as possible.

Questions

Information Officers (Function)

asked the Prime Minister whether, in view of the increasing control that the Government are exercising throughout the country as a result of their nationalisation of many industries, he will give an assurance that the Government will refrain from introducing Government views and Government news by the utilisation of the publicity agents which are attached to all Government Departments.

If the hon. Member means that information officers should not function for the issue of news and comments on matters concerning their Departments, the answer is: "No, Sir."

Will the right hon. Gentleman recall that at the Imperial Press Conference held this month there was widespread complaint against the views of the Government anonymously given by unsigned articles? Is he not further aware that any tendency to suppress the source of news for the Press is a negation of democracy? Why not let the Press find their own news in their own way, which they do admirably?

I do not know about the first point which the hon. Gentleman made, and I disagree with the last.

Is the right hon. Gentleman not aware that the first point was given wide publicity by that wonderful free Press which, thank God, we still have in this country?

Emergency Powers (Duration)

asked the Prime Minister whether he is now in a position to declare the date of the end of the national emergency.

I would refer my hon. and gallant Friend to the reply given by my right hon. Friend the Lord President of the Council on 18th December to the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler).

Would the right hon. Gentleman say if the next election is the probable date of the end of the national emergency?

Assistance Board (Deputy-Chairman's Salary)

asked the Prime Minister if he will state the amount of salary enjoyed by the present deputy-chairman of the Assistance Board.

While recognising to the full the high qualifications of the new occupant of this post, is the right hon. Gentleman aware that Miss Violet Markham, whose qualifications were certainly not less, has held this post for many years past at a salary of £700, and what is the reason for doubling the salary of this new appointment?

I am aware of that, but the salaries have varied from time to time. The first deputy-chairman received £3,000. Miss Markham received £750 at her own request. The chairman, whom we all remember in this House, has had £5,000, and £1,500 seems to be a very suitable sum for the deputy-chairman.

Rations Changes (Announcements)

asked the Prime Minister whether he will ensure that, in future, announcements of alterations in the rationing of commodities affecting the whole nation are made first in the House of Commons and not at Press conferences or during broadcasts by Members of His Majesty's Government.

Changes in rations nearly always affect the whole nation, and in present circumstances they have to be made frequently and often at very short notice. Some of the changes are of comparatively minor importance. Those of major importance are usually announced in the House, if it is sitting at the time, and this is the practice which His Majesty's Ministers will continue to follow. It is, however, of prime importance, in my view, that the public as a whole should be given as long notice as possible of impending changes, and I must leave it to individual Ministers to determine the best method of securing this object in each case.

Does the Prime Minister consider that such cases are covered where the announcement of soap rationing was made at a Press conference in the morning when this House was sitting? Surely such an announcement should have been made in this House which, after all, is still responsible for the government of this country?

The hon. and gallant Gentleman is mistaken. It was made in a broadcast on the Sunday night, and the House did not sit until Tuesday.

The actual announcement was made in the Press in the morning by the Parliamentary Secretary to the Ministry of Food, and this House sat in the afternoon—two hours difference.

The hon. and gallant Member is mistaken. The announcement was made in a broadcast on Sunday night, 16th June.

Absent Ministers (Duties)

asked the Prime Minister what arrangements he has made for the conduct of public business in the absence from this country of the Secretary of State for India, the First Lord of the Admiralty, the Secretary of State for Air, the President of the Board of Trade, the Minister of Food, the Minister of Supply and the Attorney-General.

Sir, as far as the absence in India of the Secretary of State for India, the First Lord of the Admiralty and the President of the Board of Trade is concerned, I would refer the right hon. Member to the statement which I made on 19th February. In the absence of the Secretary of State for Air from this country during the negotiations for the revision of the Anglo-Egyptian Treaty, the Parliamentary Under-Secretary of State has been responsible for the day-to-day administration of the Department. Questions of major importance have been referred to me as Minister of Defence. In the recent short absence of the Minister of Supply who was leading the delegation from the United Kingdom Empire Parliamentary Association to Bermuda, the Permanent Secretary has been in charge of the day-to-day administration and supervision of the Department. Parliamentary and Ministerial duties have been shared between the Joint Parliamentary Secretaries. During the absence of the Minister of Food in Canada and the United States, the Parliamentary Secretary is in general charge of the Department. During the recent short visit of the Attorney-General to the Continent, the Solicitor-General has been responsible for public business normally falling to the Attorney-General.

While realising with gratitude that since I put down this Question, some of these Ministers seem to be drifting back to duty, does the right hon. Gentleman think it is really satisfactory that at a time when the future of the Defence Services is under review and most important decisions have to be taken, two out of three Service Ministers should be out of this country for practically three months?

The right hon. Gentleman is mistaken The Secretary of State for Air has not been away for three months.

Can my right hon. Friend say who is responsible for the continued and very frequent absences of the Leader of the Opposition?

Would it not be more convenient if, instead of the Leader of the House taking on all these various duties while his colleagues are abroad, he should come to the House on important occasions to assist in the conduct of the Business?

I am afraid the right hon. Gentleman is mistaken again. It is only in respect of the Board of Trade that the Lord President of the Council has been taking an interest.

Poland (Attorney-General's Visit)

asked the Prime Minister whether the Attorney-General's visit to Poland was made with his approval.

Was it with the Prime Minister's approval that the right hon. and learned Gentleman stated at Cracow on 16th June that General Anders had greatly abused the hospitality extended to him by England?

I am not aware of that statement. Perhaps if the right hon. Gentleman wishes me to answer that Question, he would give me notice of it. I have not heard of it.

Does the right hon. Gentleman also approve of the statement in the Press, which the right hon. and learned Gentleman made in the same speech, that His Majesty's Government had no intention of interfering with the internal affairs of—

On a point of Order, Mr. Speaker. I have often heard you rule that it is out of Order for hon. Members to give Ministers information. Surely, it is more out of Order to give them wrong information?

I did not quite hear the hon. Member's question. Perhaps he would repeat it.

Surely, it is within the recollection of the House that you have often ruled that it is out of Order for hon. Members to give information to Ministers. A fortiori, to give the wrong information must be much more out of Order.

I think the right hon. Gentleman was imputing those two statements to the Government, and, therefore, it is not a question of giving information to a Minister.

I asked the Prime Minister whether the visit had his approval, and I was only going to ask whether the statements which had been widely reported in the Press—

The Question was whether the visit had the Prime Minister's approval, and not whether the speech had his approval.

Will the Prime Minister request the Attorney-General, when he is visiting foreign countries, not to make statements on foreign policy, some of which cast reflections upon hon. Members of this House, without the authority of the Cabinet?

I suggest that it hon. Members wish a reply concerning alleged statements made by a Minister, they should give me notice of what those statements are.

I intended no discourtesy to the Prime Minister, but I am only allowed to raise a speech in the case of a Cabinet Minister; hence the form of my Question.

Forest Officers (Germany and Austria)

asked the Chancellor of the Duchy of Lancaster the total strength of British forest officers and foresters now working in the British zones of Germany and Austria as members of the Control Commission or of other services or delegations; and how many of such foresters or forest officers have been detached from the Forestry Commission for service on the Continent.

There are 27 in Germany: two in Austria. Twenty-two of those employed in Germany have been detached from the Forestry Commission.

Germany

Herr Arns

asked the Chancellor of the Duchy of Lancaster if he is aware that Herr Arns, a Gestapo interpreter, is still employed in a high-ranking official position in Neuss; and whether, in view of his past associations with the Nazis, he will remove this man from the office he now holds.

We have no evidence that Herr Arns was either a member of the Gestapo or an active participant in the Nazi movement, but his case is being examined by one of the de-Nazification panels which are composed of anti-Nazi Germans, and if my hon. Friend has any reliable information, I should be grateful if he would let me have it.

Food Situation

asked the Chancellor of the Duchy of Lancaster if he has considered the statement on the food situation in Germany made by a commander of a British Army unit at Osnabrück, of which a copy has been sent him; and whether he will give an assurance that the black market activities referred to in the statement are being eliminated

I have seen the Press reports in question and would request my hon. Friend to await the statement which my right hon. Friend the Secretary of State for War will be making later this afternoon. So far as concerns the black market activities, while a certain amount is inevitable where a serious food stringency exists, very energetic steps have been and are being taken by our authorities to suppress them. I have no information to confirm that these activities are specially marked in the Osnabrück area.

Is the hon. Gentleman aware that all the visitors to the Continent from this country come back with the same story, that there is a black market going on in every city; that, while the working classes are hungry, the visitors can get anything as long as they are prepared to pay black market prices for it?

Minesweepers (Destruction)

asked the Chancellor of the Duchy of Lancaster how many German fishing cutters have been blown up by Army demolition squads; and what is the purpose of destroying these vessels.

Thirty-eight small motor minesweepers of the fishing cutter type have been destroyed, mainly by Naval demolition parties, in accordance with an agreement reached by the tripartite Naval Commission set up under the Potsdam protocol. These vessels were in a bad state of repair and could not have been made seaworthy without an uneconomic diversion of shipyard facilities required for repairing and converting for fishing purposes other vessels which are not so seriously damaged.

Displaced Persons (Emigration)

asked the Chancellor of the Duchy of Lancaster what agencies in Germany are consulted regarding applications of displaced persons for emigration to Great Britain; and what steps are taken to check applications.

Applications by displaced persons, not of British origin, are checked by the British passport control officer at Lubbecke and by the Combined Travel Security Board, a tripartite body, operating from Berlin.

Would the hon. Gentleman answer the Question regarding the agencies consulted?

Can my hon. Friend say whether it is true that so far this machinery has resulted in not one displaced person reaching the shores of this country?

As far as I understand, that is the position. Special inquiries are being made into the reasons.

Food Situation

The following Questions stood upon the Order Paper:

86. Mr. ROYLE—To ask the Secretary of State for War whether the statement of a responsible British officer, a copy of which has been sent to him, about food in the Osnabruck district of Germany was made with his authority; and what action he is taking to prevent unauthorised statements being made.

92. Captain BAIRD—To ask the Secretary of State for War if the statement of Lieutenant-Colonel W. A. Foulkes about the food situation in Germany was made with his authority; and what action he intends to prevent officers making unauthorised statements about conditions in Germany.

At the end of Questions

On a point of Order. May I call your attention, Mr. Speaker, to the fact that in answering Question 54, the Chancellor of the Duchy of Lancaster, in his reply, asked us to await a statement that was to be made by the right hon. Gentleman the Secretary of State for War? In consequence, some of us withheld some of our intended supplementaries. If no statement is now made, it is quite possible that the wrong view will go out.

No doubt the answer will come in the ordinary course as a written answer. Ministers may ask permission to make statements at the end of Questions, but I cannot be ordered by one Minister that another may make a statement. But, no doubt, there is some mistake here.

I am not suggesting that you should take any orders from anybody, but the fact does remain that the Chancellor of the Duchy, in his reply, asked us to await a statement which was to be made, and unless we have it the wrong impression will go out.

May I explain? The intention was that the statement in question would be made by the Secretary of State for War in reply to Question 92 on the Order Paper, which was a Question about exactly the same case as that which was addressed to me, but the responsibility for answering which was that of the Secretary of State for War, since the officer in question is one of the B.A.O.R. officers.

I have had no notice that any Question would be answered at the end of Questions, but I will allow it.

I have an answer to make to Questions 86 and 92, with your permission, Mr. Speaker, and with the permission of the House.

The statement attributed to this officer was not made with my right hon. Friend's authority. I understand it was taken from a letter written by him to a friend. I hope, however, to have a full report on the matter within the next day or two, when I will write to my hon. Friends. The regulations prohibit the publication of military information, or views on military subjects, without special authority.

Is it not a matter of great importance, I ask the Leader of the House, that we should know the truth of the food conditions in Germany?

Is my hon. Friend aware that in the "Portsmouth Evening News" of 17th June it is stated that the officer told the Associated Press that the Germans are having a good laugh at us?

May I ask the Leader of the House if he will give us an assurance that the fullest information will be laid before the House, not merely a letter from the Secretary of State for War to his questioner in the House? We all want to know what are the facts.

I quite agree, and there will be no unwillingness on the part of the Government to give the facts. There is more information still to come, and my hon. Friend will take into account what has been said, and the arranging that a further Question should be put or a further statement made.

In view of this statement in the Press, is there any way of stopping junior officers making these irresponsible statements, especially in view of the fact that high officers in Germany hold quite the contrary view, and say that there is a severe state of starvation there?

My right hon. Friend deprecates any unauthorised views being expressed by serving officers, and we shall take steps in so far as we are able, to see that they do not express unauthorised views.

Has my hon. Friend no information about what the situation is, in fact, there?

There is plenty of information, of course, but I do not think it arises out of this Question.

Would it not be the duty of this officer, if he knew these practices were taking place, to put an end to them?

Is the hon. Gentleman aware that the general impression is growing in this country that the people of this country, on the food situation, are being taken for a ride, and that the reports coming from all quarters are, that the food situation is not nearly as bad as it is reported to be to the people of this country? Is he aware that the people of this country are becoming very greatly disturbed about these reports?

I think the House will recognise that that Question should not be answered by me. If it is in Order, it should be put to the Minister of Food or to the Chancellor of the Duchy of Lancaster.

May I ask whether there are any means of stopping the Beaverbrook Press from spreading misrepresentations regarding the food situation in Europe, and whether the "Daily Express," in particular, can be prevented from misleading its readers as it is doing?

We are all anxious to get at the facts of the situation, but does my hon. Friend think that an officer who, at the best, can have only a partial view of the situation, is in any position to express any views to the Associated Press?

May I reiterate what I said in my original reply, that the views of this officer were not expressed for publication? They were sent as a private letter to a friend. Obviously, the War Office cannot control those expressions. But in so far as publicity has been given in the Press to those views, we will take steps to rectify the matter, as far as we can. Certainly, all information that is available, either in the War Office or elsewhere, about the food conditions in Germany, will be given to this House and to the British public.

National Finance

Coinage (1½d.)

asked the Chancellor of the Exchequer if he will arrange for the minting of a 1½d. coin to reduce delay and inconvenience in giving change, particularly on road passenger vehicles where 1½d. fares are in great demand.

No, Sir. I think this change would create more inconvenience than it would remove.

Is the right hon. Gentleman aware that the London Passenger Transport Board issues 3¾ million 1½d. tickets daily, to say nothing of those issued by other transport organisations in the country? Will he bear that matter in mind and see if it is possible to reconsider this?

I think it would cause more inconvenience than it would remove. It would muddle up the various coins.

Ministers' Motor Cars

asked the Chancellor of the Exchequer how many motor cars are now being used by Ministers; if he will state the cost to the taxpayer; and the authority under which these motor cars are being used.

Thirty-one, at about £24,000 a year. The authority is the approval by this House of the financial provision in the Departmental Votes for travelling and incidental expenses.

Can the right hon. Gentleman give any information as to the unauthorised trips taken by Ministers in cars; and is he aware of the growing public feeling that Ministers are getting free rides in cars at the public expense?

I regard that as a typical expression of the hon. Gentleman's opinion, but it is not widely shared by sensible persons.

Surely I am right in saying—and perhaps the Chancellor would confirm it—that before the war only two official motor cars were provided.

Housing Loans (Interest)

asked the Chancellor of the Exchequer if he will make the reduction of interest on housing loans to 2½ per cent. retrospective so as not to penalise those authorities who responded early to the. Government's call to build at the close of the war.

Millet Seed Seizure, Liverpool

asked the Chancellor of the Exchequer what has been done with the £1,000 worth of millet seed seized on the s.s. "Letitia" when that ship arrived in Liverpool in April, 1946, and the £500 worth of millet seed seized on the s.s. "Empire Cromer" at the Gladstone Dock, Liverpool, on 30th May, 1946, by the Customs and Excise officers.

These goods are now lying in the King's Warehouse at Liverpool, and, if no one claims them before the end of this month, they will be handed over to the Ministry of Food.

With regard to the confiscation of dutiable goods, which Customs and Excise officers take, do they destroy them or are they always sold?

Any goods which are suitable for human consumption or human use are handed over to the Ministry responsible, which, of course, accounts for them to the Treasury when the goods are sold to the public.

Is it not a fact that millet keeps very badly; and, this millet having been kept from April to July, is it not unlikely to be any good for anything?

I hoped it would be disposed of before it went bad. In this case the seed was being loaded into a taxicab by persons who absconded on the approach of Customs officers. Efforts have been made to trace the real owners, from whom it was thought this may have been stolen. That may have accounted for a little of the delay.

Black Market Fines (Income Tax)

asked the Chancellor of the Exchequer whether his regulations permit fines inflicted on limited companies in respect of black market transactions to be charged against business expenses, thus reducing liability to Income Tax and Excess Profits Tax.

Has the right hon. Gentleman's attention been called to a recent case in which heavy fines have been imposed on a number of restaurants in respect of food offences; and can he undertake that the fines will be paid out of taxable profits?

I certainly hope so. If there was any evidence of any improper making of claims including such fines I would, of course, go into the matter. Up to date I have no evidence that any such claims have been made.

If the hon. Gentleman has any information which he thinks would put me on the track of any malpractices perhaps he would let me have it. We have no reason to think it is going on.

Questions

Compulsory Purchase Orders

asked the Chancellor of the Exchequer whether, as great hardship is caused to small property-owners by compulsory purchase at 1939 values under Section 9 of the Town and Country Planning Act, 1944, he will consider introducing amending legislation.

No, Sir, apart from the increase of the maximum supplement for owner-occupiers from 30 per cent. to 60 per cent. which I announced on 6th June.

Government Departments

Central Information Office

asked the Chancellor of the Exchequer whether he will take steps, in consultation with the British Government Information Bureau and other appropriate Ministries, to coordinate the work of the paid publicity agents attached to the Departments to eliminate overlapping and to secure a further reduction in the numbers employed, and relinquish the command which they still hold over many important sources of news.

Coordination in this field is a normal function of the Treasury, in consultation with the Central Office of Information. I regard the present arrangements as being satisfactory and efficient.

Is the Chancellor aware that substantial sums of the taxpayers' money are being utilised for producing Government propaganda, which is very often misleading as regards food and many other matters? Would he put a stop to this very undesirable practice in regard to Government propaganda?

asked the Financial Secretary to the Treasury the total number of paid publicity agents attached to all Government Departments throughout the country on 1st June, 1945; the approximate total cost of their salaries for the period June, 1945, to June, 1946; and the increase or decrease of numbers employed compared with 1st June, 1945.

The information asked for is not immediatley available. I will circulate the particulars in the OFFICIAL REPORT at an early date.

Does not the hon. Gentleman agree that utilisation of publicity agents should not only be curtailed but, really, abolished altogether, in view of the widespread abuses that have gone on especially under this Government with their propaganda? It is all propaganda.

Scientific Manpower Scheme

asked the Chancellor of the Exchequer whether he is aware that proposals have been made to re-grade scientific officers in the Civil Service, with first and second class Honours Degrees, into the experimental officer class for which such qualifications are unnecessary; and whether, in view of the need to conserve scientific manpower as indicated by the Report of the Committee on Scientific Manpower, he will arrange for an investigation to be made into the present use of scientific manpower in the Civil Service, with a view to ensuring that men and women with high qualifications are not wasted in the lower grades which could easily be filled by persons of lesser attainments.

Efficiency in the use of scientific manpower is one of the main purposes of the new scheme, and I see no reason for any special investigation. The strengthened class of experimental officers will play an important part, and it must not be assumed that the hold of a good Honours degree would be wasted there.

But will the Government realise that such a person would not be wasted if he could be put to very much better use by being employed in a capacity appropriate to his attainments?

We are anxious to make full use of capable scientists in all branches of science and with all sorts of different qualifications. I do not think the hon. Gentleman need fear that we shall waste any talents that can be brought into the public service.

Vacancies, Northern Ireland

asked the Financial Secretary to the Treasury whether, in view of the fact that unlike the situation in Great Britain, all Servicemen and women from Northern Ireland were volunteers, he will undertake that a definite priority for employment in civilian capacities with the Forces and other Imperial Government services in Northern Ireland be given to ex-Servicemen and women from the United Kingdom.

In recruitment to established posts in the Imperial Government service during the reconstruction period, minimum reservations of vacancies are set aside for ex-Servicemen and women. I am not aware that any special arrangements beyond this are called for in Northern Ireland.

Is the hon. Gentleman not aware that there is serious unemployment among ex-Servicemen and women? Ought they not to have the fullest priority, in view of the fact that they are unlikely to get work in Great Britain because of the allocations to various jobs?

That is an entirely different question from the one on the Order Paper. The hon. Gentleman asks if priority can be given to ex-Servicemen from the United Kingdom. I gather that now he means priority for those in Northern Ireland.

Questions

Cost of Living Index

asked the Chancellor of the Exchequer by how much the purchasing power of a British pound has decreased within Great Britain since June, 1945.

The cost of living index on 1st June, 1946, was 103 per cent. above 1914 as compared with 104 per cent. on 1st June, 1945. Data are not available for a similar calculation over the whole field of personal expenditure.

Has not the Chancellor of the Exchequer experienced personally how far £1 will go to-day in relation to when he first came into office?

Is the right hon. Gentleman aware that to the housewife the cost of living index is no consolation for the fact that the £ buys very much less every month?

Business of the House

May I ask the Leader of the House a question about Business? I understand that the Government propose to suspend the Rule for tonight. It is quite obvious that we cannot reach the conclusion of the Committee stage of the Finance Bill by 7 o'clock. What does he propose with regard to the long and formidable list of Measures and subjects which are on the Order Paper following the Finance Bill?

We thought that, with reasonable consideration, the Finance Bill might have been finished by 7 o'Clock. [HON. MEMBERS: "Oh."] Well, we thought so. I am not sure that we do not think so. I can see that it may not be possible to finish the Committee stage of the Finance Bill by 7 o'Clock, but we do intend that the Committee stage of the Finance Bill shall come to a conclusion today, and that we shall take the consideration of the Lords Amendments to the Borrowing (Control and Guarantees) Bill. I do not think the other Orders could be regarded as formidable. We were hoping to get them. We had better see how we go on about those. But we regard it as important and essential to get the conclusion of the Finance Bill, and to get the consideration of the Lords Amendments to the Borrowing (Control and Guarantees) Bill.

May we hope then that in our second all-night Sitting we shall have the advantage of the presence of the Leader of the House?

I can give no more guarantees of my presence than the right hon. Gentleman can give guarantees of the presence of the Leader of the Opposition. I have many other things to do. The Committee was perfectly competently led, as I am sure all parties will agree, by the Chancellor of the Exchequer and the Chief Whip. As to how Ministers dispose of themselves in these matters, that is primarily a matter between the Ministers. I suggest that it is a most indelicate question for any Member of the Opposition to put.

Is not the position of the Leader of the House unique, and one which requires him to give supreme priority to his duties to this House?

The business of the Leader of the House is to see that the Business of the House is competently handled, and everybody will agree that it was competently handled. If I may say so, the position of the Leader of the Opposition is also unique, and carries grave constitutional responsibilities—I do not wish to rub in the point—since the Leader of the Opposition has had a public salary attached to his office. [ Interruption/ ] If the right hon. Gentleman the Leader of the Opposition seeks to put me on the spot, I am just as entitled to put him on the spot.

Is not the right hon. Gentleman showing a great lack of comprehension? He is responsible for getting the Business of the House through, and that is the primary responsibility of the Administration. If hon. Members, whether in the Opposition or on the back benches, choose to discuss matters, that is for them, but it is for the Leader of the House to guarantee to carry the Business through. Over a great many years of experience I have always seen that discharged with great punctiliousness.

I do not know whether the right hon. Gentleman recalls the fact that he had a Leader of the House in the Coalition days in the shape of the Secretary of State for Foreign Affairs. These things have to be fitted in with other duties. I agree that the Leader of the House has the duty to see that the Business is going through. He is doing it, and the Business is going through; perhaps the right hon. Gentleman may have noticed that. I recall his attention again, since he has chosen quite needlessly to assume the offensive, that the Leader of the Opposition has a duty towards Parliament as well as the Leader of the House.

We all, of course, wish to show proper respect and sympathy to the Leader of the House who, in addition to the duties here, has the world on his shoulders.

The original Question was about the Business of the House, but since the right hon. Gentleman made his reply we have got rather wide of that matter.

Business of the House

Motion made, and Question put,

"That the Proceedings on Government Business be exempted, at this day's Sitting,

from the provisions of the Standing Order (Sittings of the House)."—[ Mr. Dalton. ]

The House divided: Ayes, 235; Noes, 118.

Division No. 216.]

AYES.

[3.45 p.m.

Adams, W. T. (Hammersmith, South)

Forman, J. C.

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

Allen, A. C. (Bosworth)

Foster, W. (Wigan)

Noel-Buxton, Lady

Allighan, Garry

Gallacher, W.

Oldfield, W. H.

Alpass, J. H.

Gibbins, J.

Oliver, G. H.

Anderson, A. (Motherwell)

Gibson, C. W.

Paling, Will T. (Dewsbury)

Anderson, F. (Whitehaven)

Gilzean, A.

Palmer, A. M. F.

Attewell, H. C.

Glanville, J. E. (Consett)

Pargiter, G. A.

Austin, H. L.

Greenwood, Rt. Hon. A. (Wakefield)

Parker, J.

Awbery, S. S.

Grenfell, D. R.

Paton, Mrs. F. (Rushcliffe)

Ayles, W. H.

Grey, C. F.

Paton, J. (Norwich)

Ayrton Gould, Mrs. B.

Grierson, E.

Perrins, W.

Bacon, Miss A.

Griffiths, D. (Rother Valley)

Popplewell, E.

Baird, Capt. J.

Griffiths, Rt. Hon. J. (Llanelly)

Porter, G. (Leeds)

Barstow, P. G.

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

Price, M. Philips

Barton, C.

Hale, Leslie

Pryde, D. J.

Battley, J. R.

Hall, W. G. (Colne Valley)

Pursey, Cmdr. H.

Bechervaise, A. E.

Hamilton, Lieut.-Col. R.

Randall, H. E.

Bellenger, F. J.

Hardy, E. A.

Ranger, J.

Benson, G.

Henderson, Joseph (Ardwick)

Rankin, J.

Bing, Capt. G. H. C.

Holman, P.

Rees-Williams, D. R.

Binns, J.

Holmes, H. E. (Homsworth)

Reeves, J.

Boardman, H.

House, G.

Ridealgh, Mrs. M.

Bottomley, A. G.

Hoy, J.

Roberts, W. (Cumberland, N.)

Bowden, Flg.-Offr. H. W.

Hubbard, T.

Rogers, G. H. R.

Bowles, F. G. (Nuneaton)

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

Royle, C.

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

Hynd, H. (Hackney, C.)

Scollan, T.

Braddock, T. (Mitcham)

Hynd, J. B. (Attercliffe)

Scott-Elliot, W.

Brown, George (Belper)

Janner, B.

Segal, Dr. S.

Brown, T. J. (Ince)

Jeger, G. (Winchester)

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

Bruce, Maj. D. W. T.

John, W.

Sharp, Lt.-Col. G. M.

Buchanan, G.

Jones, D. T. (Hartlepools)

Shawcross, C. N. (Widnes)

Burden, T. W.

Jones, P. Asterley (Hitchin)

Shawcross, Sir H. (St. Helens)

Burke, W. A.

Keenan, W.

Shurmer, P.

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

Kenyon, C.

Silverman, S. S. (Nelson)

Callaghan, James

Kinley, J.

Skeffington, A. M.

Castle, Mrs. B. A.

Kirby, B. V.

Skeffington-Lodge, T. C.

Chamberlain, R. A.

Kirkwood, D.

Skinnard, F. W.

Champion, A. J.

Lang, G.

Smith, Ellis (Stoke)

Chater, D.

Lavers, S.

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

Chetwynd, Capt. G. R.

Lee, F. (Hulme)

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

Clitherow, Dr. R.

Lee, Miss J. (Cannock)

Snow, Capt. J. W.

Cocks, F. S.

Leslie, J. R.

Soskice, Maj. Sir F.

Collick, P.

Lever, Fl. Off. N. H.

Sparks, J. A.

Collins, V. J.

Lewis, A. W. J. (Upton)

Steele, T.

Colman, Miss G. M.

Lewis, J. (Bolton)

Stephen, C.

Comyns, Dr. L.

Lindgren, G. S.

Stewart, Capt. Michael (Fulham, E.)

Cooper, Wing-Comdr. G.

Lindsay, K. M. (Comb'd Eng. Univ.)

Stokes, R. R.

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

Logan, D. G.

Stross, Dr. B.

Cove, W. G.

Lyne, A. W.

Stubbs, A. E.

Crossman, R. H. S.

McAdam, W.

Swingler, S.

Cunningham, P.

McAllister, G.

Symonds, Maj. A. L.

Daggar, G.

McGhee, H. G.

Taylor, H. B. (Mansfield)

Daines, P.

McGovern, J.

Taylor, R. J. (Morpeth)

Dalton, Rt. Hon. H.

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

Thomas, Ivor (Keighley)

Davies, Edward (Burslem)

McKinlay, A. S.

Thomas, George (Cardiff)

Davies, Clement (Montgomery)

McLeavy, F.

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

Davies, Harold (Leek)

Mainwaring, W. H.

Thorneycroft, H. (Clayton)

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

Mann, Mrs. J.

Thurtle, E.

Davies, R. J. (Westhoughton)

Manning, C. (Camberwell, N.)

Tiffany, S.

Deer, G.

Mathers, G.

Timmons, J.

Diamond, J.

Mayhew, C. P.

Titterington, M. F.

Driberg, T. E. N.

Middleton, Mrs. L.

Tolley, L.

Dugdale, J. (W. Bromwich)

Mikardo, Ian

Tomlinson, Rt. Hon. G.

Durbin, E. F. M.

Millington, Wing-Comdr. E. R.

Usborne, Henry

Dye, S.

Mitchison, Maj. G. R.

Vernon, Maj. W. F.

Edelman, M.

Montague, F.

Viant, S. P.

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

Moody, A. S.

Walker, G. H.

Edwards, John (Blackburn)

Morgan, Dr. H. B.

Wallace, G. D. (Chislehurst)

Edwards, N. (Caerphilly)

Morley, R.

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

Edwards, W. J. (Whitechapel)

Morris, P. (Swansea, W.)

Watson, W. M.

Evans, S. N. (Wednesbury)

Morrison, Rt. Hon. H. (Lewisham, E.)

Wells, W. T. (Walsall)

Evans, John (Ogmore)

Mort, D. L.

Westwood, Rt. Hon. J.

Fairhurst, F.

Mulvey, A.

White, C. F. (Derbyshire, W.)

Farthing, W. J.

Murray, J. D.

Whiteley, Rt. Hon. W.

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

Nally, W.

Wilkes, Maj. L.

Foot, M. M.

Naylor, T. E.

Willey, F. T. (Sunderland)

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

Yates, V. F.

TELLERS FOR THE AYES:

Williams, W. R. (Heston)

Young, Sir R. (Newton)

Mr. Pearson and Mr. Simmons

Willis, E.

Younger, Hon. Kenneth

Wilson, J. H.

NOES.

Agnew, Cmdr. P. G.

Harris, H. Wilson

Peake, Rt. Hon. O.

Assheton, Rt. Hon. R.

Harvey, Air-Comdre. A. V.

Pickthorn, K.

Baldwin, A. E.

Haughton, S. G.

Ponsonby, Col. C. E.

Barlow, Sir J.

Head, Brig. A. H.

Prescott, Stanley

Bennett, Sir P.

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

Raikes, H. V.

Birch, Nigel

Henderson, John (Cathcart)

Ramsay, Maj. S.

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

Hinchingbrooke, Viscount

Reed, Sir S. (Aylesbury)

Boothby, R.

Hope, Lord J.

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

Bossom, A. C.

Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

Roberts, H. (Handsworth)

Bower, N.

Jarvis, Sir J.

Ropner, Col. L.

Boyd-Carpenter, J. A.

Jeffreys, General Sir G.

Sanderson, Sir F.

Braithwaite, Lt.-Comdr. J. G.

Jennings, R.

Scott, Lord W.

Brown, W. J. (Rugby)

Keeling, E. H.

Shephard, S. (Newark)

Buchan-Hepburn, P. G. T.

Kerr, Sir J. Graham

Shepherd, W. S. (Bucklow)

Bullock, Capt. M.

Kingsmill, Lt.-Col. W. H.

Smith, E. P. (Ashford)

Carson, E.

Lancaster, Col. C. G.

Smithers, Sir W.

Challen, C.

Linstead, H. N.

Snadden, W. M.

Churchill, Rt. Hon. W. S.

Lipson, D. L.

Spearman, A. C. M.

Clifton-Brown, Lt.-Col. G.

Lloyd, Maj. Guy (Renfrew, E.)

Stanley, Rt. Hon. O.

Conant, Maj. R. J. E.

Low, Brig. A. R. W.

Stuart, Rt. Hon. J. (Moray)

Cooper-Key, E. M.

Lucas-Tooth, Sir H.

Sutcliffe, H.

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

MacAndrew, Col. Sir C.

Taylor, Vice-Adm. E. A. (P'dd'ton, S.)

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

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

Thomas, J. P. L. (Hereford)

Crosthwaite-Eyre, Col. O. E.

Mackeson, Lt.-Col. H. R.

Thornton-Kemsley, C. N.

Crowder, Capt. J. F. E.

McKie, J. H. (Galloway)

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

Darling, Sir W. Y.

Macmillan, Rt. Hon. Harold (Bromley)

Touche, G. C.

Dodds-Parker, A. D.

Macpherson, Maj. N. (Dumfries)

Turton, R. H.

Donner, Sqn-Ldr. P. W.

Maitland, Comdr. J. W.

Vane, W. M. T.

Dower, Lt.-Col. A. V. G. (Penrith)

Marlowe, A. A. H.

Wadsworth, G.

Dugdale, Maj. Sir T. (Richmond)

Marples, A. E.

Wakefield, Sir W. W.

Duthie, W. S.

Marsden, Capt. A.

Walker-Smith, D.

Erroll, F. J.

Marshall, D. (Bodmin)

Watt, Sir G. S. Harvie

Fletcher, W. (Bury)

Marshall, S. H. (Sutton)

White, Sir D. (Fareham)

Fox, Sqn.-Ldr. Sir G.

Mellor, Sir J.

Williams, Gerald (Tonbridge)

Fraser, Maj. H. C. P. (Stone)

Moore, Lt.-Col. Sir T.

Willoughby de Eresby, Lord

Galbraith, Cmdr. T. D.

Morris, Hopkin (Carmarthen)

York, C.

Gammans, L. D.

Morris-Jones, Sir H.

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

Gomme-Duncan, Col. A. G.

Morrison, Maj. J. G. (Salisbury)

Gridley, Sir A.

Neven-Spence, Sir B.

TELLERS FOR THE NOES:

Grimston, R. V.

Nield, B. (Chester)

Mr. Drewe and Mr. Studholme

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

Orr-Ewing, I. L.

Orders of the Day

Finance (No. 2) Bill

Again considered in Committee.

[Major MILNER in the Chair]

NEW CLAUSE—(Repeal of s. 6 of Finance Act, 1933.)

"Section six of the Finance Act, 1933 (reducing the rebate on delivery for home consumption of any oils other than light oils by one penny per gallon) shall cease to have effect."—[ Mr. Erroll. ]

Brought up, and read the First time.

3.55 p.m.

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

After the brief period of recuperation which the Government have been good enough to allow us, we return to this subject with renewed zest. I intend to tackle the matter with a new speed. Earlier in the year, the Minister of Fuel and Power, in respect of the duty of a penny per gallon on fuel oil, said: sible At present, the price of fuel oil imported into this country is controlled at £7 10s. per ton, or thereabouts, according to the quantity supplied. It is reasonable to expect that there will be a reduction in price, and then, of course, the £1 a ton duty will represent an even bigger percentage of the total cost of this vital industrial raw material than even it does to-day. Some manufacturers are using oil, despite the tax, but it is hitting manufacturers who are facing severe international competition in their products.

I propose to give briefly one or two practical examples which may perhaps entice the Chancellor to look into the matter more fully. I can assure him that there are many examples, and these are but one or two. In the steel industry, some of the more progressive firms are finding that it will become a definite economy to change over to the burning of oil fuel in their steel furnaces. The present duty, however, represents an increased cost of not less than 4s. a ton on finished steel. At the present time, we are going ahead with our export of steel, but we are already facing the competition of the United States. They are themselves very large users of fuel oil for firing furnaces. The steel works on the Eastern seaboard do not have to pay a fuel oil duty, and are consequently in a more favourable situation than our own steelmakers attempting to turn over to the consumption of fuel oil. I hope that I have demonstrated that the tax is a direct handicap on an export trade, which is trying to pick up and thrive.

I should now like to refer to the glass industry. Here in this country they have been using home produced liquid fuel known as creosote pitch. It is now required for other purposes and the Ministry of Fuel and Power have ordered the glass industry to change over to imported fuel oil. This means no less than £100,000 a year on the costs of the industry in paying the tax alone. This Order of the Ministry means a very real additional handicap to a vital industry. I hope the Committee will bear with me while I quote from a letter from the Glass Manufacturers Federation forwarded to me through the Federation of British Industries. I mention these names to show that industrialists are taking a deep interest in these matters. The letter reads:

4.0 p.m.

I want to say at once that the hon. Gentleman has made out a persuasive and interesting case. I am not in a position, and I do not think the Committee will expect me to be in a position to accept this proposal at once, but I have been looking into this question, on which I have had representation from various industrial quarters interested in this matter. I had already decided before we reached this discussion and before the hon. Gentleman the Member for Altrin-cham and Sale (Mr. Enroll) put this Clause on the Order Paper that this question should be looked at by a strong expert committee—a committee containing persons with expert knowledge in chemistry and the other matters concerned. Such a committee is now in course of being set up, and my Department is in touch with the Ministry of Fuel and Power, and we hope to get a good committee. The names will be announced as soon as we get the members together. We should like the committee to examine the whole question which is rather wide and touches a number of our industries and the general problem of cost of fuel and hence the cost of production. I hope we shall be able to get a report in time to enable a decision to be taken before the Finance Bill of next year, but there are complications with which I will not weary the Committee. I am conscious that they should be examined, because the revenue involved would be between £3 million and £4 million and that is too large a sum to dispense with at the moment, but it might not be out of reach next year. I am not committing myself, but I am definitely inclined to the opinion that this matter should be put on what I may call the short list of possibles, subject to the committee's inquiry concluding, for next year. I could cite figures and go into the history of this matter, but I think we should let it go to the committee for it is well worthy of consideration. I am very friendly to this type of idea; I hope that perhaps the hon. Member for Altrincham and Sale will continue to keep in touch with me as he offered to do, for he is evidently well-informed on the subject and in touch with people who know all about it, and I hope also in view of what I have said, he will be prepared to withdraw his Clause.

I think the Committee is grateful to the hon. Member for Altrincham and Sale (Mr. Erroll) for raising this subject and also to the Chancellor of the Exchequer for the sympathetic way in which he is dealing with the matter. I only want to say that I hope he will impress upon this committee which is being set up the urgency of their inquiry. Anything that can be done in industry to save fuel by turning to alternative methods is of the utmost importance. There are a number of industries whose coal stocks are dangerously low and we are past Midsummer Day. From what I hear there is real danger that far more will be lost by industry having to close down during the next three months through lack of coal, than would be lost in respect of this tax. I fully agree with what has been done and what is happening, but this is a matter of real urgency. There may be unemployment, we may lose valuable export trade and we may have a setback through shortage of coal in industry and if the situation is regarded in that light then it will be agreed that everything that can be done should be done to expedite and cheapen alternative methods of fuel. It would undoubtedly be a national advantage to expedite the investigation.

I am at one with the Chancellor in saying that the Committee ought to be grateful to my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) for raising this issue, which is one of considerable importance, and also for the well informed speech we have heard. I am a little worried, however, at the Chan cellor's statement that he is setting up an expert committee with a view to having something in the Finance Bill next year. I should have thought that this is one of the subjects which, for all practical purposes, is known in all its details to the various Government Departments concerned. The question of alternative fuel is not something that has drifted into the consciousness of the nation in 1946. There has been a great deal of this sort of thing in the past, and I think the Chancellor is running a great risk in delaying the matter. I realise that £3,500,000 is an amount which the Chancellor does not want to give away at this stage, but one has to weigh the disadvantages against the advantages. The right hon. Gentleman, with his previous experience of these matters, is not one to stress unduly the merely financial side—

Yes, I know, but I am sure the right hon. Gentleman would not stress that factor unduly if other factors were of greater importance. Really alarming speeches have been made by the Minister of Fuel and Power about the coal shortage, and if the right hon. Gentleman has had time to read the morning newspapers he may have seen a speech by Mr. Lawther, the miners' leader, on the very dangerous position into which we are drifting in regard to coal reserves in factories and power stations. If anything could be done quickly to relieve any part of the demand for coal during the coming months, it should be done, even at the cost of £3,500,000. I should be surprised if there is anything further to inquire into, because I was mixed up with these things when I was Secretary for Mines, and I know that a great deal of information was available in the Department then, and at the Board of Trade. Since then, a number of industries have made use of this fuel, and I should have thought that the safer line, from the national point of view, would be to consider, between now and the next stage of the Bill, accepting this proposal in order to give its benefits during this critical winter. Then the expert committee could be set up, and if it did not come to the same view as some of us have now, they could make an alteration. Let us risk the £3,500,000 not coming into the Exchequer in favour of encouraging firms to go ahead as fast as possible during this critical winter.

I am sure the right hon. Gentleman will agree that the prospects are very bad on the coal front, and that anything we can do to reduce the demand for coal while the position is so bad would be to the national advantage. I ask the right hon. Gentleman not to close his mind to the fact that there is a good deal of information at hand. I should have thought there was enough information on which to take a gamble. I thank my hon. Friend the Member for Altrincham and Sale for having raised this issue, and I hope the Chancellor will bear in mind the possibility of doing something now. If the coal position turns out to be as bad as some of the prognosticators have forecast, it will be almost too late, in next year's Finance Bill, to take the necessary action.

4.15 p.m.

As we have a good deal of progress to make I had hoped that when I made what I intended to be a sympathetic and helpful reply it might lead to some abbreviation of the subsequent Debate. When I do that, however, and a large number of Members rise to speak, I am not encouraged to be helpful. I hoped that after I had intervened following the interesting speech of the hon. Member for Altrincham and Sale (Mr. Errol) nothing further would be added to the Debate. If I rise early in a discussion in order to meet a particular case I am a little discouraged if the subsequent Debate is prolonged when I have given an undertaking that I intend to be as helpful as I can. It will have repercussions on our Debate later. I am sure Members do not want to have a second all-night Sitting, and I hope to be able to cooperate with the Opposition in abbreviating the Debate.

I am seized of the importance and urgency of this question of coal supplies. I apprehend that it is important to do what we can to investigate fully the possibility of easing the position, but we must have an inquiry. That is the view of a number of different people who have looked into this matter. There are several points which need to be looked into more closely, as to how far a reduction in duty will be efficacious in giving us, early, a wide extension of the use of this oli. We must see what is the field within which we can hope for good results in the substitution of this oil for other fuels, and the consequent cost. That does not mean that we should delay, and I shall not delay. Already, steps have been taken to get an expert committee set up, and I hope we shall soon be able to get it working. I shall not delay the committee's proceedings; on the contrary, my whole tendency will be to prod it. If, in the course of the financial year, there is some action which we can take, my mind will not be closed to that possibility. I do not like the suggestion that we should take a gamble. I think it is better to get the committee's report first, and then see if there are ways and means by which we can take action during the financial year.

Does that mean that the committee set up in 1936 for the use of alternative fuels has been disbanded, or will this problem be laid before them?

No, a committee was set up some years before the war which was charged with the duty of studying the use of alternative fuels.

There are all sorts of continuing inquiries and standing committees, which deal with these things. What I contemplate is a small committee of persons with special knowledge of this particular problem, rather than the wider problem.

In view of the cooperative reply which the Chancellor has given, I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Customs duty on oils for producing gas.)

Notwithstanding the provisions of Subsections (1), (2) and (3) of Section eight of the Finance (No. 2) Act, 1945, the rate of customs duty payable on oils used in a refinery for producing gas, the gas from which is used for generating heat, light or power for consumption outside the refinery shall be chargeable at the same rate as is applicable to heavy hydrocarbon oils.—[ Mr. Orr-Ewing. ]

Brought up, and read the First time.

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

This new Clause raises a narrower point than that which has just been raised by my hon. Friend the Member for Altrincham and Sale (Mr. Erroll). Its purpose is to remove from oils used in the production of certain gases the higher rate of duty paid on certain classes of oil and to standardise on the rate of duty lower than that which applies to those higher rated oils. The recommendation of the Ayre Committee's report was applied in the Finance Act, 1945, as regards the freeing of certain petroleum gases from duty if they were used only for certain purposes. The actual freedom which was granted was narrow, and although at that time it was a brave gesture to help yet it has proved in experience that that gesture was not big enough, and that the help was not quite as practical as it was assumed it might be, that is to say, at the time of the Finance Act, 1945.

The gases referred to in the Amendment are really by-products in the cracking, refining, and reforming of oil, the treating of oils which are unsuitable for motor spirit in such a way that they become so suited. They are therefore byproducts of the refining industry. The gases produced as these by-products are extremely valuable both for lighting and heating and they are used freely in the area of the refinery itself without tax complications. The complication arises in this way; hardly any refineries can consume all the gases that are produced as by-products of their processes, and they want to get rid of them. If they do not get rid of them the economic efficiency of the plants falls, but if they do try to get rid of them then they are faced with a very difficult tax problem.

There are two classes of oil, a light type of hydrocarbon and a heavy hydrocarbon oil, used in this process and it is most unlikely that the two classes will be so perfectly balanced that the resultant gases can be sold off in balanced forms at prices which are reasonable in view of the present rate of taxation. The taxation varies between the two classes of oil very considerably; on the one, the heavier class, the rate of tax is only a penny, whereas on the lighter class it rises to 9d. a gallon. The effect of that tax on the heavier oils is an addition of something like 25 per cent. and on the lighter oils it is equivalent to a tax of 210 per cent. It will be quite clear that if the refiner cannot balance what he calls his "feed stock" in such a form as to be able to absorb the heavier costs within the lighter costs the ultimate cost of the gas will be uneconomic and nobody will buy it.

What then is the refiner to do? The proposal in this new Clause is that the Chancellor shall help not only the refining industry but possible and potential users of the gases as well, by reducing the duty to the lower rate so that the gases can be more easily disposable and so that the refineries can be more efficiently run. There are two very distinct sides to this question, and I would urge both of them on the Chancellor. Under present conditions, as I have said, increased cost of refining results and inefficiency results equally. A market is closed which should be open and potential users are barred by high costs from using the gases. In fact I have been informed that a very considerable industrial enterprise in South Wales is awaiting the result of the Chancellor's decision on this matter before deciding definitely whether they will proceed to erect certain plant because if they cannot obtain the gas at a reasonable price their plans fall to the ground.

The matter is therefore not only important but has a considerable urgency. I would go rather further than that in pressing the importance of this matter. It seems to me to be a very great mistake when—I believe in error—a tax has the effect of stultifying a vast amount of research. I am sure that the Chancellor and the whole of the Committee will appreciate the great necessity to encourage research, particularly in this field, because all the indications are that a great many new products can be developed with the assistance of research and of expert refining from the products of the refining industry. All that work is hampered so long as this higher rate of duty exists and so long as all the disadvantages accruing from it persist.

I would beg the Chancellor to look at the proposal in this new Clause very carefully. I hope that after the luncheon interval his batting may be just a little different from what it was before—it does sometimes happen—and that he may be able to help us. I again stress the urgency. It is not a faked case for urgency but a real case. It is, I claim, just as urgent for consideration as the problem we were discussing under the previous new Clause.

In principle I am quite prepared to accept the Clause. Like the mover of the previous new Clause, the hon. Gentleman made an interesting and informative speech, as I am sure will be recognised throughout the Committee. In this case too, I had been giving some consideration to this point before the new Clause was actually put down, and here I am helped by the fact that the revenue loss is negligible; it is not a matter that need be taken into account at all in reaching our decision. Quite apart from that I agree with the case made for urgency by the hon. Gentleman and I notice, in particular, what he has said about certain important developments in South Wales being perhaps to some extent dependent upon an early decision here; that would be yet another argument in addition to the general case which he developed powerfully and convincingly in favour of the acceptance of the proposal. The words of the new Clause are not quite satisfac- tory as they stand, but I am prepared to accept in principle what the hon. Gentleman proposes, and to put down on the Report stage, a new Clause giving effect to his suggestion.

I am sure that we on this side of the Committee are grateful to the right hon. Gentleman for the way he has met a proposal which, I think he will agree, was extremely well presented and raised an important if relatively small point. I hope the right hon. Gentleman will proceed as he has begun. I should like to point out the change that has come over him. On the first day of our Debate there was "nothing doing;" on the second day he said he would look into the matter; on the third day he said he would consider it, and on the fourth day he has accepted it. If only we were having a fifth day there is no knowing what might happen.

I should like to join with the right hon. Gentleman the Member for West Bristol (Mr. Stanley) in thanking the Chancellor for accepting, in principle, the Amendment proposed by my hon. Friend the Member for Weston-super-Mare (Mr. Orr-Ewing). It would not have been so necessary for me to emphasise the fact that I am glad of this, although it will help in South Wales and thus comes nearer to my area than some other matters, had I not experienced at an earlier hour a sense of frustration caused by the Chancellor denying me an opportunity of thanking him. That being the case I feel that it would be ungracious and unkind of me, and that I might be exhibiting all those qualities which one expects on the other side of the Committee but not on this side, if I did not, On this occasion, take the opportunity of thanking the Chancellor for a Clause which is thoroughly progressive, which will advance industry, and which will give employment, three things which are of great value from the national point of view and which we Tories would naturally support and encourage in every way. It would be rather mean and not very nice of me if I did not congratulate the Chancellor on abandoning the outlook of those who surround him in such few numbers at the present moment, and surrendering to solid Tory opinion by swallowing a Clause which is thoroughly good in every way. Those are some of the reasons why I support the Chancellor in his attitude towards this proposal. Another reason is that giving praise to the Chancellor is also giving very great pleasure to the Patronage Secretary and the hon. Gentleman who represents the Communist Party, the hon. Member for West Fife (Mr. Gallacher).

4.30 p.m.

In view of the Chancellor's assurance that he will place on the Order Paper a Clause carrying the same meaning as that which I have submitted, I would like to express my gratitude to him. I assure him and the Committee that I am quite certain he is acting in a very practical manner in accepting the principle of this Clause, which will be of real practical value to several branches of industry. I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Exemption from stamp duty of certain conveyances on sale.)

Stamp duty shall not be payable on any conveyance on sale of any new house to a purchaser who bona fide intends to reside therein, provided that this provision shall apply only in regard to the first transaction in which the house is sold after the same has been constructed.—[ Lieut.-Commander Clark Hutchison. ]

Brought up, and read the First time.

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

Since we have resumed our labours the Chancellor has been in a most conciliatory mood. He has accepted the principle of the last two new Clauses and I am tempted to hope that the light of his countenance will shine favourably on this one. This Clause aims at assisting people to purchase and own their own houses, and in so doing it implements a recommendation contained in the recent Report of the Scottish Housing Advisory Committee, Cmd. 6741. This White Paper deals specifically with the provision of houses for owner-occupation in Scotland, and my proposed new Clause arises out of the recommendation contained at the end of paragraph 148, which reads as follows: I stress that only new houses are concerned. I ought to explain that this Housing Advisory Committee was a body set up by Mr. Tom Johnston, when he was Secretary of State for Scotland and is charged with the duty of advising the Secretary of State for Scotland on various aspects of housing policy. From time to time, the Secretary of State places certain matters before it for investigation. As a result of a remit made to it by Mr. Tom Johnston, the Committee brought forward this and a number of other recommendations. The Advisory Committee is a very representative body, as the Financial Secretary will see if he will look at the list of members at the front of the Report. All political parties and industrial interests are represented. The hon. Member for the Springburn Division of Glasgow (Mr. Forman) is or was one of the members. The Report is a purely Scottish document, but there is no reason why the recommendations should not be equally applicable to England and Wales. It is just as desirable that people in the southern part of the Kingdom should be encouraged to own their own houses. When a person sets out to purchase a house he is confronted with a number of legal and other charges which are somewhat discouraging. If my suggestion is adopted, at least one of these financial hurdles will be removed from the path of the would-be owner. I agree that Stamp Duty is not a tax which is confined to sales of property such as houses. It is chargeable on transfers of stocks and shares and other things, but I think there is a special case in respect of a transaction in new house property. The matter is put very clearly in paragraph 147 of the Report, a portion of which I will quote: agree that that puts the case very reasonably for some special provision in the case of the sale of a new house.

As to what it might cost, it is not within my power to estimate that, but I would like to draw the Financial Secretary's attention to this point. According to a calculation prepared by the Scottish Building Societies Association, houses on which advances are made change hands every 10 or 12 years. The normal rate of Stamp Duty is 10s. per £50 value of the transaction. This means that if the life of the house is 60 years—that is the normal life laid down in recent legislation, such as the Housing (Financial Provisions) (Scotland) Act—and if we assume the value of the property to be £1,000, the sum of £50 to £60 will be paid to the State by successive owners in the form of Stamp Duty. The State therefore does well out of Stamp Duty in transactions with a single house. I do not think I am asking very much when I ask that the Stamp Duty might be waived on the first transaction of buying a new house. It would give a small but welcome saving in capital expenditure to the would-be purchaser.

I would remind the Financial Secretary that Clause 44 gives exemption from Stamp Duty in the case of documents connected with the nationalisation schemes. That would appear to indicate that the Chancellor of the Exchequer does not regard Stamp Duty as sacrosanct and quite untouchable, and he might very well see fit to agree with my proposal. It is very desirable to encourage the ownership of house property. It is a thing in which the Party to which I belong believes most profoundly, and some hon. Members opposite also pay lip service, if nothing more, to this ideal. My proposed new Clause will do something to assist towards this end without imposing any great expense on the Exchequer, and I ask the Government to look favourably on it.

I hope that the Financial Secretary will approach this problem with a fresh mind. I know that he had a good deal of sleep last night, and therefore his mind will be supple, fresh, resilient and receptive to new ideas. [ Interruption. ] I am delighted to hear that the hon. and learned Member for North Hammersmith (Mr. Pritt) has now woken up. The approach to this Stamp Duty question offers a great opportunity to the Financial Secretary. I am perfectly certain he appreciates how cramping and how destructive a thing is the whole system of Stamp Duty, and if he would take the lead in this case, and boldly cast it overboard in the case of new houses, he would set a most encouraging precedent for the future. I hope he will approach it in that spirit. I am sure that he is the more likely to do so from the fact that the Chancellor of the Exchequer is not here. Let me reassure the Financial Secretary. The Chancellor is always obsessed, on any question of the remission of taxation, with the idea of inflation. Let me point out that the loss of revenue, and the inflationary effect of making this concession, will be very small. He can rely upon his colleague the Minister of Health to see that there are so few houses built that the concession he makes will cost very little.

This is a Clause which the Government feel they cannot accept. The recommendation of the Scottish Housing Advisory Committee, which was quoted, is, in point of fact, in very tentative terms, as the hon. and gallant Member for West Edinburgh (Lieut.-Commander Clark Hutchison) said. All that the Committee recommended was that the Treasury should be invited to consider whether the payment of Stamp Duty could be suspended on the sale of new houses for owner-occupation. Stamp Duty is a completely inappropriate instrument for encouraging housing production. How would it really work out? On a house worth £1,000 the Stamp Duty will be £10. In the case of the higher income categories that amount cannot seriously be said to be a real obstacle in the way of the acquisition of a new house. In the case of the really low income categories, £10 is, of course, a very substantial sum, but the great need in the low income categories is for houses to let rather than houses to buy, so that no effective purpose would be served by the exemption of conveyances of houses from Stamp Duty.

As I understand the proposal, it is that it should relate only to the first purchase of a house. If hon. Gentlemen consider the position they will see that it would be extremely difficult to administer the exemption. I suppose that the Inland Revenue would have to inquire in the case of each transaction and satisfy themselves that it was a first purchase. But an even more serious obstacle is contained in the wording of the Clause that the Stamp Duty shall not be payable when the purchaser " bona fide intends to reside" in a house. What is to be the test of a bona fide intention? Supposing the purchaser can with perfect honesty say at the time he buys a house that he intends to reside in it, how long is he to continue to reside in it, in order to qualify for permanent exemption of the Stamp Duty in relation to that transaction? Is the position to be—as it logically should be, supposing he makes the declaration, or whatever the appropriate proceeding would be—that he intends to reside in the house, and subsequently changes his mind, say, a year, two years, five years or 10 years later, that the Stamp Duty should be refunded? Where is the line to be drawn? It will be logical if the exemption is granted in the first instance, when he goes into that house, that if he changes his mind, and ceases to reside in it, he should refund the duty. To supervise that and to make sure that the duty was refunded would impose an enormous burden on the revenue which would be quite disproportionate to the result which would be achieved. For those reasons it would be extremely difficult to administer.

4.45 p.m.

Again, if one exempts houses at all, it is quite illogical to restrict the exemption to new houses. If the object is to encourage owner-occupiers there is no logical basis upon which the restriction to new houses can be founded. If the exemption were accepted in principle, it should extend, as a matter of logic, to the acquisition of all houses, and how far are we to go? The real difficulty in the way of accepting the Clause is twofold. In the first place, we do not think that it would have any appreciable effect in the direction desired. As I say, in the case of a person with a substantial income, clearly the amount of the Stamp Duty would not have much effect in determining him to acquire or not to acquire a particular house. He would either want to buy a house or he would not, and he would pay the Stamp Duty if Stamp Duty was levied. In the lower income categories, the great need and the great drive is for houses to let, and those whose in- comes is such that they are only in a position to lease houses, to acquire a house on a letting, would gain no benefit from this exemption. Therefore, the exemption which would be granted, as all these exemptions are granted, at the expense of the general body of taxpayers, would operate unfairly against persons whose incomes were in the lower categories, and who would derive no benefit.

It would only benefit people whose income was high enough to put them in the category of persons likely to acquire a house. That is the first reason why I say that the new Clause should not be adopted by the Committee. The second reason is that it would be extremely difficult to work administratively. If we wanted to adopt such a scheme we should have to have some system of verifying that the purchaser wanted to live in the house. We should then want some system of supervision to make sure that if he did go into the house, having honestly said that that was his intention to move into the house, and if he subsequently changed his mind, he would have to refund the duty. A great deal of work would have to be done in order to secure to the revenue a great number of small sums of £10, £11, £12, etc., according to the price of The house. For those reasons, I ask the Committee not to accept this Clause.

I confess I am very disappointed, not with the manner of the Solicitor - General's reply — which, as always, was courteous and painstaking—but certainly with the matter. Though disappointed, I was not surprised. When I saw the Chancellor of the Exchequer go out I knew that we had come to the end of our good innings, and at any rate, for the moment, no more of our Clauses would be accepted. The Solicitor-General bases his rejection of this Clause on two grounds. He says it would not do any good; and secondly, that if it would do any good, it would be difficult to administer. I am not at all impressed by the first of the two arguments. We have to put against the Solicitor-General's authority—and after all he does not pretend to be an authority on this matter of housing—the report of a most respectable Scottish Committee, containing a large number of distinguished names. I confess that none of them was familiar to me, but they had a most respectable ring. This Committee, who were obviously selected by the Government as experts on this matter, having considered it, came to the conclusion that this would help housing. As the Solicitor-General said, it is quite true that they were tentative in their approach to the Treasury, but if the Solicitor-General reads the report again, I think he will find that that was not because they were doubtful about the aid which this would be to housing, but because they were naturally shy in expressing to the Treasury any opinion on whether it was workable. Therefore, I dismiss the first of the Solicitor-General's reasons and would prefer, on that matter, to accept what I believe, without offence, to be the greater authority of the special housing committee.

Of course, when the Solicitor-General comes to his second reason, the administrative difficulty, he is on firmer ground, but I think hon. Members on all sides will realise that that is an argument which can always be put up in any Treasury brief against any proposal which the Treasury does not want to accept. No one drafting a Clause, however good his intention, can expect without an intimate knowledge of Treasury practice and Parliamentary draftsmanship to avoid all the snags, but if an instruction is given that, at any rate, the principle of what is suggested should be accepted, those snags very soon disappear and a workable alternative is found, even if it is not possible to accept, the actual words on the Paper. I really cannot believe that it is impossible to devise some machinery sufficiently reliable to satisfy oneself about the bona fide intention of the purchaser to reside in the house. I doubt whether it would be necessary to go much further than requiring a sworn affidavit, allowing the man to run all the risk of prosecution if that affidavit should be falsely sworn and if it should be proved that he was telling a lie. I cannot help feeling that if only the Solicitor-General could be persuaded to swallow the first—I cannot remember whether you swallow straws or camels—[An HON. MEMBER: "Gnats."]—if the the Solicitor-General could be persuaded to swallow the first gnat, namely, the fact that this would be helpful to building, he will have no difficulty at all in persuading the Treasury to find a manner in which this could be carried out. I hope very much that before we come to the end of this Debate he will reconsider his position and give us at any rate the same measure of satisfaction that the Chancellor has given us on the previous two new Clauses.

Like my right hon. Friend I feel doubly disappointed at the very negative approach of the hon. and learned Solicitor-General to this proposed new Clause. My hon. and gallant Friend who moved it in such felicitous terms, and who represents some fortunate part of Edinburgh, the precise geographical designation of which for the moment escapes me—[An HON. MEMBER: "West Edinburgh."]—my hon. and gallant Friend the Member for West Edinburgh (Lieut.-Commander Clark Hutchison) expressed the hope that the learned Solicitor-General would score the hat trick on behalf of the Chancellor of the Exchequer with this Clause. Now, instead of fulfilling that hope, he has sent down a remarkable assortment of "wides" and "no-balls." Most of this loose stuff has been very properly punished by my right hon. Friend, and I do not seek to go into the question of the administrative difficulties with which he has dealt so well. It seems to me that if a principle is good it is the business of the Government, with the vast resources at their command, to translate that principle into proper administrative effect.

I want to take up two points made by the hon. and learned Solicitor-General. The first is that this Clause would not serve as a real concession to intending house purchasers, because the amounts would not be such as to make any difference to what he called the higher income categories. Surely the point is this, that a house which before the war, at the then level of building costs, could be purchased for a comparatively small sum now costs a vast deal more, probably some 2½ times as much, and therefore people who want to buy houses have to expend that amount of money whether they belong to what the learned Solicitor-General chooses to call the higher income groups or not. It is rather a case of the lower or lower middle income groups having to pinch and scrape in order to get together the amount to buy a house at the present inflated cost, and anything the Government can do by way of remission of stamp duty will be an active help to them.

I suggest that the result would be to add to the cost of the house by the amount of money saved.

There are some propositions so fantastic that one can hardly bring oneself to deal with them. I pass to the second point to which I wish to draw the attention of the Committee. This was the confident statement made by the hon. and learned Solicitor-General that the desire of people as a whole to-day is for houses to let. I am very familiar with that observation, because I hear it very frequently, and I recognise its origin. Though the voice is the pleasant, caressing tone of the learned Solicitor-General, the hand is undoubtedly the hairy hand of his right hon. colleague the Minister of Health, whose theme song it is that there is no desire on the part of the people of this country today for the purchase of houses. I have gone into the statistical aspect of this matter more than once before in this House, and I do not intend to detain the Committee with a lengthy rehearsal of those considerations this afternoon. This, however, I would say: There is no evidence for the proposition that he brings forward. If he has any evidence in support of the statement he has so dogmatically produced, I am sure the Committee would be very glad to hear it. So far from there being any evidence of that, there is evidence of the precise contrary, because in a period of war, when there has been no house building at all, the records of the building societies show that they have advanced money for the purchase not of new houses but of houses at present held by tenancy. That is to my mind incontrovertible evidence of the fact that there is a genuine desire for house purchase in this country, and so it does not become the hon. and learned Solicitor-General to take up a position behind the barricade supplied to him by the Minister of Health for debating purposes this afternoon.

As my hon. Friend the Member for Kingston - upon - Thames (Mr. Boyd-Carpenter) has said, this would be a cheap concession for the Government; it is not open to the Government to say that this Clause would involve the Treasury in heavy and prohibitive expenditure, because as we all know so very few houses are being built that the cost of this concession at present would be microscopic. It has, however, a value in principle which I believe to be very great. It has a value in giving some encouragement to people, and there are a very large number in all income groups, who wish to buy their houses. It is a unique opportunity for the Government to show that they mean what they say when they say, as the right hon. Gentleman the Minister of Health has frequently said, that he is not against house ownership and house purchase on principle. If the Government really mean that, here is an opportunity for them to give evidence to the country of their bonâ fides in making that statement. I urge the Solicitor-General not to take a superficial and secondhand view of the desires of the country in this matter, but to recognise that the principle here advanced is the right one, and to accept the obligation that it is proper for a Government to accept, of finding the right machinery to translate the principle into effect.

5.0 p.m.

I am glad that one argument, at any rate, used by the Solicitor-General has not been allowed to go unchallenged. I heard him say that the poorer part of the people in this country do not want to purchase their houses, and it seemed to me that he, like many of the aristocrats on the Government side of the House, do not really know how the poor people live. Let him come and make an investigation in North and South Wales, and I guarantee that he will find that a very large majority, I should say 90 per cent., of the small and medium sized houses are owned by the people living in them. There is a most passionate and admirable desire on the part of the poor, those who are euphemistically described as "on the lowest income scale," to own their homes, the particular kind of people from whom I come. It is usually the only little bit of property they are ever able to get. I hope that that argument will never be put forward again in this House.

I would not have intervened but for the reply given by the Solicitor-General. I have listened to many arguments from the other side, and they always seem based on a two-line policy, related to the higher-income people and the lower-income people. I assure the Solicitor-General that many millions of middle-class people need to be considered. It is time that the flag of the middle-class people was pressed forward and their case was heard. I have been concerned with hundreds of people in my time who have bought their own houses and have desired to set up their own castles. The Englishman's home is his castle. Those people have a great interest in their homes. I am talking about what used to be the range of houses costing about £1,000. I assure the Solicitor-General that when a man has paid his deposit and has obtained a building society or some other kind of mortgage, he very often has so many costs that the burden of Stamp Duty falls very heavily upon him. I assure the Solicitor-General that real benefit would be given by the proposed new Clause to tens of thousands of people in this country.

I repudiate most strongly the suggestion that it is the desire of the masses of the people of this country to rent houses. I agree with what has already been said that tens of thousands of people would like to own their own homes and desire to buy them. It is up to the Government to assist those people in every possible way. Ownership of houses in this country has been the cause of great stability in years gone by. I hope to goodness the Government are not going to discourage it. There may be a great need of houses to let, but we must not blind our eyes to the fact that there is a great need to encourage working-class and middle-class people to own their homes and so to have a stake in the country. I have the greatest satisfaction in supporting the proposal. There may be administrative difficulties, but surely the Chancellor can get round many of them. They are not insurmountable by an agile Chancellor. The Solicitor-General missed out of consideration many millions of middle-class people in his references to higher incomes and lower incomes. For that reason, I suggest that he should reconsider the proposal, to see whether he can meet us in the matter.

I think the Committee is ready to come to a decision on this matter.

I was bitterly disappointed with the prefabricated arguments used by the Solicitor-General. In many cases, costs connected with houses will come out of the gratuities of ex-Service men. The point was expressed to me very clearly the other day by an ex-Service man, who said: "My gratuity will pay for three pieces of utility furniture and the legal costs of getting into the house." In many hundreds of cases the costs will come directly out of the gratuity. I ask the Solicitor-General to take that fact into account in reconsidering this matter. The costs are very considerable for people with lower incomes and who wish to own their houses. The concession proposed in the new Clause would be very welcome among a very large number of ex-Service men who are now trying hard to own their houses. It would be a concession to a number of very worthy people with whom everybody has the very greatest sympathy. I shall support the proposal in every possible way.

I would most gladly have responded to your appeal, Major Milner, to cut the Debate short, had this matter of the owning of houses by the ordinary persons in this country not been so important. It has a vital effect upon the lives of hundreds of thousands of people and it is not one that any political party can afford to ignore. It is a vital issue. I was glad that almost for the first time on this great issue, a Member of the small Liberal group should have spoken up for the small man.

Commenting on this matter, the Solicitor-General said, in effect, "A matter of £10 will not stop anyone from buying a house." That attitude is all right in a great, large, bureaucratic lawyer, but it will not do for the ordinary, small man in this country. When this man looks into the building of a house he has to regard every detail. Nothing is more likely to turn him off than the fact that he has to take £10 out of his pocket and give it to the Government. He regards that as complete waste. Knowing this Government, he will regard it as more of a waste than ever before. When the Solicitor-General used that argument he was on absolutely false ground, as it applies to the ordinary person like myself and the majority of people in this country.

The Solicitor-General went on to refer to the Scottish Committee having only approved of this matter in a moderate way. Who ever knew a Scottish Committee to lay down anything with great emphasis, if there was anything to be got out of the Exchequer? They are not so foolish as that. Stating a thing in a mild way sometimes has a much greater power of extracting money from the Exchequer. That may be one of the ways in which the Scots have been able to get hold of the greater part of the English bricks to build houses. If they were to put too much emphasis upon a thing like that the Exchequer might feel there was a lot of money in it. I admire the Scotsmen for their cleverness in the matter. We were told that this would be very difficult to administer, but we have had illustrations of the kind of situation in which the Chancellor wanted to do a thing, and has been able to do it very well. The Solicitor-General said he did not like the words " bona fides. " Surely, with all the resources of the Treasury at their command, the Law Officers can change those two words quite easily.

I think the Bill might be amended to provide that when a house is built, the person who buys it should be exempted from Stamp Duty on that house. That provision would be easy to administer. I hope that the proposer of the new Clause will press the matter to a Division and force the Government to take up the position that in this direction, as in so

many other ways, they will use taxation for the purpose of obstructing the building of houses rather than for the building of houses. That was the real meaning of the speech of the Solicitor-General. We know that the Government are not only obstructing the building of houses, as will happen if the Bill is not amended by the proposed new Clause, but that at the back of it all is the fact that there is a bitterly hostile feeling in the whole Socialist Party at the people of this country owning their own houses. The Socialist Government are allergic to the very idea of anyone owning a house. Our job is to help people to get their own houses. That is why I support the proposed New Clause.

We have had an almost completely negative response from the Government to the arguments which have been put up in favour of the proposal. The Government should go into this matter more fully, and give us an indication between now and the Report stage that they will either accept the Clause, or will propose similar words. If we have that promise, we might not press the matter. Otherwise, we must take this matter to a Division.

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

The Committee divided: Ayes, 136; Noes, 263.

Division No. 217.]

AYES.

[5.14 p.m.

Agnew, Cmdr. P. G.

Erroll, F. J.

Langford-Holt, J.

Aitken, Hon. Max.

Fletcher, W. (Bury)

Lennox-Boyd, A. T.

Assheton, Rt. Hon. R.

Fox, Sqn.-Ldr. Sir G.

Lindsay, M. (Solihull)

Baldwin, A. E.

Fraser, Maj. H. C. P. (Stone)

Linstead, H. N.

Barlow, Sir J.

Galbraith, Cmdr. T. D.

Lipson, D. L.

Bennett, Sir P.

Gammans, L. D.

Lloyd, Maj. Guy (Renfrew, E.)

Birch, Nigel

George, Maj. Rt. Hn. G. Lloyd (P'ke)

Lucas-Tooth, Sir H.

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

Glyn, Sir R.

Lyttelton, Rt. Hon. O.

Boothby, R.

Gomme-Duncan, Col. A. G.

MacAndrew, Col. Sir C.

Bower, N.

Gridley, Sir A.

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

Boyd-Carpenter, J. A.

Grimston, R. V.

Mackeson, Lt.-Col. H. R.

Bracken, Rt. Hon. Brendan

Gruffydd, Prof. W. J.

McKie, J. H. (Galloway)

Braithwaite, Lt.-Comdr. J. G.

Hannon, Sir P. (Moseley)

Macpherson, Maj. N. (Dumfries)

Buchan-Hepburn. P. G. T.

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

Maitland, Comdr. J. W.

Bullock, Capt. M.

Harvey, Air-Comdre. A. V.

Manningham-Buller, R. E.

Carson, E.

Haughton, S. G.

Marlowe, A. A. H.

Challen, C.

Head, Brig. A. H.

Marples, A. E.

Clifton-Brown, Lt.-Col. G.

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

Marsden, Capt. A.

Cooper-Key, E. M.

Henderson, John (Cathcart)

Marshall, D. (Bodmin)

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

Hinchingbrooke, Viscount

Marshall, S. H. (Sutton)

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

Hogg, Hon. Q.

Mellor, Sir J.

Crosthwaite-Eyre, Col. O. E.

Hollis, M. C.

Moore, Lt.-Col. Sir T.

Crowder, Capt. J. F. E.

Holmes, Sir J. Stanley (Harwich)

Morrison Maj. J. G. (Salisbury)

Darling, Sir W. Y.

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

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

Davidson, Viscountess

Hurd, A.

Neven-Spence, Sir B.

De la Bère, R.

Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

Nield, B. (Chester)

Dodds-Parker, A. D.

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

O'Neill, Rt. Hon. Sir H.

Donner, Sqn-Ldr. P. W.

Jarvis, Sir J.

Orr-Ewing, I. L.

Dower, Lt.-Col. A. V. G. (Penrith)

Jeffreys, General Sir G.

Peake, Rt. Hon. O.

Drewe, C.

Jennings, R.

Pickthorn, K.

Dugdale, Maj. Sir T. (Richmond)

Kerr, Sir J. Graham

Ponsonby, Col. C. E.

Duthie, W. S.

Kingsmill, Lt.-Col. W. H.

Prescott, Stanley

Eccles, D. M.

Lancaster, Col. C. G.

Price-White, Lt.-Col. D.

Prior-Palmer, Brig. O.

Smithers Sir W.

Walker-Smith, D.

Raikes, H. V.

Snadden, W. M.

Watt, Sir G. S. Harvie

Ramsay, Maj. S.

Spearman, A. C. M.

White, Sir D. (Fareham)

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

Stanley, Rt. Hon. O.

White, J. B. (Canterbury)

Renton, D.

Stoddart-Scott, Col. M.

Williams, C. (Torquay)

Roberts, H. (Handsworth)

Stuart, Rt. Hon. J. (Moray)

Williams, Gerald (Tonbridge)

Ropner, Col. L.

Sutcliffe, H.

Willoughby de Eresby, Lord

Salter, Rt. Hon. Sir J. A.

Taylor, Vice-Adm. E. A. (P'dd'ton, S.)

York, C.

Sanderson, Sir F.

Thornton-Kemsley, C. N.

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

Scott, Lord W.

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

Shephard, S. (Newark)

Touche, G. C.

TELLERS FOR THE AYES:

Shepherd, W. S. (Bucklow)

Turton, R. H.

Mr. Studholme and

Smiles, Lt.-Col. Sir W.

Vane, W. M. T.

Major Conant.

Smith, E. P. (Ashford)

Wakefield, Sir W. W.

NOES.

Adams, W. T. (Hammersmith, South)

Edwards, John (Blackburn)

Logan, D. G.

Allen, A. C. (Bosworlh)

Evans, S. N. (Wednesbury)

Lyne, A. W.

Anderson, A. (Motherwell)

Evans, John (Ogmore)

McAdam, W.

Anderson, F. (Whitehaven)

Fairhurst, F.

McAllister, G.

Attewell, H. C.

Farthing, W. J.

McEntee, V. La T.

Austin, H. L.

Foot, M. M.

McGhee, H. G.

Awbery, S. S.

Forman, J. C.

Mack, J. D.

Ayles, W. H.

Foster, W. (Wigan)

McKay, J. (Wallsend)

Ayrton Gould, Mrs. B.

Fraser, T. (Hamilton)

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

Bacon, Miss A.

Freeman, Maj. J. (Watford)

McKinlay, A. S.

Baird, Capt. J.

Gaitskell, H. T. N.

Maclean, N. (Govan)

Balfour, A.

Gallacher, W.

McLeavy, F.

Barstow, P. G.

George, Lady M. Lloyd (Anglesey)

MacMillan, M. K. (Western Isles)

Barton, C.

Gibbins, J.

Macpherson, T. (Romford).

Battley, J. R.

Gibson, C. W.

Mainwaring, W. H.

Bechervaise, A. E.

Gilzean, A.

Mallalieu, J. P. W.

Benson, G.

Glanville, J. E. (Consett)

Mann, Mrs. J.

Berry, H.

Gooch, E. G.

Manning, C. (Camberwell, N.)

Bing, Capt. G. H. C.

Goodrich, H. E.

Manning, Mrs. L. (Epping)

Binns, J.

Gordon-Walker, P. C.

Mathers, G.

Blenkinsop, Capt. A.

Greenwood, Rt. Hon. A. (Wakefield)

Mayhew, C. P.

Blyton, W. R.

Grenfell, D. R.

Mikardo, Ian

Boardman, H.

Grey, C. F.

Millington, Wing-Comdr. E. R.

Bottomley, A. G.

Grierson, E.

Mitchison, Maj. G. R.

Bowden, Flg.-Offr. H. W.

Griffiths, D. (Rother Valley)

Montague, F.

Bowles, F. G. (Nuneaton)

Griffiths, Rt. Hon. J. (Llanelly)

Moody, A. S.

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

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

Morley, R.

Braddock, T. (Mitcham)

Gunter, Capt. R. J.

Morris, P. (Swansea, W.)

Brown, George (Belper)

Guy, W. H.

Morris, Hopkin (Carmarthen)

Brown, T. J. (Ince)

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

Mort, D. L.

Brown, W. J. (Rugby)

Hale, Leslie

Moyle, A.

Bruce, Maj. D. W. T.

Hall, W. G. (Colne Valley)

Mulvey, A.

Buchanan, G.

Hamilton, Lieut.-Col. R.

Murray, J. D.

Burden, T. W.

Hardy, E. A.

Nally, W.

Burke, W. A.

Harris, H. Wilson

Naylor, T. E.

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

Hastings, Dr. Somerville

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

Callaghan, James

Herbison, Miss M.

Noel-Buxton, Lady

Chamberlain, R. A.

Hewitson, Capt. M.

O'Brien, T.

Champion, A. J.

Hicks, G.

Oldfield, W. H.

Chater, D.

Holman, P.

Oliver, G. H.

Chetwynd, Capt. G. R.

Holmes, H. E. (Hemsworth)

Orbach, M.

Clitherow, Dr. R.

House, G.

Paling, Will T. (Dewsbury)

Cluse, W. S.

Hoy, J.

Palmer, A. M. F.

Cobb, F. A.

Hubbard, T.

Parker, J.

Cocks, F. S.

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

Paton, Mrs. F. (Rushcliffe)

Collins, V. J.

Hutchinson, H. L. (Rusholme)

Paton, J. (Norwich)

Comyns, Dr. L.

Hynd, H. (Hackney, C.)

Pearson, A.

Cooper, Wing-Comdr. G.

Irving, W. J.

Peart, Capt. T. F.

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

Jeger, G. (Winchester)

Perrins, W.

Cove, W. G.

John, W.

Porter, G. (Leeds)

Crossman, R. H. S.

Jones, D. T. (Hartlepools)

Price, M. Philips

Cunningham, P.

Jones, J. H. (Bolton)

Pritt, D. N.

Daggar, G.

Jones, Asterley (Hitchin)

Proctor, W. T.

Dames, P.

Keenan, W.

Pryde, D. J.

Dalton, Rt. Hon. H.

Kenyon, C.

Pursey, Cmdr. H.

Davies, Edward (Burslem)

Kinley, J.

Randall, H. E.

Davies, Ernest (Enfield)

Kirby, B. V.

Ranger, J.

Davies, Harold (Leek)

Kirkwood, D.

Rankin, J.

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

Lang, G.

Rees-Williams, D. R.

Davies, R. J. (Westhoughton)

Lavers, S.

Reeves, J.

Deer, G.

Lee, F. (Hulme)

Reid, T. (Swindon)

Diamond, J.

Lee, Miss J. (Cannock)

Rhodes, H.

Dodds, N. N.

Leslie, J. R.

Ridealgh, Mrs. M.

Driberg, T. E. N.

Lever, Fl. Off. N. H.

Roberts, Sqn.-Ldr. Emrys (Merioneth)

Durbin, E. F. M.

Lewis, A. W. J. (Upton)

Roberts, W. (Cumberland, N.)

Dye, S.

Lewis, J. (Bolton)

Rogers, G. H. R.

Ede, Rt. Hon. J. C.

Lindgren, G. S.

Scollan, T.

Edelman, M.

Lipton, Lt.-Col. M.

Scott-Elliot, W.

Segal, Dr. S.

Stewart, Capt. Michael (Fulham, E.)

Warbey, W. N.

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

Stross, Dr. B.

Watson, W. M.

Sharp, Lt.-Col. G. M.

Stubbs, A. E.

Weitzman, D.

Shawcross, C. N. (Widnes)

Symonds, Maj. A. L.

Wells, W. T. (Walsall)

Shawcross, Sir H. (St. Helens)

Taylor, H. B. (Mansfield)

White, C. F. (Derbyshire, W.)

Shurmer, P.

Taylor, R. J. (Morpeth)

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

Silverman, S. S. (Nelson)

Thomas, Ivor (Keighley)

Whiteley, Rt. Hon. W.

Simmons, C. J.

Thomas, John R. (Dover)

Wigg, Col. G. E.

Skeffington-Lodge, T. C.

Thomas, George (Cardiff)

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

Skinnard, F. W.

Thorneycroft, H. (Clayton)

Wilkes, Maj. L.

Smith, Capt. C. (Colchester)

Thurtle, E.

Willey, F. T. (Sunderland)

Smith, Ellis (Stoke)

Tiffany, S.

Williams, W. R. (Heston)

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.

Young, Sir R. (Newton)

Sorensen, R. W.

Usborne, Henry

Younger, Hon. Kenneth

Soskice, Maj. Sir F.

Vernon, Maj. W. F.

Sparks, J. A.

Viant, S. P.

TELLERS FOR THE NOES:

Stamford, W.

Wadsworth, G.

Mr. Joseph Henderson and

Steele, T.

Walker, G. H.

Mr. Popplewell.

Stephen, C.

Wallace, G. D. (Chislehurst)

I think it would be for the convenience of the Committee if the next two new Clauses were taken together. Therefore, I would ask the hon. Member who is to move the next new Clause to deal with the one following as well.

NEW CLAUSE.—(Allowance of rehabilitation costs for profits tax.)

There shall be deducted from the profits for the purposes of the profits tax in the accounting period in which they are incurred any rehabilitation costs as defined in Subsection (5) of Section thirty-two of this Act.—[ Sir A. Gridley. ]

Brought up, and read the First time.

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

In moving this new Clause, I will also deal with the proposed new Clause following it on the Order Paper, the marginal heading of which is, "Allowance of rehabilitation costs for Income Tax," and which reads as follows: for Income Tax and Profits Tax, but I feel that rehabilitation costs ought to be allowed as and when they are incurred. For Income Tax and the old N.D.C., there is no provision for attributing them to some past year but simply to allow them as a charge in the year in which they are incurred and in which the money is actually expended. I recognise that it is perfectly true that for Income Tax, capital expenditure will in most cases be the subject of allowances under the existing Income Tax law as provided in the Act of 1945. But such allowances may take a very long period to be fully effective, and as the rehabilitation liabilities arose out of wartime needs, it can hardly be considered satisfactory to spread the costs over so long a future period.

The provisions of the Act of 1945 safeguard the Revenue from making an allowance for the same thing twice over. If that safeguard has not been considered by the learned Solicitor-General, I would not wish to be obstructive and object to incorporating in my proposed new Clause any further safeguards which the Treasury may consider necessary, although I very much doubt whether they would consider that any further shutting of the door, which is already very tightly closed, is really required. I have explained this matter as briefly as I can, because I am usually a man of few words, and I do not use half a dozen sentences to explain a point which can be explained in one. Perhaps sometimes I am not so clear as I might be because I try to be brief. I have endeavoured to put the arguments, as I see them, for these new Clauses, and I hope the Solicitor-General will be good enough to accept them.

5.30 p.m.

I would like, briefly, to support my hon. Friend. As I see it, if a man puts up a new building, or makes some other improvement or repair to his belongings which count as a rehabilitation cost, it is like any other piece of development or repair, he gets it back in the end. The Revenue allows him to set it off. I have always taken the view that we have been wrong in our Income Tax law in regard to buildings. It was not until the Act of 1945 that a man who constructed a new building received an allowance, and it could be written off, as my hon. Friend said, in 45 years. What I think we need to do now is to telescope the period over which these expenses can be got back. Surely, what we want to do as quickly as possible is to divert money into new plant and new buildings. There are repairs which have not been done during the war, and I am sure hon. Members will agree that the principle that "a stitch in times saves nine" is just as applicable to industrial property as to one's sock. These repairs are very heavy. Anything the Government can do now to help industrialists, in fact if possible to push them in that direction, to give them a definite inducement to get on with their repairs, is something we ought to encourage. If these new Clauses were accepted it would be an inducement to hurry up with the repairs, because the amounts could be written off against the profits now. Therefore, I hope the learned Solicitor-General will consider these new Clauses with sympathy.

During the war I was lent to the Government as a temporary civil servant. I went round persuading people to do all sorts of things to help us obtain increased output. We repeatedly said to them, "That will be all right. You can depend upon this thing being dealt with if you erect this, when we come to re-establish it in the future." I feel in duty bound to put this point to the learned Solicitor-General. The man who did nothing is not suffering anything. I am most anxious that people who did meet us, and did all sorts of unnatural things in their factories, pulling down this and putting up the other, and now have the rehabilitation costs to face, should not be in a worse position than the people who refused to do anything. Therefore, I support these new Clauses which will make it fair to the people who met us, as against the people who did not, when it comes to rehabilitation.

I lend my support to these new Clauses. During the war I came across many cases where men had gone out of their way, on purely patriotic grounds, as my hon. Friend the Member for Edgbaston (Sir P. Bennett) has said, to lay out their factories for war purposes, which was a great asset to the war effort. If this is not granted these people will be at a great disadvantage. As my hon. Friend says, these people did this from the patriotic point of view, feeling that at the end of the war, whatever Government were in power, if they had to spend money to put their factory into a peacetime condition, every possible consideration would be given by the Government. I think this is a perfectly reasonable thing to ask. If these people do not get this concession, they will be left in a very unfair position. I have evidence to show that men have turned their factories upside down for the purpose of war production. They will have a struggle to get back on to a peacetime basis. I have every feeling of confidence that this is something which the learned Solicitor-General will not refuse.

I am afraid I must disappoint hon. Gentlemen opposite. I hope they will not think I am insensitive to the difficulties of people who are resuscitating enterprises which have been adversely affected by the war. I listened to the hon. Gentleman the Member for Stockport (Sir A. Gridley), and I see his point of view, and the points of view of other hon. Gentlemen who spoke. It is difficult to get going again. However, from the point of view of the revenue this has to be considered. If the concession were made it would be an extremely expensive one. Again, hon. Gentlemen will ask, "How much?" From the very nature of things it is almost impossible to give any reliable estimate, but it would be a very expensive concession. As the hon. Gentleman the Member for Stockport pointed out, it would mean the wear and tear allowance, for example, in respect of buildings, would all fall as one lump in a period of one or two years when taxes are high. That would mean there would be a very considerable loss to the Revenue as a result of that position. I agree it is very much in the interests of the Revenue. I agree the reverse is the case so far as the people who are sponsoring the production are concerned, to spread over the wear and tear allowance in the way it would be spread over under the ordinary provisions of the Income Tax and the National Defence Contribution provisions.

Hon. Gentlemen must bear in mind the distinction between a tax which is a war tax and has come to an end and taxes which are continuing taxes. Of course, Clauses 32, 33 and 34 had to be introduced It was obligatory to introduce the provisions of those Clauses because Excess Profits Tax is coming to an end, and will have come to an end by the end of the year. Therefore, it is imperative to make provisions for rehabilitation and deferred expenses, and so on, for the purpose of this tax in order to spread them back and attribute the various items to the Excess Profits Tax period. That does not apply with regard to Income Tax and the National Defence Contribution, Is the position really quite as hard as hon. Gentlemen think? I do not think it is quite as hard as they envisage it. Rehabilitation expenses will, perforce, be largely of a revenue character. Some of them will not; a good many will be of a capital nature. Those which are of a revenue nature will be allowed as deductions from profits under the ordinary provisions of the Income Tax Acts, in the year to which they are appropriate as deductions. Of course, those provisions of the Income Tax Acts are applicable also to the National Defence Contribution. Therefore, so far as rehabilitation expenses are concerned a good proportion of them—it is very difficult to estimate what proportion—will be attributable to the year in which they are incurred as ordinary revenue outgoings of the profits and losses of those years.

What about those rehabilitation expenses which are of a capital nature, and which cannot be so attributed? In the case of buildings, as the hon. Gentleman the Member for Stockport said, there is the 10 per cent. initial allowance and then the yearly allowance of two per cent.; the net result is a 45 year period. In the case of plant and machinery the process is much quicker, as hon. Gentlemen know. Under the Income Tax Act, 1945, there is the initial 20 per cent. allowance, and then the ordinary wear and tear allowance under Rule 6 of the rules applicable to Schedule D multiplied by 5/4 as the result of the appropriate Section of the Income Tax Act, 1945, which steps up the wear and tear allowances which would have been appropriate under Rule 6. There fore, so far as plant and machinery are concerned the process is much quicker. Rehabilitation expenditure which is of a capital nature—that is to say, which consists, in a substantial part, of the reconstruction of buildings, or adaptation of plant and so on, in order that it can be used for the postwar period—is not a useless expenditure from the point of view of the business. In the case of a building, for example, it is expenditure which will continue to be of benefit to the business for a number of years. If particular undertakings incur capital rehabilitation expenditure—I repeat, capital rehabilitation expenditure—for the purpose of readapting a building in order to put them in a position to carry on their enterprise in that building, they will continue to have that building and year by year derive advantage from the use of the building until it is written off as an obsolete asset.

Therefore, it is not so unfair on them as one might at first sight think. As a result of the capital rehabilitation expenditure which they incur they will have brought into being, by adaptation or conversion, an asset in the shape of the building, plant or machinery, which they can continue to use for a number of years, and which will be to the advantage of that enterprise for a period of years. It is true it comes within the category of rehabilitation expenditure. It does, in a sense, have a double character. However, it will serve as a lasting asset to the business, so it is not quite as harsh as hon. Gentlemen might think at first blush. I do stress that because I think it most important in order to get a true perspective. That only applies to capital rehabilitation expenditure. Income rehabilitation expenditure which, of course, will be a good deal of it, will be income which will qualify as a deduction from profits and losses in the current year of the life of the enterprise. Having regard to the fact that it will be an expensive concession—it is one which cannot be afforded—and that there are counter-balancing circumstances, namely, the deduction of the revenue rehabilita- tion expenditure, the progressive writing off of the capital rehabilitation expenditure, and the accelerated writing off of that expenditure in so far as it is attributable to the provision of plant and machinery, I ask the Committee to say that a sufficient case has not been made out for these new Clauses, and I would accordingly ask the Committee to reject them.

The learned Solicitor-General has made a most persuasive statement from the Treasury point of view. Nobody could have been more conciliatory, and nobody could have been more sympathetic. The hon. and learned Gentleman has a Harley Street manner, a bedside manner, which some of his colleagues should try to imitate. If one looks at the back benches opposite, one already sees the effect of his dulcet tones on the hon. Gentleman the Member for South Cardiff (Mr. Callaghan). Would the Chief Whip forgive me? I do not like to interrupt his disciplinary action in waking up the hon. Gentleman the Member for South Cardiff, but I think these admonitions should be addressed to hon. Members in private, in the Chief Whip's study, rather than on the floor of the House. The only reason I feel inclined to say anything is that I was once again surprised by the powers of the Treasury to induce Ministers to back the most unpopular of all Measures, namely, of course, anything which impedes our industrial recovery. The Treasury say this is an expensive concession. That makes me ask myself this question: Is the country made for the Treasury or is the Treasury made for the country?

5.45 p.m.

It is the most short-sighted view merely to say that the cost of this proposal is excessive from the Treasury's point of view. The Treasury contributes nothing to the productive capacity of this country. It is true it is a partner in every industry—a sleeping and a greedy partner; but the notion that the Treasury can contribute anything to the industrial resucitation of this country is absurd. The Treasury consists of a number of excellent gentlemen who spend most of their time at the present moment, so far as I can see, trying to do the tremendous amount of work thrust upon them by the Chancellor of the Exchequer and other Ministers. They are utterly incapable of taking a constructive view about anything, and nowadays they do not seem to me to be able even to discharge their first function, which is, of course, the control of expenditure. If I ever could penetrate the dim corridors of the Treasury and give an educational course to its officials, I would point out to them that a provision like this is wise and rewarding.

One cannot develop any business in this country unless one is prepared to spend money on it, and the Treasury must be prepared from time to time to make concessions. I agree that it would be unreasonable to ask the hon. and learned Solicitor-General the exact cost of this concession. I am prepared to accept his view that it is expensive. Once again to rehabilitate and reconstruct our industry is going to be a very expensive business. If we are to get plant and machinery equivalent to that in the United States and other countries, we must be prepared to spend money on it—[An HON. MEMBER: Whose money?]—I would suggest that the money of the people of this country would be better directed to the reconstruction of industry than to the wasteful schemes of hon. Gentlemen opposite.

Certainly, increasing dividends. What is wrong with increasing dividends?

I should have thought that the right hon. Gentleman would have been well aware that the chief thing to do is to rehabilitate our industry, rather than to pay dividends.

One of the best ways to rehabilitate industry is to pay dividends. When the hon. and gallant Gentleman said he "should have thought" he used quite the wrong word in using the word "thought"; it was the last word he should have used when he made that senseless interruption. Hon. Gentlemen opposite really do not help the country much by this eternal prattle about increasing dividends. What does the Treasury itself do about the matter in a case like that of the Anglo-Persian Oil Company? Did the Treasury say to them, "Cut down your dividends"? [HON. MEMBERS: "No."] I am just asking the Financial Secretary to confirm these facts. Are the directors of the Suez Canal Company or the Anglo-Persian Oil Company told—

The right hon. Gentleman is going extremely wide now of the proposed new Clause.

I entirely agree, and I apologise; but if hon. Members opposite will keep on with their perpetual chatter about increasing dividends, I am likely to be led into deep waters—though "lured," I think, is the word to use. I know that the hon. and learned Gentleman cannot make this concession on the part of the Government. The Chancellor of the Exchequer is away. I do not blame him. He is probably asleep. I think that, probably, he is better asleep than awake, from the point of view of the country. But I would ask the hon. and learned Solicitor-General to reconsider his decision, and, when he has an opportunity, to bring it before the Chancellor of the Exchequer.

I do not think there is any party motive in the minds of my hon. Friends here is putting forward this proposal, it is a sensible attempt to help rebuild Britain. From time to time we have to listen to lectures from hon. Gentlemen opposite about the obsolescence of British industry. This proposed new Clause encourages the modernisation of plant. It would be a great encouragement to British industry. We are on a sellers' market, and if we think we can just sell anything from the Albert Hall to the stone lions in Trafalgar Square, we must think again. This new Clause is a small constructive attempt really to improve our competitive power abroad, and, surely, that ought to make an appeal to the Financial Secretary to the Treasury. I was thinking only last night that the Chancellor of the Exchequer has been having far too much of the limelight. We have been wanting to hear more from the Financial Secretary to the Treasury, and I wonder if he could get up now and give us his views on this new Clause, because we should be most interested to hear them.

I can illustrate the value of this new Clause by referring to a company which should be popular with the legal profession and with the hon. and learned Solicitor-General because it is a company which, in the course of its history, has made a considerable number of law suits. In 1929, 1931 and 1932 this company was very nearly on the rocks. However, people got together and pulled it through, and in 1936 it managed to progress a little. In 1941 I was with the Ministry of Aircraft Production, and the company wanted to expand the building of bombers in Northern Ireland. They had a factory that was picked upon as being suitable. That firm told us, "We do not want to give our factory to M.A.P., because if we do, and we ever get it back again, where shall we get the money for its rehabilitation? However, if the country wants it we will hand it over."

First of all, we had to turn out the company's looms, and we were asked by the company where we were going to place the looms in store. We were very careful to point out that that was not our responsibility, but theirs. Eventually, we got an old, disused factory, which had been abandoned many years before, and the company stored its good looms in that building. Now they have got to get the Ministry of Aircraft Production machinery out of the factory, and they have to get the looms back again, which have suffered very much; and they have very little money, indeed, with which to do it.

After all the promises that I made in this matter, I felt so embarrassed that when I met the head of the company in Belfast I was inclined to move over to the other side of the street because I am a little bit ashamed of what the Government are doing now in the matter of the rehabilitation of these poeple who have suffered damage during the war. I sincerely hope that between this Budget and the next, if the Solicitor-General cannot accept this new Clause today, he will reconsider the matter.

The Government should pay very close attention to this proposal. It is a very serious and momentous one. I venture to speak for Scotland, about which I know something. I was Chairman of the Scottish Council for Industry. The Committee may remember that, at the outbreak of war, three-quarters of our factory apace in Scotland was used for storage. Armament development naturally began in the engineering works best known, such as those at Coventry, and elsewhere. When, eventually, the arma- ments expansion went to Scotland, for purposes of safety from bombing, as well as because greater expansion of armament production became necessary, we found we had little factory space left to place at the disposal of the Government. What factories we had were textile factories, and one or two in the box and paper making trades. They were, very properly, taken over by the various Ministries, and used for their purposes. Our industries were ruthlessly concentrated, more ruthlessly in Scotland than elsewhere, because of their small and limited capacity.

It would seem to me that there is an overpowering case, not only in common justice, but economically, for such a new Clause as is now before the Committee. The Government have professed, and rightly professed—and I am sure that in so doing they have the support of every part of the Committee as well as of the whole country—a policy of full employment. How will it be implemented without effective reconstruction measures for industry? The Solicitor-General rejects the New Clause before us. The Government in effect are saying to me, about such factories as those in which I have an interest, "Reduce your attempts. Reduce your activities. Delay your rehabilitation. As you are over 60 years of age, make up your mind to pack up, and live on your capital." That is the kind of thing they are saying to those of us who have the recreation of the back benches of the House of Commons with which to take up our time. If His Majesty's Government are sincere, and I believe they are, in their desire to expand and develop British industry, then this is the kind of proposal to which they should lend all their authority and power and influence.

We were reminded the other day by the Lord President of the Council that 80 per cent. of British industry is in private enterprise. It is upon the expansion and development and rehabilitation of that vast range of industry on which our hopes of full employment, and the rise in the standard of life, lie. But now the Government today meets this proposal with complete indifference, and refuses us any help in the rehabilitation of our industry. The cash for which we are asking, and asking unashamedly, is cash for rehabilitation of industry, not for ourselves alone—although self interest is not wholly non- existent—but for the rehabilitation of 80 per cent. of the industry of this country. Is the price not worth paying? Is the Government so tied up with its doctrinaire Socialist theories that they have blinded themselves with a pair of Treasury spectacles? I can scarcely believe it.

I know a shipyard which extended itself more than one third uneconomically, unwisely, in the national interest, and is today seriously hampered because of that desire to serve the common weal. I am connected with an engineering business which changed the whole character of its undertaking to meet the national needs. Why should we handicap that business and handicap its 850 employees in the future? Why has His Majesty's Government so bold a grasp in certain directions, and so timorous and weak a hold on matters of enterprise? We have factories in Scotland which have been working for Ministry of Aircraft Production purposes. What is to happen to companies like that which my hon. and gallant Friend Member for Down (Sir W. Smiles) mentioned? There were new factories in Scotland with bright new shining machinery, the most modern machinery of its kind, that was stored in 1939, and today it is still lying in store. The companies have no inducement or encouragement at all. They are told to fold their arms, and to go meekly into the slough of the Socialist slump.

It is a little unfortunate that we should have to discuss such a very important new Clause, in which there is so much force, in the absence of the Chancellor of the Exchequer. During the speech of my right hon. Friend the Member for Bournemouth (Mr. Bracken) the hon. Member for South Cardiff (Mr. Callaghan) was roused from his slumber, and even he, who, if there is a defence to be put up for the Government's case, usually makes it, has not risen in this Debate to say a word on their behalf.

I apologise. I heard the right hon. Gentleman utter, in such vigorous tones and with such a fresh approach, the crassest platitudes to which it has been my misfortune to listen.

6.0 p.m.

As my right hon. Friend observes, that must have been in the hon. Member's dream.

I have seen some confabulation proceeding between the two hon. Members opposite who know most about the Income Tax law—the hon. Members for Chesterfield (Mr. Benson) and South Cardiff. No doubt some discussion is going on with a view to coming to a conclusion whether or not this is a good Clause. The merits of the case seem pretty plain. Rehabilitation costs defined in Clause 32 are to be allowed as a deduction against liability to Excess Profits Tax. All that my hon. Friends ask is, that being the case, why not allow rehabilitation costs as a charge against National Defence Contribution and Income Tax. If hon. Members refer to Subsection (5) they will see that rehabilitation costs are defined, and that the works enumerated as rehabilitation works are of three classes. First there is:

"expenditure on the removal of works designed to afford protection from hostile attack;"

In most cases these were defences put up in order to counteract the effect of enemy bombing. They were put up under duress, employers being obliged by Statute to build these works. Why on earth should not the cost of taking them down be treated as rehabilitation expenses, and be allowed against your liability as an undertaking to Income Tax and National Defence Contribution? The second class comprised in the expression "rehabilitation costs" is the removal of a trade or business from one place in the country to another, the business having been removed on account of war conditions. That means that you were ordered to transfer your plant, let us say, from the Great West Road to South Wales; you were given no option in the matter. Why should not the cost of moving back again be allowable for Income Tax and National Defence Contribution? The third class is:

"where any buildings, plant, machinery or other physical assets held for the purposes of the trade or business were, either as regards lay-out or otherwise, altered so as to adapt them to conditions prevailing as a result of the war,"

That is to say, where you converted your factory from a peacetime use to a wartime use in order to assist the war effort. I challenge any hon. Member opposite to give an answer why this expense should not be allowed against your Income Tax and N.D.C. liability. The only reason given was that of the Solicitor-General, who said that this would be an expensive concession. Surely the fact that a concession is likely to be expensive is no reason for not doing what is a very obvious and desirable act of justice. It is desirable not only as an act of justice, but in order to get British industry equipped as it ought to be, at the earliest possible date. For these reasons we shall go into the Lobby in support of this Clause.

My hon. Friend the Member for South Cardiff (Mr. Callaghan) seemed to me to be more pugnacious than constructive in his defence of the Government. One wonders whether his reading of Dod's "Parliamentary Companion" will aid him further in his defence.

I was busily engaged in seeing which Conservatives are going into another place in the near future.

The only grounds given for refusing the concession desired is that of expense. I should like to press the point that expense must be taken in comparison with what it produces. One might very well find that a £100 motor car which would not go, was very much dearer than a £500 motor car which would go. Expense, therefore, ought to be considered in conjunction with what it produces. I suggest that a good tax is one which has a maximum deterrent to expenditure in the inflationary period, from which some of us suffer, but from which apparently the Chancellor does not suffer, and the maximum encouragement to production. If this Clause were granted it would make very little difference to the amount of purchasing power, not having therefore any inflationary effects, but it would be something towards rehabilitating industry and increasing the supply of goods which is the only way to defeat inflation.

The Solicitor-General has said that he realises the difficulties in getting businesses going again, but I must confess that we on this side consider that the hon. and learned Gentleman realises all too little the difficulties and the circumstances. He went on to give us figures for the concessions on the depreciation of new capital. I would point out that these rehabilitation costs are based on 1939 prices, and that as result rehabilitation is bound today to cost 100 per cent. more than could possibly be recovered. This is a grave problem for any industrialist, and particularly for those faced with the necessity of paying for such capital improvements out of taxed income. All we are asking is that the Government should give the unfortunate capitalist a chance to enable him to fulfil his part in the Government's programme. We are often reminded that we are on trial, but if we are on trial, let us have a chance to justify our existence. Do not cripple us beforehand by refusing what we need to start the necessary rehabilitation of industry in this country. It is impossible for any Government or any Member to say that it is fair to ask industry to rehabilitate itself when it can do so only out of heavily taxed profits, not even obtaining the small advantage of this Clause. The Chancellor will find that by granting this concession the revenue he gets back from an expanding and flourishing industry will be far greater than that which he will now receive by crippling industry by refusing rehabilitation. All we want is the chance to do it.

I do not apologise to the Committee for making a second plea on this very important matter. For the Solicitor-General to say that it is expensive is not a satisfactory answer, if the point is a good one. In my opinion the Government are under an obligation to these people to give every possible assistance to rehabilitate their industries. I suggest to the Solicitor-General that if this is going to cost several million pounds, he and his colleagues ought to look around and economise in other directions to this extent. I consider that the saving of several million pounds in other ways in order to grant this concession would be well worth while. This is a much more serious matter than hon. Members on the other side seem to think. It is all right for them to laugh, but this may affect employment in the future. I should like the Financial Secretary to give us his view about it, because this is urgent. Let us have some logic and some sense.

May I ask whether we are to have a reply? We have had no reply up to now. We have heard the speech of the Solicitor-General, the chief burden of which was to concede that this Clause would be very expensive. That is really all that he said. My right hon. and hon. Friends have put forward cogent arguments, and it is hardly treating a matter of this importance in a right manner if a Minister does not reply. The Solicitor-General has been most helpful to us, and we recognise that fact, but, after all, he is a Law Officer, and it is not really the function of a Law Officer to deal with matters of policy—as the hon. and learned Gentleman would be the first to admit. The Solicitor-General is really here to guide us on difficult problems which arise on a complex Bill such as this, but when there is a question of policy, we look to a responsible Minister. Now that the most responsible Minister of all has arrived, with his usual escort, I hope that he will deal with the points which have been put. It is pretty difficult for the Chancellor, because he has not heard the arguments, but I hope that he will be able to say something on this important issue. He ought to say something in view of the very vigorous attack—and I do not agree with all that my right hon Friend the Member for Bournemouth (Mr. Bracken) said—made against the Treasury as a whole. It seems to me that it is up to one of the Ministers to put up a defence for their servants. I consider that we should have some sort of reply from a responsible Minister on what is really one of the most important series of new Clauses which have been put down.

6.15 p.m.

I apologise for intervening because I have not heard very much of the Debate, but we should like the Chancellor, refreshed with the morning dew and rising like Venus from the waves, to reply to what sounded like a most formidable criticism of the Government's action in this respect. I heard the right hon. Gentleman the Member for North Leeds (Mr. Peake) say that the only argument which the Solicitor-General had adduced in support of the official attitude was that it would cost a great deal of money. Can it be that that is the only line which the Government can take? I would ask the Chancellor to give us a short speech on this subject.

As the mover of this Motion may I be allowed to say a few more words about the new Clause. The Solicitor-General based his argument for refusing to accept it on grounds of expense. Why is there heavy expense? Does the Solicitor-General know what the Profits Tax is going to be next year? What he has said rather frightens me. If Excess Profits Tax is to go by 60 per cent. at the end of the year, presumably, from what the Solicitor-General has said, we are now being warned that some very heavy tax is to take its place, which is going to make it even more expensive for the Treasury to make a concession. The only item of expense is that the Treasury will lose in Income Tax on these rehabilitation costs which are allowed as an expense against profits. We all know that it is a terrific charge which we all have to meet. It is, therefore, in the interest of the Treasury to decide how quickly, and by how much, Income Tax can be reduced. We have been at a loss without the Chancellor since he left us earlier this afternoon. We felt that we were getting somewhere, so long as he was with us. The moment his back was turned, those who assist him hardened their hearts and decided that, without the approval of the Chancellor, they could not give anything away, small or large. I hope that now that the Chancellor has returned, we shall again find the Treasury more accommodating.

I have a great respect for the Committee, but it is not easy, when Debates are as prolonged and as interesting as they have been during the last two days, for me to be continuously present. I think that it will be agreed that I have not been absent for long during the last 19 hours' discussion, with the exception of some time for quick refreshment. If it is the desire of the Opposition to have another "go" tonight, I shall try to be as good again. I am caught at a certain disadvantage because, although I have my own view on these matters, I have not had the benefit of hearing what has been said from the other side of the Committee. Therefore, I do not think it would be right for me to say more now than that I will study the arguments, as this is a matter to which the Opposition attach considerable importance, and, if they will not press the Clause now, I will look at the Debate in HANSARD and consider between now and the Report stage, according to such judgment as I can form about it, if there is anything that can be done to meet the case which they have put. I do not think that it would be honest or sensible for me to do more than that; but that much I undertake to do.

We are obliged to the right hon. Gentleman for his offer, which we certainly accept. There is only one difficulty, and I do not think he can help us on that. When we come to the Report stage, should he find himself unable to put down an Amendment, we shall have to depend on the good will of the Chair to enable the Chancellor to give us, what he feels he cannot give now—an argument against this new Clause.

I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Further reduction of duty on publicans' licences in respect of diminution in supplies of wines and spirits.)

In Section, thirteen of the Finance Act, 1942 (which provides for a five per cent. reduction of duty on publicans' licences in respect of the diminution in supplies of wines and spirits), for the words "five per cent." there shall be substituted the words "twenty-five per cent."—[ Sir P. Hannon. ]

Brought up, and read the First time.

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

This Clause seeks to give some measure of assistance and consideration to one of the most deserving sections of the community. There has been no concession made to licensed traders, adequate to the limitation of their selling capacity, for a great number of years. In 1942, a small remission of five per cent. was made. That was regarded by the Chancellor of the Exchequer of that time as a token concession, and there was every indication that further consideration would be given to the matter later. It is well known that the licensed traders had a very bad time during the war owing to the restrictions imposed upon them. I hope that the Chancellor will take those circumstances into consideration. While American and Canadian troops were here, the hours of licensed traders were limited, and, in a variety of ways, restrictions were imposed on their earning capacity. This should have the sympathetic consideration of the Government.

When this matter was brought before the House in the Finance Bill, 1944, the then Financial Secretary to the Treasury treated my representations very kindly, and he gave some measure of confidence that this matter would have further consideration in the future. Alas, a change has taken place in the political circumstances, and the prospects of that concession, to which I looked forward at that time, have vanished. The matter is now in the custody of the Chancellor of the Exchequer. I am sure that the Chancellor would be the first to honour an understanding which was arrived at by the Coalition Government in 1944. The licensed traders are a part of the community who have served the country well, and today they are finding it very difficult to make ends meet. I hope, therefore, that the Chancellor will make some concession, because the licensed traders have had a hard time. Notwithstanding that hardship, they have always maintained their business at a very high standard. I ask the Committee to take that into consideration, and, as a matter of justice, see if something cannot be done for them. I ask the Chancellor of the Exchequer to take the case of the licensed traders into consideration, help them out of their present difficulties and give them an opportunity at least of making a living in existing circumstances.

I hope that the Chancellor of the Exchequer will be able to look with favour on this new Clause. As my hon. Friend the Member for Moseley (Sir P. Hannon) has reminded the Committee, there was a relaxation in the scale of licence duties in 1942, owing to the fall in the supplies available to licensees. Today that shortage has become much more acute. The right hon. Gentleman, I imagine, will not require much evidence on this matter; it must be apparent to him as it is to everyone else. Never was there a greater shortage of alcoholic refreshment in the country than there is today. During the Whitsuntide Recess, I visited my constituency. In the market town, on market days, for the first time, I imagine, in centuries, every single public house was short of alcoholic refreshment of any kind. It was quite impossible for the farmers, drovers and farm labourers, who attended in large numbers, to get any refreshment. I felt that it was my duty to do what I could to explain the situation. I feel that it is up to hon. Members to comfort their constituents, when they can, by explaining to them the causes of these things. I did my best. I explained to my constituents, in the cattle market assembled, that a large majority of the electors of this country last July voted for the Socialist candidates. Happily, Holderness was not one of them. We in Holderness, however, are good democrats, and we recognise rule by the majority, and I told them that what they were witnessing was the first of the sweeping instalments of Socialist planning. I went on to explain that they were witnessing the glorious red dawn of the era of the common man, and that they could expect some of those benefits as they went along—

I must remind the hon. and gallant Gentleman that this is hardly the time and place for a repetition of an election speech.

Even in my election speeches, I never foresaw such a catastrophe as this. I was trying to give the Chancellor evidence of the situation existing in my constituency, and to urge upon him the necessity of reducing these licence duties. The shortage of beer in particular is due to the policy of the Government in making certain cuts which it would not be in order to discuss now. I also explained to my constituents that His Majesty's Government are anxious to rear a new and virile generation of Germans, and that they are good internationalists. I told my constituents that they were taking part in a great crusade, and that this beer shortage was something in which the Government took great pride for that reason. My constituents refused to be comforted. They would not accept that point of view. The publicans told me that when I got back to this House I was to urge this Amendment upon His Majesty's Government, that I was to tell the Government that those constituents did not take the same international stand as His Majesty's Government; that they felt the era of the common man was not so important as reasonable refreshments for their customers; and that this experiment in State planning did not commend itself to them or to their customers. They urged me to do what I could, hopelessly outnumbered as we on this side of the Committee are, for those constituents. That is their case on which I base my support of my hon. Friend the Member for Moseley (Sir P. Hannon). I cannot equal the eloquence and passion with which he urged this new Clause. All I can do is to add my voice to his. I am quite sure that the Government are convinced of the excellence of their policy, which as far as shortages are concerned has been achieved in a most successful manner. It only remains for them to bring their policy into that line, which will enable the publicans to appreciate the benefits of a Socialist administration.

6.30 p.m.

Listening to the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) one realises how it was he got returned to this House. It is quite obvious he has in his Division people of what we would call a not very high political intelligence, the kind of elector who, obviously, falls for the type of oration to which the hon. and gallant Member has just treated the Committee. I do not doubt that it is very humorous and good entertainment but it is nothing more than that.

The hon. Gentleman was good enough to suggest yesterday that the compliments paid to the Solicitor-General would make good election posters. Would he be good enough to supply me with a copy of his last sentence to use in my next election?

Most certainly, if it will help the hon. and gallant Gentleman, and I will even embroider it. He will then probably find that the full portrait will not be of much use to him. We are dealing here with a new Clause. As a matter of fact, I understand there were two Clauses, and that they have been telescoped into one with which we are now dealing.

The effect of the two Clauses would be much the same. The object in view is to reduce the publicans' licence duty by 25 per cent. The present relief, as I think was said by the hon. Member for Moseley (Sir P. Hannon), came from the Finance Act of 1942, Section 14, which provided certain reliefs due to the shortage of certain liquors, beer, wines and spirits. Except for the publicans' licence, which is a sort of all-in composite document, it covers all kinds of liquor and over them other reliefs are spread. In the case of the publican it is an all-in document, and the relief given to him is on one liquor only, which is beer as far as England is concerned. But when one crosses the border into Scotland, I believe, the relief is given on whisky. It is a commentary on the varying habits of the Scots and English peoples. The relief given on the publican's licence takes no account whatever of wines and spirits sold by publicans, and the hon. Member for Mossley wanted to put that right by increasing to 25 per cent. the relief given under this Section 13. We have to remember that when Sir Kingsley Wood in 1942 gave that relief he used these words:

"This reduction is not of course by any means proportionate to the fall in supplies, and, therefore, in the volume of trade, but it will cost the Exchequer approximately £150,000 per annum. In the existing financial circumstances I am afraid that that is the largest reduction that I feel able to justify."—[OFFICIAL REPORT, 5th May, 1942; Vol. 379, c. 1239–40.]

In spite of the fact that earlier any reference to the fact that my right hon. Friend unfortunately cannot afford these concessions was met with jeers from the other side, nevertheless, quite frankly, that is the reason tonight why we cannot be more sympathetic to this proposal. It is true that those who deal in fermented liquor have had, because of shortages, what one might call a bad time during the last two or three years, and not only the traders but their customers too. However, this concession I am advised would cost about £600,000 on publicans' licences alone, the one type of licence with which this Clause seeks to deal. I ask the Committee to remember that my right hon. Friend, owing to the 15 per cent. drop in the quantity of beer during the present financial year, will lose in revenue between £48 million and £50 million. The Committee will realise that much as my right hon. Friend would like to help that fact alone does limit him considerably. That being so, remembering the words of Sir Kingsley Wood that £150,000 was all he could spare on this type of concession, as it would cost now £600,000 to meet the hon. Gentleman who moved this Clause, and as in addition my right hon. Friend will lose at least £48 million on beer duty this year, we cannot accept this Clause and the concession which it would involve even with the best will in the world to help.

Would it not be worth while to pay something to introduce a measure of contentment throughout the whole licensed trade in the country which deals with the common man? Hon. Members opposite are always protesting their interest in the common man. I am trying to make the common man happier through this Clause.

I must say that when I looked at the angelic face of the Financial Secretary I had very little hope for this Clause. I quite realise that if the Chancellor had got up with that rubicund smile on his face which he can switch on and off so easily, we might have had some little hope. But when the Financial Secretary got up I candidly admit that my spirits, like the spirits on which we are trying to get a little less duty, fell very considerably. What I do not think the hon. Gentleman realised is that we are not defending or arguing this Clause either for the producer, or for the distributor. Both are in the sellers' market now, because anything that the producer can get released from bond the distributor can sell. In fact the only two trades on the sellers' market are books and drink, and that shows that both the minds and the bodies of our people are thirsty. Can we not do something to gratify that quite legitimate thirst? The previous Government very properly did not impose the Purchase Tax on books and did not lay down that any coupons were to be necessary for them. That satisfied the mental thirst of the people. Here is another thirst, a physical thirst and what are the Government going to do about it?

I do press upon them the fact that the people for the past six years have had very few pleasures, and as far as we can see are going to get fewer still. Food is going to be short, clothes deficient and houses non-existent. How are they going to look at the world with any sort of spirit when there are so many cuts? A very tragic event in this House brings home even to Members of Parliament the serious position of affairs. The other day the Smoke Room, as we know, was suddenly short of whisky. The effect on the quality of the speeches for the few days following that sudden deficiency was most marked. I felt very sorry for those who had the courage and the tenacity to sit out the speeches in the Strangers' Gallery, for they were not getting their money's worth, and they must have formed a poor impression of the standard of intelligence and the quality of argument in the Members of this House. That is merely one side of the question. Take our normal, convivial, decent, honest man referred to by the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite). Nothing gives the common man of this country more hope and more pleasure than a little alcoholic refreshment. Some people, like the members of the I.L.P. sitting below me, get some entertainment of mind out of tea, and more credit to them. The average person gets it out of a limited and very moderate indulgence in alcohol.

I do believe and I do feel strongly—and it may seem perhaps an amusing way of handling a grave situation—that one has to be bright and gay some time, and if people have not the liquor to engender that spirit they have to do it with sugar or whatever other constituent is necessary. The Financial Secretary to the Treasury referred to the loss incurred from a previous concession which would amount to £48 million a year. I have suggested before, in a similar Amendment, that we could easily recoup that £48 million by making whisky more readily available to the many visitors from the other side of the Atlantic who would come here if they only knew that they could get it. I understand that in America they do not ask for a whisky and soda; they ask for Scotch. If the Government released sufficient Scotch whisky they would introduce a sufficient population of visitors to this country which would wipe out the deficiency of £48 million and put us on the right side.

I argely as a result of the present Government's policy, there is not the whisky to release.

I think my hon. Friend tends to be too pessimistic. There is enough in bond to get over the present financial stringency, caused by the reckless policy of the Government until we get relief. I know that some hon. Members would say that we are faced with two issues. Are we to reduce the price of whisky to consumers in this country, and, thereby, gratify our people here, or are we to release this whisky for the export trade and so bring in a dollar return? I would come down on the side that charity begins at home. Let us begin by reducing the tax on the publican. Let us have more whisky to distribute, and so give some little comfort both now and in the future to our long suffering people.

6.45 p.m.

We started the Committee today with two concessions by the Chancellor relating to oil for industrial purposes. Now we are asking for relief for an oil which is essential for human purposes. I believe the shortage of liquor will be admitted by everybody to be a hardship on those who believe that it is an essential oil for keeping the human body and mind in a reasonable state of contentment. The average man in the street, when he goes to his "pub," has in mind the twisted version of the well known saying, "The flesh is willing but the spirit is weak," particularly if he consumes that spirit for any length of time. The point of this Clause is to ask seriously for relief for a class which is most thoroughly deserving. Many of these men have kept their businesses alive in order to hand them over, in due course, to their sons and relatives who are coming home from war service.

The lot of the licensee at the moment is difficult. He has a discontented public, which is growing more discontented with every new manifestation of what I call this "chaos through planning." This concession, which will not be costly, will give a magnificent return to the Chancellor who, as a connoisseur of good liquor, would undoubtedly like to grant it. I feel that in the great days to come, when the country becomes one large Dalton Park, the effigy put up to him will bear in its right hand a glass on which will be inscribed, "He created £600,000 worth of good will." By accepting this Amendment he will do that. It is my practice, when I go to my constituency, to visit my local "pub," not for the sole purpose of refreshment—although my capacity in that direction has a distinct political advantage—but also to put my finger on political thought and feeling. One overpowering reason why the right hon. Gentleman should accept this Amendment is that of gratitude to that publican who has recently added to the store of great British poetry, those two lines:

My sympathies are deeply engaged with the ideas, at any rate, which lie behind this Amendment. Nonetheless, my hon. Friend the Financial Secretary has drawn attention to the difficulty in the way, that of cost at this time. Nothing is excluded from our deliberations for more than a short season. Who knows but that next year what is impossible now will be possible? It would be wrong either to commit myself to do anything next year or not to do anything. I merely say that this is the sort of thing I would like to do, if there was enough financial margin out of which to do it. Frankly, I do not think it would be right to do it now. I do not think any subsequent speaker can wring my heart strings more than the hon. Member for Bury (Mr. W. Fletcher), who has given us an account of his life with which I sympathise very much. Nor do I think any other argument will weigh with me any more than the deeply moving speech of the hon. Member for Moseley (Sir P. Hannon).

Since, no doubt, the Opposition will wish to put it on record that they wish for this concession now, and I cannot grant it, perhaps we can get a decision forthwith. I do not want to hustle the Opposition, but one of their spokesman did say yesterday that they were interested in the Purchase Tax, which they wanted discussed fairly early. We have a lot of new Clauses still to consider, and the First and Second Schedules to do, before we get to that. I hope I shall not be thought to be unduly "jollying along" the Opposition if I suggest that we make progress by coming to a decision now. Perhaps they will take the Division now, in which case I regret that we shall have to vote against the Motion.

I do not want to delay the Committee long, because the case for this Clause has been extremely well put by my hon. Friend the Member for Moseley (Sir P. Hannon), and admirably supported by my hon. and gallant Friend the Member for Holderness (Lieut.-Commander Gurney Braithwaite) and my hon. Friend the Member for Bury (Mr. W. Fletcher). In 1944, when I was in office, I was disappointed at not being able to meet the same claim which was put forward then, the only reason being that the war was on, and we were not making any tax concessions at that time. But we regarded this as one of the most important things to do when the time was opportune. Since those days the

hardship has increased; the position of the licensee has become more difficult. All over the country one hears of public houses being shut for one or two days a week. That is a situation which has probably never occurred before in this country. I hope the Chancellor is not cross with the publicans who have written the words:

"No beer, no stout,

You put them in,

You put them out."

So far as we are concerned, we intend to press this new Clause to a Division.

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

The Committee divided: Ayes, 130; Noes, 288.

Division No. 218.]

AYES.

[6.54 p.m.

Agnew, Cmdr. P. G.

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

O'Neill, Rt. Hon. Sir H.

Aitken, Hon. Max.

Hinchingbrooke, Viscount

Peake, Rt. Hon. O.

Assheton, Rt. Hon. R.

Holmes, Sir J. Stanley (Harwich)

Peto, Brig. C. H. M.

Baldwin, A. E.

Hope, Lord J.

Ponsonby, Col. C. E.

Barlow, Sir J.

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

Prescott, Stanley

Birch, Nigel

Hurd, A.

Prior-Palmer, Brig. O.

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

Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

Ramsay, Maj. S.

Boothby, R.

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

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

Bossom, A. C.

Jarvis, Sir J.

Renton, D.

Bower, N.

Jeffreys, General Sir G.

Roberts, H. (Handsworth)

Boyd-Carpenter, J. A.

Jennings, R.

Ropner, Col. L.

Bracken, Rt. Hon. Brendan

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

Sanderson, Sir F.

Braithwaite, Lt.-Comdr. J. G.

Kerr, Sir J. Graham

Scott, Lord W.

Butcher, H. W.

Kingsmill, Lt.-Col. W. H.

Shephard, S. (Newark)

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

Lambert, Hon. G.

Shepherd, W. S. (Bucklow)

Carson, E.

Lancaster, Col. C. G.

Smith, E. P. (Ashford)

Challen, C.

Langford-Holt, J.

Smithers, Sir W.

Clifton-Brown, Lt.-Col. G.

Lindsay, M. (Solihull)

Snadden, W. M.

Conant, Maj. R. J. E.

Low, Brig. A. R. W.

Spearman, A. C. M.

Cooper-Key, E. M.

Lucas, Major Sir J.

Stanley, Rt. Hon. O.

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

Lucas-Tooth, Sir H.

Stoddart-Scott, Col. M.

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

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

Stuart, Rt. Hon. J. (Moray)

Crosthwaite-Eyre, Col. O. E.

McGovern, J.

Studholme, H. G.

Cuthbert, W. N.

Mackeson, Lt.-Col. H. R.

Sutcliffe, H.

Davidson, Viscountess

McKie, J. H. (Galloway)

Taylor, Vice-Adm. E. A. (P'dd'ton, S.)

De la Bère, R.

Maclay, Hon. J. S.

Thornton-Kemsley, C. N.

Digby, Maj. S. W.

Macmillan, Rt. Hon. Harold (Bromley)

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

Dodds-Parker, A. D.

Macpherson, Maj. N. (Dumfries)

Touche, G. C.

Donner, Sqn.-Ldr. P. W.

Maitland, Comdr. J. W.

Turton, R. H.

Dower, Lt.-Col. A. V. G. (Penrith)

Manningham-Buller, R. E.

Vane, W. M. T.

Dugdale, Maj. Sir T. (Richmond)

Marlowe, A. A. H.

Wakefield, Sir W. W.

Duthie, W. S.

Marples, A. E.

Walker-Smith, D.

Eccles, D. M.

Marsden, Capt. A.

Watt, Sir G. S. Harvie

Erroll, F. J.

Marshall, D. (Bodmin)

White, Sir D. (Fareham)

Fletcher, W. (Bury)

Marshall, S. H. (Sutton)

White, J. B. (Canterbury)

Galbraith, Cmdr. T. D.

Maude, J. C.

Williams, C. (Torquay)

Gates, Maj. E. E.

Mellor, Sir J.

Williams, Gerald (Tonbridge)

Glossop, C. W. H.

Moore, Lt.-Col. Sir T.

Willoughby de Eresby, Lord

Glyn, Sir R.

Morris-Jones, Sir H.

Winterton, Rt. Hon. Earl

Gomme-Duncan, Col. A. G.

Morrison, Maj. J. G. (Salisbury)

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

Grimston, R. V.

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

Hannon, Sir P. (Moseley)

Neven-Spence, Sir B.

TELLERS FOR THE AYES:

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

Nicholson, G.

Mr. Buchan-Hepburn and

Harvey, Air-Comdre. A. V.

Nield, B. (Chester)

Mr. Drewe

Haughton, S. G.

Nutting, Anthony

Bing, Capt. G. H. C.

Haire, Flt-Lieut. J. (Wycombe)

Noel-Buxton, Lady

Binns, J.

Hale, Leslie

O'Brien, T.

Blenkinsop, Capt. A.

Hall, W. G. (Colne Valley)

Oldfield, W. H.

Blyton, W. R.

Hamilton, Lieut.-Col. R.

Oliver, G. H.

Boardman, H.

Hardy, E. A.

Orbach, M.

Bowden, Flg.-Offr. H. W.

Hastings, Dr. Somerville

Paget, R. T.

Bowles, F. G. (Nuneaton)

Henderson, A. (Kingswinford)

Paling, Rt. Hon. Wilfred (Wentworth)

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

Herbison, Miss M.

Paling, Will T. (Dewsbury)

Braddock, T. (Mitcham)

Hewitson, Capt. M.

Palmer, A. M. F.

Brown, T. J. (Ince)

Hicks, G.

Paton, Mrs. F. (Rushcliffe)

Brown, W. J. (Rugby)

Hobson, C. R.

Paton, J. (Norwich)

Bruce, Maj. D. W. T.

Holman, P.

Pearson, A.

Buchanan, G.

Holmes, H. E. (Hemsworth)

Peart, Capt. T. F.

Burden, T. W.

House, G.

Perrins, W.

Burke, W. A.

Hoy, J.

Porter, G. (Leeds)

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

Hubbard, T.

Price, M. Philips

Byers, Lt.-Col. F.

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

Pritt, D. N.

Callaghan, James

Hutchinson, H. L. (Rusholme)

Proctor, W. T.

Castle, Mrs. B. A.

Hynd, H. (Hackney, C.)

Pryde, D. J.

Chamberlain, R. A.

Irving, W. J.

Pursey, Cmdr. H.

Champion, A. J.

Janner, B.

Randall, H. E.

Chater, D.

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

Ranger, J.

Chetwynd, Capt. G. R.

John, W.

Rankin, J.

Clitherow, Dr. R.

Jones, A. C. (Shipley)

Rees-Williams, D. R.

Cluse, W. S.

Jones, D. T. (Hartlepools)

Reeves, J.

Cobb, F. A.

Jones, J. H. (Bolton)

Reid, T. (Swindon)

Cocks, F. S.

Jones, P. Asterley, (Hitchin)

Rhodes, H.

Collick, P.

Keenan, W.

Ridealgh, Mrs. M.

Collins, V. J.

Kendall, W. D.

Roberts, Sqn.-Ldr. Emrys (Merioneth)

Colman, Miss G. M.

Kenyon, C.

Roberts, W. (Cumberland, N.)

Comyns, Dr. L.

Key, C. W.

Rogers, G. H. R.

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

Kinghorn, Sqn.-Ldr. E.

Sargood, R.

Crossman, R. H. S.

Kinley, J.

Scollan, T.

Daggar, G.

Kirby, B. V.

Scott-Elliot, W.

Daines, P.

Kirkwood, D.

Segal, Dr. S.

Dalton, Rt. Hon. H.

Lang, G.

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

Davies, Edward (Burslem)

Lavers, S.

Sharp, Lt.-Col. G. M.

Davies, Ernest (Enfield)

Lee, F. (Hulme)

Shawcross, C. N. (Widnes)

Davies, Harold (Leek)

Lee, Miss J. (Cannock)

Shawcross, Sir H. (St. Helens)

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

Leonard, W.

Silkin, Rt. Hon. L.

Davies, R. J. (Westhoughton)

Leslie, J. R.

Silverman, S. S. (Nelson)

Deer, G.

Lewis, A. W. J. (Upton)

Simmons, C. J.

Diamond, J.

Lewis, T. (Southampton)

Skinnard, F. W.

Dodds, N. N.

Lindgren, G. S.

Smith, Capt. C. (Colchester)

Donovan, T.

Lipson, D. L.

Smith, Ellis (Stoke)

Driberg, T. E. N.

Lipton, Lt.-Col. M.

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

Dugdale, J. (W. Bromwich)

Logan, D. G.

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

Durbin, E. F. M.

Lyne, A. W.

Snow, Capt. J. W.

Dye, S.

McAdam, W.

Solley, L. J.

Ede, Rt. Hon. J. C.

McAllister, G.

Sorensen, R. W.

Edelman, M.

McEntee, V. La T.

Soskice, Maj. Sir F.

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

McGhee, H. G.

Sparks, J. A.

Edwards, John (Blackburn)

Mack, J. D.

Stamford, W.

Edwards, N. (Caerphilly)

McKay, J. (Wallsend)

Steele, T.

Edwards, W. J. (Whitechapel)

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

Stewart, Capt. Michael (Fulham, E.)

Evans, John (Ogmore)

McKinlay, A. S.

Stokes, R. R.

Evans, S. N. (Wednesbury)

Maclean, N. (Govan)

Stross, Dr. B.

Fairhurst, F.

McLeavy, F.

Stubbs, A. E.

Farthing, W. J.

MacMillan, M. K. (Western Isles)

Symonds, Maj. A. L.

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

Mainwaring, W. H.

Taylor, H. B. (Mansfield)

Follick, M.

Mallalieu, J. P. W.

Taylor, R. J. (Morpeth)

Foot, M. M.

Mann, Mrs. J.

Thomas, Ivor (Keighley)

Forman, J. C.

Manning, C. (Camberwell, N.)

Thomas, John R. (Dover)

Foster, W. (Wigan)

Manning, Mrs. L. (Epping)

Thomas, George (Cardiff)

Fraser, T. (Hamilton)

Marquand, H. A.

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

Freeman, Maj. J. (Watford)

Martin, J. H.

Thorneycroft, H. (Clayton)

Gaitskell, H. T. N.

Mathers, G.

Thurtle, E.

George, Lady M. Lloyd (Anglesey)

Mayhew, C. P.

Tiffany, S.

Gibbins, J.

Middleton, Mrs. L.

Timmons, J.

Gibson, C. W.

Mikardo, Ian

Titterington, M. F.

Gilzean, A.

Millington, Wing-Comdr. E. R.

Tolley, L.

Glanville, J. E. (Consett)

Mitchison, Maj. G. R.

Tomlinson, Rt. Hon. G.

Gooch, E. G.

Monslow, W.

Ungoed-Thomas, L.

Goodrich, H. E.

Montague, F.

Usborne, Henry

Gordon-Walker, P. C.

Moody, A. S.

Vernon, Maj. W. F.

Greenwood, Rt. Hon. A. (Wakefield)

Morgan, Dr. H. B.

Wadsworth, G.

Greenwood, A. W. J. (Heywood)

Morley, R.

Walker, G. H.

Grenfell, D. R.

Morris, P. (Swansea, W.)

Wallace, G. D. (Chislehurst)

Grey, C. F.

Morris, Hopkin (Carmarthen)

Warbey, W. N.

Grierson, E.

Morrison, Rt. Hon. H. (Lewisham, E.)

Watson, W. M.

Griffiths, D. (Rother Valley)

Mort, D. L.

Weitzman, D.

Griffiths, Rt. Hon. J. (Llanelly)

Murray, J. D.

Wells, W. T. (Walsall)

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

Nally, W.

White, C. F. (Derbyshire, W.)

Guest, Dr. L. Haden

Naylor, T. E.

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

Gunter, Capt. R. J.

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

Whiteley, Rt. Hon. W.

Guy, W. H.

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

Wigg, Col. G. E.

NOES.

Adams, Richard (Balham)

Austin, H. L.

Barton, C.

Adams, W. T. (Hammersmith, South)

Awbery, S. S.

Battley, J. R.

Allen, A. C. (Bosworth)

Ayles, W. H.

Bechervaise, A. E.

Alpass, J. H.

Ayrton Gould, Mrs. B.

Bellenger, F. J.

Anderson, A. (Motherwell)

Bacon, Miss A.

Benson, G.

Anderson, F. (Whitehaven)

Balfour, A.

Berry, H.

Attewell, H. C.

Barstow, P. G.

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

Wilkes, Maj. L.

Woodburn, A.

Zilliacus, K.

Williams, W. R. (Heston)

Yates, V. F.

Williamson, T.

Young, Sir R. (Newton)

TELLERS FOR THE NOES:

Willis, E.

Younger, Hon. Kenneth

Mr. Joseph Henderson and

Mr. Popplewell.

NEW CLAUSE.—(Maintenance and development expenditure to be a deduction for surtax purposes in certain cases.)

Where it appears to the Special Commissioners that any person carrying on a trade or business either alone or in partnership has during any year expended or applied the whole or any part of the profits thereof upon or towards the maintenance and development of that trade or business they may direct that the amount so expended or applied or so much thereof as they may determine to have been reasonably necessary or advisable for such maintenance and development shall be deducted in computing his total income for the purposes of surtax.—[ Sir H. Lucas-Tooth. ]

Brought up, and read the First time.

7.0 p.m.

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

I do this hopefully because the Chancellor of the Exchequer has repeatedly expressed himself as being in favour of the principle of ploughing back the profits of business, and this new Clause is designed to encourage that process. It is intended to encourage ploughing back when this is done by individuals, and indeed, if it is fortunate to be incorporated in the Bill, it will make it possible for the first time for certain businesses to use a really substantial proportion of their earned profits for the maintenance and development of the business.

Under the existing law a public company pays no Surtax at all on sums which it either places to its reserve or reinvests in its business, and up to the year 1922 a private company was in the same position. In 1922, however, the position of private companies was altered by the passing of Section 21 of the Finance Act of that year, which provided that the profits of small private companies controlled by fewer than six persons could be assessed to Surtax if an excessive amount of them was withheld from distribution. The question whether the amount which the directors decided to withhold from distribution in the case of these small companies was or was not excessive was left to the discretion of the Commissioners, and the Section to which I have referred provides that the Commissioners are to have regard to what is necessary or advisable for maintenance and development. It will be noticed that those words reappear in the new Clause which I am moving.

Section 21 of the Finance Act, 1922, was intended primarily to prevent tax avoidance and was not a Section which gave a concession. Indeed, it operated in the reverse sense since its purpose was to prevent certain individuals from forming their businesses into companies and then using those companies for the purpose of avoiding Surtax by leaving a substantial part of the profits in the business and, at some subsequent date, withdrawing those profits and escaping Surtax because in the interim they had become capital and were not liable to Surtax and could be expended. I should like to tell the Government that for my part I have no complaint to offer as to the operation of Section 21 of the Finance Act of 1922. There have been complaints as to its operation and I think that in so far as those complaints have been valid they have been based on very much wider considerations. The general consideration whether or not it is desirable to give some relief from taxation for those who plough in part of their income, whether for the development of their business or otherwise, is a very much wider issue and not one which I intend to raise in the Clause before the Committee.

The intention of this new Clause is simply to apply the same principle as that of Section 21 of the Act of 1922 to unincorporated concerns. To do this it is necessary to turn the wording of that Section inside out. Under Section 21 the intention was to subject to Surtax profits which should have been distributed by the business. Under the present Clause the purpose is to free from Surtax that part of the profits of a concern which ought not to be withdrawn from the business. The principle is identical in both cases and the wording of this Clause is intended to be the same as the wording of the other Section although necessarily turned round the other way. There are two points which I should like to submit to the Committee in recommending this Clause. The first is that it specifically refers only to the profits of the business concerned. It may be argued, and indeed, it has been argued, that any individual who uses part of his general income for the development of his business ought to be entitled to some tax relief. The question whether any income invested should be given relief is, however, a very much wider one, as I have already said, and not one which this Clause is intended to raise. This Clause is merely intended to put a private individual, whether trading by himself or in a partnership, on exactly the same footing as a private limited company.

It may be said by the Government in reply that the private individual or the member of a partnership has his own remedy. He has only to convert his business into a limited company to get the benefit of Section 21. Of course, in so far as that argument is valid I should perhaps warn the Government in advance that it will completely destroy any reliance that they may place on saying that this new Clause would be expensive because, if it is open to any individual to apply his own remedy and obtain all he needs, it is not open to the Government to say that this Amendment would cost a single penny. I do not think for a moment that the Government can properly put forward that argument, because there are many concerns which it is not desirable or possible to convert into a company.

I do not want to go into details, but the type of business I have in mind is the small trading concern which may be prosperous but small in the sense of not having a large and elaborate organisation and which must, perhaps, belong to some larger trade organisation. I understand that many of those trade organisations lay down as a matter of principle that their members must not be limited companies. They are not unnaturally anxious for the credit of their constituent members and they are, I think, very properly, entitled to say that those constituent members must take full esponsibility for their legal obligations and must not hide behind the cover of limited liability. In that type of case it is not open to the concern to convert itself into a limited company and there are many other cases where, for private family reasons, the financial constitution of the business is such that the formation of a company is not possible, and so on. There are many such concerns and they have all suffered by having been constantly subjected, if prosperous, to a heavy rate of Surtax which made it impossible for them to compete fairly against private companies having the great advantage of being free from Surtax in respect of those sums that they have re-invested for the development of their businesses.

7.15 p.m.

There is one other point to which I should draw the attention of the Committee. The Government may object that the Clause as drafted could be used as a tax dodging device. There may be substance in that to this extent. I want to be quite candid. It might be possible for an individual to escape Surtax on some part of his profit for one year by taking advantage of the Clause and investing that profit—subject only to Income Tax—in his business, and in some subsequent year realising the capital asset into which he has converted it and using it as part of his income, thus escaping Surtax on that capital asset. I admit that is a possibility, but it can easily be provided for. It needs some wording—which I have not ventured to put before the Committee because I do not think it part of the Opposition's task to provide all the machinery for a suggestion of this kind—to set up machinery whereby if an individual does attempt to evade Surtax in that way, he should be made liable for Surtax on any sums which he withdraws from his business in some subsequent year. A provision of that kind should appeal to the Government. Presumably the sum so withdrawn would attract Surtax at the rate payable at the time of withdrawal and as things are going now, it looks as if the intention of the Government is to go on increasing the rate of Surtax. They will, therefore, get a higher yield later if anyone uses the Clause for such a purpose. No argument can be put against the Clause. It is a belated act of justice to a very worthy part of the trading community, giving them rights equal to rights already enjoyed by the small limited companies. The Clause is also entirely consonant with the needs of the country and the policy of all Parties in this Committee.

I wish briefly to support the new Clause and to say at the outset that, like the hon. Member for South Hendon (Sir H. Lucas-Tooth), I have no intention of bolstering up any avoidance of taxation. I know the operation of Clause 21 of the Finance Act, 1922, from personal experience in connection with many companies. In considering questions of dividends and how much should be distributed out of a company, it is always sound advice to say that it is not wise, right or proper to attempt to leave too much of the profit in a company because, quite properly, the Commissioners have power to create a Surtax assessment on the profits left in. Against that policy, I have no objection whatever. It is right that where money is left in a company instead of being distributed, it should not escape Surtax if those funds are not necessary in the business. In my experience of negotiations with the Commissioners, I have always found them extremely fair if a good case could be made out that the funds were required for future developments of the company or for the purpose of meeting liabilities which might not be known at the time. I see the hon. Member for West Fife (Mr. Gallacher) shaking his head, but I can give a great deal of credit to the Commissioners for that.

I know the hon. Member does. That is why he shakes his head. One day I shall get him over to this side when he changes his views. But I shall be out of Order to continue on those lines. I have no complaint with Section 21 of the Finance Act, 1922. But I am anxious about this. This Clause gives power to the Commissioners to create a Surtax assessment on undistributed profits if they are not required for the maintenance and development of the company's activities. There are many callings which cannot be carried on as a limited company. Some undertakings are prohibited from doing so. The Solicitor-General may suggest that if such people want the benefit of that Clause they should form themselves into a limited company. It was part of my job to advise people to form companies and take advantages of the benefits of the Companies Acts, but there are people who still adhere to a partnership or private enterprise because they feel they thus have a far more distinct identity. Nothing will convince them that limited liability has such a great advantage. It is no answer to say that these people, as a private limited company, would be in the same position. I should like to see exactly what the new Clause provides—that where money has been expended for the development of a business, such expenditure should be outside the scope of Surtax assessment. The point is self-explanatory. I hope the Solicitor-General will be prepared to accept the new Clause.

This new Clause which has been so ably moved by the hon. Member for South Hendon (Sir H. Lucas-Tooth) is one which is of very great consequence indeed to the City of London, which I have the honour to represent. In the City of London there are a large number of merchants and brokers, and they have recently made representations to the Chancellor of the Exchequer. The British Federation of Commodity and Allied Trade Associations, which is a body covering practically the whole of the organised markets in the produce, commodity and allied trades of Great Britain, have approached the Chancellor of the Exchequer on this very subject. It is very desirable that the matter should be fully ventilated in this Committee and I am very hopeful that the Solicitor-General will find a way of meeting the very real difficulties of these traders. I attach the very greatest importance to this, and I can speak from personal experience of the difficulties which arise from the state of the law as at present. I regard the law in this respect as very harsh, and it is certainly desirable that we should try to remedy it in some way.

I do not suppose it is necessary to put before the Committee the importance of preserving the trading and commodity markets in the City of London. There was an occasion not very long ago when a Debate took place here with regard to a commodity market in another city, and those of us on this side of the House did not share the views pat forward by the Government. Grievous damage has, in my view, been done to the community in consequence of that action, but there has been no suggestion up to now that the Government take a general view on those lines. I hope that no such suggestion will be made. It is clear to all thinking men that the importance of the invisible exports of this country, which accrue very largely from these organisations, and the importance which they have in the financial balance of our trade, can hardly be exaggerated. It is difficult to say exactly what they mean to us. They have been estimated at one time or another, and I suppose that £400 million a year is probably not an exaggeration of what those invisible exports amounted to in the days when we were allowed to trade. I am sure that hon. Members appreciate that a great deal of this trade arises through the trading in goods which never come to this country at all. Merchants and brokers in London deal in the goods, which are shipped from one part of the world to another, and they get brokerage and make profits. The goods are shipped in British ships and so on—invisible exports coming into this country in the form of the profits of the shipping companies, the insurance interests or whatever it may be. We are a nation of traders, and that is the way we managed to live in this country. Unless we are able to build up that business again, I doubt whether we shall find the money with which to pay for the food we need.

The commerce of the City of London has fallen into a parlous condition. One reason has been the condition of the taxation system. When Income Tax was first imposed, the level of tax was comparatively low and none of the very serious consequences which have now arisen followed at that time. The evil consequences of taxation are due to the high level the taxation has reached rather than to the system of taxation itself. I would like to draw the attention of the Committee to the fact that all commodity trades are essentially risk-bearing trades, and, therefore, it is very necessary that private traders or partners in firms engaged in risk-bearing should be enabled in some way or another to set aside part of their profits for retention in the business to safeguard themselves and the community in which they deal. Hon. Members should study the present levels of taxation. I see that the hon. Member for West Fife (Mr. Gallacher) is smiling. I am not sure that he studies these matters as closely as he might. If he has, he will have discovered, as most of us have, that the amount which is left out of an apparently large private income is in these days extremely small and is inadequate to build up the reserves which are necessary in a big trading business.

Another factor which has perhaps been overlooked is that when a partner in a firm retires, he has to consider whether he will leave the money in the business or take it out. In the old days before the war and before taxation reached such very high levels, there was a considerable temptation to the partner to leave the money in the business because it earned more than when invested in Government securities. But what is the position now? It is that the rate of tax is so high that if he leaves the money in the business he will probably get very much the same return as if he had invested it in Government securities, and he is tempted to take the course which is not in the interests of the trade of the country or the City of London and put it into gilt-edged securities. Those factors, coupled with the very high level of Death Duties, are all depleting the resources of the merchants in the City of London. It is of immense importance for the Government to give this matter their consideration and try to find some way of meeting the difficulty. I can hardly believe that the Chancellor of the Exchequer and the Treasury are not fully aware of the contribution which is made to the trade of this country by the merchants and traders, and, therefore, they must be anxious to meet the difficulties in some way or other.

7.30 p.m.

What will probably be put to me by the Financial Secretary or the Solicitor-General when replying is, "Why do not those traders take advantage of the Limited Liability Acts and become limited liability companies?" There are several reasons. I would like to illustrate the position by referring to my own personal experience. I was for many years before the war a member of the London Stock Exchange. I only retired from being a member of it when I became a Member of the Government in 1939. The Stock Exchange is composed of firms which trade as partnerships or as individuals. There may possibly be one or two firms which are unlimited companies, but the vast bulk of the firms on the Stock Exchange are partnerships or private individuals. The essence of carrying on business in the Stock Exchange is that one risks the whole of one's personal resources in every bargain and transaction one undertakes. When one walks into the market and deals with a man one may not know very well, one knows that the whole of his personal assets are pledged to support his bargain. The very watch chain he is wearing comes off in the event of him not being able to complete his bargain. That adds enormously to the credit status of the trader in question. I want to encourage that.

It is important that these people should have the highest possible credit. It is the absolute essence of trade in the City of London that credit should be at high level. The moment we start introducing into a community of that sort the limited liability company, there are certain grave disadvantages. Traders are limited in the amount they are to contribute in the case of insolvency. It is not as easy as it might sound to say," Take advantage of the law as it is." To put the case shortly, it is that there should be some alleviation of the present inequitable position in which the sole trader and the commercial partnership are penalised under the present state of the law, when the whole of their profits, including those placed to reserve, are liable to Surtax. I suggest the problem is one which the Government have to face. My hon. Friend has put before the Committee a means by which they can deal with the question. If that particular method does not meet with the approval of hon. and right hon. Gentlemen on the Front Bench opposite, I beg them to bring forward some alternative proposal to meet the difficulty.

I am sorry that we shall have to disappoint hon. Gentlemen opposite once more. We feel that there is no sufficient case for this new Clause. What is its object? It has been explained clearly by hon. Gentlemen opposite who moved and supported it as being directed, in effect, to bringing partnerships in the same position as limited companies in so far as Surtax is concerned.

One knows the distinction very well, but companies, except in so far as companies within Section 21 of the Finance Act, 1922, are concerned, are not liable to Surtax, and Surtax is only payable on the dividends paid by these companies to their shareholders. What reason has been put forward for altering the system upon which the commercial life of the City of London and this country has been built? The Companies Acts of 1908 and 1929, and amendments, introduced and elaborated in the greatest detail this system of limited liability companies, and it is around that system that the commercial life of this country has developed during the last 30 or 40 years.

Why should not a trader, if he wishes to place himself in the same position as a company with regard to Surtax, convert himself into a company? The right hon. Gentleman the Member for the City of London (Mr. Assheton) says that the reason is that the trader likes to present himself as risking the whole of his personal fortune upon the deal he makes with another trader. That may well be a laudable motive on his part. He may well feel that he can put something to his credit if he is ready to risk the whole of his personal assets. But that is no reason whatever why he should not, if he wants, and very sensibly wants, to be in the same position as companies, do what practically every trader in the commercial life of this country has done, fall in with the system embodied in the Act of 1929, and use the limited liability company system.

Might I make one point at this juncture? If the Solicitor-General will allow me to go back to the illustration of the London Stock Exchange, members are not accepted who are public limited liability companies. There is not only the trade in the City of London to consider but international trading, the creditworthiness of merchants and brokers of London in New York, Amsterdam or Johannesburg.

Might I answer by saying that I gather that the Stock Exchange has already seen the light, and has altered its rules in such a way as to make it possible for jobbers to convert themselves into limited liability companies?

The companies they form are unlimited liability companies. There is no limited liability. The directors are open to the full consequences of the bankruptcy law in cases in which they do not fulfil their obligations.

The right hon. Gentleman said that they took the full consequences of their actions. He should have said "of their crimes."

In answer to the right hon. Gentleman the Member for Bournemouth (Mr. Bracken), I would say say that that is at least half way. It is a recognition, at all events, that there must be some invasion of the system of the individual trading by the individual. The right hon. Gentleman the Member for the City of London says that there is the international position to consider. Surely, that does not carry one very far. At a rough estimate 99.9 per cent. of the international commerce which flows between the various countries of the world, in the case of this country and other countries at least, is carried on by limited liability companies.

It is perhaps true to say, again I speak subject to correction by the right hon. Gentleman, who possesses much greater knowledge on these subjects than I do, that to a large extent brokers and middlemen remain individuals. Apart from that I should have thought that all the great volume of commerce—[An HON. MEMBER: "Lloyds."]—Lloyds brokers are practically always limited companies. I agree that Lloyds underwriters are not. Lloyds brokers are, and we hear that jobbers on the Stock Exchange are halfway to becoming limited companies. They are unlimited companies at the moment, but it is a recognition that there is no really adequate or cogent reason for adhering rigidly to the system whereby a trader remains an individual and risks his own fortune on the venture on which he is engaged with other traders. It may be laudable, but it is not in consonance with modern times.

The limited liability company system has spread, and is bound to go on spreading. It is because of the recognition for some such instrument as a limited liability company, and in order to enable it to be carried on effectively, that the Companies Acts were introduced, and that the system has developed on such a large scale on the lines of the Companies Acts. This Clause seeks to go counter to that in order to enable traders to remain individual traders. No reason can be given from the commonsense point of view—I do not mean that offensively—to prevent a trader, if he naturally and properly wishes to escape the liability of Surtax which a limited company enjoys, from converting himself into a company. It is not as if it was to do anything in the slightest possible degree unrespectable to convert oneself into a limited company. Everyone knows that there are tiny mush- room companies formed simply for dishonest trading. I put them on one side; one does not consider them. Bona fide companies have nothing unrespectable about them, and there is no reason why any trader, most anxious as he may be to preserve his commercial reputation, should not do what so many have done in the past and will do in the future, and avail himself of the facilities afforded by the Companies Act, 1929.

To conclude the point I have been trying to make, I submit that no case has been made out for what is really a startling innovation. Surtax can be avoided by the creation of a limited company on perfectly lawful and legal lines. That is one of the amenities that is deliberately made available to limited companies. Traders who find it necessary, for the purpose of conducting their enterprise, to accumulate reserves should avail themselves of the limited liability company machinery, because that is the machinery designed under the law to enable them to effect that purpose. For that reason I ask the Committee to say that there is no real reason why this new Clause should be accepted, and I ask the Committee to reject it.

I spend some of my time in the City of London, and I must thank the Solicitor-General for the lavish tribute he has paid to the joint stock companies tonight. It seemed odd, because so many hon. Gentlemen who sit behind him have spent their time abusing the joint stock system. It has been the staple abuse of capitalism by Socialism for years. But I am not prepared to join with the Solicitor-General in paying all these tributes to joint stock companies. They are a convenient form of trading, but to use his words, we must not rigidly adhere to any system. I believe there are dangers. I find it intolerable to listen to all the jaw that goes on at directors' meetings, or, for that matter, in the Cabinet. One of the worst experiences that can fall upon a human being is to listen to a number of voluble, boring colleagues, arguing their heads off for hours, whether it be in No. 10, Downing Street, or a board room in the City. I regard it as one of the greatest advantages that have come to me that I am relieved of having to listen to so much conversation.

There are in the City a number of people who do not want to be bothered by trying to persuade colleagues to take a certain line of action. A good business man must always be prepared to risk a lot of money. If one has to convince a number of cautious colleagues of the wisdom of taking a great risk in some distant part of the world, one will find one's temper is frayed, and often the business is not done. Therefore, I have always thought that these private partnerships in the City were of the highest possible consequence to our industrial or commercial life. It is true, as the Solicitor-General says, that a man who likes safety first will always rush off and register himself as a limited liability company.

If a man is willing to risk his own capital—and surely that is the sort of man we all want to encourage—and conduct his business on the principles of the pioneers who built up British industry, why discourage him? Why think there is any special merit in the joint stock system? There is none. The Minister of Supply spent a great deal of his early life in attending meetings of mushroom companies in order to try to make the directors behave, and in due course, he himself recognised that it was a desirable position to be a director and he became one of the most affluent men in the City. He is more patient than I am, and therefore I think he likes sitting at board meetings. It is of the highest importance to us to try to keep the partnership system going. My hon. Friends who put down this Amendment know perfectly well that if British industry is to make a complete recovery we must once again restore the adventurous pioneering spirit. British industry was not built up by a lot of old gentlemen sitting around at board meetings with ear trumpets and secretaries recording minutes.

7.45 p.m.

As I was saying before the hon. Gentleman interrupted me, I ask hon. Members to consider the wisdom of this Clause. It is quite true that it is convenient for the Treasury and for Somerset House that all business should be organised in joint stock companies, but it does not really fit in with the needs of our time. Although at the present moment we are in a sellers' market, once again we shall require from the people of this country the same adventurous spirit they have shown in the past. Why, this little speck of an island has become the greatest trading power in the world through the energy and enterprise of persons who organised themselves in partnerships and found trade in every part of the world. It was they who built up modern industry; it all came from the qualities of initiative, enterprise, and intolerance of the tremendous amount of discussion that always takes place when human beings are assembled, whether in a Cabinet or at a board meeting.

The Solicitor-General is a little biased in this matter because he has the good fortune to be a lawyer. Lawyers, of course, cannot form themselves into partnerships, but they can do other things of great advantage to themselves. Strange as it may seem, they can for instance retire from their profession having sent out but not having collected their accounts—which may amount in some cases to £100,000 or £200,000—and they can collect those accounts later on, and not pay one penny of Income Tax upon them. If that is good enough for the lawyer, why are people in the City not allowed to practise, not these taxation dodges that are so bad from the point of view of the legal profession, but the principle that taking it all in all individuals can render a better service to the country if they are free from the need of explaining their actions to dull or backward directors or timid colleagues? Would it not be much better for us if the Government accepted this Clause, to help these men who once again will go out and get trade for Britain? If they are risking their own money they are much more likely to bring great advantages to this country than are the safe little men who register themselves as a joint stock company from the day they start operations, lest they should drift into bankruptcy. Any sensible man who comes into business realises that he must risk his money, and must even lose great quantities of it, before in the end he can hope to make a success of his affairs.

The Solicitor-General should remember that he is a member of a great profession which would not tolerate this business of joint stock associations. For a man with such a catholic mind, such a broad approach to life, he should not take this very narrow view, but should see that the partnership system is allowed to develop in the natural way suggested by my right hon. Friend the Member for the City of London. I do not want him to decide at once on this point, I equally do not want him to look at it, because the Government have promised to look at so many things in the last 24 hours that no human being could possibly accept that they could look at any more. I am afraid that my hon. Friends will divide the Committee on this matter, and as I would not wish to give the Government too much exercise, particularly the Solicitor-General, whose work in this Committee has been exceptional—his colleagues have thrown upon him nearly all the labour of piloting this Bill through the House, and there has never been a more industrious pack horse or a more amiable Minister—

What is the idea of throwing such bouquets at him? What do you want from him?

I only want a little sweet reasonableness. Is it not disgraceful in a Government like this, with so many people holding nominal posts such as the Lord President of the Council and the Lord Privy Seal, that the Solicitor-General should be working hard, day in and day out, bearing the main burden of Government work?

My hon. Comrade does not quite meet the point by saying that the Solicitor-General will be paid over-lime.

I cannot see that what the right hon. Gentleman is saying now has any relationship at all to the question under discussion.

I entirely agree. I was paying a tribute to the Solicitor-General and making a slight criticism of the Government.

May I ask my hon. Friends on the other side to remember that we have a lot of Clauses and Amendments on the Order Paper? We on this side at least are not anxious to go on all night, although we shall be very willing to do so if the need arises. But we must have this Bill tonight, and I wonder whether hon. Members opposite would be willing to meet us and let us take a Division now.

I will not take up too much of the time of the Committee, but I feel very keenly on this subject. I have listened with the greatest care and attention to the Solicitor-General and I do not think that he begins to understand what the partnership has meant in the building up of trade in this country in the past, nor indeed what it means today. All the great industries, especially the exporting industry, have been built up largely by the private partnership system. Some of those great partnerships still exist, and many of the people concerned think it infra dig. for the partnership to become a limited liability company. There is still a great deal of that fine old feeling in the City of London. We have heard a great deal about the part which partnerships have played in the business of the City of London, but surely there are also many other partnerships in different parts of the country. Generally speaking they represent comparatively small, enterprising business men, and I would urge the Solicitor-General to consider this matter most carefully before lightly turning it aside. The small business men working with private partnerships have for many years been heavily penalised. I have been delighted to hear the Chancellor recently urging people to plough back profits into their business in order to develop it for the good of the community as a whole. For several years past these small partnerships have been absolutely prevented from ploughing back sufficient capital to carry on their businesses properly, and I feel very keenly that partnerships have suffered from severe hardships and injustices in the past. I hope the Government will consider this matter very carefully indeed.

Perhaps I might be allowed to add something as the mover of this new Clause. I was extremely disappointed with the speech of the Solicitor-General, and I am bound to say that it appears that he has gained very little knowledge from his experience at the Bar either in connection with the formation and administration of companies and part- nerships or indeed of the application of the companies law in this country. I see one of the hon. and learned Gentleman's supporters sitting behind him, the hon. and learned Member for East Leicester (Mr. Donovan); had he told the Committee that there was no case whatsoever for this Clause, it might have made some considerable impression upon us, but with great respect I am bound to say that the learned Solicitor-General's reply was just one of those replies read out from a brief supplied by someone in an office. It was not as good a reply as we are entitled to expect. He said that there was no case for this Clause, but I venture to submit that my hon. Friends and I have put forward a very strong case. One thing was quite evident, namely that the learned Solicitor-General put forward no case whatsoever against this new Clause. He made no claim either that it was expensive or that it would not work; the only reply he gave was that we had failed to make out a case. In those circumstances I hope that the Committee will divide on the new Clause.

I am extremely sorry that the Solicitor-General has had to reply to a point like this. [HON. MEMBERS: "Oh."] Hon. Members may not join with me in that expression, but I think it is quite wrong that the Solicitor-General should be put up there to answer for the business world, which is carried on under a partnership system, because his views showed that his knowledge of the volume of business carried on in the City of London and in the country as a whole by individuals and private partnerships is very limited. I say that with great respect to him because I appreciate that he deals with us on this side of the Committee in a most courteous manner, and I do not in any way seek to be discourteous to him. Millions of pounds' worth of trade is carried on in this country, export trade and trade of all descriptions, under private partnerships, and the Government ought to have armed the Solicitor-General with an answer on the point of the volume of trade carried on by partnerships, so that he could have given the Committee some idea of what is involved. I think the hon. and learned Gentleman has a just complaint against the people who brief him on a point of this description, because he is not fully alive to the actual facts. A great deal of trade is carried on by these people and they are a rather important class.

8.0 p.m.

I would not have intervened in this discussion had it not been for the reference made to me a few moments ago. I quite agree that one can say that a tremendous amount of hardship rests upon people who choose to run their businesses by means of a partnership, instead of forming themselves into a limited company. I have seen it frequently in practice. We can say, of course, as the Solicitor-General has said, that it is easy to turn the business into a limited company. The moment that is done, the business or the company has the benefit which is sought to be obtained in respect of private individuals by the proposed new Clause. There are two reasons why I suggest to hon. Members opposite that they should not persist in this proposal. The first is that, as it is drafted, the proposal is impossible of acceptance by anybody. Four partners, under the wording of the proposed new Clause, if each of the partners is entitled to a quarter share of the profits, would be entitled to Surtax deduction on the whole of the profits. That provision is inapplicable to the Clause, and ought to be withdrawn. The second reason is that the proposal is unnecessary. I cannot detain the Committee by explaining why the proposal is unnecessary, because the matter is rather technical. If any hon. Member wants to know more, I suggest that he should come and consult me.

We have had a very full discussion. I wish to make only one point, in rejoinder to the hon. and learned Member for East Leicester (Mr. Donovan). The hon. and learned Member suggested two reasons why we should not press our proposal to a Division. The first was that there was some technical defect in the drafting. I am prepared to believe it, because we have not the assistance of the official draftsmen as the Government have. Earlier in the Debate we said that if a better Clause could be produced by the Government to carry the same object into effect we should be only too glad to accept it. For that reason I should not be prepared to accept the advice of the hon. and learned Member. His second argument was that the proposed new Clause was unnecessary. The Solicitor-General developed the argument that partners in private trade could, if they wanted to, become public limited companies. It is not right that we should be asked to alter the whole structure of our business life in order to fit in with the convenience of the Board of Inland Revenue. It is the duty of the Board so to arrange their affairs that taxation can be extended to the community however it might conduct its trade.

There are great advantages in partnership. Let me give one illustration. I take my mind back to the time of the

Hatry crash in 1929, when things in the City of London were extremely difficult. I suggest that if the Stock Exchange in London had been full of public limited companies there would have been a panic such as had never been seen in this country before. Confidence was maintained because private traders were pledged to the last farthing, and had to maintain their bargains.

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

The Committee divided: Ayes, 123; Noes, 279.

Division No. 219.]

AYES.

[8.04 p.m.

Aitken, Hon. Max.

Grimston, R. V.

Nield, B. (Chester)

Assheton, Rt. Hon. R.

Hannon, Sir P. (Moseley)

Peake, Rt. Hon. O.

Baldwin, A. E.

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

Peto, Brig. C. H. M.

Barlow, Sir J.

Harvey, Air-Comdre, A. V.

Pickthorn, K.

Bennett, Sir P.

Haughton, S. G.

Ponsonby, Col. C. E.

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

Head, Brig. A. H.

Prescott, Stanley

Boothby, R.

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

Ramsay, Maj. S.

Bossom, A. C.

Henderson, John (Cathcart)

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

Bower, N.

Hinchingbrooke, Viscount

Renton, D.

Boyd-Carpenter, J. A.

Hurd, A.

Roberts, H. (Handsworth)

Bracken, Rt. Hon. Brendan

Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

Roberts, W. (Cumberland, N.)

Braithwaite, Lt.-Comdr. J. G.

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

Ropner, Col. L.

Buchan-Hepburn, P. G. T.

Jeffreys, General Sir G.

Scott, Lord W.

Butcher, H. W.

Jennings, R.

Shephard, S. (Newark)

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

Keeling, E. H.

Shepherd, W. S. (Bucklow)

Carson, E.

Kingsmill, Lt.-Col. W. H.

Smiles, Lt.-Col. Sir W.

Challen, C.

Lambert, Hon. G.

Smith, E. P. (Ashford)

Clifton-Brown, Lt.-Col. G.

Langford-Holt, J.

Smithers, Sir W.

Conant, Maj. R. J. E.

Lennox-Boyd, A. T.

Snadden, W. M.

Cooper-Key, E. M.

Lipson, D. L.

Spearman, A. C. M.

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

Lucas-Tooth, Sir H.

Stanley, Rt. Hon. O.

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

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

Stoddart-Scott, Col. M.

Crosthwaite-Eyre, Col. O. E.

Mackeson, Lt.-Col. H. R.

Stuart, Rt. Hon. J. (Moray)

Cuthbert, W. N.

Maclay, Hon. J. S.

Studholme, H. G.

Darling, Sir W. Y.

Macmillan, Rt. Hon. Harold (Bromley)

Sutcliffe, H.

De la Bère, R.

Macpherson, Maj. N. (Dumfries)

Taylor, Vice-Adm. E. A. (P'dd'ton. S.)

Digby, Maj. S. W.

Maitland, Comdr. J. W.

Thornton-Kemsley, C. N.

Dodds-Parker, A. D.

Marlowe, A. A. H.

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

Donner, Sqn.-Ldr. P. W.

Marples, A. E.

Touche, G. C.

Dower, Lt.-Col. A. V. G. (Penrith)

Marsden, Capt. A.

Turton, R. H.

Drewe, C.

Marshall, D. (Bedmin)

Vane, W. M. T.

Dugdale, Maj. Sir T. (Richmond)

Marshall, S. H. (Sutton)

Wakefield, Sir W. W.

Erroll, F. J.

Maude, J. C.

Walker-Smith, D.

Fletcher, W. (Bury)

Mellor, Sir J.

White, Sir D. (Fareham)

Foster, J. G. (Northwich)

Moore, Lt.-Col. Sir T.

White, J. B. (Canterbury)

Fox, Sqn.-Ldr. Sir G.

Morris, Hopkin (Carmarthen)

Williams, C. (Torquay)

Fraser, Maj. H. C. P. (Stone)

Morris-Jones, Sir H.

Williams, Gerald (Tonbridge)

Gammans, L. D.

Morrison, Maj. J. G. (Salisbury)

Willink, Rt. Hon. H. U.

George, Lady M. Lloyd (Anglesey)

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

Winterton, Rt. Hon. Earl

Glossop, C. W. H.

Mott-Radclyffe, Maj. C. E.

Glyn, Sir R.

Neven-Spence, Sir B.

TELLERS FOR THE AYES:

Gomme-Duncan, Col. A. G.

Nicholson, G.

Sir Arthur Young and

Commander Agnew

NOES.

Adams, Richard (Balham)

Battley, J. R.

Brown, T. J. (Ince)

Adams, W. T. (Hammersmith, South)

Bechervaise, A. E.

Bruce, Major D. W. T.

Allen, A. C. (Bosworth)

Bellenger, F. J.

Buchanan, G.

Alpass, J. H.

Benson, G.

Burden, T. W.

Anderson, A. (Motherwell)

Berry, H.

Burke, W. A.

Anderson, F. (Whitehaven)

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

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

Attewell, H. C.

Bing, Capt. G. H. C.

Callaghan, James

Austin, H. L.

Binns, J.

Castle, Mrs. B. A.

Awbery, S. S.

Blenkinsop, Capt. A.

Champion, A. J.

Ayles, W. H.

Blyton, W. R.

Chater, D.

Ayrton Gould, Mrs. B.

Boardman, H.

Chetwynd, Capt. G. R.

Bacon, Miss A.

Bowden, Flg.-Offr. H. W.

Clitherow, Dr. R.

Balfour, A.

Bowles, F. G. (Nuneaton)

Cluse, W. S.

Barstow, P. G.

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

Cobb, F. A.

Barton, C.

Braddock T. (Mitcham)

Cocks, F. S.

Collick, P.

John, W.

Pryde, D. J.

Collins, V. J.

Jones, A. C. (Shipley)

Pursey, Cmdr. H.

Colman, Miss G. M.

Jones, D. T. (Hartlepools)

Randall, H. E.

Comyns, Dr. L.

Jones, J. H. (Bolton)

Ranger, J.

Cooper, Wing-Comdr. G.

Jones, Asterley (Hitchin)

Rankin, J.

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

Keenan, W.

Rees-Williams, D. R.

Daggar, G.

Kendall, W. D.

Reeves, J.

Dames, P.

Kenyon, C.

Reid, T. (Swindon)

Dalton, Rt. Hon. H.

Kinghorn, Sqn.-Ldr. E.

Rhodes, H.

Davies, Edward (Burslem)

Kinley, J.

Ridealgh, Mrs. M.

Davies, Ernest (Enfield)

Kirby, B. V.

Rogers, G. H. R.

Davies, Harold (Leek)

Kirkwood, D.

Royle, C.

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

Lang, G.

Sargood, R.

Davies, S. O. (Merthyr)

Lavers, S.

Scott-Elliot, W.

Deer, G.

Lawson, Rt. Hon. J. J.

Segal, Dr. S.

de Freitas, Geoffrey

Lee, F. (Hulme)

Sharp, Lt.-Col. G. M.

Diamond, J.

Lee, Miss J. (Cannock)

Shawcross, C. N. (Widnes)

Dodds, N. N.

Leonard, W.

Shawcross, Sir H. (St. Helens)

Donovan, T.

Leslie, J. R.

Silkin, Rt. Hon. L.

Driberg, T. E. N.

Lewis, A. W. J. (Upton)

Skinnard, F. W.

Dugdale, J. (W. Bromwich)

Lewis, T. (Southampton)

Smith, Capt. C. (Colchester)

Durbin, E. F. M.

Lindgren, G. S.

Smith, Ellis (Stoke)

Dye, S.

Lipton, Lt.-Col. M.

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

Ede, Rt. Hon. J. C.

Logan, D. G.

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

Edelman, M.

Lyne, A. W.

Snow, Capt. J. W.

Edwards, John (Blackburn)

McAdam, W.

Solley, L. J.

Edwards, W. J. (Whitechapel)

McAllister, G.

Soskice, Maj. Sir F.

Evans, John (Ogmore)

McEntee, V. La T.

Sparks, J. A.

Evans, S. N. (Wednesbury)

McGhee, H. G.

Stamford, W.

Fairhurst, F.

McGovern, J.

Steele, T.

Farthing, W. J.

Mack, J. D.

Stephen, C.

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

McKay, J. (Wallsend)

Stewart, Capt. Michael (Fulham, E.)

Follick, M.

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

Stross, Dr. B.

Forman, J. C.

McKinlay, A. S.

Stubbs, A. E.

Foster, W. (Wigan)

Maclean, N. (Govan)

Summerskill, Dr. Edith

Freeman, Maj. J. (Watford)

McLeavy, F.

Symonds, Maj. A. L.

Gaitskell, H. T. N.

MacMillan, M. K. (Western Isles)

Taylor, H. B. (Mansfield)

Gallacher, W.

Macpherson, T. (Romford).

Taylor, R. J. (Morpeth)

Gibbins, J.

Mainwaring, W. H.

Thomas, Ivor (Keighley)

Gibson, C. W.

Mallalicu, J. P. W.

Thomas, John R. (Dover)

Gilzean, A.

Mann, Mrs. J.

Thomas, George (Cardiff)

Glanville, J. E. (Consett)

Manning, C. (Camberwell, N.)

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

Gooch, E. G.

Manning, Mrs. L. (Epping)

Thorneycroft, H. (Clayton)

Goodrich, H. E.

Marquand, H. A.

Thurtle, E.

Gordon-Walker, P. C.

Mathers, G.

Tiffany, S.

Greenwood, Rt. Hon. A. (Wakefield)

Messer, F.

Timmons, J.

Greenwood, A. W. J. (Heywood)

Middleton, Mrs. L.

Titterington, M. F.

Grenfell, D. R.

Mikardo, Ian

Tolley, L.

Grey, C. F.

Millington, Wing-Comdr. E. R.

Tomlinson, Rt. Hon. G.

Grierson, E.

Mitchison, Maj. G. R.

Ungoed-Thomas, L.

Griffiths, D. (Rother Valley)

Monslow, W.

Usborne, Henry

Guest, Dr. L. Haden

Montague, F.

Vernon, Maj. W. F.

Gunter, Capt. R. J.

Moody, A. S.

Viant, S. P.

Guy, W. H.

Morgan, Dr. H. B.

Walkden, E.

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

Morley, R.

Walker, G. H.

Hale, Leslie

Morris, P. (Swansea, W.)

Wallace, G. D. (Chislehurst)

Hall, W. G. (Colne Valley)

Mort, D. L.

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

Hamilton, Lieut.-Col. R.

Moyle, A.

Warbey, W. N.

Hardman, D. R.

Murray, J. D.

Watson, W. M.

Hardy, E. A.

Nally, W.

Weitzman, D.

Harrison, J.

Naylor, T. E.

Wells, W. T. (Walsall)

Hastings, Dr. Somerville

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

White, C. F. (Derbyshire, W.)

Henderson, A. (Kingswinford)

Noel-Buxton, Lady

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

Henderson, Joseph (Ardwick)

Oldfield, W. H.

Whiteley, Rt. Hon. W.

Herbison, Miss M.

Oliver, G. H.

Wigg, Col. G. E.

Hewitson, Capt. M.

Paget, R. T.

Wilkes, Maj. L.

Hicks, G.

Paling, Rt. Hon. Wilfred (Wentworth)

Willey, O. G. (Cleveland)

Hobson, C. R.

Paling, Will T. (Dewsbury)

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

Holman, P.

Palmer, A. M. F.

Williams, W. R. (Heston)

Holmes, H. E. (Hemsworth)

Pargiter, G. A.

Willis, E.

House, G.

Paton, Mrs. F. (Rushcliffe)

Wilmot, Rt. Hon. J.

Hoy, J.

Paton, J. (Norwich)

Woodburn, A.

Hubbard, T.

Peart, Capt. T. F.

Yates, V. F.

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

Perrins, W.

Young, Sir R. (Newton)

Hutchinson, H. L. (Rusholme)

Popplewell, E.

Younger, Hon. Kenneth

Hynd, H. (Hackney, C.)

Porter, G. (Leeds)

Zilliacus, K.

Irving, W. J.

Price, M. Philips

Janner, B.

Pritt, D. N.

TELLERS FOR THE NOES:

Jeger, G. (Winchester)

Proctor, W. T.

Mr. Pearson and Mr. Simmons.

NEW CLAUSE.—(Medical expenses.)

In Schedule D, Cases I and II, Rule 3, in sub-clause ( a ) of the Income Tax Act, 1918, after "vocation," insert "except where medical expenses have been incurred as a consequence of illness or breakdown arising out of carrying on the trade, profession, employment or vocation."

In Schedule D, Cases I and II, Rule 3, in sub-clause ( b ) of the Income Tax Act, 1918, after "vocation," insert "except where medical expenses have been incurred owing to the illness of the parties or their families."—[ Mr. Champion. ]

Brought up, and read the First time.

8.15 p.m.

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

Schedule D to the Income Tax Acts, 1918, to which reference is made in the proposed new Clause, says: b ) goes on:

Illnesses to taxpayers cause them to suffer two losses of income. There is the loss of income, first of all, arising out of the taxpayer's failure to carry on his trade or profession, and, secondly, as a result of the extra medical expenses incurred by him. A case of a shorthand writer came to my particular notice in this connection. It was a case in which, as the result of carrying on his profession as a shorthand writer, a man caught pneumonia, and not only did he suffer a long spell away from his work and lost a considerable amount of income as a result of that, but he also incurred medical expenses to the extent of £60. That £60 was a large sum for this man, and the fact that he had to pay Income Tax on the whole of his income, and did not receive any allowance on that £60, meant that he was paying something like 10s. in the £ on that £60 that he had to pay out in order to recover his health to enable him to carry on his employment.

Normally there has been no very great outcry in regard to this type of expenditure. I can imagine that is why it has not figured very often in Amendments to Finance Bills. With Income Tax at 10s. or 9s. in the £, the amount involved is very considerable. The case really is that this medical expense is an exceptional one. It is not one that is common to everybody. That seems to me to be the main purpose of allowances, that there shall be some allowance for exceptional expenses. I think that runs through the whole of the allowances under the Income Tax Act. This would be an allowance for an exceptional state of affairs as far as the taxpayer is concerned.

The point I am trying to make is not a new one. It was made in the Royal Commission which sat to consider the Income Tax Act in 1919. That Commission, despite the fact it said that in particular cases any operation of the general rule may have resulted in individual cases of hardship, went on to recommend that no action be taken. It might be argued by whoever is to reply that that is a sufficient justification for rejecting this new Clause. To that I would say most of the recommendations of that Royal Commission have never been carried into operation; they have never found their way on to the Statute Book. Therefore, it would be no answer to my suggestions to say that this failure to recommend was a sufficient one. In reading the evi- dence presented to that Royal Commission I was struck by that of a Mr. George Carter on behalf of the Labour Party, who very strongly stressed the necessity for giving an allowance. He complained that there was insufficient provision for cases of individual hardship, especially in the case of sickness, and he pleaded with the Royal Commission at that time, to make a recommendation in favour of special allowances in the cases which I am putting forward. I suggest to the Chancellor that Income Tax allowances by way of deduction would provide a very welcome relief in times of exceptional difficulty, and I urge him to accept this new Clause. I will not argue the case at any great length, because I realise the anxiety there is to get this Bill. I also realise that in this Committee hon. Members seem to have an amazing facility for making 100 words do the work of ten. We have seen that during the last two days. I think those who move Amendments in this Committee might try to put their points briefly, as I am doing, in the hope that I may get some concession.

I would say straight away that, for the reason my hon. Friend has just given, I would like to accept this new Clause. I most heartily agree with him that the number of words spilled in this Chamber, particularly in the last few days, was in inverse ratio to the amount accomplished by them. I shall try to emulate my hon. Friend's brevity in dealing with the new Clause which he has moved. What my hon. Friend desires to do is very laudable, namely, to allow anyone who pays tax under Schedule D to deduct any medical expenses, which he may incur through his own illness or the illness of his family, from the income he derives from his office, vocation, or profession. That is extremely wide. In this Committee down the years many proposals have been put forward, some of them quite general in character, such as the hon. Member has suggested this evening, some of them quite peculiar and particular, dealing, say, with ex-Servicemen who have been disabled, or with widows in certain situations, and so forth. The difficulty which the Royal Commission found in 1919, and which still exists is the impossibility as it would seem to be of finding a form of words which would meet disability and ill health of the kind to which my hon. Friend referred.

It is because of that more than anything else that, up to how, it has been impossible to find a form of words which would suit what my hon. Friend wants to do by this new Clause. The words, he has set down, are much too wide. There would be no limit whatever. It would be possible for a man to take his whole family away to a sanatorium, and charge it up as a medical expense against his income under Schedule D. I do not know quite why my hon. Friend limits himself to Schedule D. As perhaps he may know, employees have gone over from Schedule D to Schedule E, and the people who would be helped by this new Clause, would not be the kind of people whom he desires to help, and who should be helped if we can do so. Fortunately, we have the National Health Service Bill, which will shortly be on the Statute Book, and in the National Insurance Bill, which is now under consideration in another place. It may well be those two Measures, with others, will help those who fall sick and find it very difficult to make ends meet, when money which they had to pay to the tax-gatherer could have gone towards helping them either to secure comforts, or to pay a doctor from whom they could have obtained good advice. We see very clearly the point the hon. Member is making. However, it is quite impossible for us to accept this new Clause, much as we would like to do so. Therefore, I hope he will be willing to withdraw the Motion.

I think the Financial Secretary should take a rather higher view of the capabilities of his colleague the Chancellor of the Exchequer. He said it was difficult to find a form of words to meet this point. One of the main triumphs of this Finance Bill is the Chancellor's great success in dealing with theobromine. If the Chancellor can do that on a subject which has been so difficult since 1876, surely he could give some hope to his colleague in regard to this new Clause. I think the hon. Gentleman who moved the new Clause made an extremely good case, which was in no way weakened by the reference of the Financial Secretary to forthcoming legislation, to which it would be improper for me to refer further at the moment. If these new Measures are to afford such great assistance to the taxpayer then, of course, there would be no charge which could properly be raised in regard to the new Clause which the hon. Gentleman has moved. Therefore, it would be the giving of a concession which, in the vast majority of cases, would cost the Treasury nothing, but it would be a very real concession, written into the Finance Bill for meeting cases of extreme hardship.

It may be that under the new National Health Service Bill treatment will be free. Suppose a man is incapable of walking and has to be conveyed from a rural district to a health centre. Surely that would be the kind of case with which the Chancellor would wish to deal. The Financial Secretary had logic on his side when he pointed out that this referred only to a limited number of cases in Schedule D, whereas so very many more people at the moment are taxpayers under Schedule E, as the result of the introduction of P.A.Y.E. I believe that this matter could be solved if the Government were willing to apply their skill in drafting to the earlier problems in Clauses 2 and 3 of the Bill. Then, I think, this new Clause might be applied, and then the hon. Gentleman would feel that the cases not covered would be covered by legislation, and that he had written into the Finance Act a real provision for those who need help in this particular way.

8.30 p.m.

I did not get a favour-able reply from the Financial Secretary to the Treasury in spite of the reception the proposal received in other quarters of the Committee. I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Amendment of Section 31 of Finance Act, 1926.)

Notwithstanding the provisions of Section thirty-one of the Finance Act, 1926 (which deals with adjustments on the discontinuance of a business) no additional assessment shall be made for the year preceding the year of assessment in which the discontinuance occurs if the discontinuance is due to the business or part thereof having been compulsorily acquired under any enactment providing for the nationalisation of undertakings of the class to which the business or part thereof belongs.—[ Mr. Keeling. ]

Brought up, and read the First time.

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

The purpose of this new Clause is to prevent hardship which would otherwise arise when a nationalised business is assessed for tax. When such business is wound up what is called cessation for tax purposes takes place, and what are called cessation adjustments are made under the Act quoted in this new Clause. I can best explain the matter, perhaps, by taking a concrete case. Suppose that a particular colliery is nationalised, and suppose, also, that the vesting date is, as it is likely to be, this current year of 1946–47, then, under the adjustment provisions of this Act, the colliery will be assessed for the previous year, 1945–46, either on the basis of the year before that, or on the actual profits, whichever be the higher, at the option of the Treasury. I suggest, and, indeed, it is obvious, that it is unjust that the Inland Revenue should be entitled to exercise this option against a nationalised concern.

The right given to the Revenue to increase the assessment of the penultimate year is a necessary protection to them against the ordinary taxpayer, because an ordinary business may avoid an assessment on the profits of an exceptionally profitable year by winding itself up, by arranging a cessation in the year following. But nationalisation is outside the control of a business which is being nationalised, and I suggest that it would be unfair if the individual colliery—and this apples to any nationalised business—if a nationalised business were penalised in Income Tax assessment for the year 1945–46 because the Government propose to nationalise the business in the year following, 1946–47. I feel sure that the Chancellor of the Exchequer will see the force of my argument, and I hope he will give me this new Clause.

The hon. Gentleman has made a good case, and I am prepared to accept his new Clause in principle; and if he will be so good as to withdraw the Clause—the words are not quite appropriate—I will undertake, as in other cases, to consider a suitable wording, and to put it down on the Report stage to give effect to the case he has made. The nationalisation of industries is a procedure which, evidently, needs to be treated in an exceptional fashion from the Revenue point of view; and although the Government are clear that it is in the national interest to extend the field of nationalised industries, we do not wish, as a mere by-product of that process, to do injustice to those for whom the hon. Gentleman has spoken. Therefore, I accept the new Clause in principle, and I hope he will be prepared to withdraw the Clause.

I am much obliged, and I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

The new Clause—[ Amendment of Finance ( No. 2 ) Act, 1945, and Finance Act, 1920]—in the name of the hon. Gentleman the Member for Widnes (Mr. C. Shawcross) is out of Order.

I understood, Major Milner, there was some possibility of your ruling this proposed new Clause out of Order. I submit it is not out of Order, but comes within the rules. I have looked up the precedents in the latest edition of Erskine May on this matter, with reference, particularly to Standing Order No. 244; and it seems clear, whatever the practice may have been in the past, that a new Clause is not in Order if it imposes a higher scale of taxation. This new Clause is designed, and is designed only, to obtain the same revenue, without in any degree increasing taxation. It seeks to replace a Section it proposes to reject, and it will produce the same revenue whilst, at the same time, being of great benefit to the motor industry, and to the users of motor cars.

I am afraid the hon. Gentleman cannot argue about the Clause being called. It is out of Order because it would increase the charge on certain vehicles. It states:

"The duty to be charged in respect of a vehicle … shall … be charged at a flat rate of £12 10s."

It means that vehicles would be charged tax on a higher rate. That being so, I am afraid I must rule the new Clause out of Order.

I bow to your Ruling, but I am afraid I have not explained my point clearly.

NEW CLAUSE.—(Amendment of 57 & 58 Vict. c. 30, s 4, as to aggregation.)

In addition to any property excluded from aggregation by section four of the Finance Act, 1894, as amended by subsection (1) of section twelve of the Finance Act, 1900, section fourteen of the Finance Act, 1914, and section fifty-one of the Finance Act, 1927, all property passing or deemed to pass on the death of a person dying after the commencement of this Act, under a disposition not made by the deceased to some person other than the wife or husband, or a lineal ancestor or lineal descendant of the deceased, shall not be aggregated with the property of the deceased for the purpose of determining the rate of estate duty.—[ Mr. Erroll. ]

Brought up, and read the First time.

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

The purpose of this new Clause is to amend the law as it affects the aggregation of moneys for the purpose of levying Estate Duty. As the law now stands, all the property, including the capital for providing a life rent, on the death of the individual is aggregated and charged with duty at the appropriate rate. It is said that this may seem a quite reasonable state of affairs, as by now it has been hallowed by the passage of many years. Nevertheless, the state of the law, as it at present stands, can give rise to very severe hardship. One does not hear very much about these cases, because the persons concerned are so afflicted by hardship that they have not the means, nor are they in the mood, to raise the voice of protest.

I should like to make the matter clear by means of one or two examples, because it is a matter of some complexity, and it is not readily comprehended without regard to a number of details. The position is that any capital sum, which may be held in trust for an individual so that that individual has merely a life rent on that capital sum, is aggregated together with any property belonging to the estate for the purpose of levying Death Duties. That may lead to the capital sum which is held in trust being very severely reduced in size as the result of Estate Duty having been levied at a very much higher percentage than would have been the case had the Estate Duty applicable to that sum alone been paid.

When I came to look at this matter in detail, I was struck by the injustice which could be caused by the operation of the principle of aggregation as it at present stands. To illustrate this I would quote two cases. My first case is where there was a fund of some £24,700, which of course had already borne duty at the appropriate rate. It was left in trust for three persons for their respective lives. On the death of one of them, the Estate Duty payable on the trust fund proved to be 26 per cent. instead of 4 per cent., for no better reason than that the deceased had left a large free estate which went elsewhere, and in which the surviving life tenant of the fund had no interest. The two surviving tenants suffered a very severe diminution of income through no fault of their own. In my second example two people inherited equal sums of £4,000, each subject to separate life rents In the case of A, he gets the whole £4,000 since in his case the life renter had no other income. In the case of B, he receives only £2,000 instead of £4,000 for the reason that the life renter in his case had an inheritance—he was a millionaire. I claim, therefore, that by aggregating the considerable estate of the deceased, it thus caused considerable hardship to B.

This matter has been considered in the past. I find that a strong Committee, sitting in the year 1900 when Estate Duties were much lower, decided that the principle as it at present stands was fair, and that all property of the deceased must be aggregated. I maintain that the principle of aggregation in that respect is a false principle, because the life renter has no interest in the capital which provides him with a life rent. It is wrong for the capital to be aggregated in this way. Any solicitor could quote examples of this kind, but they do not receive the publicity they should. I am sure that I shall be told in reply that the principle of aggregation is sacred, and that the principle of Estate Duty is that duty must be levied on the property passing at death—I see that the Chancellor nods his head—without regard to the effect on the beneficiaries. I have no quarrel with that. My point is that in this case we are having what I would describe as a false aggregation, since the life renter does not own the capital from which his rent is derived, and thus there can be cases of hardship which could be very serious. My Clause seeks to rectify an injustice which has become much more grievous than it was in 1900 when as far as I can tell from my brief research the rates of duty were not very considerable. I agree that this matter has been raised at short notice, and I appreciate that it is scarcely likely that the Chancellor will accept my Clause. Nevertheless, I do not think that I have wasted the time of the Committee in drawing attention to the matter and in securing, I hope, the promise from the Chancellor that he will look favourably on the matter, and consult the working body of solicitors on this harsh injustice through what I believe to be a false principle of aggregation.

8.45 p.m.

A Clause very much in the same form as that at present proposed appeared in the Finance Act, 1894. In other words, in that Act there was an exception which prevented an aggregation in the circumstances the hon. Member for Altrincham (Mr. Erroll) has described. That Clause operated from 1894 to 1900. It was taken out of the Finance Act of that year because a very learned and strong committee had been appointed to consider the operation of that Clause—it had been subjected to a great deal of criticism—and reported that there was no possible justification for the exception, because all the exception did was to give to beneficiaries a freedom from tax which in no sense they deserved—it was quite fortuitous and a complete windfall so far as they were concerned. For that reason the Chancellor of the Exchequer of the day deleted from the Finance Act, 1900, the exception which the hon. Member now wants to introduce. The hon. Member comes along more than 46 years later and wants to revert to the position of 1894 which was discontinued in 1900. We must oppose the Clause for exactly the same reason the committee gave in 1900 in reporting against it, which is the reason I gave a few moments ago. The hon. Member says that duties are higher now than they were then. That is true, but that means that the donee of the particular slice of the estate if the Amendment is accepted will now get a much bigger exemption of duty than in 1900. The mischief is, therefore, worse than it was then. Apart from that objection, which weighs very heavily in the mind of my right hon. Friend, if this Clause were accepted it would in a full year cost the Revenue no less than £3 million. For these two reasons I ask the Committee to reject the Clause.

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

NEW CLAUSE.—(Relief for tenants on the maintenance of property.)

(1) For the purposes of Rule 8 of No. V of Schedule A as amended by Section thirty-two of the Income Tax Act, 1945 (which grants relief in respect of maintenance, repairs, insurance and management of property), a person occupying any premises as the tenant thereof shall be treated as if he were the owner thereof if, under the covenants contained in the lease or agreement by virtue of which he occupies the premises, the whole of the burden of repairing the premises falls upon him.

(2) The provisions of this section shall have effect as from the sixth day of April, nineteen hundred and forty-six, and accordingly in Subsection (1) of Section thirty-three of the Income Tax Act, 1945, the words "or, in the case of expenditure by a tenant, could, if he had been the owner," shall be omitted.—[ Viscount Hinchingbrooke. ]

Brought up, and read the First time.

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

We are drawing to the end of these new Clauses, and are coming to the solid meat of te Purchase Tax Amendments, In anticipation of that stage, I hope that the Chancellor will become a little more expansive than hitherto. I understand that he has accepted a new Clause moved by my hon. Friend the Member for Twickenham (Mr. Keeling), and I hope that he will be inclined to accept mine. This idea that he must not come down to the Committee stage of the Finance Bill and give away £5 or £10 million seems to me to be fantastic. The second Reading of this Finance Bill was worth £3,161,000,000. When the Chancellor comes to the Committee Stage of the Finance Bill he cannot seem to open his shoulders at all, even to the extent of a few million pounds one way or the other. I should have thought that it would have appealed to the Chancellor's artistic sense to play about with £3,000 million on the Second Reading, and then to have come along to the Committee and deal moderately with £10 million, £20 million or £30 million one way or the other. Of course, he could find the money if he were not so intent on a balanced Budget. If I had been able to say anything on the Second Reading, I would have tried to prove to the right hon. Gentleman that he could have afforded another £300 million or £400 million in remission of taxation if he had carried on the general ratio of loan borrowing to taxation receipts that he was working on before.

This Clause is designed to put tenants of property in exactly the same position as owners as regards their claim against the Revenue for maintenance, repairs, insurance, management and all the legitimate costs which are covered under Schedule A of the Income Tax Act, 1918. Let me look at the position of the tenant at the present time. I am not speaking at the moment generally but of a particular class of tenant who have what is known as a repairing lease. That lease may run from anything between one and 999 years. Schedule A tax is payable by the tenant, but it is deducted from the rent. Therefore, in fact, the owner of the property pays the Schedule A tax. For that reason, the tenant is held to be precluded from claiming against Revenue for the costs of repairs of his tenancy property, since he does not pay the tax. Likewise the owner, although he pays the tax, is precluded from claiming against the Revenue because he does not carry out the repairs. I suggest that in those circumstances, there is a particular set of properties which, as a result of high taxation, will tend to deteriorate in relation to other properties and that money which ought to be spent on them will not be spent? Let me give as an example, the magnificent Regency houses in Regents Park which belong to the Crown Land Commissioners, the provisions of the various Income Tax Acts are such that a direct incentive is given to the owner of all property in hand to repair that property and keep it up-to-date. But in the case of these types of houses in Regents Park, which are tenanted houses with a repairing lease, that incentive does not work to the same extent. Hon. Members must have in mind numerous cases of tenanted property, where there is not that same incentive to keep the premises modernized because the occupiers cannot claim against the Revenue for the cost of repairs.

Let us look at the position of owners under the Finance Act, 1918. They can claim for repairs, renewals, insurance and management and, indeed, all expenditure on the property which is devoted exclusively to maintaining the taxable value of the property. Various court decisions, at different times, have made these provisions very far-reaching indeed. For example, interior decoration, provided it is not in the nature of lavish embellishment, is a proper charge against revenue. The replacement of a worn out water-system or drainage system is a proper charge, and likewise a proportion of the cost of converting an old gas lighting or heating system to electricity. There is no doubt at all that, in these days of high taxation, these provisions have been of enormous assistance to owners of property and have constituted a very considerable incentive in keeping their properties in good repair. I want that incentive to apply to tenanted property. I do not think that there is going to be considerable cost in doing so. I am not asking the Chancellor of the Exchequer to unbalance his precious Budget.

The cost will be quite negligible for two reasons. First, because already the majority of small properties—those which are on a weekly, monthly or quarterly tenancy—are covered by the landlord's obligation to keep them in good repair, and, of course, he is already charging the cost of that against Schedule A tax; secondly, I understand that it is the case that a proportion of the persons catered for under my Clause are already subject to a de facto ruling of the Inland Revenue. Although they are in fact tenants, they are treated as if they were owners, if the term of the lease of their house is of seven years or more. Unfortunately that provision is not very widely known, it ought to be universally recognised and accepted, and tenants ought to base their claims on it. In any case, I do not see why legal sanction should not be given to what is an admirable piece of administrative practice by the Inland Revenue. I hope that the Chancellor will devise some form of words to enable this to be inserted in a new Clause at a suitable stage. I am not wedded to my own words.

I do not think that I need add much more. I would like to explain the relevance of the Income Tax Act of 1945 to my new Clause. As regards Subsection (I), it is to enable tenants, like owners, to be repaid the appropriate maintenance costs where these costs are in excess of the assessment. That is what the Income Tax Act, Section 32, provides for. The purpose of Subsection (2) of my Clause is to cut out of the Income Tax Act, 1945, Section 33, what would be a redundancy if my Clause were accepted.

9.0 p.m.

I do not say it in any spirit of complaint, but I would draw attention to the fact that this very complicated Clause was put down at a rather late stage—I think, on Saturday—and we would have liked some time to examine it to see what effect it would have on the existing state of the law. So far as we can see the Clause does not really effect any great alteration in the present law. Its object is to assimilate the position of tenant to the position of owner for the purpose of certain claims in excess of the ordinary repairs claim which the owner is entitled to make under Rule 8 of No. V of Schedule A of the Income Tax Act of 1918. Tenants, if they have what is known as a beneficial interest in the land in question by virtue of the fact that they occupy it at a rent which is less than the annual value are already in that respect in a position similar to that of the owner of the land. As I have said, so far as we can see the Clause does not alter the preexisting position. What I should like to say to the noble Lord is this—I would ask him not to press his Clause at the present time but to give us the opportunity of comparing it more carefully than we have been able to do hitherto, with the present state of the law, and we will communicate the result to him between now and the Report stage. He can then determine what course he should take on the remaining stages of this Bill. I ask him on that understanding not to press this Clause.

I shall be very glad to fall in with the request, but I should like to ask the Solicitor-General whether he could go so far as to say that the Government are sympathetic with the principle. On that understanding, I would be prepared to withdraw the Motion, realising that the Clause was put down late, and that there was not sufficient time to go into it in detail. If it had been put down for the Report stage, the same set of circumstances would apply.

It is difficult to answer that question. We shall gladly look at the Clause, but I will not commit myself at the present stage, beyond saying that the Clause is not very far away from the law as it stands. That is as far as I wish to go without full reflection upon it.

I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Repeal of Section 5 of Finance Act, 1925.)

Section five of the Finance Act, 1925 (imposing excise duty on artificial silk) shall cease to have effect.—[ Mr. Erroll. ]

Brought up, and read the First time.

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

The purpose of this Clause is to remove the Excise Duty of 6d. per pound on continuous filament rayon yarn. When this tax was introduced in 1925 the manufacture of rayon was quite a new thing and it was then considered to be roughly equivalent to luxury silk and as such it was, therefore, to be taxed as, essentially, a luxury material. In those days that was probably the right attitude to adopt, and I do not quarrel with the decision then made. However, the young rayon industry developed rapidly and prosperously and the result was that articles of rayon became cheaper and more popular so that it was not long before prices were reduced and the material came to supply the everyday needs of a very large proportion of the population. Nevertheless, the tax remained, and I now submit that it is a completely anachronistic duty and ought to be removed. Furthermore, by taxing the raw material of the rayon industry we are taxing what is essentially a developing industry, and it is surely wrong to tax a new development at a time when we want all the new and developing industry we can possibly have.

I understand that there has been, naturally, a good deal of pressure from the trade on the subject not only at present, but over a considerable period in the past. I do not propose to delay the time of this Committee by referring to previous representations on the subject, because these are well enough known to the Chancellor of the Exchequer. However, I must, if I may, draw his attention to the fact that when I moved my last new Clause, I was singularly unsuccessful, because I referred to a Committee which met in 1900 which seemed to take a good deal out of my case. I think in this case I can refer to another Committee whose findings will powerfully reinforce my argument and it is a Committee which should make a great appeal to hon. Gentlemen opposite. I am referring to the much lauded, much delayed and almost omnipotent cotton working party. On page 32 of that massive report recently published by the Stationery Office between rather gaudy paper covers, quite unlike the usual sombre State papers to which we are used—

Yes, the new order and maybe the new frivolity. I only wish the right hon. Gentleman would take some things seriously and particularly the tax on rayon. However, be that as it may, we must have our little jokes, however serious things are. I should like to quote from page 32 of that book. In referring to the future development of the industry the working party say:

"It is in our view entirely out of date to refer to rayon as still suitable for taxation as a luxury. We regard the tax as a regrettable handicap to the full development of a modern industry."

I feel that on this occasion at any rate my arguments are powerfully reinforced by a modern progressive body of opinion recruited by the present Government. I, therefore, feel my case, this time, rests on strong, firm and sure foundations, and I have no doubt whatsoever but that the Chancellor will sympathetically consider my new Clause and I hope grant it.

I have for a long time taken a keen and sympathetic interest in the rayon industry, and I have had the privilege of meeting, from time to time, a number of the personalities in that industry. One can, at any rate, say that they bear comparison very favourably with some of the leading personalities in some of the older industries. I think that the rayon industry is one of the most hopeful lines of future production in this country both for the home market and for export. In the days of the war, when I was President of the Board of Trade, I remember explaining to an earlier and less talented House of Commons that the rayon and chemical industries were the two great hopes as they were then revealed by the statistics. That has gone on.

The hon. Member for Altrincham and Sale (Mr. Erroll), who, if I may be allowed to say so, has made not one but several interesting and well-formed and well-composed contributions to our discussions on the Finance Bill, has been reading the cotton working party's report. In the old days it was thought that cotton was jealous of rayon. It may be there is still a flicker of truth in that, but it is all the more interesting, therefore, to read that the cotton working party is supporting the proposal to free the rayon industry from the residue of earlier taxation.

It would cost £2 million to do what the hon. Gentleman wishes and these millions add up. The noble Lord the Member for Southern Dorset (Viscount Hinching-brooke), who was addressing the Committee a few moments ago, took a rather sketchy and irresponsible view of our public finances, which I cannot accept. I must compare the concession with the finances involved, and explain to the Committee what each separately would cost. Then I leave it to the Committee to do the addition sum, and see what the financial result would be if all the lot were accepted. I wish to put this matter in as favourable light as I can, and, very definitely, I shall be very disappointed if, assuming that my tenure of office is a long one, I cannot succeed in doing what the hon. Gentleman wants me to do. I think the rayon Excise Duty is outdated, inappropriate, and unsuitable to modern conditions, and an undue burden on one of the most progressive and lively of our industries. I would like to remove this Excise Duty. I am always anxious in these cases not to promise what I cannot later perform, and I cannot promise to do it next year, although I hope it might be possible for me to do so then. At any rate, I shall be disappointed if I cannot do it next year. I go so far as to say that. But I do not think I can do it now, for several reasons.

One is that I cannot afford the extra £2 million at present. This is a loss of revenue which will increase. The rayon industry has been well above the average in all the expansive movements which we have lately seen, and which are hopefully reflected in the latest export figures. As home production increases, the loss corresponding to the removal of the Excise Duty would likewise increase. At the present rate of production, the loss would be £2 million, and if the level rose then the loss of revenue would be greater than that. For the moment, I cannot find that additional revenue loss. There is another reason why I can- not accept the Amendment. There is a complicated system of Customs Duties on rayon products, and I do not think it would be simple to remove the Excise Duty, and leave the complicated Customs structure as it is. However, I hope that by next year I might be in a position to review the whole matter. I do not for a moment suggest that I wish to deny an element of tariff protection to the rayon industry. I am no Free Trade doctrinaire, and never have been. I am prepared to believe that it would be useful, at this stage of our industry, to have a certain differential favourable to the home production of rayon, particularly when we have regard to what has been happening to British rayon interests in other parts of the world in recent years, and to rayon production in other countries in artificially favourable conditions.

I do not wish to imply that the differential should be reduced, but I suggest that it is not tidy or appropriate at this moment to clear away the Excise Duty while leaving the Customs structure as it is. But I have been looking into this problem rather closely. I have reached the conclusion that in this Bill I should not do what the hon. Member is asking. What I intend to do however is something which it would, perhaps, be convenient for me to announce now. I propose to move a new Clause, on the Report stage, which will give a rebate of the Excise Duty of 6d. per lb. on artificial silk which is shown to have been used in the manufacture of tyres for motor vehicles. We are increasingly using this remarkable substance in order to fabricate tyres, and I have been in communication with Mr. Samuel Courtauld, who has been ill, but who, I am glad to hear, is now better, because I regard him not only as a personal friend, but as one of the most valuable figures in British industry. I have had discussions with him, out of which this proposal has grown. When I was President of the Board of Trade, he came to see me, and I told him of our great preoccupation with the persistent tendency towards unemployment in the development areas. Mr. Courtauld said he had it in mind to undertake a great extension of his production in the postwar period, and he was patriotic enough, as I thought, to ask me to suggest to him places where it would be particularly useful, from the point of view of the Coalition Government's policy regarding diminution of unemployment in the postwar period, for him to locate his new factories. I suggested various possible alternatives, and out of them he chose a site in West Cumberland, at Sellafield, where there was, during the war, a Royal Ordnance factory. There, Mr. Courtauld will fabricate on a large scale tyres made of rayon—

9.15 p.m.

Yes, we owe much to the Liberal Party. The arrangement now entered into is that Mr. Courtauld has definitely undertaken to go ahead with the transformation of what, in the war, was a Royal Ordnance Factory at Sellafield into a new factory. It will be quite a large production unit, which will employ, I hope, several thousand people on the making of this fabric for motor tyres. It was represented to me forcibly—and I accepted the representations—that it would be desirable to assist this new development—and there is nothing like it in this country on this scale—by giving a rebate of Excise Duty on artificial silk which is shown to have been used in this manufacture. I told Mr. Courtauld that I would do that, and he told me that he would go ahead. Of course, that will not apply exclusively to him, Any of his rivals in the trade will equally benefit by the rebate—

When I say "I," I am assuming that the Opposition would not hesitate to follow this lead. I should be astonished if they differed from me on this matter.

The right hon. Gentleman should not go around promising private individuals something which only the House of Commons can approve.

We should never get a start with anything at that rate. I told Mr. Courtauld what I should propose to the House, and I am sure that even if the Opposition vote against it we shall carry it. That is what I have told them all. Why try to "crab" a helpful thing like this? I thought I was going a little distance towards meeting what the mover of the new Clause has been asking. Why there should be all these undertones of grizzling dissent I do not know. At any rate, I shall move a new Clause on the Report stage, and Members opposite can do what they like. I shall not worry. If that is their mood, let them vote against it. I hope that what I have said will go a little distance towards helping this industry, and meeting the admirable case which was presented by the mover of this Clause. For those reasons, since we are to move so far this year, and in view of the undertaking which I gave to look most sympathetically at the larger proposal next year, I hope the hon. Member will not press his new Clause to a Division.

I am sorry that the right hon. Gentleman rather spoiled the effect of his speech by his slightly childish exhibition towards the end. [HON. MEMBERS: "Oh."] I will withdraw that, or at least I will withdraw the word "slightly." The only exception I took was not to the proposal of the right hon. Gentleman but to what seemed to us perhaps rather unnecessary egoism on his part. There is something more than a formality in insisting that Ministers shall not talk about, "We will give this to the people." In fact, it is the House of Commons who give and Ministers who propose to the House. Certainly we have nothing but the greatest agreement with the proposal that the right hon. Gentleman has made and when it comes to the discussion on the Report stage we shall give at all our support. At this late hour I do not want to speak for long on this subject although it is an extremely interesting one. Anyone who has had anything at all to do with the rayon industry must have been impressed both with the way in which it has overcome its difficulties in the past, and with the very great future which appears to open out for it.

I was particularly interested in the quotation from the cotton working party because in my day at the Board of Trade there was not any doubt as to whether there was jealousy between cotton and rayon. Anyone who sat with me for some months in Committee upstairs on the Cotton Industry Bill would have seen it clearly, and it is a very hopeful sign that cotton should join in a Measure that can be of assistance only to rayon. All of us would wish that the right hon. Gentleman had found it possible to give this benefit now, but I must say frankly that for my own part I agree with him in his decision that this benefit must, at any rate for the moment, be postponed.

He was, I think, a little unfair to my noble Friend the hon. Member for South Dorset (Viscount Hinchingbrooke) whose Budgetary ideas he described as "sketchy and irresponsible." They are not that—they are only modern. The trouble is that the Chancellor and I are not modern; we are old-fashioned and we still believe in—I will not say a balanced Budget, but anyhow in one that partially attains to equilibrium, and I do not think it would be right for us on this side of the Committee to press the Chancellor for this concession this year.

There is, of course, no need to discuss now the particular concession he announced which will form the subject of a new Clause, but I think that my hon. Friend who moved the present Clause so extremely ably may feel very satisfied with the result of this discussion, and I am sure the Committee will feel confident that if it is not possible to do much for the rayon industry today it is the determination of the Chancellor to do something really substantial for it in the future.

I rise for the particular purpose of adding my congratulations to my hon. Friend above the Gangway for the way in which he has brought forward a new Clause which I think is of great value to the trade and industry of the country, and which also has a very valuable quality in that it has caused the Chancellor of the Exchequer to make a most interesting statement. I will not cause disagreement at this time by saying anything about the rather different aspect which the Chancellor threatened to bring into the Debate towards the end of his statement, but I would like to say one word in addition to what has been said by my right hon. Friend the Member for West Bristol (Mr. Stanley). The Chancellor did refer slightingly to a personal friend of mine, the noble Lord the Member for South Dorset (Viscount Hinchingbrooke), in his speech when he used the words, "sketchy and irresponsible." He was also indiscreet when at one time he referred to a previous Parliament in connection with a Clause such as this. If we are to have that kind of gibe thrown at us we may be stirred up and forced to retaliate. I hope the Chancellor will not do it any more because, although I am a very peaceable person, he may upset the peaceable standard of the Debate. If the right hon. Gentleman goes on in this way much longer he might even cause me to become irritable and might force me to make speeches which I have no doubt you would like, Major Milner, but which some hon. Members might not like.

I would urge the right hon. Gentleman not to stir things up for the rest of the evening. So far as the other side of the Committee are concerned, I know that their minds have been reduced by last night's sitting to the state of that of a salp, but having been so reduced I I should not like the Chancellor to do anything to bring them below the state of that of a salp

In view of the Chancellor's illuminating and helpful reply, I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Exemption from duty of agricultural implements and raw materials.)

Goods imported into the United Kingdom of the categories specified in the Schedule (Agricultural implements and raw materials to be imported free of duty) to this Act, being articles used as implements or raw materials in agricultural production, shall be imported free of any duty.—[ Mr. Hopkin Morris. ]

Brought up, and read the First time.

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

This Clause is designed to be of assistance to the agricultural industry by exempting from the duty that is now imposed the implements and raw materials that are used in agricultural production. The removal of these duties would have been important at any time, but I think that there has been no time when the removal was more urgent than it is at the present moment when agricultural production needs all the encouragement that can be given to it, and when any handicap which it suffers by a burden such as these duties impose upon it should be removed.

In view of the sympathetic hearing which he has given to other proposals, I think the Chancellor should consider this claim to assist agriculture at the present time, and I am very confident that he will listen to this appeal sympathetically because of a happening some years ago. I have already reminded him of previous speeches during the course of this Debate, but I will now remind him of a previous Vote when not only he, but a large number of his colleagues on the Front Bench and of his supporters on other Benches voted for this very proposal in 1937. The right hon. Gentleman has said from time to time in the course of this Debate that he succeeded in doing various things in the course of this Finance Bill which neither the Conservatives nor the Liberals had been able to do or had attempted to do. The present new Clause gives him an opportunity of doing what he himself championed and voted for in 1937—and the removal of these duties would have been of great assistance to the agricultural industry in 1937. Today, however, with a great and urgent need for agricultural production, there is an urgent necessity for their removal, and I hope the Chancellor will see his way clear to accept this new Clause.

9.30 p.m.

I hope it may be convenient if I intervene at this stage Naturally, we are very much concerned to assist British industry in every practicable way. The agricultural implements and raw materials which are referred to are now free of duty and Purchase Tax except in the case of imports of non-Empire origin. If they come in from the Empire there is no Import Duty and no Purchase Tax. There are, of course, imports from the Empire, particularly Canada, I believe, of some of the implements which the hon. Gentleman has in mind.

The question today regarding imports turns more on licensing facilities than rates of duty. The emphasis has been shifted. We have to watch our balance of payment and our imports very carefully, and demand only what is essential. What is important in practice is to obtain an import licence rather than a mere duty reduction on goods one may never be licensed to import. It is worth while pointing out regarding agricultural machinery that under Section 10 of the Finance Act, 1932, the Treasury has power to license the duty-free importation of machinery provided they are satisfied that similar machinery is not for the time being procurable in the United Kingdom itself. If it were, it ought to be bought in the United Kingdom. If sufficient is not available or if it is a type of machinery not made here, the Treasury has power to license for duty-free importation. At present all the machinery whose importation is allowed by the Board of Trade qualifies, I am informed, for duty-free importation and is duly licensed by the Treasury under the powers conferred on them. This is not a particularly live issue, and if I were to accept the Clause it would not in practice make any difference to the facilities for British farmers, including Welsh farmers, to obtain the machinery they require. On the other hand, there is a certain objection to making this change now. The duties in question were imposed before the war, in order to protect British manufacturers, and it is possible that some other countries—I will not name them, although I have two or three in mind—may ask for reductions in our duties in the forthcoming trade negotiations. They will not necessarily get them, but they will ask. It would be inexpedient at the moment to reduce or remove the duties because it would deprive us of a bargaining factor in the negotiations to be undertaken. I, therefore, ask the hon. and learned Member to believe me when I say that I am entirely sympathetic to the purpose he has in mind, and I ask him to withdraw, or not to press the new Clause because, in the first place, it will make no practicable difference to the present position, and in the second place it will deprive us of a bargaining factor in the discussion to which we are committed.

I should like to say how much I welcome the statement of the Chancellor of the Exchequer. I represent an agricultural constituency in Devonshire where we are all as anxious as we can be to help to remedy the shortage of food. But there is a grave shortage of agricultural implements there. I hope the Chancellor will lose no opportunity of making good the shortage.

I am delighted to hear that the Chancellor of the Exchequer has the interests of the agricultural community at heart. There has been a tendency to believe, with some justification, that the Labour Party is tending to be too industrial in its attitude to the economic problems of our time, and I am grateful for the assurance from the Chancellor of the Exchequer that agricultural interests will be carefully watched. I would like clarification on two points. First, we sought to reduce the duty on raw materials, including fertilisers. I would like assurance from the Chancellor that there is no duty whatsoever on fertilisers, because if there is, it is absurd that we should be jacking up the cost of production by charging certain additional sums in import duties on fertilisers and at the same time subsidising food. That would be a very wrong and cumbersome method. Second, are we importing tractors from any particular part of the world, and, if so, is import duty being paid on those tractors? I understand that in the last six months we have exported some 3,800 tractors. I would like some clarification on that point to make certain that we are not doing a two-way business.

With regard to fertilisers, I am advised that by far the greater part of the fertilisers that we are bringing in are entirely exempt from import duties. There is, I gather, a small part liable to an ad valorem duty of 10 per cent., but the greater part is exempt. With regard to tractors, I am not, of course, furnished with exact particulars. The hon. Gentleman did not give notice that he wished to ask about this. I assume that if there were a need for tractors to be imported, representation should be made to the Board of Trade because it is the Board of Trade who should deal with this and it is a little outside the detail of my departmental responsibility. I am advised that all the agricultural machinery, which I take it includes tractors, whose importation is allowed by the Board of Trade is imported duty free and is duly licensed by the Treasury under the Finance Act, 1932. With regard to exports, I am delighted. I have not checked the figures, but I know exports are doing very well. I am glad to hear that we are exporting a number of them, and if that is so, I suppose our need for imported tractors is very small. I should suppose that our own tractor production was doing so well that we did not need much importation. But that is a factor outside my immediate departmental knowledge, and should be checked with the Board of Trade. In so far as manufactured machinery cannot be obtained in this country, or if we are short of tractors of any special type, we cannot make ourselves, importation duty free is permitted under licence.

Is the exemption of duty applicable only to particular types of tractors or implements not made in this country or not available in this country? The Chancellor seemed doubtful whether we were importing any tractors and whether we needed them. During the war we imported about one-third of our agricultural machinery and still very much need tractors. Is the point of the proposal that only implements which are not made here should be free from duty, or, if there is a general shortage in this country, importation will be licensed, even if similar types are made here?

Perhaps the hon. Member would pursue the matter for further detail with the Minister of Agriculture or the President of the Board of Trade. I am most anxious to be of assistance to the Committee but this is outside the strict Treasury field of knowledge, though if given notice I would be glad to find out the information, and then either I or one of my colleagues would tell the hon. Gentleman. I can only repeat that under Section 10 of the Finance Act, 1932, the Treasury has power to licence—and here I do come in—duty free importation of agricultural machinery, provided they are satisfied that similar machinery is not for the time being procurable in the United Kingdom. At the present time, all the machinery the importation of which is allowed by the Board of Trade—and here I pass the ball to my right hon. Friend or those who are acting for him—qualifies for duty-free importation and is duly licensed by the Treasury under the powers referred to. If my right hon. Friend the President of the Board of Trade, or somebody acting for him, says "all clear," I cause the licence to be issued duty free.

I regret very much that the Chancellor has not been able to listen with greater sympathy to this new Clause. He says, in effect, that the duties are trivial. If they are trivial the Chancellor cannot use them very much as a bargaining counter in the forthcoming conference. In the meantime, they are a burden on agriculture. I do not think that the answer about the Finance Act, 1932, is conclusive, because the plea I am putting forward is the very different one, to free agriculture from the burdens of duties on the raw materials and implements necessary for production. All that the Finance Act, 1932, does is to make it possible to go before the Import Duties Advisory Committee, and give them the alternative. My plea is the different one, that agricultural production by itself deserves that these duties should be removed. If they are trivial, I hope the Chancellor will be able to give the matter further consideration.

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

FIRST SCHEDULE.—(Provisions as to Justices' Licences in Suspense by Reason of Compulsory Acquisition.)

Motion made, and Question proposed, "That this be the First Schedule to the Bill."

We all want to get on to the Purchase Tax Schedule, but I hope it will not be out of Order if I congratulate the Committee on having secured the attendance of the Lord President of the Council. After his long absence from our Debates, we welcome him most heartily, and hope he will have a pleasant evening among us. I am sorry if I cause him to blush.

I wish to ask a question on this Schedule. The Schedule is linked up with Clause 10 of the Bill, which deals with some technical matters about the suspension of justices' licences, where licensed premises are compulserily acquired, and the Schedule gives the various provisions with regard to that matter. I would like to ask the Minister whether there is anything in this Schedule to which our attention should specially be called for this reason: it is almost incomprehensible. I take it that the only people who need really bother about this Schedule are, first the licensees, secondly, the justices, and thirdly, the Commissioners, and if the hon. Gentleman can assure me that all these three sections of persons are satisfied with the provisions of the Schedule, and indeed understand them, we can go straight away. But may I once again protest to the Government at the drafting of the Schedule. We have already complained several times about the drafting in this Bill. This is really quite incomprehensible. I do not want to go through it, as we have other things to do, but I wish the Minister would look, first of all, at lines 40 to 46 on page 50. It is quite impossible to make any sense of that sentence by inserting the words referred to in the previous paragraph. Would the Minister also look at paragraph 11 on page 51, and see if he can make any sense of it? I have read it several times this evening and it does not make any sense at all. I will read just one passage out of it. It says:

9.45 p.m.

I can assure the right hon. and gallant Gentleman that this Schedule is reasonably well understood by the interested parties. Had that not been so I am quite sure there would have been some Amendment on the Order Paper. In addition to that, I think that all the parties have been consulted, and that this Schedule does not make any alteration in the existing law from that which was laid down in the Finance Act, 1942. If it had been possible to have brought compulsory purchase of licensed houses under the definition of "war circumstances" the provisions of the Finance Act, 1942, would have been appropriate for this matter. But compulsory acquisition cannot, by the widest stretch of the imagination, be brought within the definition of war circumstances. All that has happened has been a necessary modification to meet this change. There is no alteration in the principles of the existing law.

I am certainly puzzled how compulsory acquisition of licensed premises could be brought under war circumstances. Are these acquisitions meant to be permanent? Is the Minister going into the public-house trade himself?

The acquisitions which are contemplated are those which will be required, for example, by the Minister of War Transport in widening a road or something like that, in doing which it will be necessary to acquire a licensed house.

Technically speaking, I am not a learned Member of the Committee; I am just an ordinary Member. The Minister said the Clause was reasonably well understood by all the interested parties. Surely, from a legal point of view a Clause is either understood or not understood. I would like him, if he would, to explain what "reasonably well understood" means from a legal point of view.

Understood by any reasonable person.

Question put, and agreed to.

Second Schedule agreed to.

THIRD SCHEDULE.—(Purchase Tax. Exemptions and Reductions of Rates)

It might be helpful to the Committee if I were to say a word or two about this Schedule. The Committee will appreciate that there are over 50 Amendments proposed to this Schedule. I have considered how they might be discussed, and whether it would be possible to have something in the nature of a general Debate to include them all. On consideration, I thought that that would not be to the advantage of Members of the Committee who wish to move their own Amendments, and that the better course would be, if the Committee agreed, to group certain of the proposed Amendments together. In that event, I will indicate, as we go along, which of the Amendments, in my view, may be so grouped, and thus enable interested Members to speak on them and the Chancellor of the Exchequer to reply. Perhaps it might then be possible at some stage when the Chancellor has heard the main arguments, for him, with the agreement of the Committee, to make something in the nature of a general statement. If so, and I shall take no exception, it may then be possible to dispense with some of the later Amendments. I take it that course is acceptable to the Committee? I shall now call the first Amendment, which is in the name of the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). Perhaps the hon. Member for Eastbourne (Mr. C. S. Taylor) will discuss his Amendment at the same time.

If, after we have discussed the Amendment standing in my name and the name of a number of my hon. Friends, along with the other Amendment, we should wish to pursue the second Amendment to a Division, should we be permitted to move the Amendment formally after the first Amendment had been disposed of?

I beg to move, in page 53, line 11, at the end, to insert: Third Schedule to the Bill. The greater part of these articles are required by newly married people who try to furnish and set up a home, but I would suggest to the right hon. Gentleman that, although in the Third Schedule there already appear a very considerable number of articles required for the setting up of the kitchen in a home, they do not go very much further and, important though the kitchen may be, it is not the sum total of the average home. In moving this Amendment, therefore, I appeal to the manifest intentions of the right hon. Gentleman himself.

The Committee will be very well aware—this is not, of course, a party matter—of the fact that at this moment a very large number of young people, and in particular young ex-Service people, are engaged in the very difficult task, having acquired a house, of trying to furnish it and to set up a home. The number of our fellow citizens engaged in this, at the moment, somewhat arduous task is very substantial indeed, and—again it is not a party point—it is perfectly obvious that the discharge of that task is met by very considerable administrative and financial difficulties at present. The cost of the purchase of the simplest articles of domestic furniture is now very high, and it is a matter of the utmost difficulty, in particular for the young ex-Serviceman trying to establish himself on the very meagre gratuity which he has been granted, to find the means to acquire the mere necessities of domestic life. I am perfectly certain that for that reason hon. Members on both sides of the Committee will agree that it is very harsh and very unfair that the necessary expenditure involved should be augmented and increased by the effect of the Purchase Tax.

Therefore, the object of this Amendment is merely to free from the effect of that tax the purchase of the fundamental necessities of domestic life. As I understand it, the object—and if I may say so the very proper object—of that tax is to restrict, in these difficult days, the purchase of articles which are not strictly necessary. I would suggest to the Committee that none of the articles specified in this Amendment come within that category. They are all domestic necessities, they are all objects which it is necessary to acquire if one is to set up a home, and therefore the very object of the Purchase Tax, the restriction of unnecessary purchases, does not apply to these articles. They are all necessities. They are all articles whose price at the moment is inordinately high. They are all articles which are required by the young couple trying to set up a home. [ Interruption. ] I am perfectly certain that hon. Members who have studied the terms of this Amendment will accept that proposition. That being so, is there any conceivable justification for imposing Purchase Tax upon them? I do not think that the right hon. Gentleman will suggest that, from a broad economic point of view there is any such necessity. It is equally perfectly obvious and manifest that, from the point of view of human necessity, these are objects which it is desirable should be remarkably cheap. An hon. Gentleman opposite was courteous and helpful enough to observe that that is the fourth time. It may be that it is necessary to repeat things four times in order to penetrate his mental processes.

On a point of Order. I am sure, Mr. Chairman, that there is a rule against tedious repetition.

There may have been some repetition in the hon. Gentleman's remarks, but I am not sure that it is sufficiently tedious to call for my intervention.

I very much regret, Major Milner, if the very few remarks I have so far offered in support of this Amendment have appeared tedious to the hon. Member, and with the very greatest of respect, which without any question I feel for him, I would venture to commend to him this suggestion. This Amendment, whether he accepts its exact terms or not, does matter a great deal to a very great number of the younger generation of our fellow citizens. I make no apology whatever for urging that necessity upon this Committee. I am perfectly certain that the hon. Member himself is perfectly well aware of this necessity, or if not, his constituents are. I hope and believe that to have taken, so far, four minutes in urging the necessity for reducing the price of articles necessary to a young couple setting up a home does not strike hon. Members as tedious. [ Interruption. ] If hon. Members opposite really feel that this is a matter for jesting I am not prepared to argue with them. That argument will be put forward far more forcibly by their own constituents. If hon. Members opposite—

I must remind the hon. Member that his arguments should be addressed to the Chair.

10.0 p.m.

I believed that they were addressed to the Chair, Major Milner. I think I am entitled to submit to the Chair an expression of hope that hon. Members opposite appreciate the force of arguments which I am putting forward. [ Laughter. ] This is not a matter of frivolity or amusement to a large number of people, I would remind hon. Members opposite. If they show themselves capable of discussing this matter—

The Amendment which the hon. Member is moving contains no reference to hon. Members opposite.

I am grateful for your assistance, Major Milner. Perhaps I was a little provoked by interjections from the other side into believing that hon. Members there do not fully appreciate the relation between the Amendment and the practical necessities of life. I hope that I am not beyond the Rules of Order in saying that that failure by hon. Members opposite argues a certain irresponsibility. I am not putting forward a party matter. The Amendment covers a matter of great importance to many people. We are told that production is rising and that there is a prospect of domestic needs being satisfied. There is no justification, therefore, for maintaing the Purchase Tax upon the necessities of domestic life.

On a point of Order. You indicated a few minutes ago, Major Milner, that the Chancellor would make a statement, presumably on the subject of this Amendment. My right hon. Friend has no Amendment upon the Paper. In order that we might not have to listen to a repetition of what we have just heard, would it not be convenient for my right hon. Friend to make a statement indicating what proposals he is willing to accept, so that we might shortcircuit the speeches?

That is a matter for the right hon. Gentleman to decide. I have made my suggestion which the Committee approved.

I support the Amendment which has been moved by my hon. Friend. The Amendment does not refer only to Servicemen or newly married couples, but also to the Darbys and Joans, old couples, whose furnishing fabrics have become motheaten during the war. I do not want to labour the point which has been made so well by my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), but I would like to make a few observations about the Amendment. I would like to see all furnishing fabrics exempted from Purchase Tax, but, in addition, I would like to draw the attention of the Chancellor to the very special case of hotels and boarding houses which have suffered during the war. I have no financial connection with hotels or boarding houses whatsoever, but I would ask hon. Members to realise that because of the change of guests, hotels and boarding houses have to send their linen and towels to the laundry much more often than the ordinary housewife who, perhaps, sends her sheets and towels once a week.

If hon. Ladies opposite have had any experience of laundries, they will know that laundries do not send back linen and towels in the same condition in which they receive them. Therefore, hotels and boarding houses should have special consideration in that they have to send their furnishing fabrics far more often, and they are likely to come back far more tattered because of the large number of washings which these fabrics have to undergo. [An HON. MEMBER: "They do not come back at all."] As the hon. Gentleman says, sometimes they do not come back at all. I would ask the Chancellor to realise also that hotels and boarding houses are the potential of a very large invisible export. That invisible export, which may produce dollars or other currency, will eventually probably produce additional food for the housewife, or other things which the housewife wants to buy and which can be supplied from other countries with the money which the boarding house industry obtains in this country. I know there are lots of faults to find with the hotel industry in this country, but it is no good complaining about that industry unless we help them by removing from their shoulders some of the taxation which has been imposed upon them. I support wholeheartedly the Amendment, but I would like to make this special plea for the hotel and boarding house industry, knowing full well that the Chancellor appreciates the point that I have tried to make tonight.

We are moving a little slowly, and it is for you, Major Milner, to determine what is the most convenient procedure for the Committee to follow. We can, of course, take one by one the long series of Amendments put down by hon. Members. Each can be supported by one or more speeches and I can reply at the end of each. That is one procedure, although I am afraid it may be long. If at any time it should be thought desirable that we should accelerate that process either by grouping together a number of Amendments—

Of course, it is subject to the Chair, and it is also up to me to help the Committee to do their work, with general agreement. I am merely inquiring. So far, there has been no grouping of Amendments—

On a point of Order. Is not what the Chancellor of the Exchequer is now saying a reflection on the Chair? If my memory serves me aright, Major Milner, you suggested we should group some of the Amendments appearing on the Order Paper in the names of my hon. Friends.

I am in the hands of the Committee. I can sit as late as any hon. Member, and perhaps last as well as most. I am quite prepared to go on until dawn breaks. However, if there were any means of getting equally good results in a shorter time I daresay they would be worth exploring. At any time it is thought convenient I would be prepared to make a general statement on where it seems to me we can make concessions. At the moment that is not in question and, therefore, I must confine myself to this Amendment. I make the offer to the Committee that if at any time they think it would save time, I would make a statement in which I would indicate some of the points on which it seems to me concessions may be made. However, I am very anxious not to rule out, by making such a statement, facilities for Debate on particular points, which may either be covered by the group of concessions I would suggest or lie outside them. I would not like it to be thought I was closing my mind prematurely against arguments. On the other hand, if we are to have arguments repeated 60 times on 60 different Amendments the clock may turn round more than once.

It is for the Committee to respond to that offer as they wish. If the right hon. Gentleman the Member for West Bristol (Mr. Stanley) wishes to comment on that at any stage I will give way.

I think that on the whole we are likely to make quicker progress if we all keep our tempers strictly under control. We are anxious to get through this part of the business as expeditiously as possible. I think the right hon. Gentleman realises it is not an easy problem which we have been set. I was not at all enamoured of what I first understood to be the right hon. Gentleman's proposal, that he should make a general speech now, setting out the concessions he was prepared to make. That seemed to make nonsense of any Debate at all, if he was to announce the concessions before he had heard the arguments for the respective groups. Subsequently, I understood he really meant something different; that what he was prepared to do was to make a general statement on the sort of concessions he had in mind, which would give an indication to hon. Members of the ones he was prepared to accept without any further argument and the ones on which it would be necessary to bring pressure to bear if he was to change his mind. The right hon. Gentleman having made his general statement, hon. Members who had not in the first instance been lucky in pressing their claims would not in any way be precluded from arguing their Amendments, and the right hon. Gentleman would not close his mind to the possibility of some subsequent change if the argument for a particular article were put extremely well. I do not know what my hon. Friends think. I think that on those lines—it being quite understood the rights of hon. Members to move their Amendments subsequently are not prejudiced—that might lead to a substantial saving of time, without in any way impinging upon the rights of hon. Members.

Are we now to understand that the Chancellor is prepared to make a statement covering the points put forward by the right hon. Gentleman the Member for West Bristol (Mr. Stanley)? I think probably he could not make it on this particular Amendment, unless that is now withdrawn. Perhaps the Chancellor could make a statement at the end of the Debate rather than at the beginning.

The right hon. Gentleman the Chancellor of the Exchequer can make a statement at any time, but as I indicated, if he makes it now he will not have heard the remarks of hon. Members in all parts of the Committee. My view is we should take the first seven or eight Amendments and then possibly on the wide Amendment in the name of the hon. Member for Stalybridge and Hyde (Mr. Lang) have a general statement if the right hon. Gentleman is then agreeable and has heard some of the views of the Committee.

On that Amendment I should propose to group no less than eight proposals together, and I thought that, conveniently at that stage, as soon as the Chancellor of the Exchequer had heard some of the arguments, and hon. Members had for the most part put forward their points, it might be possible for the Chancellor of the Exchequer then to make a general statement, and that we might then hope that the majority of hon. Members would be satisfied, and that certain Members who have Amendments down might not then wish to move them. I am, however, in the hands of the Committee as to whether they desire a general Debate now or later.

I am equally in the hands of the Committee. I am anxious to meet the general convenience.

On a point of Order. I should like to be clear on the point, because I understood we were discussing the first two Amendments. Now, Major Milner, you have mentioned some others, six or eight. Do I understand that the Chancellor's speech is to be on the first eight or the first two Amendments?

I thought the Committee had made up its mind on the suggestion I have proposed. I cannot do more than that. If the Chancellor of the Exchequer desires to make a general statement, and the Committee is agreeable, that is a matter for the Committee. [HON. MEMBERS: "Hear, hear."] But I strongly recommend the Committee to adopt the course I have suggested—to deal with the first two Amendments which are being taken together; and then to deal with the following three Amendments, which are separate, and which, I hope, we may take quite shortly; and, then, eventually, we shall come to a group of no less than eight, which, in my view, hang together, and on which the Chancellor could make his general statement.

I will do whatever is desired. Nothing wastes time more than to talk about what to do next before we begin to do it, so, perhaps, I may say at once that I propose to follow the course suggested, and to confine my remarks, at this stage, to the Amendment moved. As soon as it shall seem to be of general convenience to the Committee, I shall ask leave to make a statement covering the whole field of the concessions which I feel I can make on the Purchase Tax. I shall be guided by the Committee as to when that time comes, and the sooner it comes, of course, the more it will tend to abbreviate discussion.

I make this first statement before we tackle any of these Amendments seriatim, because it is the background against which my own concessions must be measured. I have to be careful about the width of the concessions that can be made, and I do not feel that I can justify, in the present state of the national finances, total concessions of more than about £2 million a year. The cost of this particular Amendment, this one to which I now address myself, is substantially more—for this single proposal—than £2 million a year. That, automatically, rules it out. I cannot afford it this year. I will indicate in my general statement what I think I can do within the ceiling of £2 million, but this particular proposal would cost £12 million in a full year and nearly £10 million this year. Therefore, much though I sympathise with the case that has been made by the hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) who moved it, I cannot accept it this year. It costs too much.

But it should be noted that, although I cannot accept the Amendment he has proposed, already utility furnishings of the categories in which he is interested, and on behalf of which he has argued, are exempted. That is one of the agreements reached some years ago, in the relatively early days of utility production, when the late Sir Kingsley Wood was Chancellor of the Exchequer and I was President of the Board of Trade in the Coalition Government. We discussed the matter together, and we reached the view that utility products, as a general rule, should be entirely free from Purchase Tax. This case arises also in other connections, where there is a certain range of utility goods, which are good of their kind, capable of improvement and gradually being improved. That is, so to speak, a palliation of this difficulty, and I hope that it will make it less ungrateful to the hon. Member when I say that I am not able to accept the Amendment. I do not think there is anything more which I can say on the general question.

In regard to hotels and boarding houses, I am most anxious to do everything reasonably possible to assist them to recover their facilities both for entertaining our own people on holidays, and, as was rightly pointed out, in encouraging the arrival and an agreeable stay in this country of visitors from the Dominions, the United States and elsewhere, which will be an invisible export. Having sought to offer a crumb of comfort to the hon. Member for Kingston on the grounds that there were utility articles not taxed, I will offer this additional comfort by saying that the trouble for hotel and boarding houses is not that there is a Purchase Tax on these things, but that supplies are still scarce, although they are rapidly increasing. I do not think that it is so much the effect of Purchase Tax on these articles as the fact that supplies are very scarce. The flow of supplies is not my responsibility, but that of the President of the Board of Trade, and in his absence that of my right hon. Friend the Leader of the House. They are applying their energies to building up the supply of these things, and this difficulty for hotels and boarding houses will at any rate be greatly diminished. As I say, it is not primarily a matter of Purchase Tax, but a matter of available supplies.

On a point of Order. Will you explain, Major Milner, exactly how the Committee can express a desire to hear the statement of the Chancellor on the concessions he is proposing to make? Obviously I cannot ask for that immediately after the Chancellor's speech, but supposing there was a desire now, which I have every reason to think there is, and in view of the Chancellor's statement that he has £2 million which he proposes to concede to the taxpayers, would you explain exactly how that desire could be expressed?

I had hoped that I had the agreement of the Committee on this matter. I have indicated the simplest way in which these Amendments can be dealt with to give hon. Members, with Amendments down, a reasonable opportunity to make their points. In my view, it is reasonable that, say, the first seven or so Amendments be taken. I have also indicated that it might then be agreeable to the Committee for the Chancellor to make his general statement on the Amendment in the name of the hon. Member for Stalybridge. That was my proposal, which I understood was accepted, and I suggest that we might now proceed and that the hon. Member shall not persist on a point which has already been put forward and dealt with.

With great respect, Major Milner, will you explain exactly how you propose to test the feelings or sentiments of the Committee? There was a certain amount of noise from the other side when you mentioned that you would accept a certain number of Amendments, and hon. Members on this side of the House kept quiet. Will you, therefore, say how you propose to test the feelings of the Committee?

Further to that point of Order. I can only say that, although I am prepared to accept the Chancellor's suggestion, I thought that we should save time if we all fell in with the suggestion made by you from the Chair. Time is being wasted by discussing how or when we may save time.

As I understand it, the Committee agrees with my suggestion, and I propose to proceed on the lines which I have indicated.

You made a statement, Major Milner, before the first Amendment was moved that you would take a certain number of Amendments grouped together, and you have since indicated that you would take a lot more. I am still asking whether there is any real technical way in which you can test the views of the Committee.

The hon. Gentleman has referred to a certain amount of noise from this side of the Committee and a certain amount of noise from the other side. Apart from the fact that noise from this side of the Committee is always better than noise from the other side, we are trying on this side to cooperate with the Chair in getting these things through and to work with the Chancellor of the Exchequer in the proposals he has made. The hon. Member for Nuneaton (Mr. Bowles) is putting difficulties in the way. If he continues to do so, there will be no alternative but to take each item individually. I hope that hon. Members opposite will join with us in endeavouring to push through, with the Chancellor of the Exchequer, the proposal which has come from the Chair of dealing with these things in a block way, so that we can get through them quickly.

I am still asking, Major Milne, in what way you think you can really test the present feeling of this Committee on the proposal which you have made.

We were, I think, before the interruption, discussing the Amendment in the name of my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). I think that these are two Amendments with which everyone sympathises. Furnishings, bedding, carpets and rugs are all articles which we would like to see cheapened and from which we would like to see the Purchase Tax removed. The Chancellor has given one overriding reason why it is impossible to accept this Amendment. I, for one, am prepared to accept the global sum which he has put forward—that of £2 million, as roughly covering whatever concessions he is prepared to make. Therefore it is clear that if any Amendment such as this is going to cost £12 million, it is quite impossible for the Chancellor to accept it. I accept that as a reason for its rejection, as I would any subsequent Amendment where the same argument was advanced.

10.30 p.m.

There is one point I would like to put. The Chancellor has stated that there would be a total of £12 million to meet if these two concessions were granted. I wonder if he could state what the cost would be it the Amendment standing in the name of the hon. Member for Eastbourne (Mr. C. S. Taylor) were allowed, without that of the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), that is, if the furnishings, etc., for hotels only were allowed.

It is difficult to give an answer to that question, because it would be administratively difficult to deal with. The Committee will recognize that some of these articles are taxed at the wholesale point before they pas into the retail trade, and before we know whether they are going to a hotel at Eastbourne or a private house in Kensington or Oxford. It is not really possible, therefore, to give an answer to that question, or even to give an assurance that we could administer the thing in that limited way. The two must stand or fall together.

The right hon. gentleman seems to have put forward a somewhat inconsistent reply to this Amendment. The first objection, reasonably enough, was that the cost would be £12,000,000, and that is the most important one; but, secondly, he sought to palliate his objection by saying that he did not think it mattered very much anyway because there were after all, tax free utility articles that were available. There seems to be some inconsistency between these two arguments. If the total cost of these concessions is £12,000,000, it is perfectly obvious that this tax falls very heavily indeed, and its weight is not offset by the availability of adequate quantities of utility articles. Therefore, I must confess I would have been more impressed if the right hon. Gentleman had based his objection solely on the basis of the cost, and had not drawn across the red herring of the utility articles. The actual figure is, of course, a substantial one, and if the right hon. Gentleman finds it necessary to balance his Budget and to finance his Socialist expenditure by taxing domestic utilities, it is not for the Opposition to deprive him of that revenue. Taking all those matters into consideration, while I am not prepared to withdraw the Amendment, I cannot force it to a Division.

Amendment negatived.

I now propose to call the Amendment in the name of the hon. and gallant Member for West Edinburgh (Lieut.-Commander Hutchison), and I would suggest that the other in the name of the hon. Member for Buckrose (Mr. Wadsworth), which also deals with knives, should be taken with it.

I beg to move, in page 53, line 11, at the end, to insert "Jack knives."

This Amendment is designed to assist those who follow the sea as a profession. I move it because I feel the position in regard to tools and implements requires clarification. I am informed by the Customs and Excise that a knife which is used for a specific purpose is exempt from Purchase Tax. Thus, for example, a butchers' cleaver is exempt from tax. Similarly, other implements, such as marlin spikes, are exempt, but a jack knife, such as is used by sailors, and which incorporates in it a spike and a blade, is subject to a tax of 33⅓ per cent. I have here a couple of samples of jack knives. This old pattern jack knife, used by seagoing men and known colloquially as a "pusser's dirk," weighs about half a pound. Nobody would say it was any thing but an implement or tool. This more modern knife—

On a point of Order. Is it in Order for an hon. Member to produce a lethal weapon in this Chamber?

It is perfectly in Order for the hon. and gallant Member to do so by way of exhibition or illustration.

Further to that point of Order. In 1928, the then hon. Member for South Tottenham produced a railing, and Mr. Speaker ordered him to take it out. He had produced it for a demonstration.

It is obvious that these articles are tools or implements, and there is a strong case for exempting them from tax. The ordinary, small screw-driver does not pay tax, and these knives which are of great importance to seafarers, ought to be in the same position. The cost price of the new pattern knife, is 15s., over and above which their is no less than five shillings Purchase Tax. Every member knows that we are a maritime nation. We are anxious to assist and encourage those who follow the sea as a profession. It would be helpful to all who follow the sea as a part-time occupation, such as sea scouts if that burden of Purchase Tax on implements used in following their trade could be eased. I would remind the Chancellor of the Exchequer and the Committee of what happened at Dunkirk. The B.E.F. was saved by the fishermen, yachtsmen, inshore boatmen and lifeboatmen—the men who are using these implements or tools. I would ask for sympathetic consideration to exempt the articles mentioned in this modest little Amendment.

The Amendment in my name has as its object to ask the Chancellor of the Exchequer to take Purchase Tax off knives, forks and spoons, I am sorry I have no exhibits here. I must make it quite clear I do not intend to speak very long. One reason is the really serious danger to my reputation After speaking on other Amendments I do not wish to be the only person in the Committee not asleep. When introducing an Amendment of this kind, one has to try to see what lies in the mind of the Chancellor of the Exchequer. This is rather difficult. I feel he would not sympathise with any Amendment unless we could make out a case that the articles were, first, absolutely essential to every home and, second, that they had no tinge of being luxury articles. Knives, forks, and spoons, which are not fabricated from silver or gold, do definitely comply. There is no home in England without knives, forks and spoons. Even before the honeymoon, when the young couple are deciding to set up home together, they first of all arrange and consider their dockets. They decide whether they will sleep on the floor or eat on the floor, but in the list of wedding presents which they hope to receive from their relatives, knives, forks and spoons are at the top of the list. [An HON. MEMBER: "And cruets."]

I would also draw the attention of the Chancellor to the fact that knives, forks and spoons have increased considerably in price. I have made inquiries in the trade, and I find that they are on the average 100 to 150 per cent. higher in price than in 1939 without Purchase Tax. If the tax were removed it would be found that the price has trebled or doubled in the last six years. That is a most serious situation, because knives, forks and spoons constitute an important feature in setting up a home and in the articles to be used in the home. I do ask the Chancellor to consider these points, and, if he has not already made up his mind, to concede this relief in the £2 million he has suggested to be used for this purpose. Before I sit down perhaps you, Major Milner, would tell me whether you wish me to speak now on other Amendments standing in my name?

There are two Amendments now before us. There is the wider one which has been moved by the hon. Member for Buckrose (Mr. Wadsworth) which covers knives, forks and spoons, not fabricated from silver or gold. I am afraid that on the grounds of cost I could not concede it. It would in itself cost £2 million, and would practically use up the whole of my disposable surplus. Therefore, I cannot accede to the Amendment this year. On the other hand, I readily agree that domestic cutlery of this kind now stands high in the list of priorities for the removal of the Purchase Tax, but I hope the hon. Member will not press it this year in view of the total cost. I will give him the assurance that I will keep it in mind. I do not want to make any definite commitments, so that I will not go further than saying that I will keep it in mind for next year. It will go on the high prority list together with certain other articles, which shall receive very sympathetic consideration next year.

With regard to the Amendment proposed by the hon. and gallant Member for West Edinburgh (Lieut.-Commander Hutchison), I am advised that it is not possible to delimit the concession to jack knives only. We must go a little wider than that. I had approached this Amendment with a very open mind, because the cost is a great deal smaller, but we cannot limit the concession to jack knives. We must I am advised extend it to cover clasp knives, including the jack knife, as one particularly used by sailors. The exemption of clasp knives would cost about £200,000 in a full year. I am anxious to make a genuine business of this matter, and I say quite frankly that I approach this with an open mind. I was moved by the arguments and the exhibits of the hon. and gallant Member, and I would find it very hard to deny this small though deserving alleviation to sailors and others who need these knives in the course of their work. Therefore, I would be prepared to accept the hon. and gallant Gentleman's proposal provided that he understands that it cannot apply to jack knives only. I will put down for the Report stage a new proposal in terms of clasp knives and the cost of that will be £200,000.

Let me make it quite clear. I am going to do better than the hon. and gallant Member suggests. He asked for the exemption of jack knives. I have said that I will go further and exempt all clasp knives, which include jack knives. I will go wider. I will put down on the Report stage a proposal to this effect.

There is a point to be noted. Some of these modern knives which sailors use are not clasp knives.

On a point of Order. One Amendment has been withdrawn, but two Amendments were called. My hon. Friend the Member for Buckrose (Mr. Wadsworth) spoke in favour of his Amendment, and then the Chancellor made his speech, and every other hon. Member was deprived of the opportunity to speak on these two Amendments. Are we going completely to curtail discussion on the whole matter like that? I understood you to say, Major Milner, on this proposal, that you would allow a few speeches, and then the Chancellor would get up to say what he had to say. So far, we have had the Proposer of two Amendments and no one else.

We have had these two Amendments before the Committee, and Members have been allowed to support or object to them. The hon. and gallant Member for West Edinburgh (Lieut.-Commander Hutchison) has withdrawn his.

Yes, but the other Amendment has been proposed and has not yet been withdrawn.

I do not agree at this stage to withdraw it. I would like to see if I have some support in the Committee.

I beg to move, in page 53, line 20, at the end, to insert:

"Knives, forks and spoons (not fabricated from silver or gold)."

I feel I have a perfect right to express an opinion on this Amendment, because I represent one section of the City of Sheffield. No matter how much hon. Members opposite may object, I am still going to say what I wish to say. I represent two sections covered by this Amendment. I represent the users of knives, forks and spoons, and I represent the manufacturers in the cutlery industry. I want to be perfectly fair to both sides. It is in the interests of the cutlery industry if more knives, forks and spoons are given to the people to use, and it is also in the interests of the householder that he should get more knives, forks and spoons in his home. So we cannot look at this either from a political point of view or an unbiassed point of view. We have to look at it purely from the point of view of what is right and fair in the interests of all sections of the community. I have information from Sheffield that the burden of Purchase Tax on knives, forks and spoons, is very hard indeed on the consumer population. The Chancellor has £2 million to spare, or to spread about, and I would have thought that the wiser way to deal with this £2 million was not to cut everything out completely, and only take one particular section, but to reduce the Purchase Tax on most of these things, so that instead of getting complete exemption he can give relief to every possible section using, in my particular instance, knives, forks and spoons.

It is high time, in the case of knives, forks, and spoons, that some relief should be given to the homes of the people. After all, there is health involved in knives, forks, and spoons. I have many times shared a spoon, but there are many people with whom I would not like to share a knife and fork.

I cannot hear the hon. Member for West Fife (Mr. Gallacher). I feel that in spite of all the levity on the other side of the House, there is a grand case, a sound case, that knives, forks, and spoons—[HON. MEMBERS: "Knives, forks, and spoons."] Yes, they are getting a bit sharp for you, are they not? There is a case for a reduction in the Purchase Tax on knives, forks, and spoons—[HON. MEMBERS: "Knives, forks, and spoons."] I am trying to be perfectly fair on a point with which I am sure all hon. Members must agree; they too represent people who use these things. If it is a matter of indifference to them it is a matter of grave importance to Members on this side of the House. Instead of totally absorbing Purchase Tax on a single article, will not the Chancellor give general relief by giving some concession on most of these articles so the greatest benefit is spread amongst the greatest number?

My hon. Friend has, in emphatic language put forward a claim for the City of Sheffield as cutlery producers in support of this Amendment. Naturally I am sympathetic with that case because there was a time when I represented a Sheffield constituency until dislodged by the right hon. Gentleman the First Lord of the Admiralty. But I am in this difficulty over this Amendment, or, rather, I am in two difficulties. The first is the statement of the Chancellor that within the ambit of his £2,000,000 ceiling—although, of course, it is within the power of the Committee to raise that ceiling—the Chancellor has stated that these concessions can be made in this Budget. That, naturally, is a weighty argument, but my difficulty is that I do not yet know the fate of the other Amendments which have been put down to the Schedules. I hope the Chancellor is going to make concessions, within this very limited field, upon articles which go to the furnishing of the home. Of course, knives and forks are a very important part—[An HON. MEMBER: "And spoons."] Spoons are generally a very important prerequisite to the establishment of the home.

But there are things which are more important than table cutlery, which, after all, is not generally in such short supply as some other articles. If one knew, for instance, the fate of the Amendment in the name of the hon. Member for Lonsdale (Sir I. Fraser) which will, I think, be taken in the next group, dealing with wallpaper, it would be easier to come to a decision on this one. I hope that the Chancellor, in the very limited area of his concession, will concentrate on the sort of thing which

goes to the setting up of the home. It will not cost him much because houses are being produced in very small quantities, and it seems appropriate that the £2 million should be concentrated in that manner. I am bound to say that in view of what the Chancellor has said and of what may come in later Amendments, I think that he is probably wise in resisting the Amendment.

We have had on this Amendment an interesting and somewhat significant admission from the Chancellor of the Exchequer. As I understand it, he has said that it is not possible for him to afford the remission of the tax on these useful articles. It is probably just as well that at this stage of the proceedings it should have been put conspicuously on record that the cost of the financial policy of this Government is such that it is necessary to impose a tax on simple domestic articles of this kind. I hope that the hon. Member for Buckrose (Mr. Wadsworth) will not withdraw this Amendment, and that hon. Members opposite may, by having under the compulsion of the Party Whips to vote for this tax, be forced, for perhaps the first time, to realise the cost in the taxation on the people they represent of the policies which they support.

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

The Committee divided: Ayes, 118; Noes, 257.

Division No. 220.]

AYES.

[10.56 p.m.

Agnew, Cmdr. P. G.

Fox, Sqn.-Ldr. Sir G.

Lucas, Major Sir J.

Aitken, Hon. Max.

Fraser, Sir I. (Lonsdale)

Lucas-Tooth, Sir H.

Baldwin, A. E.

Gage, Lt.-Col. C.

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

Barlow, Sir J.

Galbraith, Cmdr. T. D.

Mackeson, Lt.-Col. H. R.

Bennett, Sir P.

Gammans, L. D.

McKie, J. H. (Galloway)

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

George, Lady M. Lloyd (Anglesey)

Maclay, Hon. J. S.

Bossom, A. C.

Glyn, Sir R.

Macmillan, Rt. Hon. Harold (Bromley)

Boyd-Carpenter, J. A.

Gomme-Duncan, Col. A. G.

Macpherson, Maj. N. (Dumfries)

Bracken, Rt. Hon. Brendan

Grimston, R. V.

Maitland, Comdr. J. W.

Buchan-Hepburn, P. G. T.

Hannon, Sir P. (Moseley)

Manning, C. (Camberwell, N.)

Butcher, H. W.

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

Marlowe, A. A. H.

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

Harvey, Air-Comdre. A. V.

Marples, A. E.

Carson, E.

Haughton, S. G.

Marshall, D. (Bodmin)

Clifton-Brown, Lt.-Col. G.

Head, Brig. A. H.

Maude, J. C.

Conant, Maj. R. J. E.

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

Mellor, Sir J.

Cooper-Key, E. M.

Henderson, John (Cathcart)

Moore, Lt.-Col. Sir T.

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

Hinchingbrooke, Viscount

Morris, Hopkin (Carmarthen)

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

Hope, Lord J.

Morrison, Maj. J. G. (Salisbury)

Crosthwaite-Eyre, Col. O. E.

Hurd, A.

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

Crowder, Capt. J. F. E.

Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

Mott-Radclyffe, Maj. C. E.

Cuthbert, W. N.

Jeffreys, General Sir G.

Neven-Spence, Sir B.

Darling, Sir W. Y.

Jennings, R.

Nicholson, G.

Digby, Maj. S. W.

Keeling, E. H.

Nield, B. (Chester)

Dodds-Parker, A. D.

Kingsmill, Lt.-Col. W. H.

Nutting, Anthony

Donner, Sqn.-Ldr. P. W.

Lambert, Hon. G.

Peto, Brig. C. H. M.

Dower, Lt.-Col. A. V. G. (Penrith)

Lancaster, Col. C. G.

Pickthorn, K.

Drewe, C.

Langford-Holt, J.

Pitman, I. J.

Dugdale, Maj. Sir T. (Richmond)

Lindsay, M. (Solihull)

Ponsonby, Col. C. E.

Fletcher, W. (Bury)

Lloyd, Maj. Guy (Renfrew, E.)

Prior-Palmer, Brig. O.

Foster, J. G. (Northwich)

Low, Brig. A. R. W.

Ramsay, Maj. S.

Reed, Sir S. (Aylesbury)

Sutcliffe, H.

White, Sir D. (Fareham)

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

Taylor, C. S. (Eastbourne)

White, J. B. (Canterbury)

Roberts, W. (Cumberland, N.)

Taylor, Vice-Adm. E. A. (P'dd'ton, S.)

Williams, Gerald (Tonbridge)

Ropner, Col. L.

Teeling, William

Willoughby de Eresby, Lord

Scott, Lord W.

Thomas, J. P. L. (Hereford)

Winterton, Rt. Hon. Earl

Shepherd, W. S. (Bucklow)

Thornton-Kemsley, C. N.

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

Smiles, Lt.-Col. Sir W.

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

Smith, E. P. (Ashford)

Touche, G. C.

TELLERS FOR THE AYES:

Stoddart-Scott, Col. M.

Turton, R. H.

Mr. Wadsworth and

Stuart, Rt. Hon. J. (Moray)

Vane, W. M. T.

Mr. Emrys Roberts.

Studholme, H. G.

Walker-Smith, D.

NOES.

Adams, Richard (Balham)

Fraser, T. (Hamilton)

Mack, J. D.

Adams, W. T. (Hammersmith, South)

Freeman, Maj. J. (Watford)

McKay, J. (Wallsend)

Allen, A. C. (Bosworth)

Gaitskell, H. T. N.

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

Alpass, J. H.

Gallacher, W.

McKinlay, A. S.

Anderson, F. (Whitehaven)

Gibbins, J.

McLeavy, F.

Attewell, H. C.

Gibson, C. W.

MacMillan, M. K. (Western Isles)

Austin, H. L.

Gilzean, A.

McNeil, H.

Awbery, S. S.

Glanville, J. E. (Consett)

Macpherson, T. (Romford)

Bacon, Miss A.

Gooch, E. G.

Mallalieu, J. P. W.

Baird, Capt. J.

Goodrich, H. E.

Mann, Mrs. J.

Balfour, A.

Gordon-Walker, P. C.

Manning, C. (Camberwell, N.)

Barstow, P. G.

Greenwood, A. W. J. (Heywood)

Manning, Mrs. L. (Epping)

Barton, C.

Grenfell, D. R.

Marquand, H. A.

Bechervaise, A. E.

Grey, C. F.

Mathers, G.

Belcher, J. W.

Grierson, E.

Mayhew, C. P.

Bellenger, F. J.

Griffiths, D. (Rother Valley)

Messer, F.

Berry, H.

Griffiths, Rt. Hon. J. (Llanelly)

Middleton, Mrs. L.

Bing, G. H. C.

Guest, Dr. L. Haden

Mikardo, Ian

Binns, J.

Gunter, Capt. R. J.

Millington, Wing-Comdr. E. R.

Blyton, W. R.

Guy, W. H.

Mitchison, Maj. G. R.

Bowles, F. G. (Nuneaton)

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

Monslow, W.

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

Hale, Leslie

Moody, A. S.

Braddock, T. (Mitcham)

Hall, Rt. Hon. G. H. (Aberdare)

Morley, R.

Brown, George (Belper)

Hall, W. G. (Colne Valley)

Morris, P. (Swansea, W.)

Brown, T. J. (Ince)

Hamilton, Lieut.-Col. R.

Morrison, Rt. Hon. H. (Lewisham, E.)

Buchanan, G.

Hardy, E. A.

Moyle, A.

Burke, W. A.

Harrison, J.

Murray, J. D.

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

Hastings, Dr. Somerville

Nally, W.

Callaghan, James

Henderson, A. (Kingswinford)

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

Castle, Mrs. B. A.

Honderson, Joseph (Ardwick)

Noel-Buxton, Lady

Chamberlain, R. A.

Herbison, Miss M.

O'Brien, T.

Champion, A. J.

Hewitson, Capt. M.

Oldfield, W. H.

Chetwynd, Capt. G. R.

Hicks, C.

Oliver, G. H.

Clitherow, Dr. R.

Hobson, C. R.

Orbach, M.

Cobb, F. A.

Holman, P.

Paget, R. T.

Cocks, F. S.

Holmes, H. E. (Hemsworth)

Paling, Rt. Hon. Wilfred (Wentworth)

Collick, P.

House, G.

Paling, Will T. (Dewsbury)

Collins, V. J.

Hoy, J.

Pargiter, G. A.

Colman, Miss G. M.

Hubbard, T.

Paton, Mrs. F. (Rushcliffe)

Comyns, Dr. L.

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

Peart, Capt. T. F.

Cooper, Wing-Comdr. G.

Hutchinson, H. L. (Rusholme)

Perrins, W.

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

Hynd, H. (Hackney, C.)

Platts-Mills, J. F. F.

Crawley, Flt.-Lieut. A.

Irving, W. J.

Popplewell, E.

Crossman, R. H. S.

Isaacs, Rt. Hon. G. A.

Porter, G. (Leeds)

Dalton, Rt. Hon. H.

Janner, B.

Price, M. Philips

Davies, Edward (Burslem)

Jeger, G. (Winchester)

Pritt, D. N.

Davies, Ernest (Enfield)

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

Proctor, W. T.

Davies, Harold (Leek)

John, W.

Pryde, D. J.

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

Jones, A. C. (Shipley)

Pursey, Cmdr. H.

Davies, S. O. (Merthyr)

Jones, D. T. (Hartlepools)

Randall, H. E.

Deer, G.

Jones, Asterley (Hitchin)

Ranger, J.

Delargy, Captain H. J.

Keenan, W.

Rankin, J.

Diamond, J.

Kenyon, C.

Rees-Williams, D. R.

Dodds, N. N.

Kinghorn, Sqn.-Ldr. E.

Reeves, J.

Donovan, T.

Kirby, B. V.

Reid, T. (Swindon)

Driberg, T. E. N.

Lang, G.

Ridealgh, Mrs. M.

Dugdale, J. (W. Bromwich)

Lavers, S.

Roberts, Goronwy (Caernarvonshire)

Durbin, E. F. M.

Lawson, Rt. Hon. J. J.

Rogers, G. H. R.

Ede, Rt. Hon. J. C.

Lee, F. (Hulme)

Royle, C.

Edelman, M.

Lee, Miss J. (Cannock)

Scollan, T.

Edwards, N. (Caerphilly)

Leonard, W.

Scott-Elliot, W.

Edwards, W. J. (Whitechapel)

Lever, Fl. Off. N. H.

Segal, Dr. S.

Evans, S. N. (Wednesbury)

Lewis, A. W. J. (Upton)

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

Evans, John (Ogmore)

Lindgren, G. S.

Sharp, Lt.-Col. G. M.

Fairhurst, F.

Lindsay, K. M. (Comb'd Eng. Univ.)

Shawcross, C. N. (Widnes)

Farthing, W. J.

Logan, D. G.

Shawcross, Sir H. (St. Helens)

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

Lyne, A. W.

Silkin, Rt. Hon. L.

Follick, M.

McAdam, W.

Skeffington, A. M.

Foot, M. M.

McAllister, G.

Skinnard, F. W.

Forman, J. C.

McGhee, H. G.

Smith, Capt. C. (Colchester)

Foster, W. (Wigan)

McGovern, J.

Smith, Ellis (Stoke)

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

Thorneycroft, H. (Clayton)

Weitzman, D.

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

Thurtle, E.

White, C. F. (Derbyshire, W.)

Snow, Capt. J. W.

Tiffany, S.

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

Solley, L. J.

Timmons, J.

Whiteley, Rt. Hon. W.

Sorensen, R. W.

Titterington, M. F.

Wigg, Col. G. E.

Soskice, Maj. Sir F.

Tolley, L.

Wilkes, Maj. L.

Sparks, J. A.

Usborne, Henry

Willey, F. T. (Sunderland)

Stamford, W.

Vernon, Maj. W. F.

Williams, W. R. (Heston)

Stewart, Capt. Michael (Fulham, E.)

Viant, S. P.

Williamson, T.

Stross, Dr. B.

Walkden, E.

Willis, E.

Summerskill, Dr. Edith

Walker, G. H.

Yates, V. F.

Symonds, Maj. A. L.

Wallace, G. D. (Chislehurst)

Young, Sir R. (Newton)

Taylor, H. B. (Mansfield)

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

Zilliacus, K.

Taylor, R. J. (Morpeth)

Warbey, W. N.

TELLERS FOR THE NOES:

Thomas, George (Cardiff)

Watkins, T. E.

Mr. Pearson and

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

Watson, W. M.

Mr. Simmons

I beg to move, in page 53, line 22, at the end, to insert "Wallpaper."

The purpose of this Amendment is to remove the Purchase Tax from wallpaper. I hope that should my hon. Friend the Member for Darwen (Mr. Prescott) catch your eye, Major Milner, he, who has studied this matter, may be able to give the Committee information which will convince them that this is a most just and worthy cause. It would cost very much less than £2 million, and that is relevant to what the Chancellor said. I thank the Chancellor for having indicated that he has £2 million to give away. May I say that it is not for us to accept that limitation. The purpose of this Committee, the guardian of the public purse, is to guide the Chancellor and to aid him. If we think £3 million or £5 million is a proper figure we must convince a sufficient number of hon. Members opposite to come into the Lobby with us in order to achieve our purpose. This is an Amendment which a Labour Government, above all, ought to accept. Wallpaper is the covering of the insides of people's houses. Before the war in 95 per cent. of the houses in this land wallpaper was used to cover their walls. I will not trouble the Committee with the reasons. Wallpaper is warm, clean and cheerful. Wealthy people can afford paint, and can buy paint without paying Purchase Tax, whereas the great mass of my constituents, and the constituents of hon. and right hon. Members opposite, must pay Purchase Tax for the covering of the walls of their houses, unless, of course, they use distemper which is an extremely bad substitute. Children make distemper dirty with their hands, and it does not cover up the cracks. That is why the poor and the masses use wallpaper.

I add one other argument, and it is one of equity. The paint industry thrived during the war and was working fully. The wallpaper business was closed down in the national interest because it was impossible to devote paper to that purpose. Therefore, we have two trades supplying competitive articles, one taxed and the other not taxed. It seems to me that that should be taken into account. If the Chancellor rises to answer me I shall feel sure he is going to make a concession; if he is not going to make a concession it is generally the Fniancial Secretary who is put up to do the job. If the Chancellor is not going to make this concession I want the aid of the Committee in seeing that the people get this covering for the insides of their houses without tax. I appeal to the Committee. Let us cheer up our country by giving the people some well designed and nicely coloured covering for their drab walls.

11.15 p.m.

I would add a few words in support of the Amendment. It is a good feeling that men have who desire to beautify their homes, and this is a reasonable plea to put to the Chancellor. I hope he will take it into favourable consideration. I would ask the Committee to bear in mind the striking fact that paint and distemper, the great competitors of wallpaper, do not carry Tax. The working class, in general, prefer wallpaper, and their pride in their homes is sound citizenship. Wallpaper can also be controlled through the medium of price control. From every point of view this proposal should make a strong appeal to the Chancellor. I would remind him that in his Budget statement he offered to give this favourable consideration on the next occasion—which this is—and I hope he will give the concession.

May I briefly support the plea made by my hon. Friend the Members for Lonsdale (Sir I. Fraser) and the hon. Member for North St. Pancras (Mr. House)? I think I should tell shortly the history of the matter. In his Budget statement in October, 1945, when he was referring to tax concessions which he was making, the Chancellor used these words, in reference to possible alleviation in the Purchase Tax:

I draw the attention of the Committee to this very important fact, that there are many Amendments on the Order Paper, and that many of them, no doubt, if not all, are very important matters; but this Amendment is distinct and peculiar, in that it affects houses. It is not even of knives, spoons and forks. It deals with an inherent part of house construction. I would ask the Committee to bear that in mind. It is a fact that the bulk of the working class houses in this country have wallpaper, and that working class people like wallpaper. This concession would assist not only in new housing, but in renovating existing houses. There is much renovation required. The working class people wish to redecorate their kitchens, bedrooms and drawing rooms. This proposal would help to brighten the lives of the poorer section of the community, and it is on that basis that I make this plea.

When last the hon. Member for Lonsdale and I raised this question, the Chancellor replied, and the reason he gave for his rejection of the suggestion was one of cost. I am quoting from HANSARD of 31st October, when, referring to the question of cost, he said If you double that figure of £250,000 you have £500,000, and I would suggest that the Purchase Tax has not doubled. As the Chancellor has £2,000,000 to play with quite apart from the fact whether he can or cannot make a greater concession, I suggest that it would be in the interests of the community if £500,000 were directed to reducing the Purchase Tax on wallpaper. One alternative I would suggest is, that if you did not wish to abolish it altogether, he could reduce the tax of 33⅓rd to 16⅔ds. Let me also remind the right hon. Gentleman that while I have no doubt that clasp knives are important, and he has made a concession of £200,000 for them, the concession for which I am appealing would be of considerably greater importance. There is one other argument. The wallpaper industry made a great contribution to the war effort. Now we are getting back to prewar and production is half that of prewar. Our exports are approximately 5 per cent. It is true that wallpapers are not always readily available, but it is being produced in ever increasing quantities, and I believe that it would be a great concession to make and meet a great need for a wide section of the community if the Chancellor could see his way to do it.

I hope the Chancellor will see his way to do what is being asked, but I was shocked at the reasons advanced by the mover when he said that wallpaper should be used to cover the cracks. If I thought it was to be used for that purpose, I would suggest that wallpaper be abolished altogether. Wallpaper was introduced by a great artist and a great Communist, William Morris, for the purpose of introducing a measure of art and beauty into the working class homes.

I would remind the hon. Member that wallpaper was introduced into this country 150 years before William Morris was born.

I do not want to enter into an argument now, but modern wallpaper was certainly introduced by William Morris for working class homes. Does the hon. Member mean to argue that working class homes had wallpaper on their walls prior to the time of William Morris? Nonsense. They scarcely had any walls to their homes, never mind wallpaper. William Morris introduced it to help the working class beautify their homes and to give them a measure of art, and it is for this reason that I hope the Chancellor will consider making a concession, and not from the point of view of the paper being used to cover up the dirt and fill in the cracks.

We have had very interesting speeches from both sides of the House on this subject and I frankly say before the speeches were made I was not quite decided as to what it was right to do. I will make a proposal to the Committee in a moment. The background is that production, as the hon. Member for Darwen (Mr. Prescott) has said, quoting back to the past in our discussions on the autumn Budget, is going very well. Wallpaper is an example of an industrial product in which reconversion is proceeding very satisfactorily. Labour is returning and production is rising, and in terms of revenue, if I were to accept this Amendment, I would lose £1 million this year. That is in the current year of which we are speaking. That is the best estimate my advisers make, and I never question these estimates because they turn out to be very accurate. This puts me in a difficulty. I feel it would be possible to give half that amount away. I am anxious to assist this industry. My hon. Friend the Member for North St. Pancras (Mr. House) has spoken with a knowledge of the building industry in its various branches and the hon. Member who represents the Communist Party here, or half of it, has added his voice. Although the Liberal Party has not supported it, I am sure they would feel that something should be done, so there seems to be a kind of general agreement of all sections of the Committee.

I have been considering what it would be right to do and what I am prepared to recommend to the Committee is to do what the hon. Member for Darwen suggested as a possibility in the concluding passesages of his speech. I am prepared to propose to the Committee to reduce the tax from 33⅓ per cent. to 16⅔ per cent. as a stage. I would like to get rid of it altogether, but the loss is too much in relation to other things; too much this year. I am prepared, as an instalment to assist this industry, to meet the request made from different sections of the Committee and recommend a reduction of the existing duty by one-half with the hope that it may be possible, perhaps next year, to abolish it altogether. May I add this one word? If hon. Members are keeping a statistical check of what is going on they will see this would mean that I was losing half a million pounds.

May I say how glad I was to hear what the Chancellor of the Exchequer said? We have a responsibility in going through these long Schedules and we have to select priorities. It would be easy to divide against the Government on every Amendment, but it would not show a great sense of responsibility. I am bound to say that I like this last concession. It struck me that wallpaper had the strongest claim of any of them. It is part and parcel of the construction of houses, unlike some of the other things coming up later, and if it were administratively possible to confine the concession to newly married couples and not to sweep away the whole tax, that would be the ideal solution. I am glad that the right hon. Gentleman has chosen this concession. I think it is a very wise thing. If my arithmetic is correct that still leaves some £800,000 in hand. [ Interruption. ] I beg pardon, that is not altogether correct. I was thinking of some other concession. Obviously we are better off than I thought we were. I want to say to Members in all parts of the Committee that if we do not support them in all their proposals it is because we must make a firm stand on some of these suggestions. I do not think it would be disastrous if we raised the ceiling to £3 million. [An HON. MEMBER: "On wallpaper?"] I mean over the whole of the Purchase Tax reliefs. In the meantime I am bound to say that I welcome the concession that has been made.

11.30 p.m.

I would point out for the benefit of my hon. Friend who showed his disapproval of my rising that hon. Members on this side of the Committee have imposed on them a self-denial ordinance in Debates of this kind. [An HON. MEMBER: "Why?"] There is one point which I want to put to the Chancellor. He has made a considerable concession to the manufacturers of wallpaper, and in addition next year he may even go further and completely wipe off the tax on wallpaper. That to me is a very important point. I understand that a con- siderable amount of flour is needed for the adhesion of wallpaper to the wall. In view of the continuing food shortage the Chancellor ought to bear this point in mind before coming to any further decision or concessions. He certainly ought to consult with the Food Minister upon what may be a question of the utmost gravity.

I will consult the Food Minister, but it does not affect the rate of duty. The answer to the hon. Member might conceivably be the amount of production which might be permitted. It does not affect what we are now discussing, which is the rate of duty of Purchase Tax, but I will look into the point made by him.

The hon. Member for Darwen (Mr. Prescott) and I, and I hope those who joined with us in putting forward this Amendment join in offering thanks to the Chancellor for this concession. As a matter of principle we feel that part of a house should not be taxed, and wallpaper is part of a house. Therefore, we cannot feel wholly satisfied with the concession because, of course, the tax should have gone completely. Nevertheless, the Chancellor has done well within the limits available to him and I should like to offer our very sincere thanks. The Chancellor will not be giving the whole of this concession to the wallpaper manufacturers, as was suggested by the hon. Member for Stretford (Mr. Austin). It will go to the whole of the trade, including all the people who work in it. The hon. Member might like to know that there are few trades in this country where both sides work together so harmoniously.

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

I now propose to have a general discussion, in which perhaps the Chancellor if he thinks fit might care to make an early statement, on the Amendment standing in the name of the Member for Stalybridge and Hyde (Mr. Lang) which reads:

"Schedule 3, page 53, line 24, at end, insert: 'All domestic and electric labour-saving appliances.'"

That in my view would be the one Amendment which it would be fitting for the Committee to discuss in a general way so that the whole range of electric appli- ances mentioned on the Order Paper might be included, and as I had said if the Chancellor so wishes, he could make an early statement on the intentions of the Government. The discussion on this Amendment allows of a pretty wide Debate.

On a point of Order. Would it not be more convenient if the discussion were on the first Amendment which stands in the name of the Member for Stockport (Sir A. Gridley), because if the question is discussed on the Amendment which you suggest, it would mean that the Amendment had been called and that the other Amendments which are to be discussed would be passed over and could not be voted upon?

I thought that the course I have suggested was for the convenience of the Committee and would have allowed the widest possible discussion.

The alternative is to hang these Amendments on some wider Amendment. The next one is that in the name of the hon. Member for Tonbridge (Mr. G. Williams), which deals with rat and mouse traps and fireguards. That does not seem to me to be a very wide Amendment.

On a point of Order. I suggested that it should be discussed on the first Amendment, instead of on the last of those which are to be discussed together. I would suggest the one in the name of the hon. Member for Stockport (Sir A. Gridley) which deals with suction cleaners, irons and washing machines.

The Amendments in the name of the hon. Member for Stockport only cover a somewhat small range of articles and not the very wide range covered by that in the name of the hon. Member for Stalybridge and Hyde.

Would it not be desirable for the Chancellor of the Exchequer to read the Amendments out and say to which he can definitely say, "No hope." Then those Amendments could be withdrawn and the others on which there is some hope could be discussed.

Would you accept a Motion in the name of the Patronage Secretary to take the Amendment in the Third Schedule, page 53, line 24? This, I believe, would overcome the difficulty. I think it would clear the ground.

I have suggested a general discussion on the very wide Amendment in the name of the hon. Member for Stalybridge and Hyde.

May I refer to the previous Amendments being cut out from being developed upon? When you originally put this forward, Major Milner, you said it would be open to anyone, while grouping the Amendments for the purpose of discussion, to allow them to be put afterwards to the vote. If that plan was accepted it would cut out all further Amendments from a Division.

That is not so. It does not cut out the previous one by the hon. Member for County Down (Sir W. Smiles), or that in the name of the hon. Member for the Isle of Wight (Sir P. Macdonald), or that in the name of the hon. Member for Stockport (Sir A. Gridley). It does cut out, it is true, Amendments prior to these. [HON. MEMBERS: "Why"?] The alternative, I must point out, is to take the Amendment following the one which has already been disposed of. That is the one in the name of the hon Member for Tonbridge (Mr. G. Williams) and work through the Amendments one by one. I understood that it was the desire of the Committee that the Chancellor should make a statement.

Do I understand that the Amendment in my name is not included in the later Amendments? If so, I would like to point out that that Amendment, dealing with domestic devices, would come under the terms of the later Amendments.

Then it could also be discussed on the wider Amendment referring to domestic articles.

May I suggest that the Amendment in my name is also dealing with a domestic device?

Then the hon. and gallant Member's Amendment can also be discussed with that of the hon. Member for Stalybridge and Hyde.

I have an Amendment down to which domestic appliances equally apply, namely, mincers.

The hon. Member might, if he so wished, speak on the question of mincers under the general Amendment in the name of the hon. Member for Stalybridge and Hyde.

Am I to understand that, despite the fact that, for instance, the Amendment in the name of my hon. Friend the Member for Stockport comes before the Amendment you now call, you will, if the hon. Member so desires, allow him to put it formally to a Division?

Is it not perfectly competent, with your permission, for the Chancellor to make a statement on any of these Amendments by leave of the Committee? If you agreed to that he could make his statement on the very next Amendment on the Order Paper. It seems to me the Committee would be well advised to accept that course. Will that get us out of the difficulty?

Possibly that would be the simpler course although the Chancellor has not heard the arguments. That being so, I will call the hon. Member for Tonbridge, and, with the Committee agreeing, the Chancellor will make a general statement on that Amendment.

I beg to move, in page 53, line 22, at the end, to insert "Rat and mousetraps and fireguards."

As you have decided to take this course, Major Milner, I will, of course, be as brief as I can. I would like to point out that the food situation today is as perilous as it has ever been before, and it is being made even more perilous by the existence of rats in our midst. It is very difficult to estimate precisely how much damage rats are doing in this country, but if we consult our experts they will tell us that 30 rats every day eat the equivalent of one healthy human being. Or if we consult another expert he will tell us that a rat during the course of a year eats as much as 20s. worth of food. He also states that there are probably as many rats in the country as there are human beings, and if we make a quick calculation we will realise that probably £50,000,000 worth of food is being eaten every year by rats. A great deal of that food is paid for in dollars—precious dollars. It is a crime to waste dollars, but it is an outrage to waste food.

11.45 p.m.

The rats gnaw at our potatoes, at our cereals, at our sugar beet, and they do not turn their noses up at the finished article of a more delicate nature. Apart from what they eat, they do damage by tearing packages to pieces, by ripping sacks up and destroying containers, and also by running over foodstuffs and rendering them unfit for human consumption. At the present time, with food as it is today, it is stupid to allow rats to continue eating the foodstuffs while we are cutting down to rations to our people. The best way of curing the rat menace is to exempt from the Purchase tax the rat traps which we buy every day. The effect would be perhaps that the small man would buy six rat traps instead of four. The net result to the whole country might be that 600,000 rats would be killed instead of 400,000. The same thing applies in a minor degree to mice. With regard to the article of a very different nature which is included in my Amendment, I should like to explain that the parents of children under the age of seven years are under a statutory obligation to protect their children from inflicting danger on themselves from fires, and I therefore include fireguards.

I would like to begin by dealing with the Amendment which has been moved. I was not quite clear, nor has the hon. Member for Tonbridge (Mr. G. Williams) made it clear to me, why rat- and mouse-traps were proposed in the same breath with fireguards. Fireguards would cost the Revenue more, but they would not cost a very large amount. They would cost the Revenue something of the order of £50,000 this year and £100,000 in a full year. I think it is a reasonable proposal that fireguards, for the protection of children, in particular, should be exempted, and I will accept that. I was more doubtful about the rat-and the mouse-traps, but they would not cost very much, and since I do not wish to seem to be accepting the hon. Gentleman's proposal by halves or thirds, I am quite willing to agree to the rat- and mouse-traps. I was moved by his reference to the possible saving in dollars which otherwise might need to be expended on food to be consumed by the lower creatures rather than by ourselves. That moved me a good deal to my final conclusion.

I have been invited to indicate one or two further directions in which it would seem to me that concessions might be made in the Purchase Tax. I set myself originally a ceiling of £2 million, and we have already agreed to clasp knives for £200,000 and wallpaper—halving the rate—£500,000. That is £700,000. Now we have thrown in rat and mousetraps and fireguards. Let us say £100,000—I will not add anything for the two smaller items—in a full year. That would amount to £800,000. May I indicate to the Committee the cases which seem to me the strongest for remission or reduction when we combine, as I have to, the two factors which constantly bear on all these cases? In the first place, there is the case on merits for the remission; and, secondly, the cost to the Revenue. I have thought that the following might properly be met. In the first case, I have had from educationalists a good number of representations regarding projectors and so forth, and I have tried to define the thing in such a way as to give a good deal of advantage to schools and at the same time not to run away with too much revenue. I propose to accept an Amendment which comes later on—which may need rephrasing—to exempt from Purchase Tax still projectors and substandard films, strips and slides. That is not as wide as some hon. Members wanted me to make it, but there will be scope to discuss that when we get there. However, I have been able to go a considerable distance to meet the requirements of those interested in education. The hon. Member for Greenwich (Mr. Reeves) was particularly interested in this, and hon. Members in other parts of the House were too. It would cost £25,000, and is well worth making.

I have been asked by the right hon. Member for North Leeds (Mr. Peake), who is not in his place, but who has always taken a great interest in the mining industry, by the hon. Member for Bodmin (Mr. D. Marshall) and the hon. and gallant Member for Ayr Burghs (Sir T. Moore) to make an exception in the case of miners' lamps in one form or another. That appeals to me, and I am sure that it will appeal to all of us. It is not possible to make an exception for miners' lamps as such or for lamps exclusively for the use of miners. It would not be reasonable to do so because if a lamp is used by other classes of people it would have to be exempted for them too. I think I can find a formula whereby acetylene cap lamps and acetylene hand lamps of the kind used by miners can be exempted. I am advised that it will also bring into the field of benefit a number of other workers who make use of those lamps in their callings. The cost will be negligible. It will be well worth doing.

I have had representations from the hon. Member for Bodmin in respect of sailing vessels. We had a discussion under the heading of Entertainments Duty, and I said then that I thought that perhaps we could handle this. I have given an undertaking to look into the question of regattas to find out the legal position, in order to clear them if I can from Entertainments Duty. I suggested that perhaps I could do even more good to the interests with which they are concerned if I could exempt sailing vessels from Purchase Tax. That, I propose to do. They are a special case, in view of the national value attaching to the seafaring population, who know their way about sailing vessels in all conditions of weather. I think that that will be generally approved. The cost will be £100,000 in a full year and it will be well worth while.

I now turn to a different type of case, which has been represented to me. Obviously I am picking these cases out in relation to different sections of the community as I am sure I ought to do. I ought to endeavour to assist here this group and there that group, according to my financial resources. People who dwell in country districts where there is no electricity or gas have to make use of oil lamps. I have been asked whether we could possibly exempt the oil-lamp chimneys. That is something which I propose to do. The cost will be small, only £50,000.

Many proposals have been made with regard to domestic appliances. I would like, before I make a further proposal, to remind the Committee that in my two Budgets I have already moved a considerable distance along this road. I am very glad to do so. I would also remind the Committee that in the first Finance Bill for which I was responsible I cleared electric heaters, stoves and other appliances, both electrical and gas, and that in the proposals already embodied in the Schedule, which I hope the Committee will accept, I am proposing to remit the Purchase Tax on electric kettles. In addition, I am proposing in the Schedule to exempt certain articles of furniture—built-in furniture in kitchens, kitchen fittings, dressers, cupboards and so on. I am anxious to move along that road.

With regard to the other Amendments, I have thought about them and compared their cost and their price to the consumer, and I think electric irons have a strong case for remission. This will cost £500,000 in a full year, but I think that is a suitable remission. Having proposed that remission, if the Committee agree to it, I do not propose on this occasion to go further in the field of electric appliances. I do not propose in particular to exempt at this stage either electric washing machines or vacuum cleaners. Both of those would cost a great deal more, and neither of them are so universally used by so wide a range of housewives as the electric iron. I propose, therefore, to exempt electric irons, but not at this stage to go further along this road.

I have had a great deal of representation about deaf aids. [AN HON. MEMBER: "Speak up."] If the hon. Gentleman cannot hear me, he had better come a little nearer. I have found it rather difficult to decide how far I should go in this case, because in many of these aids there are batteries which are not exclusively used by deaf people. I have considered at some length whether there is any administrative device by which one could, so to speak, earmark batteries which were included in deaf aid appliances, but I am advised that that is not feasible. I have looked at all sorts of possibilities. The right hon. Member for the City of London (Mr. Assheton) need not press me to reconsider that point, because I have reached a conclusion which I think will be satisfactory to him. I am anxious not to propose any administrative devices which are burdensome and troublesome both to the public and to the officials who have to administer them. Therefore, I abandon any attempt to mark a certain number of batteries of an identical character produced at some fac- tory,according as to whether or not they go to assist deaf people or whether they are used for other purposes. I have, therefore, decided to recommend to the Committee that the deaf aid low tension batteries—high tension batteries are exempted already—should be exempted, and in order to give effect to exempting low tension batteries used in deaf aid appliances I shall have to exempt this class of low tension batteries as such without specific reference to their use in deaf aid appliances. That will cost me more money and will give relief to certain people who are not particularly strong claimants as such for relief, but it is the only way to assist deaf people whom we desire to help. That will cost me £750,000 in a full year.

Therefore, at this stage I have just gone above the £2,000,000 mark in what I have done already. The hon. and gallant Member for Holderness (Lieut-Commander Braithwaite), who was anxious that we should not be too pedantic about the £2,000,000, will be gratified about the flexibility—a word which is often used in this connection—of our arrangements. We have gone slightly above that figure, and I think it is legitimate to do so, but I do not think I ought to be pressed to go much further. I will, however, mention two other matters. One I have already referred to—rayon yarn. I mentioned this earlier this afternoon when discussing Excise Duties on rayon. The hon. Member for Altrincham and Sale (Mr. Erroll) moved an Amendment upon which we had a discussion, and I then indicated that I was prepared to give a rebate on the Excise on rayon yarn for tyres. That will cost me £350,000 in a full year. That is Excise, not Purchase Tax. Since we are now considering tax alleviations that should be borne in mind, not towards the Purchase Tax total but as a further tax relief.

12.0 m.

I have been much pressed with regard to rabbits. Hon. Members in all parts of the Committee have spoken to me, written to me and rung me up about rabbits. Apparently, what is desired is that we should not have a Purchase Tax upon garments made from the skins of rabbits kept as domestic pets, or backyard denizens in any dwelling in any part of the country. I think that is reasonable. It is one of those things in which widespread feeling in the country is evidenced by the fact that so many hon. Members have raised it, and something should be done about it. Therefore, though it does not arise directly on this Schedule, if the Committee are agreeable I am prepared to have suitable provisions inserted on the Report stage, making it clear that garments made from these pelts shall not be subject to tax.

All this adds up to something over £2 million in the field of Purchase Tax alone, together with these other concessions in the field of Excise over and above what I proposed when the Budget statement was first laid before the Committee. I hope I shall not be hard pressed to go any further on this occasion than the list I have indicated. As the Debate proceeds, so long as it does proceed, no doubt other cases will be put forward, and I would not like it to be thought that I am lacking in sympathy for quite a number of other cases which I have not mentioned. I have tried to make a selection on the principle I indicated, namely, having regard to the amount of revenue sacrificed, to the degree of necessity of the article relieved, and, in the third place, seeking to distribute the advantage of this remission amongst different and distinct classes of the community—the rural community, the mining community, the housewives and so on. I have done my best in making this selection, and I offer it to the Committee as a basis of discussion. I am prepared to reply to points which may be raised, where appropriate to do so, though I hope I will not have to inflict on the Committee a long repetition of what I am saying now. As we reach particular Amendments I am prepared to indicate where the concessions I have indicated impinge upon the proposals which are put before the Committee from time to time.

Do I understand the right hon. Gentleman will put down the appropriate Amendments on the Report stage?

It is always more convenient, as the Committee well knows, that we should reserve the final draft, where it is possible for a Government spokesman to accept proposals, until the Report stage, because sometimes the wording has to be slightly revised. Therefore, I hope the Committee would, in regard to the group of cases I have mentioned, allow me to take the initiative in putting down Amendments on the Report stage, which would give effect to the undertakings I have just mentioned.

Then does the Committee now desire to have a Debate on the general question, on the understanding that, if desired, any single item can later be moved formally? Or is it desired to go through the remainder of the Amendments item by item?

Major Milner, you really took out of my mouth something I was about to say. I intended to preface it, however, by thanking the right hon. Gentleman very much for his full statement. I am sure all hon. Members appreciate the consideration he must have given to this problem over a considerable period, and the very wide distribution of the proposed reductions, touching different industries, different kinds of employment, and different kinds of people. The presents have been distributed, but the presents have been distributed over the widest possible field. At least, that is the first impression I get from what he said. I noted that the right hon. Gentleman's proposal is that, in order to cover all the points, he should undertake himself, on behalf of the Government, to put down the necessary Amendments on the Report stage, when they will all be discussable and we can consider them; because they will require a little consideration, obviously. The Chancellor has had a good deal of time to consider these concessions; we have heard of them only now. But the fact that he will have to put them down seriatim on the Report stage will mean that they will be open to discussion then. So it seems to me that tonight we can save ourselves a good deal of trouble, if that is agreeable to hon. Members concerned who have Amendments down dealing with these matters, if they will not move them, because they will have to be moved by the Chancellor at the next stage. Therefore, in the rest of our discussion, hon. Members who have Amendments dealing with the points the Chancellor has not discussed may be free to raise the points they have in mind. I am quite sure, if that is agreeable to the Committee as a whole, that we can cut out a lot of discussion without surrendering any rights, because they will have to come up on the Report stage. That is the proposal I would make, if I may, whilst thanking the Chancellor for the attention he has given to this problem.

Do hon. Gentlemen desire to offer any observations on the suggestion the right hon. and gallant Gentleman has made?

I wanted to ask the Chancellor a question arising out of his speech.

We must decide the form of procedure. I am not quite clear what the right hon. and gallant Gentleman was proposing. I gather the desire is to have a general discussion. Or are we to take each item in turn? That is the question for the Committee to decide.

May I suggest that those of us who wish to, should make our comments upon the Chancellor's proposals, and that, thereafter, particular Amendments may be formally moved in cases where hon. Members are dissatisfied because the terms of their Amendments have not been met, but that such Amendments should not be pressed to a Division?

May we have an assurance that the Closure will not be used on us? There are a number of us who have points to raise. If we can raise them briefly we shall be quite agreeable to the proposal. We have had during the last 36 hours the experience of being gagged and not able to put our points. If we have protection from that we shall be quite agreeable to the proposal.

The hon. and gallant Gentleman ought not to have asserted hon. Members have been gagged. I cannot of course give any assurance. As I understand it, the Committee generally is accepting the suggestion to have a general discussion now. We can have a reasonable discussion on that basis.

I accept the suggestion. The only comment I would make upon the Chancellor's proposals is to thank him for accepting the point of an Amendment in my name to exempt electric irons, though I regret he was not able to go further. There are other Amendments in my name and from the Liberal side dealing with the Purchase Tax, and I would like to ask the Chancellor how far he is intending to go in these cases. Is he going to remit that tax altogether this year on these articles? The right hon. Gentleman had a deputation to see him and I did not think he was impressed at the time and I wondered what his action was going to be. I am very glad to see the concessions which are to be made. What we want to know is to what extent these concessions are to be made. Are the taxes to be remitted altogether this year on all these things or are they to be limited in form? What is the position? I wonder if he can explain, and elucidate upon, that.

Would it be convenient if I answered this point now? In the case of wallpaper the proposal I make is to reduce the duty by half. In all the other cases which I have mentioned my proposal is to remove the Purchase Tax and to remove it now.

I must thank the Chancellor for having met the objections to these cases and removed the tax altogether. I think it is a wise thing because on this occasion I had a very long speech prepared to prove he would not get much out of it. He has saved a good deal of unemployment by his action and I can only express my thanks to the Chancellor of the Exchequer for what he has done for a very important industry.

There is an Amendment on the Order Paper in my name in which I ask that the Purchase Tax be removed on devices, incorporating flint or electrical ignition, which are attachable by a flexible gas connection to gas appliances. I would ask the Chancellor to give sympathetic consideration to this on the ground that he did say he would consider every case on its merits and on the cost to the revenue. I will briefly state the case on the merits and also inform him of what the cost to revenue would be. I hope that when I have done this he will favourably consider this Amendment. At the present time gas cooker manufacturers are able to sell their devices because they are tax free when fitted to new cookers but Purchase Tax has to be paid when they are sold over the counter. The position created by this anomaly—to remove which this Amend- ment is proposed—is that a cooker as a proprietary commodity is always sold direct from the gas company. This position arises even if the devices are fitted to new cookers: since the cookers are articles of which the gas company are not the manufacturers Purchase Tax would be applied and it can only be removed if this device is sold to the gas companies through the gas cooker manufacturers. The gas cooker manufacturers would then have to include the device at an all-in price.

12.15 a.m.

The point I have to make is that the gas cooker manufacturers are placed in the position which prejudices the sale of this article. Charges can be made for fitting and in many other ways, and in that way the price can be forced up to the consumer and the gas match can be shown to be cheaper in that way than this other proprietorial article. I want to submit that it is not to the advantage of the consumer to have these restrictions in the trade, and the anomaly which I have mentioned should be removed. The total cost of accepting this Amendment and removing this anomaly would be only about £27,000, approximately one per cent. of the total concessions which the Chancellor has to give us. I do suggest because that amount is small that he will consider it, and because the anomaly is great he will give it sympathetic consideration. At present there is really very unfair discrimination against these ignition appliances made by independent firms, and this discrimination is greatly in favour of the device made by the manufacturers of gas appliances. For that reason I do hope that the Chancellor will favourably consider this matter.

May I, with all due seriousness, raise the question of this device of taking this matter on one Amendment with which I entirely agree? There are hon. Members sitting in the Library or in other parts of the building and all they see on the indicator is, "Mr. So and So's Amendment." They cannot possibly know what is going on, and as this is an important matter many of them might like to be here and to take part in the Debate.—[HON. MEMBERS: "They should be here."]

I am afraid that the only remedy for that is for them to come into the Chamber.

I raise this in all seriousness because it is well known that many hon. Members do their constituency correspondence in the Library and such places, and I think I must register my view that this is a dangerous device and that there should in future be some better warning than this.

I desire briefly to refer to one aspect only of this matter, which in my view has not received sufficient attention this evening. That is the self-imposed global figure of the right hon. Gentleman of £2 million. It does seem to me that that figure is distressingly inadequate as a measure of concession of Purchase Tax. The measure of its inadequacy should be seen from nothing so much as the single remission on electric irons—a very necessary if very small item. The revenue in respect of that household contrivance represents a valuation of a quarter of the whole global concession. My name is down to, I think, only one of these various Amendments asking for remission of Purchase Tax on items of domestic use. That is not because I should only wish to support the remission on that one, but simply because they all seem to me to be articles which ought in justice to have the Purchase tax remitted upon them as soon as possible. It is disappointing that the sum total of the Chancellor's concessions amounts to so very few items actually being relieved of Purchase tax.

I am obliged to the right hon. Gentleman. I appreciate what he has said. It is disappointing to find such a small total of concessions as set down on the Order Paper. I do not want to be unduly controversial at this hour, but I do feel that if the position had been reversed and there had been a Conservative Chancellor of the Exchequer coming to this Committee and saying he was bound by this global figure, he would not have got away with quite so placid an acceptance of that assumption as has been accorded to the right hon. Gentleman this evening. He would have been told, I am sure, that these were old-fashioned economics and not as taught in the London School of Economics. These things need a very much wider angle of approach. We were all told as recently as 12 months ago that we must bear in mind that we had indulged in lavish expenditure, and had taken great risks for war, and must do the same to ensure a satisfactory domestic economy. Some such phrase as that appeared in the election address of many hon. Members opposite. I would like to be sure that the right hon. Gentleman has in fact calculated the global maximum of £2 million according to a correct standard of computation. I am not clear whether this has been computed simply in accordance with that according to the London School of Economics standard. I might be forgiven for describing as old-fashioned, Treasury, book-keeping doctrine; and I would ask whether the Chancellor has taken into account those wider circumstances to which I have referred.

A correct method of computation to take, in assessing the real loss of revenue involved, is to consider the fact that there is a substantial set-off in the way of not only increased human happiness, but of the increased productivity which arises from increased human wellbeing. Every one of these domestic articles, on which a remission of Purchase Tax is asked, affects the daily lives of citizens, and therefore affects their capacity for production. We are constantly told that we are in danger of forgetting that increased production is what this country requires. I believe that if the right hon. Gentleman was able to take a bolder view of the remission of Purchase Tax than he now takes, he would find that he had a dividend in the increase of individual productivity, due to the increased feeling of wellbeing and happiness in the minds of the workers which would follow and justify the course taken. I am bound to record my regret at this very conservative—with a very small "c"—approach which the right hon. Gentleman has seen fit to take to this problem tonight.

My friends and I appreciate very much the concession which the Chancellor of the Exchequer has made, following the suggestion that the Purchase Tax should be taken off certain projectors and items used for educational purposes, such as film strips and 16 mm. stock. But I would like to point out that by selecting the first Amendment, instead of the second Amendment, an anomaly is created. I feel sure that when the Chancellor redrafts the Amendment for the Report stage he will have to take that into consideration. I particularly notice that the first Amendment states:

"Projectors for substandard sound and silent films, slides, film strips, episcopes and diascopes, also substandard films, slides and film strips of all types."

There is an obvious omission in the drafting. It should read, I suggest:

"Projectors for substandard films, or for slides or for film strips."

and then:

"film strips and substandard films."

Then the whole of the apparatus and the films required for these goods would be covered. If not, it means that the projector used for film strip will be covered, but the film strips themselves will not be covered. I am sure that is not the intention, and that it is the intention that both projector and film stock, completed film stock used in connection with the projectors, should be relieved of Purchase Tax. The second Amendment covers a wider field, but it does complete the field, whereas the first Amendment does not. I would appreciate it very much if the right hon. Gentleman would take that into consideration. It is necessary to complete the ring to have the words "film strips" added.

I still have not given up hope that the Chancellor of the Exchequer will be able to help the rowing clubs of this country. I have an Amendment down in Schedule 3, page 54, line 5, at the end, to insert: wear out, they warp, and they twist, and when they get to that condition they are not so efficient.

I predict that the regatta shortly to be held at Henley will show that foreign crews will do well, and one of the reasons is that their boats and oars are very much better than ours. Nearly all our crews, the Leander crew I know, for instance, is rowing in a boat built in 1938. The cost of these boats has gone up very considerably since before the war. Even this year there has been great difficulty to know exactly what the postion was with regard to the Purchase Tax on racing boats and oars. Aylings, of Putney, who are the leading manufacturers of oars and sculls, inform me that at the beginning of the year the Customs and Excise could not make up their minds whether oars of racing boats were liable to Purchase Tax as they were not mentioned in Section 14 of the Order. It was then decided by the Chancellor's Department that rowing boats designed for racing would be liable for tax, but skiffs, punts, canoes, and even cabin cruisers were not liable. The respective gear for these classes of boats came under the same ruling.

That, of course, raises the problem whether clinker built boats were "designed" for racing. Eventually, in March of this year, it was laid down that all boats and gear were liable to 33⅓ per cent. Purchase Tax on the wholesale price. I do not know whether the Chancellor realises the position in his Department, and what the position was early in the year. He shakes his head, but I do ask him to look into this matter because I believe there is a genuine case for the remission of Purchase Tax on these racing boats and oars. The price of a good pair of racing oars in 1939 was £5 10s.; it is now £8 5s. and in addition there is £2 is. 3d. Purchase Tax, while for a pair of sculls the prewar figure was £3 10s., and it has now risen to £5 15s., and in addition there is £1 8s. 9d. Purchase Tax.

In this case Aylings have an arrangement with the Customs and Excise whereby they are able to let them go at 25 per cent. Purchase Tax as they are manufacturers retailing their products direct to the public. With regard to racing eights, the great builders are Messrs. Sims of Putney. The Chancellor will know, having been to the university, that they are the world famous boat builders. An eight shell before the war cost £113. To-day it costs £200 plus 33⅓ Purchase Tax. The single sculler before the war cost £27, and to-day it costs £45 plus 33⅓ Purchase Tax. These increases in costs are very serious indeed. They have to be met by the young men themselves who are rowing in the boats. If an undergraduate at the university plays cricket or football, he plays on the college football or cricket ground which is provided for him free as it belongs to the college. There is little cost in equipment. He has to buy a pair of football boots, and there is also the cost of the football. But the expenses of training a crew are considerable in addition to the cost of boats, oars, maintenance and boat houses.

In this country the great event of the year in river racing circles is the Oxford and Cambridge Boat Race. This year the cost of it to each University boat club and the members of the crew presented great problems. The hon. Member for St. Marylebone (Sir W. Wakefield) raised this matter on the Floor of the House. All the colleges and clubs have this same great difficulty in sending crews to regattas. This is a great sport. The university or college is always looked upon as being a good college or not according to whether it is high up on the river or not. It is very important to this country that we should be able to compete in the international boat races of the world on equal terms with the foreigners. If we compete on equal terms and we have as good boats as the other fellows, we will win. We do not want to see our crews competing under great handicaps. We want to see them competing without any unnecessary handicaps to enable them to win and uphold the prestige of the country. Rowing is the cleanest sport in the world. I challenge any hon. Member to deny that. It is the oldest sport in which the amateur will beat the professional. No professional eight has ever beaten an amateur eight. I ask the Chancellor, if he cannot give us a decision to-day, to promise that he will look into this matter between now and the Report stage.

12.30 a.m.

I want to refer to another sport older than rowing, and that is rabbit keeping. I want to say a word of appreciation on this to the Chancellor of the Exchequer, on be- half of the rabbit keepers of this country, for the response which he has made to the representations made to him from all parts of the country and from this House about the Purchase Tax on rabbit pelts. Rabbit keeping is one of the oldest and most popular of our home industries and occupations. Members of rabbit clubs and individual rabbit keepers throughout the country will hear with greatest satisfaction the decision which has been made.

My hon. Friend the Member for Oxford (Mr. Hogg) and I had, I thought, a very reasonable and moderate Amendment to put the Purchase Tax on bicycles at a reduced rate. The reason I attach importance to this—I see the Chancellor of the Exchequer beginning to shake his head already, but I must say that I shook mine when he was making some of his concessions—is that at the present time bicycles are relied on so much by people in the country districts, including agricultural workers and the small tradesmen. Bicycles are a very severe burden upon those who are not highly paid, and who live in the out-of-the-way places. They are a necessity for these people to get to their work. I am glad that the Parliamentary Secretary to the Ministry of Agriculture is here, as I am sure he will bear out what I say about the necessity of the bicycle for agricultural workers to get to their work. On Budget Day the Chancellor talked about the people of the country travelling to the beauty spots, but as long as his colleague the Minister of Fuel and Power keeps the petrol rationing on, it will be impossible for people to get to the beauty spots except by cycle.

Let us look whether any of the Purchase Tax remissions, either announced today or set out in the Bill, benefit the agricultural workers or those who live in the country districts. The Chancellor has done it with the chimney glasses for lamps. The lawn mower, and roller are to be reduced, but not the bicycle. Garden furniture and everything for the wealthy people in the country are to get the benefit of reductions, but not the necessities for the poorer men in the country districts. Walking sticks, trunks, bags, cameras, but not bicycles. I appreciate that the bicycle may cost a certain amount, and I should have thought that if the Chancellor wanted to help people who live in the out-of-the-way districts he would have exempted bicycles first and foremost. It is a matter of great iniquity that Purchase Tax is still charged on bicycles. Without a bicycle workers have to walk to work on their feet, and that is not the way to facilitate production.

I would add a word on the subject of rabbits. The Chancellor does not want to accept an Amendment I had down in relation to rabbits. He gave me an assurance that he would accept it, and there was an agreement between us. I understand that he referred to the domestic rabbit, but it is difficult to tell the difference. I have seen some rabbits of the domestic variety that resembled the wild rabbit. I ask the Chancellor to stick to his good resolution and his promise, and to accept the Amendment.

I would like to put two points to my right hon. Friend. He touched upon the matter of batteries for deaf aid appliances, and I suggest that his experts might like to look into a difficulty. In giving his concession, he may not give it to the people to whom he wants to give it. These low tension batteries are divided into three categories—the wet low tension battery which might possibly be used in a deaf aid appliance, the separate dry battery, and a third type which is combined with the high tension battery. I believe he will find on investigation that the majority of deaf aid equipment uses the combined type of high tension and low tension batteries, and apparently this will not come under the concession that he has given. Therefore, the vast majority of deaf aid users will not get the concession. I think my right hon. Friend might like to look into that point and deal with it on the Report stage.

The second point is this. The Chancellor has at various times stated that Purchase Tax did not affect the export market, but I have found one example of where Purchase Tax affects our ability to export, and that is in respect of television receivers. I would like briefly to put the case to him from this point of view. Before the war the radio manufacturers in this country were concerned to see that they kept the lead against their foreign competitors, notably the Americans. They did, in fact, anticipate the low manufacturing cost which would come about when their output was great, and they put television sets on the market at a very low price which at that time showed them a loss. They did this, because, unless one can popularise British television quickly, people who want television transmitters and equipment may go to other countries, notably America, for it. We have so far kept ahead of the Americans in this very important market, but there is this peculiarity about television, that if a country uses American television transmission equipment, that market immediately becomes closed to British radio television receivers, because the American system is entirely different from the British system. Therefore, we in this country wish to see British radio television get going and popularised as quickly as possible, so that foreign buyers will come to this country, and not go elsewhere, for their television transmitting equipment.

I admit that television receivers are not exactly the kind of articles on which the Chancellor would like to exempt Purchase Tax at the moment, because they are semi-luxury goods. But I suggest that he should look ahead and see what the effect of keeping Purchase Tax on these receivers will be from the long-term point of view. It is necessary that we should popularise television quickly, and the manufacturers are willing to do this by taking a loss on television receivers at the moment, but if Purchase Tax is added to their low price the effect of the manufacturers' enterprise will be nullified, and their ability to popularise British television so that British equipment can be sold to our customers abroad will also to a large extent be nullified. I hope the Chancellor will look into this matter a little later if he cannot do so now, in order to make sure that we secure the important markets for this country in the future.

12.45 a.m.

In remitting the Purchase Tax on these articles I think the Chancellor has taken the largest slice of his £2 million off the low tension batteries in order to aid deaf people. I wonder if, before he made that decision, he consulted the Minister of Health? The Minister of Health has a plan, which he has already announced, to issue free to all deaf people an aid which he will maintain throughout the whole of the year, at no expense to the individual. Have arrangements been made for this issue? Between now and the Report stage will the right hon. Gentleman see if that scheme is to come into operation during this financial year? In remitting £700,000 worth of Purchase Tax on low tension batteries only a small portion will really go to aid those people whom he most wishes to assist. If the right hon. Gentleman finds between now and the Report stage that these people with the disability which he intends to help are to get assistance from the Ministry of Health, will he also consider preventing a disability in relieving the Purchase Tax on tooth brushes, in regard to which there is an Amendment in the names of my hon. Friend the Member for Flint (Mr. Birch) and my hon. Friend the Member for Altrincham and Sale (Mr. Erroll)? I cannot believe that that would cost a great deal of money, and it would not only assist people with a disability, but would assist prevention.

There are two Amendments down in my name, and it will save a great deal of time if I refer to them now, because, in the present circumstances, I do not propose to move either of them. The Chancellor has been good enough to announce that the concession asked for with regard to electric irons is to be made. I am sorry we cannot have the Purchase Tax remitted from all household articles of that kind, because I believe such a gesture would have been greatly appreciated, particularly by the housewives of the country who, during the war, have made a tremendous effort and great sacrifices. They would have appreciated the opportunity to obtain these things to enable them to put their homes in order at reasonable cost. Indeed, if the appeal is to be made to women to continue in employment during the national emergency, it seems to me something will have to be done to make their lot a little easier. They have not had too good a time, and are not having too good a time now. However, I am very grateful for what has been done. I do not think justice has been done in regard to electric boilers. I believe a concession in that respect would effect considerable saving, and in the present circumstances that might be a matter to be considered carefully.

The other Amendment in my name refers to caravans. On the face of it, this might appear to be a sort of luxury business. My intention was not to regard it as such. At the moment large numbers of men are being demobilised, and they include young men in whom I have a particular interest, as chaplain to the Showmen's Guild. Those young men are returning to business as showmen, which is important in a great many ways, as well as bringing in a good deal of money to the Exchequer. Those men have to buy their caravans, which are entirely residential, and have to pay Purchase Tax on them. The Chancellor knows about this better than I do, but I am confidently informed there has never been any certainty about how this tax came to be slipped on. I am told that in one case there has been a refusal to pay it, and for five years there has been no attempt made in law to collect the tax. I would like to know a little about how this tax came to be slipped on. In these days of housing shortage, caravans might play a very useful part. Many of these caravans are superbly fitted. They have adequate equipment; they are easily located. I should prefer to live in almost any kind of caravan than in most of the prefabricated places that I have seen. I was hoping we might have had some concession here, so that people coming back from the war might have been able to set up homes without too great an expenditure, and that the use of the caravans might have been possible as a relief, and a very pleasant relief, to the housing shortage. In these circumstances, as I understand it, the Chancellor has given us his maximum gifts, and it would be of no use to move the Amendment.

There are two Amendments in my name with which I should like to deal. The first relates to mincers. I am sure most married men have helped their wives to do a little mincing. The point I would make to the Chancellor is that in these days of food shortage it is necessary that no food should be wasted, and I think my hon. Friends in all parts of the Committee will agree, that to exempt mincers would encourage the careful women folk even more to use up all their food. I will not weary the Committee by making the point at any length, but I would ask the Chancellor to consider mincers, which are really necessary in these difficult days. I hope he will consider them before the Report stage. The next point is that of domestic pails, those most useful domestic articles. If things get much worse than they are today there will be many of us to kick them. I hope the Chancellor will make a concession on pails before he finally makes up his mind about the limits of the concesssions he can grant.

I was much relieved when the Chancellor came to his well spread list of alleviations, two of which are the subjects of Amendments to which I have put my name. Up to that moment, I thought he had cast himself in a narrower world of high octane sympathy. But there is one article I hope he will try to consider—there is great need for it—and that is the washing machine. I believe that there is no single article, if it became of widespread use in this country, as it is in the United States and in Canada and in other lands, which would bring greater relief to the housewives. Hon. Members opposite sometimes scoffingly seem to indicate that we on this side do not understand the domestic problems of those in our constituencies. I represent a Lancashire industrial constituency, in which I spend a lot of time. I believe that the electric washing machine, if it came into widespread use, would produce an almost greater relief to the housewives than any other single article. It is true its use would be restricted at the present moment, as one of the first results of this magnificent planning we have heard about is, that soap is about to be exhibited as an ornament, rather than employed as an article of general household use. But in spite of that, the sooner we begin the task of getting the electric washing machine into general use the better. This cannot be done, nor can it be produced in mass so that it can be in cheap and general use in every household, unless the impulse is given to it by the Chancellor in meeting this demand for the abolition of, or, at any rate, a reduction in, the tax. I do really impress upon him, that this will do more to relieve the anxieties and the strain upon the housewives than almost anything else. Even if he cannot make his £2 million more elastic, certainly, thinking a little ahead, he might give high priority to the case when next we have to suffer his charity.

There is one question I would like to ask the Chancellor about rabbits. I have a live rabbit club in my constituency, and many of the members are the back garden type of rabbit breeder interested in very ex- pensive types of rabbit fur, which is liable to 100 per cent. tax. I would like to ask the Chancellor if, in considering rabbit skins, he is considering the expensive type of rabbit skins known as Rex fur.

I would like to urge upon the Committee, and the Chancellor, the particular Amendment we are discussing, and that is the question of the pistol for lighting gas cookers, and what is known as a gas match. I wrote to the Chancellor on this and had hoped, as there was such a small amount of tax—

I intervene to say that the case has already been put by the hon. Member for St. Marylebone (Sir W. Wakefield) in relation to the Amendment standing on the Order Paper in the name of the hon. Member for St. Marylebone and the hon. Member for Bath (Mr. Pitman).

I fully understand that and I had hoped it was one in which the Chancellor would concede the case. He has already conceded over mouse-traps and rat-traps, where he has said, de minimis, it does not matter. In this particular case, as I say, I wrote to him and had hoped there would be a concession and I still hope there will be. The cost as I see it is a matter of a very small amount in tax: it is interfering with the business of a firm in my constituency which employs a great number of men. The number of gas pistols which that firm can manufacture is limited by licence granted to that firm for the manufacture, and the amount of Purchase Tax which is accordingly, by reason of the licensing system, in control of the Government is in the order of £27,000 per annum, a very small amount. It is causing great discrimination against a small firm in competition with the big gas cooker manufacturers, who are allowed, with the gas match as part of the cooker, to escape the tax, whereas the small firm, which supplies the gas match or gas pistol for later attachment to the gas cooker is made subject to tax. It is a tax not only small in itself, but one which is imposing a handicap on enterprise in industry. The other item on which I had an Amendment down is on notepaper and other stationery. That matter was raised last year in connection with office machinery. We have now got the situation in which the punched card machine is exempt from Purchase Tax but the cards which it needs to operate are subject to tax.

1.0 a.m.

Similarly, the special roles of stationery which are attached to adding, calculating machines and listing machines are subject to Purchase Tax. Again, there is the case of specially designed stationery.

The factor which we have found in the course of the consideration of this case is that about 95 per cent. of stationery is used for business and productive purposes; stationery is normally not a matter of consumption, but of production. It is part of the business efficiency of this country. The Chancellor has already made an admission in general principle that production should be freed from tax before consumption. Another special feature of this 95 per cent. of all stationery going to production rather than to consumption is the further fact that the amount of tax which the consumer pays to the Chancellor through Customs and Excise is a deduction against his profits in the calculation of the amount of tax paid to the Chancellor through Inland Revenue, so that no doubt the Chancellor considers that he is getting a very much greater yield out of this tax on notepaper and other stationery than in point of fact he is. The meaning of the words "and other stationery" is very wide and was designed to cover matters like charter parties or share certificates, and, in fact, any form of material used in business with which pen and ink or typewriter comes into contact. If one gets a charter party on which one can print the whole of the information, it is not subject to tax, but if the place for the date is left vacant and one merely adds the date, then that immediately makes it become subject to Purchase Tax. Stationery is very full of anomalies in that way, and I would strongly urge the Chancellor to consider this one further concession to be taken into account between now and the Report stage.

I should like to call the attention of the Chancellor to what apparently is a trivial matter, but which would never have been brought to my mind if I had not today received a pathetic letter from a miner. Only a few hours ago I was able to put an Amendment on the Paper regarding what are technically called the transformations or wigs. In this country quite a number of people, unfortunately, suffer from baldness. This miner's daughter after she was five years of age, lost all her hair, and the tragedy of the position is—this man is only a miner—that this girl is now growing up and each wig costs anything from £25 to £35, which includes 100 per cent. Purchase Tax. Consequently, I believe that, while it is only a trivial matter so far as this Committee is concerned, if it a matter of the utmost importance to a person suffering from this complaint. Therefore, I beg of the Chancellor to investigate the position between now and the Report stage and see if he can squeeze into that £2 million bag the complete abolition of the Purchase Tax on goods for the transformation of people who suffer in this way. I am told that Pepys cut his hair and only paid £3 for a periwig. I am also told that the wife of Marcus Aurelius had more than 3,000 wigs. I am sure that, if our Chancellor had been Chancellor to Marcus Aurelius, he would have had no money to pay out for Purchase Tax on wigs. Therefore, I beg of him to do something in this direction.

I rise to refer to an Amendment standing in my name, asking that Purchase Tax on silk and silk fabrics shall be reduced from 100 per cent. to 33⅓ per cent. Some three months ago the hon. and gallant Member for Great Yarmouth (Squadron-Leader Kinghorn), and I, visited the Financial Secretary with a deputation from the silk industry. It was a very representative deputation; the trade unions, the employers and employees were represented. It was received by the Financial Secretary with his usual courtesy. We had a very good hearing, and he whispered, afterwards, that out of all the deputations he had received we had presented our case better than any.

Before the war, the silk industry did go through a difficult time. It had tremendous competition to meet from Japan, Italy, and France, and the industry and the people working in it suffered a great deal. During the war the industry applied itself 100 per cent. to the manufacture of parachutes, in the first place, of raw silk, and then when we ran out of stocks of silk, the industry developed nylon and perfected this new fabric. It was responsible for saving tens of thousands of Allied airmen's lives and it played its part in other aspects of the war effort, such as in the production of insulating material for aircraft. Soon after victory the industry got together to consider how it was going to face the future. It got busy very quickly. It transformed itself back to peace conditions, but it has had every difficulty in its way. Whereas before the war raw silk cost 10s. a pound it now costs 63s. a pound. That figure is high because the Government bought most of our raw silk from Syria, when we were unable to buy from the Far East. They are holding great stocks now and unless prices are reduced immediately there will be a great loss, because America is taking silk from Japan and we shall get about six or eight per cent. of Japanese silk. I am told that the Amercians will sell this at about 40s. or 45s. a pound.

Before the war silk ties made in my Division at Macclesfield sold at from 2s. to 6s. 6d. Today similar ties are selling at 37s. 6d. I would not like to ask where the Chancellor of the Exchequer and the Attorney-General get their ties, but I doubt very much if they come from Macclesfield. I would like to recommend them to sample the square silk from my Division. I am informed that if the Purchase Tax on silk were reduced to 33⅓ per cent., silk ties could be retailed at 12s. 6d. instead of 37s. 6d. I feel there is discrimination regarding this industry, because silk is the only fabric which is taxed at 100 per cent., and silk is not a luxury.

I think many people think that silk is a luxury; it is not. Silk can be used in a gentleman's vest; five or six per cent. of silk merely adds strength to the material, but it involves a tax of 100 per cent. Silk is a fibre which can be used in competition with, and at a lower price than, either rayon, wool, or linen. The cheapest silk stockings were sold before the war at 1s. 11d. a pair. No one could possibly call it a luxury when millions of girls and women were purchasing these stockings. In fact, 80 per cent. of the raw silk imported into this country were put into silk stockings.

I would like to say a few words about the export trade of this industry. The industry at this moment is getting a fair amount of orders from overseas, Scandinavia and other countries, and there are great opportunities. I do ask the Chancellor to see that this industry gets a fair deal at home to assist it in carrying out its contribution to our export programme. The industry is a progressive one; the employers and workers recognise the minimum wage agreement, and if that is to be maintained they must have a home market. It is agreed by all that, if the Chancellor will seriously consider the reduction of the taxation of this industry, it will stand a chance, but if he refuses to yield on this occasion, in a matter of two or three years we may well have tens of thousands of people unemployed in East Cheshire because he will not help us. I do implore him to reconsider the matter.

I wish to raise a point with regard to which I have an Amendment on the Order Paper. It is the reduction of Purchase Tax on children's toys. The Chancellor, in a speech he made about an hour ago, said that he based the concessions that were made on three principles. The first principle, I think he said, was that he had to distribute fairly between the different sections of the community. Now there is one section of the community that has not, so far, received any concession at all, and that is the youngest section of the community. I think we have a principle in this matter. During the years of war they have had very largely to do without toys, though sometimes, it is true, they have had a certain number of parcels sent to them from abroad. But in the main they have had to do without or with second-hand or make-do-and-mend toys.

Toys are now coming on to the market for the first time, practically, since the war. They are in limited quantities and their price is so prohibitive that they are entirely out of the range of a great many families and households in this country. Take, for instance, some of the increases in prices which have taken place since before the war. The price of a doll which cost something like 3s. 6d. before the war is now up to 21s., 6s. 8d. of which is Purchase Tax. The ordinary 6d. bucket before the war now costs half a crown. I do not think there can be any justification for retaining the 33⅓ per cent. Purchase Tax on these cheaper quality toys. The right hon. Gentleman the Chancellor of the Exchequer said the second principle on which he based the concession he made was where it was a necessity. One may argue whether toys are a necessity or not, but they are certainly not a luxury, and I should have said they were a very important part of a happy childhood.

1.15 a.m.

We have talked about concessions being made to the housewives, and the Chancellor of the Exchequer has provided a very large sum for taking off the Purchase Tax on electric irons. The housewives will be relieved of a great deal of trouble and anxiety, but the provision of toys for the children is a very important thing, too, and it would take away a great many of the burdens of the housewives if we could provide a variety of cheap toys in order to keep the children amused. The children have had a lean time during the war. They have been denied a great many of the advantages that they would normally have had. They have been denied normal home life and many other pleasures which they would have expected to enjoy during peacetime. I believe that Members in all parts of the House feel that one of the first things we would wish to do in peacetime is to make up to the children for these recent years. The last ground on which the Chancellor of the Exchequer based his concessions was loss of revenue. I hope he will tell us when he comes to reply what the loss of revenue would be if the Amendment in my name were carried. He will observe that the Amendment is a very modest one. I am not asking for complete exemption from Purchase Tax, but a reduction. There is no justification at all for not making this very modest concession, in my opinion, and I beg of the Chancellor of the Exchequer to make this concession. I beg of him to prove to us once and for all that he is as avuncular as he looks.

The Amendment standing in my name is so small that probably the Chancellor's advisers have not even considered it. I had hoped that as it was so small he would include it, because I believe that under that proletarian neckwear he has a warm heart for the small householders. I put this Amendment, which asks for the exemption from tax of metal clothes poles, forward because in my constituency, and I imagine in everybody else's, there are many small homes where the homely clothes prop is a most important item. For six or seven years, certainly in my constituency, it has been impossible to buy wooden props, and they are now being made of tubular metal of a very light and cheap nature. I hope that the Chancellor will see his way to accept this small Amendment. I am convinced that the total amount of money must be so small as hardly to affect his Budget at all. There are a great many housewives to whom the washing on Monday, or whatever the day is, makes it one of the most important days of the week. The means of putting the washing outside with a clothes prop—[ Laughter. ] It may be something to laugh at, but I do not think it is. I know that in my own home the clothes prop is very important; it is in other places, too. I hope that the Chancellor will be kind enough to think of the housewives who have had to put up with a lot of trouble during the war and cannot get any but metal clothes props on which Purchase Tax is charged and will see what he can do. I hope that hon. Gentlemen who find it so amusing will go home and ask their wives whether I am right or wrong.

I want to ask the Chancellor to consider silk. I am deeply interested in the textile trade, but I am not personally concerned with silk, except that I am of the opinion that the industry has been very harshly treated in regard to Purchase Tax, of which it is paying at the 100 per cent. rate. Earlier this evening, the Chancellor told us of his consultations with Mr. Courtauld. He will realise that a basic product like silk is closely allied to the synthetic fibres. I cannot think of any industry where there is greater scope than in plastics and rayon. That silk should be treated so very harshly is very unfair. I ask the Chancellor to take this matter back for reconsideration. If he makes a concession in the case of silk, and brings silk into line with other fabrics, he may get considerable revenue, which will make the concession worth while.

I support the plea that has been made for the reduction of the tax on pedal cycles. My hon. Friend the Member for Thirsk and Malton (Mr. Turton) has made out an excellent case, especially as affecting the agricultural community In days when I was not a Member of this House and when we were, as I am often told, suffering under Tory misrule, it was possible for people to employ alternative means of progress, such as a motor cycle. Now, even if they have motor cycles, they have no petrol to put into them. I am sure the Committee will agree that country bus services have been much diminished, and that the number of persons who travel on them has also diminished. In spite of a protest meeting the other day, the Government have not seen fit to alter the rules. Never have bicycles been so important, and the Purchase Tax upon them inflicts very great hardship, especially upon the agricultural community. Nothing would give a greater incentive to production in the rural communities than a cheapening of the means of getting to and from where people work or live. Whatever it costs, the Chancellor should give this concession.

As the right hon. Gentleman has made one concession to me tonight, I hesitate to ask for another, but I desire to say a word about the silk industry. I ask the Chancellor to give very serious consideration to the representations which have been made concerning that industry. It cannot continue to bear 100 per cent. Purchase Tax. Irreparable harm will be done to the industry unless some alleviation is given in the immediate future, and I ask that the right hon. Gentleman shall give the matter his urgent and serious attention.

I would like to reinforce the arguments put forward by my hon. and gallant Friend the Member for Henley (Sir G. Fox) with regard to rowing boats used for the purposes of racing. I cannot understand why the Chancellor has given a concession for sailing boats but not for these particular rowing boats. The Chancellor, who is wearing a near-international tie, is apparently not interested in the performance of our boats in competition with those from other countries. Why should we be handicapped? It is true that we can purchase a new boat at an enhanced price, plus Purchase Tax, but it is hardly reasonable or fair. This has a great reaction upon international affairs. It seems rather far fetched to say so, but unless we can put up a good fight against invaders from abroad and beat them in our own boats, it is astounding what reactions that has in our affairs with other countries. When these boats are old, water gets into the timber. They are just as good, but they are not as fast, and the competition which is to take place at the end of next week is very largely a question of the speed of the boats. Why should not our crews be able to buy boats at a reasonable price to enable them to compete on equal terms with competitors from overseas? I see that nobody is listening on the Front Bench opposite, but I would like to salve my own conscience, as one who likes the river and who likes to see the British competitors arrive first over the finishing line. I would ask the Chancellor to be as reasonable in this matter, as he has been on the question of sailing boats.

I have an Amendment on the Order Paper to lower the rate of Purchase Tax on "pictures, prints, engravings and frames therefor." This category of articles includes mechanically produced works of art, and these cover a very wide range. They are to be found in most homes—in fact, in practically every home, and especially the smaller homes. It would be a very great benefit to these poorer people who like these articles in their houses if the Purchase Tax could be reduced. At present it is on the highest rate, which is unfair. We want our people to have brighter homes after all these years of war. The homes are very drab. They have never been so drab and dirty before, and anything we can do to encourage the people to buy these prints and hang them in their homes would be a great help towards restoring brightness to people's lives. The tax, for instance, on a picture sold for a guinea is no less than 10s. 6d. This, of course, is to be compared with the original works of art and hand painted works which bear no Purchase Tax at all. I do urge the Chancellor to bear this in mind when he comes to make his next concession.

1.30 a.m.

We have had a very interesting discussion, according to the procedure which seemed good to the Committee. I have taken a very careful note of all the points that have been raised, and I will speak on one or two of them before I sit down. I will further examine all of them, of course, in the light of the various tests which we have all been discussing—how much it will cost, how widely the effect will be dispersed, and so on. I will touch upon a part of the speech of the hon. Gentleman the Member for Hertford (Mr. Walker-Smith), because his was the only speech which did not fasten on to some particular article. The Committee must forgive me if I say these things more than once. However, if points are raised more than once it is fitting I should repeat my comments. Why do I not at once give everything away to everybody? That would, of course, be very simple. As an immediate consequence, it would promote good feeling and be generally aggreeable to all. But, as a later consequence, it would be disagreeable to all, because unless we retain some proportion in our finances we shall—to repeat a phrase I have used before—not keep within striking distance of a balanced Budget next year. When that time comes it must be a matter for us to decide, but we must be within striking distance. This limits the amount of tax remission which I can give away now under any head at all, whether we are discussing Purchase Tax, Estate Duty, Income Tax, Excise, or what we will.

There is no sanctity about the figure of £2 million, which I took as a working hypothesis for additional concessions tonight. Indeed, so little precise significance, as distinct from approximate significance, did I attach to it that I have already, under pressure of cogent arguments adduced from various sections of the Committee, gone slightly above it. This process cannot be permitted to go on indefinitely. Again I am sorry to quote myself, but a Chancellor of the Exchequer, if he be true to his duty, to his predecessors and to his successors, must be able, now and then, to frame the monosyllable "No." I must frame that monosyllable in reply to many of the requests put before me tonight. I would also remind the Committee that this additional group of concessions which I have offered tonight amount already to the order of £2¼ million and those now set out in the Schedule will amount in a full year to more than £15 million. Therefore, in this financial year alone, as far as we have yet gone, approximately £17¼ million of Purchase Tax revenue has been surrendered. One further reason why it would be wrong to give way too widely and on too great a scale to the various requests is this. I often hear that there are great dangers of inflation. I myself have often said there is a risk of inflation. I distinguish a good deal between a risk of inflation and an actual arrival at anything that could be properly called inflation. The two things are quite different. This is one of the safeguards against this risk exploding in our midst with disastrous consequences. One of the safeguards is that we should maintain, not only the Purchase Tax but various other taxes which mop up purchasing power which might otherwise go astray. It diminishes the gap between revenue and expenditure, which might have to be bridged by financial devices, such as loans, which might have an inflationary tendency. The noble Lord shakes his head, but I thought I was saying something with which everyone would agree.

It is the ever rising prices, as the result of the continual fight between the men working in different industries to get higher wages.

I do not want to be led off on that. All I am saying is that one way to reduce the risk of inflation is in the Purchase Tax. It limits and defers purchasing power from rushing in too great quantities towards a scarce supply of goods. All this is in reply to the hon. Gentleman the Member for Hertford, who, I see, has now returned, and who made as interesting a contribution to our discussion as he does to our Sunday reading each week.

I am sure the Committee would not expect me, so many claims having been deployed, one after another, in the discussion we have had, to make any commitment now, after having said I am to give away some £2,250,000, which is additional to what I have already proposed in the Bill—and to the £48 million I am to lose on beer money—I shall not be expected to make any further commitment. But what I will undertake to do is carefully to set in a row and compare, one with another, the various additional suggestions that have been made tonight. Some of them, obviously, are exceedingly good cases for tax reduction, provided the general revenue situation permits. Children's toys, for example, and other cases which have been put forward, obviously, have very strong claims for tax relief, provided the general financial situation permits it, and if it can be given at reasonable cost. The noble Lady the Member for Anglesey (Lady Megan Lloyd-George) has spoken, in particular, of the cheaper toys, wondering whether we could get some kind of relief of Tax, limited to cheaper toys. I have thought of that before; it has appealed to me, and I have had a preliminary investigation made into it. Many difficulties seem to emerge, but I shall be very happy to look at it again, and, similarly, at all the other cases, including bicycles and all the others of which I have taken a careful note, and will read of again in HANSARD.

But I must strike a note of caution, so as not to be misunderstood by the Committee. I have gone almost as far as I think is wise, at this moment, for me to go; and even though there may be disappointment, for the time being, in some sections of the Committee, I must be prepared to face that, rather than win easy popularity by making reliefs which I do not think I should be justified in making. I hope, this having been said, and this commitment having been made, and there being scope for future discussion on particular points which I must put down and which hon. Members may wish to discuss on the Report stage, that we may now, without further effluxion of time, get the Purchase Tax Schedule of the Bill. We have had a long discussion, on experimental lines. It has been an interesting experiment, which may be useful in the future. I would be grateful if the Committee would be prepared soon to reach an effective decision.

An Amendment was moved in the earlier part of the proceedings. It is to Schedule 3, page 53, line 22, at end, insert: "Rat and mousetraps and fireguards." It was moved by the hon. Member for Tonbridge (Mr. G. Williams).

Where I have given a straight concession the course is for the Amendment to be withdrawn.

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The only information I have had of hon. Members desiring to move Amendments is of one by the hon. Member for Henley (Sir G. Fox). Are there any other Amendments to be moved?

May I intervene again here? I gave an undertaking to look at the cases raised, including bicycles. In spite of this, if it is the intention to divide the Committee, hon. Members will put me in the position of asking the Committee to vote against that proposal. This will make it difficult to get the matter considered at a later stage. That is what will have to happen because I will not give anything more away.

The Chancellor earlier made a statement that he would be making a decision upon that Amendment later. As far as bicycles are concerned he has not shown a case at all for including them.

Does the hon. Member for Henley (Sir G. Fox) desire to move his Amendment?

I beg to move, in page 54, line 11, at the end, to insert "Pedal cycles."

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

The Committee divided: Ayes, 77; Noes, 188.

Division No. 221.]

AYES.

[1.45 a.m.

Agnew, Cmdr. P. G.

Fletcher, W. (Bury)

Langford-Holt, J.

Aitken, Hon. Max.

Fox, Sqn.-Ldr. Sir G.

Lindsay, M. (Solihull)

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

Galbraith, Cmdr. T. D.

Linstead, H. N.

Assheton, Rt. Hon. R.

George, Maj. Rt. Hn. G. Lloyd (P'ke)

Lucas, Major Sir J.

Baldwin, A. E.

Gomme-Duncan, Col. A. G.

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

Barlow, Sir J.

Harvey, Air-Comdre. A. V.

Mackeson, Lt.-Col. H. R.

Bossom, A. C.

Haughton, S. G.

McKie, J. H. (Galloway)

Boyd-Carpenter, J. A.

Head, Brig. A. H.

Macmillan, Rt. Hon. Harold (Bromley)

Bracken, Rt. Hon. Brendan

Henderson, John (Cathcart)

Maitland, Comdr. J. W.

Buchan-Hepburn, P. G. T.

Hinchingbrooke, Viscount

Manningham-Buller, R. E.

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

Hurd, A.

Marsden, Capt. A.

Clifton-Brown, Lt.-Col. G.

Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

Mellor, Sir J.

Conant, Maj. R. J. E.

Jarvis, Sir J.

Morrison, Maj. J. G. (Salisbury)

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

Jeffreys, General Sir G.

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

Crowder, Capt. J. F. E.

Jennings, R.

Neven-Spence, Sir B.

Cuthbert, W. N.

Kingsmill, Lt.-Col. W. H.

Peto, Brig. C. H. M.

Donner, Sqn.-Ldr. P. W.

Lambert, Hon. G.

Pickthorn, K.

Drewe, C.

Lancaster, Col. C. G.

Pitman, I. J.

Prescott, Stanley

Stuart, Rt. Hon. J. (Moray)

White, Sir D. (Fareham)

Prior-Palmer, Brig. O.

Studholme, H. G.

Williams, Gerald (Tonbridge)

Ramsay, Maj. S.

Sutcliffe, H.

Winterton, Rt. Hon. Earl

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

Teeling, William

York, C.

Ropner, Col. L.

Thornton-Kemsley, C. N.

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

Scott, Lord W.

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

Shepherd, W. S. (Bucklow)

Touche, G. C.

TELLERS FOR THE AYES:

Stanley, Rt. Hon. O.

Wakefield, Sir W. W.

Mr. Turton and

Stoddart-Scott, Col. M.

Walker-Smith, D.

Mr. Crosthwaite-Eyre

NOES.

Adams, Richard (Balham)

Hall, W. G. (Colne Valley)

Popplewell, E.

Attewell, H. C.

Hamilton, Lieut.-Col. R.

Porter, G. (Leeds).

Austin, H. L.

Hardy, E. A.

Pritt, D. N.

Awbery, S. S.

Harrison, J.

Proctor, W. T.

Bacon, Miss A.

Henderson, Joseph (Ardwick)

Pryde, D. J.

Baird, Capt. J.

Herbison, Miss M.

Pursey, Cmdr. H.

Barton, C.

Holman, P.

Randall, H. E.

Bechervaise, A. E.

Holmes, H. E. (Hemsworth)

Ranger, J.

Belcher, J. W.

House, G.

Rankin, J.

Berry, H.

Hubbard, T.

Rees-Williams, D. R.

Blyton, W. R.

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

Reeves, J.

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

Hynd, H. (Hackney, C.)

Ridealgh, Mrs. M.

Braddock, T. (Mitcham)

Irving, W. J.

Roberts, W. (Cumberland, N.)

Brown, George (Belper)

Janner, B.

Royle, C.

Brown, T. J. (Ince)

Jeger, G. (Winchester)

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

Burke, W. A.

Jones, D. T. (Hartlepools)

Sharp, Lt.-Col. G. M.

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

Keenan, W.

Shawcross, C. N. (Widnes)

Callaghan, James

Kenyon, C.

Shawcross, Sir H. (St. Helens)

Champion, A. J.

Kinghorn, Sqn.-Ldr. E.

Silkin, Rt. Hon. L.

Chetwynd, Capt. G. R.

Kirby, B. V.

Simmons, C. J.

Clitherow, Dr. R.

Lang, G.

Skeffington, A. M.

Cobb, F. A.

Lavers, S.

Skinnard, F. W.

Cocks, F. S.

Lee, F. (Hulme)

Smith, Capt. C. (Colchester)

Colman, Miss G. M.

Lee, Miss J. (Cannock)

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

Comyns, Dr. L.

Leonard, W.

Snow, Capt. J. W.

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

Lewis, A. W. J. (Upton)

Sorensen, R. W.

Dalton, Rt. Hon. H.

Lewis, T. (Southampton)

Soskice, Maj. Sir F.

Davies, Edward (Burslem)

Lindsay, K. M. (Comb'd Eng. Univ.)

Sparks, J. A.

Davies, Harold (Leek)

Logan, D. G.

Stephen, C.

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

McAllister, G.

Stokes, R. R.

Davies, S. O. (Merthyr)

McGovern, J.

Swingler, S.

Deer, G.

Mack, J. D.

Symonds, Maj. A. L.

Delargy, Captain H. J.

McKay, J. (Wallsend)

Taylor, H. B. (Mansfield)

Diamond, J.

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

Taylor, R. J. (Morpeth)

Dodds, N. N.

McKinlay, A. S.

Thomas, George (Cardiff)

Driberg, T. E. N.

McLeavy, F.

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

Dugdale, J. (W. Bromwich)

MacMillan, M. K. (Western Isles)

Thorneycroft, H. (Clayton)

Durbin, E. F. M.

McNeil, H.

Thurtle, E.

Ede, Rt. Hon. J. C.

Mallalieu, J. P. W.

Tiffany, S.

Edwards, N. (Caerphilly)

Mann, Mrs. J.

Timmons J.

Evans, S. N. (Wednesbury)

Manning, C. (Camberwell, N.)

Tolley, L.

Evans, John (Ogmore)

Manning, Mrs. L. (Epping)

Usborne, Henry

Fairhurst, F.

Mathers, G.

Vernon, Maj. W. F.

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

Mayhew, C. P.

Wadsworth, G.

Follick, M.

Messer, F.

Walker, G. H.

Foot, M. M.

Middleton, Mrs. L.

Watkins, T. E.

Forman, J. C.

Millington, Wing-Comdr. E. R.

Watson, W. M.

Fraser, T. (Hamilton)

Mitchison, Maj. G. R.

Weitzman, D.

Freeman, Maj. J. (Watford)

Monslow, W.

White, C. F. (Derbyshire, W.)

Gallacher, W.

Morley, R.

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

George, Lady M. Lloyd (Anglesey)

Morris, P. (Swansea, W.)

Whiteley, Rt. Hon. W.

Gibbins, J.

Murray, J. D.

Wigg, Col. G. E.

Gibson, C. W.

Nally, W.

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

Gilzean, A.

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

Wilkes, Maj. L.

Glanville, J. E. (Consett)

Noel-Buxton, Lady

Willey, F. T. (Sunderland)

Goodrich, H. E.

O'Brien, T.

Williams, W. R. (Heston)

Gordon-Walker, P. C.

Oldfield, W. H.

Williamson, T.

Greenwood, A. W. J. (Heywood)

Paget, R. T.

Willis, E.

Grey, C. F.

Paling, Will T. (Dewsbury)

Yates, V. F.

Griffiths, D. (Rother Valley)

Pargiter, G. A.

Zilliacus, K.

Griffiths, Rt. Hon. J. (Llanelly)

Pearson, A.

Guest, Dr. L. Haden

Peart, Capt. T. F.

TELLERS FOR THE NOES:

Gunter, Capt. R. J.

Perrins, W.

Captain Michael Stewart and

Guy, W. H.

Platts-Mills, J. F. F.

Mr. Bing

Does the hon. and gallant Member for Macclesfield (Air-Commodore Harvey) desire to move his Amendment relating to silk goods and fabric?

I feel that the Chancellor of the Exchequer has got out of this situation very lightly, if I may say so, but I am not going to press for a division on this Amendment if the Chancellor will give an assurance that he will particularly investigate my Amendment, because it does affect the whole industry, and a great number of people. It is not a question of luxury. Will the Chancellor promise to look into this thoroughly?

I certainly will with great pleasure so promise. But I hope the hon. and gallant Gentleman will not embarrass me by forcing me to vote against what he wants.

The hon. and gallant Gentleman cannot withdraw the Amendment. He has not moved it.

Motion made, and Question proposed, "That this be the Third Schedule to the Bill."

On a point of Order. May I draw attention to the Amendment in page 53, line 35, to leave out "Epidiascopes." This is an Amendment of an entirely different nature—

On a point of Order. I wish to know whether the rather novel procedure followed this evening debars any hon. Member from bringing to the attention of the Chancellor of the Exchequer points arising from Amendments proposed here, whether or not the Chancellor has promised to make concessions or look into them.

I have not on the Order Paper a formal Amendment, but I wish to raise a point on the Third Schedule with reference to china, porcelain, earthenware, stoneware, and other pottery ware. There is a qualifying statement preceding the reference in the Schedule indicating that these articles which indicate that in this connection

"the following articles are to be of a kind used in the preparation or serving of food or drink."

The only observation I wish to make is, that in the area from which I come—the Potteries—while great appreciation is felt of the concessions which the Chancellor has already made, it is also felt that it would have been reasonable not to have restricted the removal of the tax to articles used for the preparation of food and drink, but extended it to one or two other articles. I hope the Chancellor may be kind enough, when he considers other items, to bear this in mind and perhaps give us his point of view. The Chancellor said that considerations of necessity and of usefulness to various sections of the community, were the principles which would guide him. I suggest that he should give attention to certain articles which are of interest to very member of the community. I refer to things like bed-pans, hospital ware which is necessary both in the home and in the hospital, toilet ware, ewers and basins and other sanitary conveniences. These are of great importance to many working class families who have not got the modern homes which we on this side of the Committee are going to provide them with, very soon I hope. I would say in passing that at the moment there is a Purchase Tax of 33⅓ per cent. upon these very necessary articles, whilst on articles of enamel toilet ware there is a Purchase Tax of only 16⅔ per cent. It is felt we are making a reasonable request. The industry has already made written representations to the Chancellor, but I understand he felt unable to do anything about these concessions immediately. I believe that we have a very good case, and if the Chancellor feels unable to make the concession in the days immediately ahead, perhaps there will be another opportunity, when he will give consideration to it.

Question, "That this be the Third Schedule in the Bill," put, and agreed to.

FOURTH SCHEDULE.—(Purchase Tax. Chargeable processes: relevant classes of goods.)

2.0 a.m.

I beg to move, in page 57, line 24, after "skin," to insert "other than of rabbit."

The Chancellor of the Exchequer undertook to accept this and a subsequent Amendment, but in view of the observations he has made since, I propose to move it.

I have no objection in principle to accepting this Amendment. I thought that it might be more convenient to look at the question as a whole on the Report stage. I can assure the hon. Member that there is no catch in this. If he strongly presses me to accept this Amendment I will do so now, but I thought it would be more convenient to take this point in conjunction with other matters which we have discussed and examine it before the Report stage. I do not press that, however, and if it will make the hon. Member feel safer, I will accept the Amendment.

The Chancellor of the Exchequer gave a clear and definite

Exceeding

12,500

and not exceeding

15,000

7·2

Exceeding

15,000

and not exceeding

18,000

8·4

Exceeding

18,000

and not exceeding

21,000

9·6

Exceeding

21,000

and not exceeding

25,000

10·8

Exceeding

25,000

and not exceeding

30,000

12·0

Exceeding

30,000

and not exceeding

35,000

13·2

Exceeding

35,000

and not exceeding

40,000

14·4

Exceeding

40,000

and not exceeding

45,000

15·6

Exceeding

45,000

and not exceeding

50,000

16·8

Exceeding

50,000

and not exceeding

55,000

19·5

Exceeding

55,000

and not exceeding

65,000

20·8

Exceeding

65,000

and not exceeding

75,000

22·1

Exceeding

75,000

and not exceeding

85,000

23·4

Exceeding

85,000

and not exceeding

100,000

24·7

Exceeding

100,000

and not exceeding

120,000

26·0

Exceeding

120,000

and not exceeding

150,000

28·6

Exceeding

150,000

and not exceeding

200,000

31·2

Exceeding

200,000

and not exceeding

250,000

33·8

Exceeding

250,000

and not exceeding

300,000

36·4

Exceeding

300,000

and not exceeding

400,000

39·0

Exceeding

400,000

and not exceeding

500,000

41·6

Exceeding

500,000

and not exceeding

600,000

44·2

Exceeding

600,000

and not exceeding

800,000

46·8

Exceeding

800,000

and not exceeding

1,000,000

49·4

Exceeding

1,000,000

and not exceeding

1,250,000

52·0

Exceeding

1,250,000

and not exceeding

1,500,000

54·6

Exceeding

1,500,000

and not exceeding

2,000,000

58·5

Exceeding

2,000,000

65·0

The right hon. Gentleman the Chancellor of the Exchequer was kind enough to give a very friendly reception to certain suggestions which I submitted to the Committee yesterday. While I do not feel absolutely confident that he is going to extend the same benevolence to the Amendment now before the Committee, there are certain considerations which I think it my duty to submit on this matter and which I wish to press very seriously upon the Chancellor's attention. Before I come to the details of the Amendment I had better put myself right by making clear that I have no personal interest in this matter. I have never received a bequest, and anything I may leave

assurance late the night before last or early yesterday morning that he would accept this Amendment. I am sure that he would not like to break his undertaking.

Amendment agreed to.

Further Amendment made: In page 57, line 26, after "skins," insert: "other than of rabbit."—[ Mr. Turton. ]

Schedule, as amended, agreed to.

Fifth to Eighth Schedules agreed to.

Ninth Schedule

I beg to move, in page 64, to leave out lines 14 to 33, and to insert:

behind me when I go is not likely to add much grist to the Chancellor's mill. I hope I may be acquitted of uncharitable feelings towards the Chancellor if I add that I sincerely trust that when that time comes he will not still be the occupant of his present office.

The effect of the Amendment would be to maintain at their present rates the whole scale of Estate Duty, which it is proposed to increase, while retaining the reductions in the lower ranges which are proposed in the Bill. I do not commend the Amendment on any plea of hardship, though such arguments might be advanced. I look at the matter entirely from the standpoint of expediency and on purely economic grounds. I would like to make one point only on the score of hardship, and that is that before contemplating any additions to the already very heavy scale of Estate Duty, especially in the higher ranges, the Chancellor might have given consideration to the undoubted hardship involved in the treatment of spouses, where an estate passes at death. The husband and wife are treated, for purposes of Income Tax and Surtax, as one person, but when an estate passes at death from one spouse to another, tax is levied as though there was no relationship at all. I suggest that that is a matter which might have been considered before increases in the general scale were contemplated.

The proposal to increase the scale of Estate Duty can be criticised on several grounds. The first is that the proposal is entirely inflationary in tendency. The Chancellor made some reference to inflation a short time ago. I notice that in the speech, I think it was at Bournemouth, he said that the worst dangers of inflation were already past. I wish I could agree with him. I do not. I think the danger is still with us and that it is very serious, for a variety of reasons. Purchasing power has been increased in various ways—payment of postwar credits, payment of family allowances, which will begin in August, will add many millions to the purchasing power of the community; and £48 million which would have been spent on beer will be available for other purposes because the beer will not be there.

There is the effect, to which the noble Lord the Member for Horsham (Earl Winterton) referred, of the steadily increasing level of prices which is going to be affected by the increase of prices of overseas products. Any increase in price levels, whether it is due, in the first instance, to inflation or not, carries with it the risk of inflation. Therefore, in my view, the risk of inflation is still very serious, and demands constant vigilance. There are the withdrawal of savings, the encashing of savings certificates and so on.

The right hon. Gentleman must forgive me, but he has not indicated how the question of inflation is relevant to the Amendment.

I am just coming to the point. I have said that the first ground on which I criticise the proposed increase is that it is likely, in my view, to have an inflationary effect. I will now develop that point. There is a very present risk of inflation. In my speech during the Debate on the Buget Resolution, I referred to the inflationary effect which all excessive taxation is liable to have. It arises in various ways, in so far as heavy taxation diminishes an incentive to keep prices down, and substitutes a temptation to allow prices to rise, so that the benefit of the inevitable automatic consequent reduction of debt charges and other standing charges may be enjoyed. For that and other reasons, excessive taxation has an inflationary tendency. That tendency is specially marked in the case of Estate Duty, in the first place because extravagant expenditure is incurred where otherwise capital might be accumulated. In the second place, when the tax comes to be paid, capital which is static and which, for practical purposes, is dormant, becomes mobilised. I am putting the points as briefly as possible, but I do maintain that an excessive rate of Estate Duty has a peculiarly inflationary effect. If I am right, obviously an increase which puts 65 per cent.—already a very high rate—up to 75 per cent. must accentuate that inflationary tendency.

Would the right hon. Gentleman say that an increase in Death Duties which decreases the Budget deficit is inflationary?

I am coming to that in a moment. I do say that the tendency is definitely inflationary. I now come to the second point that I wish to make. I am sure the Committee will realise that I am trying to deal as briefly as possible with a subject that might justify quite a long speech. This again is a point which I made when we were discussing the Budget Resolution in the first instance. I think it is inevitable that this increase in Death Duties must have a very unfortunate effect on certain types of business which are personal, perhaps old-fashioned, but which are proprietary business which add to the economic strength of the country. I think it will be very difficult to maintain those businesses in their present form and on their present footing when the capital invested in the businesses has, to a large extent, to be realised in order to pay Estate Duty. I now come to my third point. Here again I have to refer to a remark which the Chancellor made, according to newspaper reports, in the speech to which I have already made reference, when he said that already the financial proposals he had submitted to Parliament had made, I think he described it as a "small beginning" in the process of the redistribution of wealth. I think he was too modest in that claim. I do not know whether I have quoted him correctly.

"A modest beginning." Here is this proposal, essentially a proposal for the redistribution of wealth, and it is a redistribution in a way which will involve a reduction, and a marked reduction, in taxable capacity. That is the point I want to stress. I am now answering the point made by the hon. Member for South Norfolk (Mr. Mayhew). If the Chancellor has ever had occasion to examine the practicability of a capital levy—and this, so far as it goes, is, in effect, a capital levy—he will, I am quite sure, have been forced to the conclusion that with direct taxation at its present level a capital levy would not be worth while, simply because of the consequent loss of revenue to the Exchequer from the highest ranges of income. This increase in the rate of duty on the highest estates will undoubtedly have an effect, and I think a more than compensating effect, in a reduction in the yield of Surtax. For all these reasons, which I repeat I have stated very briefly, I suggest that the Chancellor would have been well advised to have left the highest rates of Estate Duty where they are for the time being.

I am very much obliged to the right hon. Gentleman my predecessor for stating his case for this Amendment with so much clarity, with his habitual moderation and logical approach. I do not agree with the case he has put forward, and I will offer some reasons why I cannot advise the Committee to accept the Amendment. It would in the first place, deprive me of £25¾ million this year. That is, of course, much more than it is reasonable to contemplate surrender- ing on any ground at all. In this case I will take the preliminary points before I come to the final point put by the right hon. Gentleman. I told the Committee I had been having a look at the Death Duties and in particular at the Estate Duty. It is only the Estate Duty in which I have proposed any change of any kind this year. That change, as the right hon. Gentleman knows, is of a twofold character, being in part, in terms of the number of estates affected, a very sweeping reduction of the Estate Duty clearing no fewer than 150,000 out of a total of 200,000 which otherwise would be taxable. On the one hand, that is a very substantial reduction of duty on the smaller estates, not merely by the lifting of the rate of the limit of liability from £100 to £2,000 but by a further regrading of the rates of duty from £2,000 upwards to a figure of £7,500. I have also had in mind—I have not made any proposals this year, but I might make them on a later occasion—modifications in the rest of the Death Duty structure; that is to say, in the legacy and succession duties. I propose no change there this year, but I mention it because it is in regard to these duties that account is taken of relationships between those who die and those who inherit; account is taken there of the interests of surviving spouses and surviving children, and so on. It seems to me to be the appropriate place, unless we are going to recast the structure of the duties more fundamentally than either the right hon. Gentleman or I have had in mind. It is there that account is taken of the interests of surviving spouses. Though I do not say the point has been totally absent from my mind, it seems to me better to keep Estate Duty in the form in which it is, falling in a steady gradation, and to reserve for consideration in the rest of the Death Duties field, the question of relationship.

The right hon. Gentleman will, of course, appreciate that if action is confined to legacy duty, the relief which might be held to be due to the surviving spouse could not be given.

That may well be. My point is simply that, if we are considering how best to make provision to ensure that the surviving spouse is fairly treated, it is better, I think, to leave it outside the Estate Duty field. I was merely anxious not to ignore the point made by the right hon. Gentleman about surviving spouses.

More fundamental is the right hon. Gentleman's objection to the increase in the scale which I have proposed to the Committee. I consider—and I am not alone in thinking so, as I shall show by quotation in a moment—that this, on the whole, is a beneficial arrangement. But if we need revenue in the great quantities that we do, then I do think estates have considerable taxable capacity, and there is much to be said for taking something more from that source. I do not follow the right hon. Gentleman—not in the sense of not understanding him, but in the sense of not agreeing with his view—that this will have an inflationary effect. I will not weary the Committee with a long counter-argument, but I should have thought that a tax levied on property passing at death was one of the least inflationary possibilities in the whole fiscal field. After all, a great deal of this is paid by the sale of securities. In another part of my proposals I am seeking to encourage payment in the form of transference of land, in which there can be no inflationary tendency whatever. All that happens there, is that real property changes hands. I think it can be shown that, in other aspects, the payment of Estate Duty, far from being inflationary, does enable the State to acquire revenue without having any such ill effect, and in so far as it does so—

There is not a great deal of bank money involved in the ordinary case. In the ordinary case some property is sold, changes take place, securities pass from one to another. I do not think the right hon. Gentleman's argument on that point is convincing. The right hon. Gentleman also spoke about the other tendencies to inflation. He has just whispered or mumured or spoken of "bank money." I have never denied that this is a period in which there is a danger of inflation. The danger began before I went to the Treasury, and will continue for some time. It would be out of Order to argue that at any length. One of the factors which is tending to abate the inflationary risk is the fact that we are bringing the Budget closer towards a condition of equilibrium and the more closely we bring it towards that condition the more this inflationary risk will abate, and the less danger there will be that we shall resort to the dangerous use of bank money which may itself be a seed of inflation. So much for that argument. The right hon. Gentleman proposes to accept the reduction I suggest on the lower levels of Estate Duty but to reject it on the higher levels. I do not think that is reasonable at all. It is quite true that the proposal is a proposal for the redistribution to some extent of the wealth of the country on which the heaviest duty after all falls. A duty of 75 per cent. has been mentioned. That is at the top end of the scale and falls only on estates of £2 million or more. These are not now very numerous so it cannot be denied that some re-distribution is healthy where £2 million has come into the hands of some people. I am encouraged in this by an article, a very good article which touches on this very point and appeared only today—no, it was yesterday. One loses count of the days with these late sittings. This article is concerned with this Debate which has been initiated by the right hon. Gentleman. It appeared in the "Evening Standard" and is not signed. I do not know whether Lord Beaverbrook interferes with the conduct of his papers much but the writer of the article says:

"Mr. Oliver Stanley's name stands at the head of a motion to amend the estate duty-provisions of the Finance Bill now before Parliament."

and then there is this passage in which the leader writer says:

"The Tory Party which in the past has itself been responsible for the heavier incidence of death duties, should make it plain that Mr. Stanley, and those who support him in his proposal, are representative only of their own opinion."

It goes on to urge:

"Rich fathers should be grateful to Mr. Dalton that he is making impossible a similar perpetuation of their wealth. Nothing is more corrupting to a youth than the prospect that at some certain time, as an apple drops from a tree, a fortune enough to make him forever self-sufficient will drop into his lap. Nothing is more seductive than the temptation to make a solid inheritance the foundation for a life of solid idleness."

and finally the leader writer states:

"It is said that Mr. Dalton's level of death duties will make it impossible to maintain the great landed estates. But if a 75 per cent. tax will kill them, so will Mr. Stanley's 65 per cent. tax. The Chancellor's proposals are a fair method of raising money for the benefit of ordinary and overburdened taxpayers; and by his cruelty to the pockets of rich men's sons he does a true kindness to their souls."

and the leader writer then goes all poetical and ends the article with the quotation:

"Ill fares the land, to hast'ning ills a prey, Where wealth accumulates, and men decay."

What need have we of any more persuasive witness. If we have I need only draw attention of the Committee to that distinguished writer, the hon. Member for Hertford (Mr. D. Walker-Smith) who only last Sunday, gave voice to very similar arguments in the column which he signs in Lord Beaverbrook's Sunday organ. He did say in that article in effect—I am not quoting him exactly—that the Conservative Party was rather misguided in raising the matter the way they were doing and proposing to divide the Committee on it. Perhaps the hon. Gentleman would like to tell the Committee exactly what he did say.

2.30 a.m.

I should be less than human if even at this early hour I rejected so tempting an invitation from the right hon. Gentleman. What I did say in the article—which was quoted but not in extenso by the right hon Gentleman yesterday evening when I was not able to be present—was that I consider it to be a mistake for any party to seek to intervene on behalf of the very high figures in the later serials of this Schedule. If this Amendment were confined to say the first 10 or 15 of the serials set out here, then I should say it was the proper thing to do. Having been invited to make my position clear, and deeming it my duty to do so, I would conclude by saying that, in view of the present burden placed upon the ordinary taxpayer, by way of taxation on earned income, with which is bound up the whole question of incentives, I cannot conscientiously press for a relaxation of the duty on these very high estates which are in the later parts of the Schedule.

I am sure we are all most interested to have heard the hon. Gentleman. He writes very courageously and even in some respects against his party, As I have said, I always read him with attention. I think there is a large body of opinion in the country which will agree with us here, with Lord Beaverbrook and with the hon. Member for Hertford. It is a great mistake that this matter should be raised in this way, and I can only ask the Committee to reject the Amend- ment on the ground that it will deprive us of revenue to the extent of £25¾ million, the most justly raised revenue we have.

I should not like the speech of the Chancellor of the Exchequer to pass without a word of comment, early in the morning though it may be. I think it is a great pity that so much time has been taken up by reading extracts and counter-extracts from Lord Beaverbrook's newspapers. We all wish to see a free Press, and to see opinions expressed with the utmost frankness and contrary to the ordinary party lines, but it would be a great infliction upon us, if we were to have all this read over to us again at this time, and have to undergo as it were a repeat of what we had perhaps already noticed when we opened our morning newspapers. The question raised by my right hon. Friend the ex-Chancellor of the Exchequer, the Member for the Scottish Universities (Sir J. Anderson), is a very serious and complicated question. It raises this issue of whether it is a good thing to eliminate very rich people and whether in a country wealth should be abolished. That is arguable. I am not interested in the matter, because I have never been a very rich person. The right hon. Gentleman's party have set out to abolish poverty, though they have not been successful in doing so, but the abolition of wealth is well within their power. They can eliminate large fortunes by legislation, in Budget after Budget, together with prolonging, in times of peace, taxation induced by the extreme needs of war. That is what they will quickly achieve.

Whether the country will be the better or the worse for it is a question which runs into all kinds of ethical and philosophical aspects, as well as into those which are economic. The duty of the Chancellor of the Exchequer is to think of revenue and I am of opinion that, from the point of view of the revenue, the elimination of what I might call the most obvious and fruitful taxpayers will be a source of decline. Here are people who pay these excessive, high rates. Soon they will vanish. Very soon they will disappear. You may say that it is a good thing. I am not deciding in my own mind whether or not it is a good thing. But from the point of view of the revenue it is a bad thing. It is better to have one man who leaves £2 million than ten men who leave £200,000, because of the much larger yield to the Exchequer. Because of the accepted principle in this country of scaling up the Death Duty and Income Tax there is no doubt of that. Also it applies that if you have an estate of £2 million a year the person who owns it will conserve a great part of it which will be amenable to future taxation. It does not follow then that the elimination of the larger taxpayer will be more fruitful to the revenue. It will be less fruitful. It is also true to say that the existence of a number of very considerable fortunes will lead to greater expenditure. These are facts, and if only the right hon. Gentleman would consult his statisticians at the Treasury he would ascertain that they are facts. That is on the question of the revenue. The right hon. Gentleman has made a most courteous and careful anwer to statements made in the Debate. All the same I think he is animated by spite. He said the other day that he would not offer his sympathy, that he had no sympathy, with the very rich. I am sure they would not want his sympathy. It would be very unpleasant. But the question is not one of sympathy; it is revenue with which the right hon. Gentleman is concerned. The whole course of his finance is towards the elimination of great fortunes and destroying large revenues. It is also calculated to produce many other minor deterrents to enterprise and production with which we need not trouble ourselves at present. But that is the consequence of the course which the Chancellor pursues—a deep injury to the revenue.

Then there is the question of inflation. Undoubtedly the effect on an estate, three-quarters of which is to be confiscated on death, is to encourage the expenditure of money during lifetime, contrary to all our desires for saving and so forth. These matters are not important from one point of view because you could count on the fingers of your hands and on your toes as well, probably, all the persons who will be affected by this legislation. You can sweep them away. I see that there are only 32 persons who pay tax above a certain scale. In his career the Chancellor will undoubtedly eliminate them, and while he is doing so, he will be diminishing the various productive and provident processes, and when he has done that, he will have a taxpayer popu- lation which will yield a less fruitful revenue than that which he now enjoys. But that the process is popular no one can deny. You can get loud cheers by advocating it. But the question we are concerned with is whether it is a fruitful, thrifty method of fostering the revenues of the Exchequer, and a healthy, harmonious and enriching process for developing the wealth of the State and of the country. That has not been answered. Neither from the point of view of the revenue nor in respect of the danger of inflation, have the arguments of my right hon. Friend the ex-Chancellor been in any way met. This country now marches on into very different financial scenes, and its fortunes will not be altered by whether or not you abolish all property above a certain amount. It will not be affected by that in a decisive fashion, but in so far as this kind of taxation has any influence at all, it is detrimental to the general wealth and undoubtedly it is detrimental to the broad, free, progressive, natural development of our country and its economic life.

The right hon. Gentleman has an extraordinary responsibility cast upon him. He is the inheritor of all the taxation voted by the Conservative Party—voted by the vast Conservative majority in the late House of Commons, in order to win the war. He has that immense revenue confided to him. He ought not to let his desire to win a cheap cheer, he ought not to let the advantage of wreaking some petty feeling of jealousy or spite, to lead him into courses which are detrimental to the revenue, and although I do not say they are large enough to affect the general course of our affairs they are, at the same time, injurious to our general wealth-producing capacity. After all, what are you dealing with? You are dealing with a trifling portion of the population in order to sweep it away. In war time all was offered, all was given. You can sweep them away, but remember where we have got to now. We have reached a point at which there is no more taxing the rich in order to give social advantages to the rest of the community. The parish is on the parish. You have put the whole community on itself. In the future, as you advance further upon the path of social reform, you will no longer be taking away the rich man's money amid loud cheers. All you will be doing will be showing the working man that the political parties can spend his wages for him better than he can himself.

2.45 a.m.

Truly, I will not keep the Committee more than a few minutes. The right hon. Gentlemen opposite have repeated again and again this theory that the Death Duties in some way are inflationary, in some way destroy capital and in some way have some very obscure, harmful effects on our economy. I maintain that if one looks through the history of the Conservative Party, one will find that they have one predominant role—to put forward obscure and fallacious economic arguments in defence of social injustice. This evening we have seen a prime instance of that role of the Conservative Party. To say that this increase in Death Duties in inflationary is sheer, arrant nonsense. It has been already completely countered by what the Chancellor has said. The facts are that taxation cannot be inflationary. It is the expenditure which is inflationary. That is a commonplace which would be known to any first term undergraduate, that taxation cannot be inflationary but that it is expenditure which causes inflation. Let us take this particular increase in Death Duties. What matters is what one does with the proceeds of the tax when one has raised the money. Hon. Members opposite, if they are fair, will agree with this. If the proceeds of this increase in Death Duties go to decrease the Budget deficit, that cannot be inflationary. That is self-evident. If all that happens is that money or securities are taken from private individuals and go to decrease the Budget deficit, no expenditure is involved; and that cannot be inflationary.

Hon. Members opposite are saying that in some obscure way these taxes take money from private people, which would be saved, and transfer it to the State, which spends it. If they could show that, that might, in fact, be inflationary, but, of course, that is a travesty of the real facts. It is a travesty to say that the Death Duties are automatically followed by an increase in Government expenditure. What the Chancellor does is this. He asks himself, "How much ought I to spend?" and after that he asks himself, "How much of the money shall I raise by loans and how much by taxation?" To say that an increase in Death Duties is followed by an increase in Government expenditure is entirely the wrong way of looking at this. It is the balanced-Budget mentality to say that an increase in expenditure automatically follows an increase in taxation. That may sound arid, and it may be difficult to put across even at this early hour. But it is true.

I want to turn to a more interesting aspect of what the right hon. Gentleman the Member for Woodford (Mr. Churchill) said. He tried, in fact, to defend the huge inheritances in this country. My view of this Bill is not that these increases in Death Duties are a big and drastic Socialist redistribution of wealth. If we look at the Ninth Schedule we find that it is perfectly open for an individual to inherit half a million pounds. It is utterly fantastic in a Labour Government that that should be so. That is the way I look at this Finance Bill. I cannot teach the Chancellor anything about inheritance taxation, and his views about inherited wealth are, I am sure, very similar to mine. I assure him that if he takes the line that this is a first instalment of a truly Socialist policy of inheritance taxation, he will please very many of the hon. Members on the benches behind him. I believe that an inheritance of £500,000 is totally incompatible with the whole principles of democratic Socialism. I would go further and say that if a man inherits one-tenth of that amount, he is inheriting far more than he deserves to inherit, far more than is good for him to inherit, and far more than society with its limited resources can afford to let him have.

Does the hon. Gentleman differentiate between one type of security and another? Is he thinking now in terms of cash, or property—farms, cottages, people working there?

I am thinking of inherited wealth in all its forms. I am thinking of the effect of inheritance not only on the nation but on the individual. My view is that these large inheritances encourage extravagance. I go further. They encourage idleness. They have a profoundly harmful effect upon the national morale. They tend to perpetuate class distinctions.

If the Chancellor goes forward and follows up this Budget with a real Socialist approach to inheritance taxation he will have a wide measure of support in this country. That is not a permission to go ahead on the same stereotyped lines of taxation which we have used in the past. Anybody can read the Chancellor's classic masterpiece called "Inequalities of Income," or another work by the Secretary of State for Scotland, and they will know that there are many different ways of approaching this matter. They will find a new and better principle advocated for inheritance taxation, known as the Rignano Principle of Inheritance Taxation, forgotten, but worth while reviving. It discriminates against the inherited portion of an estate and in favour of the portion which was earned by the exertions of the testator. It is worth taking out of the pigeon hole and looking at again.

I feel very strongly on this question of inherited wealth. I know of no economic, political, or moral justification whatever for the enormous fortunes which are inherited. They are, I believe, incompatible with a real, stable democracy. I believe that it is a great test of the sincerity of our Social Democracy whether it proposes to follow up its mere Socialisation Measures with drastic Measures of social and economic equality. There is a danger of the Labour movement of allowing its Socialist programme to peter out in a rather arid kind of State capitalisation which will happen if we do not follow up our socialisation Measures with drastic Measures of social and economicequality. The economic argument against heavy inheritance duties simply will not hold water for a moment. Let not the Chancellor be discouraged. On the contrary, let him go forward to his next Budget with even more drastic measures.

I was very interested in the speech of the Leader of the Opposition. He said that the person who left £2 million was a better proposition to the Chancellor than 10 people with £200,000 each. It is obvious that there will be a greater amount of revenue from the one person than from the 10 persons. I would like to put this point. Suppose one person had £3,000 million, and the rest of the national income went to the others; that would be more productive from the point of view of the Chancellor. I suggest that if we carried that argument to its logical conclusion, from the point of view of the Chancellor, what he should aim at would be for one person to get all the money, and the others to get only their subsistence. If that is the doctrine of the Tory Party for the future, I think they will be in opposition for a long time to come. I only wanted to draw the logical conclusion from the argument that was put forward. I will do justice to the Leader of the Opposition by admitting that he said there were moral and ethical considerations which, possibly, would come in as a balance with regard to exactly how many rich men and how many poor men we are going to have in the country. But hon. Members should realise where this argument would lead if the Chancellor only had regard to what is best from the point of view of the revenue producing characteristics, rather than what would be best for the whole community.

We have had a very important speech from the right hon. Gentleman the Leader of the Opposition, who rendered some embarrassing support to the speech delivered by the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson). By the looks on the faces on some of the back benches which he could not see, I wondered whether he found himself, probably not for the first time in his long and honourable career, in complete agreement with what his supporters were saying or thinking, but so far we have heard no word from them to dissociate themselves from what he said apart from the intervention by the hon. Member for Hertford (Mr. Walker-Smith) whose writings we all esteem so much. I thought the right hon. Gentleman misconceived his case a little. He said, in one of those rhetorical flourishes which we all love to hear, "Shall we eliminate the very rich people?" What we are talking about now is tax on inherited wealth, not tax on wealth which is acquired by industry or ability. There is quite a difference between the two. Tax on inheritance, which bears no relation to one's frugality or ability or ingenuity, is a totally different thing from the wealth which is acquired, for example, by Lord Nuffield or someone of that sort. I will not comment at the moment on what I think of that. I merely draw the attention of the Committee to the fact that they are two entirely different things. The next point I wish to draw to the attention of the Committee for one brief moment is the surprising statement that it is better to have one man with £2 million than ten men with £200,000.

I do not mind from what angle it is regarded. There is an old agricultural saying which is still true: "Spread the muck as widely as you can." I am sorry the right hon. Gentleman the Member for Woodford (Mr. Churchill) appears to be having such difficulty in hearing me. I do not usually speak softly. When the right hon. Gentleman talks about—

The right hon. Member for Bromley (Mr. Macmillan) will not disconcert me by saying, "Speak up." When the right hon. Gentleman speaks of my right hon. Friend the Chancellor being animated by spite and by a desire to reap cheap cheers, he misunderstands completely, not for the first time in his life, the fundamental basis upon which the Labour movement is founded. On this side of the Committee we have no time for a class society which is founded merely on inherited wealth, or which is founded on wealth of any description. There may be a case for classes; that can be argued, if classes are founded on ability, if everyone starts equal and rises up the ladder. That may be an arguable case. But to suggest that because we are redistributing wealth in this very modest manner we are actuated by spite is to misunderstand entirely what we are doing.

The right hon. Gentleman is not right when he says that this system which we are trying to achieve means that wealth will not fructify. The maintenance of capital is not dependent on inherited wealth. Our joint stock companies do not derive their capital from those sources. There is one point which was touched on briefly by the right hon. Gentleman the Member for the Scottish Universities. I am sure he will agree with me that it is a remarkable thing that rich men usually have rich wives. I think the facts will show that there is very rarely hardship of that sort in inheritance. We have taken a much too modest step. I hope we shall push the Chancellor a long way along this road. We hope he will not stop here. Do not let him be dissuaded in the well doing he has started by this midnight intrusion of the right hon. Gentleman the Member for Woodford. We do not see the right hon. Gentleman often; he has not lent much light to our deliberations tonight, although we are always glad to see him amongst us. We have started on the right road. I hope this matter will be taken to a Division when I shall be very glad to record my vote.

Are hon. Members on these benches to understand from the very eloquent speech which the hon. Gentleman has just made that the Socialist Party is now in favour of the profit motive?

That is, surely, a very relevant point. We have now had opened to us the vice of inherited wealth, which must be penalised in the most forcible manner, but great fortunes accumulated by the exploitation of labour in the pursuit of the profit motive are to be held, apparently, in a far more favoured position. I really think the hon. Gentleman should clarify his muddled thoughts upon the subject.

It is clear that hon. Members opposite are beginning to feel the pinch. At present it is only a pinch. Wait until the clutching hand gets a hold on them. Then they will have something to squeal about. The right hon. Gentleman has taken a strong exception to the fact that we are only concerned with taxing inherited wealth. I can assure him that, so far as Members on this side, with whom I am acquainted, are concerned, he need have no fears, he need lose no sleep about it; we shall not only take inherited wealth, but earned wealth. We will clean out the profit makers.

I think it would be lacking in respect if I did not intervene to make some answer to the speech of the leader of the Communist Party. I certainly would suggest to him that he should follow a little more closely what is taking place in Russia, his spiritual home, and consider the views that are being held there. The profit motive is extolled; very large fortunes are accumulated; the right of bequest at death to children and successors is admitted. All this is contrary to his views on these matters, and seems to have been unnoticed by the hon. Gentleman and his enthusiastic "crypto" sup- porters All kinds of processes are at work in Russia which will make it very difficult for the hon. Gentleman—

On a point of Order. Is it possible to relate this cheap diatribe to the subject matter of the Debate?

I was not intending to stray very far from the strait and narrow path, but when we hear the leader of the Communist Party in this Committee speak in this sort of ruthless way against property

and the profit motive, I think he ought to place himself in closer thought and concurrence with the parent body, because he made a great mistake once in diverging from their views, and, otherwise, he will be whipped and brought to heel again.

Is the right hon. Gentleman now seriously suggesting that I should take orders from Moscow?

Question put, "That the words proposed to be left out stand part of the Schedule."

The Committee divided: Ayes, 182; Noes, 59.

Division No. 222.]

AYES.

[3.09 a.m.

Adams, Richard (Balham)

Gunter, Capt. R. J.

Pargiter, G. A.

Attewell, H. C.

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

Peart, Capt. T. F.

Austin, H. L.

Hall, W. G. (Colne Valley)

Perrins, W.

Awbery, S. S.

Hamilton, Lieut.-Col. R.

Popplewell, E.

Bacon, Miss A.

Hardy, E. A.

Pritt, D. N.

Baird, Capt. J.

Harrison, J.

Pryde, D. J.

Barton, C.

Henderson, Joseph (Ardwick)

Pursey, Cmdr. H.

Bechervaise, A. E.

Herbison, Miss M.

Randall, H. E.

Belcher, J. W.

Holman, P.

Ranger, J.

Berry, H.

Holmes, H. E. (Hemsworth)

Rankin, J.

Blyton, W. R.

House, G.

Rees-Williams, D. R.

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

Hoy, J.

Ridealgh, Mrs. M.

Braddock, T. (Mitcham)

Hubbard, T.

Roberts, W. (Cumberland, N.)

Brown, George (Belper)

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

Royle, C.

Brown, T. J. (Ince)

Hynd, H. (Hackney, C.)

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

Burke, W. A.

Irving, W. J.

Sharp, Lt.-Col. G. M.

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

Janner, B.

Shawcross, C. N. (Widnes)

Callaghan, James

Jeger, G. (Winchester)

Shawcross, Sir H. (St. Helens)

Champion, A. J.

Jones, D. T. (Hartlepools)

Silkin, Rt. Hon. L.

Chetwynd, Capt. G. R.

Keenan, W.

Simmons, C. J.

Clitherow, Dr. R.

Kenyon, C.

Skeffington, A. M.

Cobb, F. A.

Kinghorn, Sqn.-Ldr. E.

Skinnard, F. W.

Cocks, F. S.

Kirby, B. V.

Smith, Capt. C. (Colchester)

Colman, Miss G. M.

Lang, G.

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

Comyns, Dr. L.

Lavers, S.

Snow, Capt. J. W.

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

Lee, F. (Hulme)

Sorensen, R. W.

Dalton, Rt. Hon. H.

Lee, Miss J. (Cannock)

Soskice, Maj. Sir F.

Davies, Edward (Burslem)

Leonard, W.

Sparks, J. A.

Davies, Harold (Leek)

Lewis, A. W. J. (Upton)

Stephen, C.

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

Lewis, T. (Southampton)

Stewart, Capt. Michael (Fulham, E.)

Davies, S. O. (Merthyr)

Lindsay, K. M. (Comb'd Eng. Univ.)

Stokes, R. R.

Deer, G.

Logan, D. G.

Swingler, S.

Delargy, Captain H. J.

McAllister, G.

Symonds, Maj. A. L.

Diamond, J.

McGovern, J.

Taylor, H. B. (Mansfield)

Dodds, N. N.

Mack, J. D.

Taylor, R. J. (Morpeth)

Driberg, T. E. N.

McKay, J. (Wallsend)

Thomas, George (Cardiff)

Dugdale, J. (W. Bromwich)

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

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

Durbin, E. F. M.

McKinlay, A. S.

Thorneycroft, H. (Clayton)

Ede, Rt. Hon. J. C.

McLeavy, F.

Tiffany, S.

Edwards, N. (Caerphilly)

MacMillan, M. K. (Western Isles)

Timmons, J.

Evans, S. N. (Wednesbury)

McNeil, H.

Tolley, L.

Evans, John (Ogmore)

Mallalieu, J. P. W.

Usborne, Henry

Fairhurst, F.

Mann, Mrs. J.

Vernon, Maj. W. F.

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

Manning, C. (Camberwell, N.)

Wadsworth, G.

Follick, M.

Manning, Mrs. L. (Epping)

Walker, G. H.

Foot, M. M.

Mathers, G.

Watkins, T. E.

Forman, J. C.

Mayhew, C. P.

Watson, W. M.

Fraser, T. (Hamilton)

Messer, F.

Weitzman, D.

Freeman, Maj. J. (Watford)

Middleton, Mrs. L.

White, C. F. (Derbyshire, W.)

Gallacher, W.

Mikardo, Ian

Whiteley, Rt. Hon. W.

George, Lady M. Lloyd (Anglesey)

Millington, Wing-Comdr. E. R.

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

Gibbins, J.

Monslow, W.

Wilkes, Maj. L.

Gibson, C. W.

Morley, R.

Willey, F. T. (Sunderland)

Gilzean, A.

Morris, P. (Swansea W.)

Williams, W. R. (Heston)

Glanville, J. E. (Consett)

Murray, J. D.

Williamson, T.

Goodrich, H. E.

Nally, W.

Willis, E.

Gordon-Walker, P. C.

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

Yates, V. F.

Greenwood, A. W. J. (Heywood)

Noel-Buxton, Lady

Zilliacus, K.

Grey, C. F.

O'Brien, T.

Griffiths, D. (Rother Valley)

Oldfield, W. H.

TELLERS FOR THE AYES:

Griffiths, Rt. Hon. J. (Llanelly)

Paget, R. T.

Mr. Pearson and Mr. Bing:

Guest, Dr. L. Haden

Paling, Will T. (Dewsbury)

NOES.

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

Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

Ropner, Col. L.

Assheton, Rt. Hon. R.

Jarvis, Sir J.

Scott, Lord W.

Baldwin, A. E.

Jeffreys, General Sir G.

Spearman, A. C. M.

Bossom, A. C.

Kingsmill, Lt.-Col. W. H.

Stanley, Rt. Hon. O.

Boyd-Carpenter, J. A.

Lambert, Hon. G.

Stuart, Rt. Hon. J. (Moray)

Buchan-Hepburn, P. G. T.

Lucas, Major Sir J.

Sutcliffe, H.

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

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

Teeling, William

Churchill, Rt. Hon. W. S.

Mackeson, Lt.-Col. H. R.

Thomas, J. P. L. (Hereford)

Conant, Maj. R. J. E.

McKie, J. H. (Galloway)

Thornton-Kemsley, C. N.

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

Macmillan, Rt. Hon. Harold (Bromley)

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

Crosthwaite-Eyre, Col. O. E.

Manningham-Buller, R. E.

Touche, G. C.

Cuthbert W. N.

Marsden, Capt. A.

Vane, W. M. T.

Donner, Sqn.-Ldr. P. W.

Mellor, Sir J.

Wakefield, Sir W. W.

Drewe, C.

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

White, Sir D. (Fareham)

Fox, Sqn.-Ldr. Sir G.

Neven-Spence, Sir B.

Williams, Gerald (Tonbridge)

Galbraith, Cmdr. T. D.

Peto, Brig. C. H. M.

Winterton, Rt. Hon. Earl

Gomme-Duncan, Col. A. G.

Pickthorn, K.

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

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

Pitman, I. J.

Henderson, John (Cathcart)

Prior-Palmer, Brig. O.

TELLERS FOR THE NOES:

Hinchingbrooke, Viscount

Ramsay, Maj. S.

Commander Agnew and

Hurd, A.

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

Mr. Studbolme

Schedule agreed to.

Tenth and Eleventh Schedules agreed to.

Bill, as amended, to be reported.

Bill reported, with Amendments; as amended, to be considered upon Monday next, and to be printed.—[Bill 138.]

Borrowing (Control and Guarantees) Bill

Order read for consideration of Lords Amendments.

Ordered: "That the Lords Amendments be now considered."

Lords Amendments considered accordingly.

CLAUSE 1.—(Treasury Control of borrowing, etc.)

Lords Amendment: In page 1, line 5, after "may", insert:

"during the period of five years from the passing of this Act."

3.17 a.m.

I beg to move, "That this House doth disagree with the Lords in the said Amendment."

This Amendment was inserted in this Bill in another place and proposes to limit the operations of this Bill to five years. As the Bill left this House, it constituted a new permanent machine. It is the view of the Government and of the elected majority of this House that we should now institute a permanent system for the better control of investments in the national interest. There was discussion of this matter both on the Floor of the House and in the Standing Committee upstairs, where the matter was considered at very great length. It was made abundantly clear—and I will not repeat the arguments used then—that this was a permanent and not a temporary mechanism of control. It will, of course, need to be operated from time to time in different fashion, but, in our view, this must be a new permanent power. If there were to develop a conflict between the two Houses on the subject, His Majesty's Government would regard it as a serious matter of principle, and at the right moment we should think it our duty to make further recommendations to the House. I hope, however, that this can be avoided, because it is our wish that this Bill should, as soon as possible, pass into law and that the various consequential steps should be taken to operate the decisions which will be arrived at under it. I content myself, therefore, by moving that we disagree with this endeavour on the part of non-elected persons in another place, to frustrate the clear intentions of the elected majority of this House to make the control permanent.

3.20 a.m.

A good many of us do not like Debates at this hour, and I rather complain about having this Measure brought before us at this stage. It is, after all, a serious matter. We have been spending two whole nights discussing the Finance Bill—a very complicated Measure—and I hope the right hon. Gentleman will contrive in future to avoid a repetition of the present position in regard to Business. I hope he will convey to the Leader of the House, who is not here, that we would very much rather discuss these matters in more convenient circumstances. I know of no necessity for such important matters to be discussed under the present conditions.

I do not propose to say a great deal about this, because we have argued the matter out at some length already, and the arguments on both sides are fairly well known to the House. I do propose, however, to put briefly one or two points. I think the House should be reminded that this Bill makes permanent the powers by which the the capital market is controlled. We had considerable argument in the earlier stages of this Bill on why permanency was to be adopted in this vital field. I would like to remind hon. Members too that the Bill contains, in the first place, the most extreme examples of delegated legislation, of a type which is met with only in time of war. We on this side of the House suggest that this legislation is essentially emergency in character, and therefore should be strictly limited in time. That is the principal reason why we would agree with the Lords Amendment. We deny the need for this

Measure as a permanent piece of machinery—I do not propose to go into reasons which have been gone into before—and therefore we agree with their Lordships. The powers conferred by the Bill are extremely wide. All attempts to modify its provisions were rejected. The most modest suggestion that an exclusion up to £50,000 be inserted into the Bill was rejected, and we have the ludicrous situation that the Treasury can, by Order, prevent the borrowing of the smallest sum of money. What an absurd restriction to have in a country which after all is a nation of traders. We do not know of course what will happen in the future, but it is monstrous that this Measure will not come up again automatically for discussion in five years' time, but is to be permanent. I ask the House to agree with the Lords in this Amendment.

Question put, "That this House doth disagree with the Lords in the said Amendment."

The House divided: Ayes, 180; Noes, 62.

Division No. 223.]

AYES.

[3.24 a.m.

Adams, Richard (Balham)

Follick, M.

Lewis, A. W. J. (Upton)

Attewell, H. C.

Foot, M. M.

Lewis, T. (Southampton)

Austin, H. L.

Forman, J. C.

Logan, D. G.

Awbery, S. S.

Fraser, T. (Hamilton)

McAllister, G.

Bacon, Miss A.

Freeman, Maj. J. (Watford)

McGovern, J.

Baird, Capt. J.

Gallacher, W.

Mack, J. D.

Barton, C.

George, Lady M. Lloyd (Anglesey)

McKay, J. (Wallsend)

Bechervaise, A. E.

Gibbins, J.

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

Belcher, J. W.

Gibson, C. W.

McKinlay, A. S.

Berry, H.

Gilzean, A.

McLeavy, F.

Bing, G. H. C.

Glanville, J. E. (Consett)

MacMillan, M. K. (Western Isles)

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

Goodrich, H. E.

McNeil, H.

Braddock, T. (Mitcham)

Gordon-Walker, P. C.

Mallalieu, J. P. W.

Brown, George (Belper)

Greenwood, A. W. J. (Heywood)

Mann, Mrs. J.

Brown, T. J. (Ince)

Grey, C. F.

Manning, C. (Camberwell, N.)

Burke, W. A.

Griffiths, D. (Rother Valley)

Manning, Mrs. L. (Epping)

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

Griffiths, Rt. Hon. J. (Llanelly)

Mathers, G.

Callaghan, James

Guest, Dr. L. Haden

Mayhew, C. P.

Champion, A. J.

Gunter, Capt. R. J.

Messer, F.

Chetwynd, Capt. G. R.

Guy, W. H.

Middleton, Mrs. L.

Clitherow, Dr. R.

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

Mikardo, Ian

Cobb, F. A.

Hall, W. G. (Colne Valley)

Millington, Wing-Comdr. E. R.

Cooks, F. S.

Hamilton, Lieut.-Col. R.

Monslow, W.

Colman, Miss G. M.

Harrison, J.

Morley, R.

Comyns, Dr. L.

Henderson, Joseph (Ardwick)

Morris, P. (Swansea, W.)

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

Herbison, Miss M.

Moyle, A.

Dalton, Rt. Hon. H.

Holman, P.

Murray, J. D.

Davies, Edward (Burslem)

Holmes, H. E. (Hemsworth)

Nally, W.

Davies, Harold (Leek)

House, G.

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

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

Hoy, J.

Noel-Buxton, Lady

Davies, S. O. (Merthyr)

Hubbard, T.

O'Brien, T.

Deer, G.

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

Oldfield, W. H.

Delargy, Captain H. J.

Hynd, H. (Hackney, C.)

Paget, R. T.

Diamond, J.

Irving, W. J.

Paling, Will T. (Dewsbury)

Dodds, N. N.

Jeger, G. (Winchester)

Pargiter, G. A.

Driberg, T. E. N.

Jones, D. T. (Hartlepools)

Pearson, A.

Dugdale, J. (W. Bromwich)

Keenan, W.

Peart, Capt. T. F.

Durbin, E. F. M.

Kenyon, C.

Perrins, W.

Ede, Rt. Hon. J. C.

Kinghorn, Sqn.-Ldr. E.

Pritt, D. N.

Edwards, N. (Caerphilly)

Kirby, B. V.

Proctor, W. T.

Evans, John (Ogmore)

Lang, G.

Pryde, D. J.

Evans, S. N. (Wednesbury)

Lavers, S.

Pursey, Cmdr. H.

Fairhurst, F.

Lee, Miss J. (Cannock)

Randall, H. E.

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

Leonard, W.

Ranger, J.

Rankin, J.

Sparks, J. A.

Walker, G. H.

Rees-Williams, D. R.

Stephen, C.

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

Ridealgh, Mrs. M.

Stewart, Capt. Michael (Fulham, E.)

Watkins, T. E.

Roberts, W. (Cumberland, N.)

Stokes, R. R.

Watson, W. M.

Royle, C.

Swingler, S.

White, C. F. (Derbyshire, W.)

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

Symonds, Maj. A. L.

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

Sharp, Lt.-Col. G. M.

Taylor, H. B. (Mansfield)

Whiteley, Rt. Hon. W.

Shawcross, C. N. (Widnes)

Taylor, R. J. (Morpeth)

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

Shawcross, Sir H. (St. Helens)

Thomas, George (Cardiff)

Wilkes, Maj. L.

Silkin, Rt. Hon. L.

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

Willey, F. T. (Sunderland)

Skeffington, A. M.

Thorneycroft, H. (Clayton)

Williams, W. R. (Heston)

Skinnard, F. W.

Tiffany, S.

Williamson, T.

Smith, Capt. C. (Colchester)

Timmons, J.

Willis, E.

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

Tolley, L.

Yates, V. F.

Snow, Capt. J. W.

Usborne, Henry

Zilliacus, K.

Sorensen, R. W.

Vernon, Maj. W. F.

Soskice, Maj. Sir F.

Wadsworth, G.

TELLERS FOR THE AYES:

Mr. Popplewell and Mr. Simmon

NOES.

Agnew, Cmdr. P. G.

Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

Ramsay, Maj. S.

Aitken, Hon. Max.

Jarvis, Sir J.

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

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

Jeffreys, General Sir G.

Ropner, Col. L.

Assheton, Rt. Hon. R.

Kingsmill, Lt.-Col. W. H.

Scott, Lord W.

Baldwin, A. E.

Lambert, Hon. G.

Spearman, A. C. M.

Bossom, A. C.

Linstead, H. N.

Stanley, Rt. Hon. O.

Boyd-Carpenter, J. A.

Lucas, Major Sir J.

Stuart, Rt. Hon. J. (Moray)

Bracken, Rt. Hon. Brendan

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

Sutcliffe, H.

Buchan-Hepburn, P. G. T.

Mackeson, Lt.-Col. H. R.

Teeling, William

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

McKie, J. H. (Galloway)

Thomas, J. P. L. (Hereford)

Conant, Maj. R. J. E.

Macmillan, Rt. Hon. Harold (Bromley)

Thornton-Kemsley, C. N.

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

Manningham-Buller, R. E.

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

Crosthwaite-Eyre, Col. O. E.

Marsden, Capt. A.

Touche, G. C.

Cuthbert, W. N.

Mellor, Sir J.

Vane, W. M. T.

Donner, Sqn.-Ldr. P. W.

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

White, Sir D. (Fareham)

Fox, Sqn.-Ldr. Sir G.

Neven-Spence, Sir B.

Williams, Gerald (Tonbridge)

Galbraith, Cmdr. T. D.

Nutting, Anthony

Winterton, Rt. Hon. Earl

Gomme-Duncan, Col. A. G.

Parker, J.

York, C.

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

Peto, Brig. C. H. M.

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

Henderson, John (Cathcart)

Pickthorn, K.

Hinchingbrooke, Viscount

Prescott, Stanley

TELLERS FOR THE NOES:

Hurd, A.

Prior-Palmer, Brig. O.

Mr. Drewe and Mr. Studholme

SCHEDULE.—(Provisions as to Enforcement and Penalties.)

Lords Amendment: In page 6, line 5, after "three months", insert:

"or to a fine not exceeding five hundred pounds or to both such imprisonment and such fine; or

(ii) on conviction on indictment to imprisonment for not more than two years."

3.30 a.m.

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This Amendment deals with the penalty provisions in the Schedule. On the Report stage of the Bill, hon. Gentlemen pressed that indictment procedure should be substituted for summary procedure. In another place, a solution has been found which, I hope, the House will think is satisfactory. What is done by the Amendment, which I ask the House to agree to, is this. The penalty has been increased from three months to two years—a very substantial increase—but as a counterbalance to that, the summary procedure has been replaced by the indict- ment procedure under which the heavier penalty may be inflicted. That is really a compromise between the views expressed on opposite sides during the Committee discussions. With that explanation, I ask the House to agree to the Amendment as embodying a reasonable compromise between the two alternatives.

3.32 a.m.

The Solicitor-General's idea of compromise is, indeed, a strange one. The whole question on the Report stage in this House turned on the possibility of allowing these cases to go on indictment. It was pressed on the Solicitor-General. He said it was quite impossible. There was no argument whatever about the terms of imprisonment for one year or two, which we, on this side, were prepared to accept. The whole argument was with regard to the case for indictment, which the Solicitor-General stoutly maintained, rising to his feet on no fewer than three occasions, was impossible and wholly undesirable. I do not often pose as a prophet. I tried to prophesy once or twice when I was young, with the result that I lost other people's money and my own friend's. I should like, merely for the edification of the Solicitor-General and for his advantage in the future, to read one or two words that I said upon that occasion. I said:

"I am hoping, of course, that the refusal of the Solicitor-General to accept this Amendment is merely a prelude to these words being moved by some noble Lord, on behalf of the Chancellor, in another place. It would be more satisfactory to accept the Amendment now, and give the House of Commons the satisfaction of removing what is clearly an injustice, instead of leaving it, as no doubt it will be left for another place to do what this House should do now."—[OFFICIAL REPORT, 7th May, 1946; Vol. 422, c. 924.]

That is exactly what has happened. All I can say is that it is a very great justification for another place, in order that omissions of this House, even when they are pointed out here, may still be put right elsewhere.

Question, "That this House doth agree with the Lords in the said Amendment," put, and agreed to.

Remaining Lords Amendments agreed to.

Committee appointed to draw up a Reason to be assigned to the Lords for disagreeing with one of their Amendments to the Bill:—The Chancellor of the Exchequer, Mr. Assheton, Mr. Bracken, Mr. Callaghan and Mr. Mayhew.

Three to be the Quorum.—[ Mr. Dalton. ]

To withdraw immediately.

Reason for disagreeing with one of the Lords Amendments reported later, and agreed to.—[ Mr. Dalton. ]

To be communicated to the Lords.

Cable and Wireless [Money] (No. 2)

Considered in Committee, under Standing Order No. 69.

[Mr. HUBERT BEAUMONT in the Chair]

Motion made, and Question proposed,

"That for the purposes of any Act of the present Session to bring the share capital of Cable and Wireless Limited (in this Resolution referred to as 'the operating company') into public ownership, to provide for the cost of making certain payments to the operating company in connection with reductions in its charges and for purposes connected with the matters aforesaid, it is expedient to authorise the payment out of moneys provided by Parlia- ment of such sums as may be required for the purpose of any undertaking given by the Treasury to Cable and Wireless (Holding) Limited for indemnifying that company against liabilities under any agreement entered into by it before the eighteenth day of April, nineteen hundred and forty-six, as surety for, or jointly and severally with, the operating company, being liabilities in respect of pensions and other benefits payable on the death or retirement of persons in employment with the operating company, or with any other company or body whose telegraph business was acquired by the operating company, or of the sufficiency or administration of any fund for the provision of such pensions or other benefits."—( King's Recommendation signified. ) [ Mr. Glenvil Hall. ]

3.39 a.m.

We ought to have an explanation on this Motion. The Government have chosen to take it now and as they are so earnestly seeking employment, the Financial Secretary to the Treasury should say a few words upon it. I would like to ask the hon. Gentleman one or two questions. By the terms of this Motion, the Treasury is given power to implement any undertaking which it gives for indemnifying the holding company against liabilities under an agreement. Could we have some indication of the possible extent of that liability, and could the hon. Gentleman explain the reasons for putting the Motion in this form instead of incorporating the undertaking in its full detail in the Bill? Here it would seem that we are being asked to agree to give powers to use moneys for the implementation of any undertaking, whatever may be its terms, and I think the hon. Gentleman will agree that in view of certain matters which came before the Select Committee concerning the relations between the Treasury and some other people—casting no reflection at all upon the company concerned—it is extremely desirable that there should be no secrecy at all in this matter.

I want to raise one further matter. I will put it shortly, as I may have an opportunity of saying something about it later. As I understand this Motion it is not wide enough to permit of this House, if it thought fit, to implement the Special Report of that Select Committee on which, of course, there was a majority of hon. Members opposite; that is to say, the report that adequate protection to officers and servants of the company, whose position may be prejudiced by the provisions of the Bill, may be given by such means as the House may think fit. I would be glad if the hon. Gentleman would say whether I am right in thinking that the terms of the Motion are so narrowly drawn that this House, if it thought fit, could not give effect to that Special Report by an Amendment to the Bill.

3.43 a.m.

As the hon. and learned Gentleman has said, this Motion implements the undertaking given when the Select Committee met upstairs to consider evidence on behalf of Cable and Wireless operating company. The Committee will remember that during the month of May we passed the Second Reading of a Bill to take over the shares of Cable and Wireless Operating Company, and at that time in proper form we passed a Money Resolution to implement the financial side of the transaction as we then visualised it. Since then, as the hon. and learned Gentleman said, the Select Committee has met and, following its meeting and the evidence then taken, has issued a report. Among others, I gave evidence, and one of the questions put to me was one asking, what were the Government's intentions towards the staffs who are now employed by Cable and Wireless operating company, and what the Government intended to do about certain pensions and other rights which had properly accrued to the staffs? It became plain that if, as we intend, the operating company is severed from the holding company, certain guarantees which have been given by the holding company to the other would have to be considered. It has, therefore, been felt right and proper—and I hope the Committee will agree with the Government in this—that as the operating company will now pass to the British Government, any guarantee and indemnity which had been given by the holding company should in future rest on the shoulders of the Government, and that guarantee and indemnity be taken over by the Government. This Motion implements that undertaking, and is essential for that purpose.

The hon. and learned Gentleman asked me two questions. The first was why the Motion is drafted in this form and whether the Government's undertaking is to be included in the Bill. The short answer is it will be included in the Bill, although not in its entirety as worded here. It is intended to insert a new Subsection before the Bill again comes before the Committee, which will I think be known as Clause 4 (4). It will not be essential to put the whole of this Financial Resolution into the Bill, but in so far as words are necessary to implement its sense they will be inserted. The Motion must, of course, be explicit in terms; it cannot be vague. It has to be limited and correspond with the undertaking that was given. As I understand it, we do not yet know what our full obligation will be, except that it will certainly cover the existing staff. An undertaking was given by my right hon. Friend the Chancellor, by general agreement I think, when the matter came before the House in May, to the effect that when we take over the staff shall not suffer by the change from private to Government employment. Quite frankly, we do not know the extent of the obligation we may be taking over. We are not sure, for example, we know the full number of the staff. We have not yet taken over. As perhaps the Committee may be well aware, the company has not been too helpful. It has not aided our endeavours to make the transfer from private to public ownership smooth and easy. It has, in fact, been this general attitude of theirs which has led to our taking over the shares, as we are doing now, before we are ready to run this organisation in the way it will eventually be run, or even fix definitely the kind of machinery that will be set up for running it.

The answer to the second question, whether this Motion covers directors, is that it does not. So far as we are concerned, at the moment at any rate, no undertaking has been given so far as directors are concerned. We are to appoint our own directors. The present directors, of the Operating Company, are, as I think the Committee will remember also directors of the holding company. We have no obligation to them so far, although it was implicit in certain evidence that was given, that if a case could be established on their behalf obviously the Government might have to look at it. As at present advised, I am not sure the wording of this Motion would cover compensation to the directors.

I do not want to take up any time on this, but I do ask the hon. Gentleman to deal with one question. I do not think he can have understood what I said to him before. I appreciate the effect of the Motion. My question to him on the terms of the Motion was whether the terms of the undertaking would appear in the Bill, or whether this Committee would be informed at some time of the terms of the undertaking which would be given. The hon. Gentleman will see the Motion does, in fact, say "any undertaking given by the Treasury." The question I put to him—and I am afraid I may not have made myself clear, in trying to deal with it very briefly—was: Will we be told what are the terms of that undertaking? The second point is that this is only a Motion covering the indemnity given to Cable and Wireless Limited in respect of liabilities for pensions and other benefits incurred by that company, if I read this Motion correctly. The second point is this. After the assurance given by the right hon. Gentleman the Chancellor of the Exchequer in the course of the Debate, the Select Committee put in a special report, which was very general in its terms. I do not think they used the word "directors," but the report and the terms of it are as follows:

"That adequate protection for officers and servants of Cable and Wireless, whose position may be prejudiced by the provisions of the Bill, be given by such means as the House may think fit."

The question I want to ask on that is, why, in view of that report of the Select Committee, have not the terms of this Resolution been drafted sufficiently widely to enable this House, if it thinks fit, to insert provisions in the Bill to carry out that recommendation of the Select Committee?

Before the hon. Gentleman answers that, I should like to put this to him. Before he makes any further commitments for the Government as to the compensation to directors, will he and the Government bear in mind that the supporters of the Government take strong exception to any compensation being given to directors, having regard to their obstructive attitude towards this Bill, and the manner in which this Government are being misrepresented and maligned?

3.52 a.m.

Quite simply, I think, the answer to the first question asked by the hon. and learned Gentleman is that the House, of course, will be entitled to know, and will be informed, of the full extent of the indemnity that is given, as and when it is given. At the moment, it is not in proper form. Negotiations and discussions have taken place, and nothing more. The Chancellor of the Exchequer gave a general overall assurance and guarantee on the Second Reading in the House, and I, on his behalf, repeated that in the Committee upstairs, and those guarantees and assurances will be put into proper form. I do not think they will appear in the Bill; I do not know why they should go into the Bill. All that the Bill deals with is the taking over of shares. It would be the wrong place entirely to put in any references in detail, regarding the staff. What we shall do in the Bill, is to take over, and to guarantee to the staff certain pension and other rights.

So far as directors are concerned, I realised who the hon. and learned Gentleman had in mind when he put the question to me. It is true directors are not mentioned by name in the very short and rather cryptic report of the Select Committee. This runs:

Can the hon. Gentleman give an assurance now that there will be no financial commitments made unless they appear in the Bill, and until the House can ultimately decide upon them?

I cannot of course give that assurance, for two reasons. First, we must be fair to people who are displaced and if later it can be proved that directors have suffered it would be unjust to leave them in such a situation, and the House might come to a decision to do something about it. It would be quite wrong of me without full knowledge of the facts to prejudice the issue by attempt- ing to give an assurance in advance on something of which I have not yet complete knowledge. Too, quite frankly, I have not the power to give it.

Question put, and agreed to.

Resolution to be reported this day.

New Towns (Money) (No. 2)

Considered in Committee under Standing Order No. 69.

[Mr. HUBERT BEAUMONT in the Chair]

Motion made, and Question proposed,

"That for the purposes of any Act of the present Session to provide for the creation of new towns by means of development corporations, and for purposes connected therewith, it is expedient to authorise such reduction of the liability of a development corporation in respect of advances made to the corporation under the said Act as may be prescribed by any order made under the said Act in connection with the winding up of the corporation."—( King's recommendation signified. )—[ Mr. Silkin. ]

3.56 a.m.

This Financial Resolution is rendered necessary by an Amendment to Clause 14 of the New Towns Bill which has been put on the Order Paper for consideration on the Report stage. The original Clause does not make provision for the possibility of a reduction in capital arising when the Development Corporation comes to an end. In the new Clause we contemplate it may be necessary to reduce the liability of the Corporation before it actually hands over the assets and liabilities to the local authorities or statutory undertakers and this Financial Resolution is rendered necessary in order to secure that end.

3.57 a.m.

I do not propose at this hour to detain the Committee long upon this question particularly as we shall have an opportunity for a Debate upon the point of substance when the new Clause comes before the Committee. I cannot help remarking it is a little odd that the point about capital on the winding up of the Corporation was not foreseen when the original Financial Resolution was put on the Paper. It is a symptom of the rush of ill-digested legislation which is coming before the House and of the strain on the administrative machinery which stands behind the House. If a little more time were taken to consider these matters we should not be discussing this Resolution at this hour. But I am not proposing to offer any opposition to it.

Question put, and agreed to.

Resolution to be reported this day.

Sheriffs (Scotland)

Motion made, and Question proposed,

"That the Union of Sheriffdoms Order, 1946, dated 15th May 1946, made by the Secretary of State for Scotland under Section 31 (2) of the Administration of Justice (Scotland) Act, 1933, a copy of which Order was presented on 20th May, be approved."—[ Mr. Thomas Fraser. ]

4.0 a.m.

I do not think that, even at this hour, this Resolution should be allowed to pass without a few words. I do not complain that the Lord Advocate has not risen to tell us anything about it, but some reference to it must go on record. This matter of the administration of justice by means of sheriffs was considered 20 year's ago, by a very strong committee which reached the conclusion that great caution should be used in effecting amalgamations of sheriffs. Since that time, I think one amalgamation has taken place. This Order provides for two more, and I feel bound to say that I do not think that any further amalgamations can be justified at all. There is a case for the two amalgamations proposed in this Order. One has been tried out experimentally for some time, and has worked well enough, but if we look at a map of the districts which have to be covered by the two sheriffs in the extreme north we shall find that they are extremely wide. Nevertheless, there are reasons for passing this Resolution, and I think there is a case, on balance, for the proposal. I think there is a case for the amalgamation of Ayr and Bute, but I have some doubt whether the amalgamation of the counties of Renfrew and Argyll will prove wholly satisfactory. I do not wish to oppose this Order, but I do wish to say I am not too sure that this is going to work satisfactorily. I hope it will. This is a borderline case, and I think no further amalgamations can be justified. I think I am right in expressing that view in order that it may be put on record before we pass from this matter.

Question put, and agreed to.

Supplies and Services (Transitional Powers) (Biscuits)

Motion made, and Question proposed,

"That the Biscuits (Charges) (Amendment) Order, 1946, dated 20th May, 1946 (S.R. & O., 1946, No. 726), made by the Treasury under Section 2 of the Emergency Powers (Defence) Act, 1939, and Section 5 of the Supplies and Services (Transitional Powers) Act, 1945, a copy of which Order was presented on 23rd May, be approved."—[ Mr. R. J. Taylor. ]

As special care was taken in the Act that these Orders should go by affirmative Resolution I think it is due to the House that we should be told why this Order is required and in a few words told what it is about. I think the Resolution should not pass without some explanation from the Minister.

I would have answered any questions the right hon. and learned Gentleman cared to ask but he did not ask any questions. He said that he merely wanted to put his views on record.

The hon. Member is now referring to the Resolution which has just been passed. This is an entirely new Order.

We have passed from the Order about sheriffs in Scotland, and we are now considering this Order in regard to biscuits.

Debate adjourned.—[ Mr. Whiteley. ]

Debate to be resumed this day.

Adjournment

Resolved: "That this House do now adjourn."—[ Mr. R. J. Taylor. ]

Adjourned accordingly at Six Minutes past Four o'Clock a.m. on Wednesday, 26th June.