House of Commons
Tuesday, June 1, 1948
The House met at Half past Two o'Clock
Prayers
[Mr. SPEAKER in the Chair ]
Private Business
LONDON COUNTY COUNCIL (MONEY) BILL
Read the Third time, and passed.
WARWICK CORPORATION BILL [Lords]
Read a Second time, and committed.
Oral Answers to Questions
British Army
Yugoslav Frontier Incident (Inquiry)
asked the Secretary of State for War to state the account given at the Army court of inquiry by 2nd/Lt. Marler who was an eye witness of the circumstances in which Lt. Burke was killed on the Austro-Yugoslav frontier.
The proceedings of the court of inquiry have just been received, but I have not yet had time to study them. When I have done so, I will write to the hon. Member. It is, however, not the practice to disclose evidence given at an Army court of inquiry.
Would the hon. Gentleman consider putting the letter which he would otherwise have written to me in HANSARD so that everybody can see the result?
I will consider that, but I should not like to commit myself definitely until I have had time to consider the report of the court of inquiry.
Questions
Eritrea (Tax Collection)
asked the Secretary of State for War why the British Military Administration in the Keren-Agordat district of Eritrea have removed the collection of native tribute from chiefs of tribes and have confided the collection to the agents of a political party, the recently formed Muslim League; and whether he will give instructions for the collection to be effected under non-party auspices.
In this district collection of tax among some of the feudally organised tribes was formerly carried out by the tribal chiefs. This system led to abuse, and as a result of protests from the tribesmen the British Military Administration decided to collect the tax direct. Collection is not in the hands of agents of the Muslim League or any other political body.
Is there no discrimination against the interests of the native chiefs? Is my hon. Friend satisfied that no political influence is exercised in the collection?
We have no evidence which leads us to suppose that there is any political discrimination. The change was made in response to protests from the tribesmen.
Arab Legion
asked the Secretary of State for War why the Arab Legion did not leave Palestine before the termination of the Mandate, in accordance with the policy of His Majesty's Government.
I would refer the hon. Member to the reply given to the hon. Member for East Aberdeen (Mr. Boothby) yesterday.
Yes, Sir, but a week or two ago the Minister himself answered that all the forces of the Arab Legion would be out of Palestine by 15th May. Is it not the case that the forces of the Arab Legion are involved in battle in Palestine?
We had every reason to believe that the forces of the Arab Legion would be out of Palestine before the termination of the Mandate. As was pointed out in the answer yesterday, we are still not certain of the position with regard to one company. As to what has happened since the termination of the Mandate, that is, of course, another matter.
Can my hon. Friend say whether the interval was 24 hours or 48 hours between the withdrawal of the Arab Legion from Palestine to Transjordan and the re-crossing by the Arab Legion of the Jordan from Transjordan to Palestine?
With regard to the whole of the Arab Legion except one company, we carried out the undertaking which was given that it would leave Palestine before the termination of the Mandate. With regard to one company, we are still uncertain whether it did in fact cross the frontier, and, if so, at what date.
I think my hon. Friend did not hear my question. I have not questioned that the Arab Legion did in fact leave, according to the letter of the promise, by 15th May. Is it not a fact that they were back in Palestine on the 16th?
What they have done in Palestine since the termination of the Mandate is not our responsibility.
rose —
We had better get on.
asked the Secretary of State for War whether the Arab Legion is still under the command of the British commander in Palestine.
No, Sir. The Arab Legion ceased to be under the command of the General Officer Commanding, Palestine, on the termination of the Mandate.
But was it not the case that the British Commander in Palestine had the responsibility for the Arab Legion; and by what particular terms did that responsibility end on 14th May?
It ended in consequence of the termination of the Mandate.
Does my hon. Friend say that an undertaking given to to this House that the Legion would leave by the 15th is fulfilled when the British commander in Palestine allows the Legion to come back again on the 16th?
It is not a question of allowing the Legion to return. It ceased to be under his command. I think it was perfectly clear to the House when the original undertaking was given that that would be the legal and practical situation.
It is very unsatisfactory.
s.s. "Dunera" (Lost Watches)
asked the Secretary of State for War why, having lost two gold watches valued at £200, belonging to Dr. Karel Koenig, who was sent to Australia in s.s. "Dunera," his Department offered only £10, increased to £40, compensation; and why, notwithstanding repeated requests on behalf of Dr. Koenig during eight years, investigations have not yet been completed.
I regret that on the evidence available I am unable to accept Dr. Koenig's valuation of £200 for the two watches, and I consider that the offer of £40, which was made in 1945 and is still open, is by no means unreasonable.
Does the hon. Gentleman suggest that it is possible to buy two gold watches for £40, and is not this haggling unworthy of His Majesty's Government.
On the evidence that has been supplied to us as to the value of these watches, I think we have made a reasonable offer. We made it three years ago and it is still open.
Is it disputed that these were two gold watches and, if so, how can the hon. Gentleman possibly contend that they were worth only £40?
No trace of the watches can be found. We have had to accept Doctor Koenig's statements as to the nature of the watches, but he really has not produced any evidence to suggest that they were worth £200 and, indeed, some of the evidence we have had from him suggests that they were worth decidedly less than that.
Will my hon. Friend continue to exercise the utmost economy with the taxpayers' money? In this regard, is he aware that it is quite possible to obtain two gold watches for the sum mentioned?
I have never attempted to obtain gold watches.
Equipment, Egypt
asked the Secretary of State for War if he is aware that two days before Egyptian forces began to invade Palestine, the Army authorities at Fayid put nearly £2,000,000 worth of their military stocks at the disposal of Egypt; and what action is being taken to ensure that such occurrences will not happen so long as Egyptian forces are conducting hostile operations outside their own territory and not in self-defence.
My hon. Friend appears to have been misinformed. The only equipment released by G.H.Q. M.E.L.F. to the Egyptians about the time referred to in the Question was twelve tractors issued on 12th May.
Even if it is only a small quantity of equipment, will my hon. Friend make inquiries to see whether any military equipment was issued at any time on the eve of the invasion of Palestine?
The answer I have given shows that we have already made inquiries which resulted in the discovery of the fact that 12 tractors were issued on 12th May.
Territorial Camps (Local Authorities)
asked the Secretary of State for War if he has considered the letter of the hon. and gallant Member for Macclesfield regarding the granting by the Angleton Rural District Council of facilities for their employees to attend Territorial Army camps in the Summer months; and if he will make a statement.
My right hon. Friend regrets that there was an error in this respect. The reply which he gave to a Question by the hon. Member for Twickenham (Mr. Keeling) on 11th May should have referred not to the Congleton Rural District Council, but to the Congleton Borough Council. The Congleton Rural District Council have stated that they will be pleased to give favourable consideration regarding leave with pay to applications from any employees wishing to attend annual camps. The Congleton Borough Council passed a resolution last October to the effect that no extra leave or pay would be given to their employees for Territorial Army camps. I am glad to learn, however, that they have since decided that they will consider applications from their employees on their merits.
Can the hon. Gentleman say why he brought in this matter by saying that the Congleton Borough Council refused, when in actual fact in February they did agree, and will he say who misinformed his right hon. Friend on this matter? Further, will he ask his right hon. Friend in future to take more care when criticising local authorities?
The matter was brought in in response to a question in this House. The reply was based on information obtained from the Cheshire Territorial and Auxiliary Forces Association, but I much regret the distress it must have caused to the local authority in question.
Pay and Allowances
asked the Secretary of State for War if he will make a statement comparing the current rates of pay and allowances of selected ranks with their equivalents in civilian industry; and in particular whether he will show a comparison between the pay received by skilled technicians in the Army and the same type of skilled technicians in civilian industry.
I would refer the hon. Member to Appendices I and II of Army Estimates which contain details of rates of pay and allowances for all ranks. As stated in paragraph 8 of Cmd. 6715, it is not possible to establish any close correspondence between Service and civilian remuneration if only for the reasons that the soldier receives much of his remuneration in kind rather than in cash and there are special arrangements for married men which have no counterpart in industry.
Is the hon. Gentleman aware that in the Command Paper, only three paragraphs after the one he has quoted, an attempt was made to compare civilian rates of wages with Army pay, and indeed that attempts have been made to suggest that the justification for the rates of pay adopted was based largely on the figures there given? Is he not further aware that the figures of civilian wages given in this Command Paper are not correct for today, and in fact are much below the present rates of wages?
Of course, I am aware that there have been some changes in civilian wages since that date, but although the comparison was made in the White Paper it was pointed out that this could only be a comparison in general terms.
Would my hon. Friend consider making a similar comparison with 1939, when they paid me 14 bob a week, knocked seven bob off for the missus, one bob off for debts, and made me salute twice for the balance?
Married Quarters
asked the Secretary of State for War how many married quarters are now under construction in the United Kingdom for officers and other ranks, respectively; and how many have been completed since 31st March, 1948.
Thirty-eight permanent married quarters for officers and 376 for other ranks are now under construction. In addition, work has started on a scheme for the conversion of approximately 1,000 huts into temporary married quarters for officers and other ranks. Thirty permanent married quarters for other ranks but none for officers have been completed since 31st March, 1948.
Is the hon. Gentleman satisfied that the target which he set in his speech on 9th March of 600 married quarters being completed, and a further 700 to be started, is likely to be achieved on the figures given?
We hope to achieve that target, and perhaps I should add that in addition to new building we make other married quarters available by repairs, by the removal of irregular occupants, and other means.
With regard to the temporary accommodation which the hon. Gentleman said is being provided, is it because those camps are not likely to be permanently occupied, or is it because the War Office is not able to obtain the materials for building permanent quarters?
It is mainly because it offers the best and speediest solution of this difficulty.
Can the hon. Gentleman say what proportion of the figures he has given is in respect of work started in the last financial year and what in this?
Not without notice.
Can the hon. Gentleman say what he means by the words "irregular occupants"?
Somebody occupying the quarters who ought not to be doing so.
Guard of Honour, Edinburgh
asked the Secretary of State for War if the parade of soldiers of the 1st Battalion, The Royal Scots, at Edinburgh on the occasion of the visit of the Lord High Commissioner to the General Assembly of the Church of Scotland was compulsory.
In accordance with normal practice, a guard of honour was ordered on the occasion of the formal opening of the Assembly.
Is the Minister aware that on 3rd May the Secretary of State for Scotland definitely assured us that all military display was to be eliminated on this occasion? How does he explain that, if the normal practice is being continued?
There was not in every respect a continuance of previous practice. The practice before the war was for the Lord High Commissioner to drive from Holyrood House with mounted escorts, and this was discontinued, but I take it that a guard of honour should be continued for the representatives of the King.
In any case, could not the vendetta against the Lord High Commissioner be now terminated, in view of the distinguished office he holds and the admirable way in which he carries it out?
Soldiers' Families (Accommodation)
asked the Secretary of State for War if he is aware that families of Regular soldiers are experiencing great difficulties in obtaining accommodation at the expiry of the husbands' terms of service with the Colours; and if he will take steps to ensure that such families are advised by commanding officers to make early application to local authorities for what accommodation they will require on the husbands' discharge.
This problem was carefully considered by the War Office in consultation with the Ministry of Health, who issued a special leaflet and application form to enable Regular soldiers to apply for houses before the end of their service. Information about this arrangement was circulated to all units, so that all interested soldiers could familiarise themselves with the procedure.
Does the hon. Gentleman realise that that may have happened in the past, but there are many soldiers who do not realise it now and that some are faced with the situation of having all their furniture with nowhere to put it? Will he see that the War Office do something to help?
I am aware of these difficulties. We have done our best to acquaint soldiers of the position and will do our best to help in that direction.
In these circumstances, are not the Government defending the principle of the tied cottage?
Are these the "irregular occupants," mentioned in another reply?
Gun Site, Walthamstow
asked the Secretary of State for War when it is proposed to release the gun site on the south-west side of, and with access to and from, the North Circular Road, Walthamstow, E.17, which is needed by the Essex County Council for building a county technical school.
This site is an integral part of the anti-aircraft defences and I regret that it does not appear practicable to release it. The requirements of land for anti-aircraft defence are being considered by the Interdepartmental Committee on Services Land Requirements in conjunction with all interested authorities.
Is my hon. Friend aware that the children who would have gone to this school have been waiting for four years for a proper school in which they can be taught? Is not that more important for this nation's progress than that this obsolete gun site should be kept?
I cannot agree that it is obsolete. It is part of the anti-aircraft defences, which are difficult to lay out in a congested area like North-East London.
Requisitioned Land, Portsmouth
asked the Secretary of State for War the acreage of land in use by, or reserved to the use of, his Department in the City of Portsmouth; and whether, in view of the shortage of land within the city for industrial and commercial development, housing, education and open space, he can hold out any hope that portions of such land under his control can be released to civilian use.
About 1,000 acres of land within the boundaries of the City of Portsmouth are used by or reserved for the use of the War Department. There are also areas of land over which the War Department holds firing rights, the right to restrict building and certain other rights. I regret that there is little hope that it will be possible to release any of this land except possibly one area of four acres which is at present the subject of negotiation.
Will my hon. Friend undertake to keep his requirements in the city under review?
Yes, Sir.
Personal Case
asked the Secretary of State for War whether he is aware that a soldier who suffers from enuresis, and whose name has been communicated to him, is compelled to sleep in the guardroom; and what action he proposes to take to make other arrangements less likely to cause distress to the soldier and trouble to the military authorities.
This soldier is sleeping in the guard-room on medical recommendation as part of his treatment. The arrangements made are calculated to add considerably to his comfort and should not cause him or the military authorities any appreciable trouble.
Does my hon. Friend realise that this exposes the soldier to ridicule on the part of his comrades, and quite unnecessary mental distress? Would it not be better for the Army and for the man concerned if he were discharged?
I think the latter suggestion is one we should consider, but this illness frequently arises from habit and is curable by breaking the habit. It was largely on medical representation that this treatment was undertaken.
Will my hon. Friend say what medical treatment the man is undergoing.
I mean to imply that sleeping in the guard-room instead of in the barrack room is part of the treatment advised.
Why?
Is it not a fact that this man suffered from this disease for a considerable time before he came into the Army, and therefore it is in no sense due to sleeping in barracks?
Foreign Powers (Seconded Officers)
asked the Secretary of State for War what is the procedure followed when an officer of the British Army, who has been seconded for service in the army of another Power, receives instructions to withdraw from that service; and if he is then under obligation to report to his original unit before service with His Majesty's Forces can be terminated.
The normal procedure would be for an officer to be ordered to join a specific British unit or depot. If an officer seconded for service with another Power wishes to resign his commission in the British Army, it is not necessary that he should first join a British unit. Until his resignation is accepted, however, he remains subject to British military law, and can be ordered to join a British unit.
Can my hon. Friend say whether these conditions were observed when recently British officers were seconded to the Arab forces and subsequently withdrawn?
Yes, Sir
Prisoners of War
Marriage Expenses
asked the Secretary of State for War whether in those cases where prisoners of war are marrying British girls either before or after civilianisation, he will arrange for them to draw in sterling such proportion of their accumulated savings as will enable them to meet their wedding and other expenses connected therewith.
As promised in reply to a similar Question by my hon. Friend on 27th January last, his suggestion was carefully examined, but it was decided that the concession requested could not justifiably be granted. Under present arrangements payment of credit balances of all German prisoners of war is a German liability. To pay part of these balances in sterling would transfer some of the liability to the British taxpayer. I do not consider that the present arrangements should be altered to give German prisoners marrying British girls preferential treatment in this respect.
But will not my hon. Friend look at this matter again, if only because the sum of money involved is exceedingly small, and it seems invidious to allow men to marry and then to put them in a position of having to get their wives to pay for such things as wedding expenses?
It is a common thing on the other side.
I am reluctant to reject my hon. Friend's request, but this matter has already been carefully examined. The existing arrangement is in accordance with the reciprocal agreement and it has been made clear—I think rightly so—that we should not give preferential treatment to a German prisoner because he has decided to marry a British subject.
Would my hon. Friend, in this connection, re-examine the question of the dollar credit cheques which are in the possession of those prisoners who worked in America for a time, because the cashing of those cheques in sterling would not involve any extra expenditure to the taxpayer?
That is a somewhat different question, and I would be prepared to look into it.
Batmen, A.T.S. Camp, Fayid
asked the Secretary of State for War if he is aware that German prisoners of war in the Middle East are employed as batmen to British women serving in that area; and if, as this is an embarrassment to the women, he proposes to take any steps to deal with the matter.
Twenty-one German prisoners of war have been employed as batmen in A.T.S. and civilian camps at Fayid during the last twelve months. Women servants cannot be employed in the desert. The prisoners of war will shortly be replaced on repatriation by local labour. I do not accept the implications in the last part of the Question.
Would my hon. Friend bear in mind not only the embarrassment to the women but the embarrassment, if that is the right word, to these wretched men?
I have already said that I do not accept the implications in the last part of the Question, nor do I consider that there is any embarrassment for me to bear in mind.
Is my hon. Friend aware that among the many intimate duties which these prisoners have to perform is that of serving morning cups of tea to these young women while they are still in bed, and that if they look too sad in the process they are reported, and if they look too happy in the process they are reported, too, and that in a situation where every prospect pleases it is difficult to achieve an in-between look?
We have had a report on this matter and it really does not bear out the suggestion that there is any difficulty of the kind described. Nor is there evidence that any German prisoner of war has been landed in disciplinary difficulties for this reason.
Roumanian Merchant Seamen
asked the Secretary of State for War on what grounds Sass Rudolf, Scaunas Haralambi and Boanca Dumitru, three Roumanian merchant seamen, are being detained as prisoners of war at Toft Hall Camp, Knutsford.
These men are only being held while their claims for repatriation to Roumania are being investigated by the Roumanian Government.
Can my hon. Friend give some indication to the House why people who were never serving soldiers, seamen or airmen are detained at this prisoner of war camp, under what clause of the Geneva Convention they are being detained, and when they are likely to be released?
These three men arrived in this country in company with other Axis prisoners of war. The Roumanian Legation were notified and asked to accept them for repatriation. We have endeavoured, but unfortunately without success, to find them employment. We hope it will be possible to arrange for their repatriation.
International Camp, Knutsford
asked the Secretary of State for War why the prisoners of war in the International Camp, Toft Hall, Knutsford, have not been offered the same terms and conditions for remaining in this country as were offered at other camps.
The same opportunities for remaining in this country have been offered to prisoners of war at this camp as at other camps. Forty-two prisoners of war from the camp have been released to civilian status.
Is my hon. Friend aware that I have received a number of complaints from prisoners at this prisoner of war camp, that it is an international camp with a variety of languages, and that there appears to have been a complete misunderstanding. Will he now offer them the same opportunities as have been offered elsewhere?
The opportunity was open to these men if they accepted that they were liable to repatriation to Germany. If they were prepared to accept that, they could apply for civilianisation.
Undermanned Industries
asked the Minister of Labour if he will give those German prisoners-of-war who are classified "A," and who are employed in undermanned industries other than agriculture, the same opportunity to remain in this country as is given to prisoners-of-war who marry British women.
No, Sir. Except in agriculture this could not be done without prejudicing the opportunities for the employment of British, Polish and European volunteer workers.
Will the right hon. Gentleman look at this matter again? There are only a very small number of these men now left in the country, and we ourselves regard them as worth-while types.
We have looked at this matter repeatedly, and on the information in our possession, we cannot change our decision.
Town and Country Planning
Local Authorities Staffs
asked the Minister of Town and Country Planning how many persons of insurable age were employed in local government service by town planning departments in England and Wales in 1947 and 1938.
The information asked for by my hon. Friend is not available.
Braunton Burrows
asked the Minister of Town and Country Planning whether he can now say by what date it is proposed to hold the long promised public inquiry into the retention by the War Department of Braunton Burrows.
The requirements of the War Department in this area have not yet been finally determined, and I am not therefore in a position to say when a public local inquiry in the matter will be held.
Is the right hon. Gentleman aware that the requirements of the War Department have now been awaited for two years in connection with these two areas? Will he urge the War Office to hurry the result of their inquiry, which has been going on for two years?
This is entirely a matter for the War Office.
National Insurance
Share Fishermen (Committee's Report)
asked the Minister of National Insurance when the Report of the National Insurance Advisory Committee on the insurance treatment of share fishermen will be available; and whether he is yet in a position to make a statement.
asked the Minister of National Insurance whether it is intended to include share fishermen in the employed class under the National Insurance Scheme.
My right hon. Friend recently received the Report of the National Insurance Advisory Committee, and copies will be available in the Vote Office today. The Committee have recommended that share fishermen should in general be included in the employed class subject to certain special conditions for unemployment benefit. My right hon. Friend has decided to accept these recommendations in principle, and is now considering with the other interested Departments the best means of giving effect to them in regulations.
Without having read these exact regulations, may I ask the Minister if, in fact, they carry out the spirit of the intention which the Minister of National Insurance has made amply apparent in the course of many replies over the last two and a half years?
Yes, I am very satisfied that they do what the hon. Member wishes.
When the Parliamentary Secretary said that the course has been adopted in principle, did he mean that the share fishermen will be allowed to contribute in the employed class from 5th July?
Yes, Sir, we intend to bring in provisional regulations which will enable them to do so.
While we are all very pleased that this Report is to be shown to us, if necessary on reading the Report, will it be possible to make further representations?
If the hon. Gentleman reads the Report, I think he will find it very satisfactory.
Reciprocal Arrangements
asked the Minister of National Insurance what arrangements have so far been completed with Commonwealth and other Governments for reciprocity in matters relating to National Insurance benefits; and with what countries are discussions now proceeding or contemplated.
Reciprocal arrangements have been made between the new schemes of National Insurance and Industrial Injuries Insurance in Great Britain and the corresponding schemes in Northern Ireland. Negotiations are now proceeding with Eire, France and the Isle of Man, and there have been preliminary discussions with Canada, Australia, New Zealand and other Commonwealth countries. My right hon. Friend hopes shortly to carry these discussions further, and also to approach the Governments of some other countries with whom a basis for reciprocity in social insurance may be found.
If a person goes overseas before the overseas country has a scheme in being, would arrangements be made for his insurance rights to be carried over in the meantime and not allowed to lapse?
That all depends on what reciprocity arrangements there may be.
How far has discussion gone with Australia and New Zealand, and are they likely to come to any immediate conclusion?
This is a highly technical subject and we are pressing on as fast as we can so far as these schemes are concerned. I am sorry I cannot add anything to what I have said in the answer.
Will they be likely to be completed this year?
Part-time Canteen Workers
asked the Minister of National Insurance whether his regulations provide that part-time canteen workers who are compelled to pay unemployment insurance contributions are able to draw unemployment benefit if they are available for work part-time.
The question of availability for work arising on a claim for unemployment benefit is one for determination by the independent statutory authorities. Generally speaking, a claimant must show that he is available for full-time work, but there are circumstances in which a part-time worker can satisfy the availability condition. Each case is considered on its merits. If my hon. Friend is aware of any particular case and will give me details, I will have inquiries made.
Is my hon. Friend aware that there is a considerable feeling of disappointment and unfairness on the part of some of these part-time canteen workers who have been informed by the Ministry of Labour that they would not be able to draw unemployment benefit, but who are still compelled to pay quite a considerable amount of contributions out of their small wages?
The question whether a person is entitled to unemployment benefit can only be decided by the statutory authorities when the claim is actually made. So far as the question itself is concerned, I hope my hon. Friend will take a broad view of this matter, because for many of these people, they being part-time employees, this is the only opportunity they have to qualify for pension, and I am sure that no hon. Member would want that right to be taken away from them.
Is my hon. Friend aware that I am not talking now about the contributions under the new Insurance Scheme, but the contributions that they have paid to unemployment insurance, which have nothing to do with qualifying for pension?
The question of part-time employment and the particular type of work to which my hon. Friend refers is being considered at the moment by the National Insurance Advisory Committee. The fact is that many of these women are married women, and under the new scheme they will have the option whether they pay or not.
Employment
Merseyside
asked the Minister of Labour if he will tabulate the classification of trades registered as unemployed, signing at Merseyside employment exchanges at the latest available date.
As the reply includes a table of figures, I will, if I may, circulate the figures for
NUMBERS OF INSURED PERSONS REGISTERED AS UNEMPLOYED AT EMPLOYMENT EXCHANGES IN THE MERSEYSIDE AREA AT 12TH APRIL, 1948. Males, 14–64 Females, 14–59. Total Building … … … 2,002 22 2,024 Civil Engineering Construction … … … 502 4 506 Shipbuilding and Ship Repairing … … … 2,149 47 2,196 Engineering, etc … … … 622 157 779 Construction and Repair of Motor Vehicles, Cycles and Aircraft 592 43 635 Electrical Apparatus, Lamps, etc … … … 203 140 343 Metal Goods Industries … … … 439 133 572 Oil, Glue, Soap, Ink, Matches, etc … … … 273 125 398 Food and Drink Manufacture … … … 437 390 827 Hotel, Catering, etc., Service … … … 470 698 1,168 Laundry Service … … … 45 111 156 Railway Service … … … 315 38 353 Goods Transport by Road … … … 412 5 417 Shipping Service … … … 2,472 26 2,498 Dock, Harbour, etc., Service … … … 1,071 11 1,082 Distributive Trades … … … 1,157 551 1,708 National Government Service … … … 1,077 344 1,421 Local Government Service … … … 624 210 834 Entertainments, Sports, etc. … … … 360 427 787 All other Industries and Services … … … 4,988 1,098 6,086 TOTAL—All Industries and Services … … … 20,210 4,580 24,790
Agricultural Workers, Norfolk
asked the Minister of Labour what were the figures of unemployed agricultural labourers registered at the employment exchanges in the Aunty of Norfolk at the latest convenient date.
Figures are not available for any date later than 15th March, when the number of unemployed men registered at employment exchanges in Norfolk for employment as agricultural workers was 233
Personal Case
asked the Minister of Labour whether he is aware of the case, details of which have been sent to him, in which a constituent who took his advice with a view to employment on the land, has not yet received a single offer; that April in the OFFICIAL REPORT, and send to my hon. Friend the May figure when extracted.
Could my right hon. Friend give me the number of building trade workers, both skilled and unskilled, registered in that list?
Building trade workers, 2,024.
Following is the reply :
the man concerned approached his local branch of the Ministry of Labour, war agriculture committees, and subscribed to farmers' journals all to no avail; and what steps he proposes to take with a view to making possible the transfer of suitable persons from non-essential industry to agriculture.
No, Sir. The particulars sent to me by the hon. Member were not sufficient to enable me to identify any application made by the person concerned to a local office of my Department. Now that I have details I have arranged for him to be interviewed, and I will write to my hon. Friend as soon as I receive a report.
Night Baking
asked the Minister of Labour if he has any information about the progress of discussion between the representatives of the employers' and workers' organisations in the baking industry on the abolition of night baking.
No, Sir, but I am in touch with the two sides on this question.
As this matter has been pending now for nearly two years, will the Minister do what he can to speed things up, as nothing but the abolition of night baking will solve the recruiting problem?
I cannot accept the latter part of the hon. Gentleman's question. It is not for me to speed things up. The two parties are in negotiation, and I await their decision.
Blind Trainees (Allowances)
asked the Minister of Labour whether he is able yet to announce a date upon which allowances will become payable to blind trainees, undergoing training in workshops for the blind.
The date from which it is proposed to bring into operation the new arrangements under which training allowances will be paid by my Deparment is 5th July.
Blind Persons (Working Party)
asked the Minister of Labour what steps he is taking to facilitate the employment of blind persons in industry and in other services.
My Department and other interested organisations have consistently advocated the employment of blind persons in open industry to the maximum possible extent. I think the time has come for a general review of what has been achieved and for a concerted effort to develop these arrangements. I have accordingly set up a Working Party
"to investigate the facilities existing for the employment of blind persons in industry and in public and other services, and to make recommendations for their development."
I will circulate in the OFFICIAL REPORT the names of the members of this Working Party and I would express my thanks to them for agreeing to undertake this task.
While I appreciate very much the right hon. Gentleman's answer, will he bear in mind that the real need is for facilities for training these persons, and that it is there that the bottleneck exists at the moment? Will he see that further steps are taken for the training of blind persons?
That is one particular feature of this investigation, because we have found from experience that many broadminded firms in this country take blind persons and train them in the work. In the long run a man trained on the job he is to do is the most suitable, and we are having on this Committee representatives of the firms who have had such experience.
The following are the members of the Working Party on the Employment of Blind Persons :
Chairman :
W. Taylor, Esq., C.B., (Under Secretary, Ministry of Labour and National Service).
Members :
Miss W. L. Adams, (Inspector of Welfare of the Blind, Ministry of Health);
Charles H. W. G. Anderson, Esq., B.Sc., (Principal, Royal Blind School, Craigmillar Park, Edinburgh);
W. G. Askew, Esq., O.B.E., (Secretary, St. Dunstan's);
W. McG. Eagar, Esq., C.B.E., M.A., (Secretary-General, National Institute for the Blind);
T. H. Smith, Esq., (General Secretary, National League of the Blind);
R. L. Webster, Esq., (Personnel Manager, Messrs. Hoover Limited);
A. E. Wilson, Esq., (Blind worker engaged on administrative duties).
Secretary :
Mrs. G. D. Stuart, (Ministry of Labour and National Service, Norfolk House, St. James's Square).
Marginal Farms, Scotland (Grants)
asked the Secretary of State for Scotland why the grants, offered in January, under the scheme for the assistance of marginal agriculture production for 1948, were reduced on 15th April, 1948, by the North-Eastern Agricultural Executive Committee; by what amount they are being reduced and in what particulars; whether he is aware that farmers have carried out, or are proceeding with, much of this work in anticipation of receiving grants on the basis originally promised; and whether these reductions are local or apply to all classified marginal farms in Scotland.
The total amount of grants payable in this area is substantially the same as last year, and approximately the same number of applications has been admitted. The operations and their cost are, however, on a larger scale than could have been anticipated and this has reduced the grants to about 50 per cent. of what would have been payable on the expected scale of operations. The situation is peculiar to the North-Eastern Area.
Is the Minister aware that what has happened in Aberdeenshire and the North East is regarded as a complete breach of faith, and will he not reconsider the matter and make arrangements for these grants to be paid in full?
The matter cannot be reconsidered. It may be that farmers anticipated that more assistance would be given to them than has been given, but they had in fact carried out the operations when the applications were still outstanding.
Does not the Minister's answer indicate that the Government are penalising an area in Scotland where the response to the Government's appeal for food production is the greatest, and that, surely, is an absurd policy?
I do not think so. The Committee offered grants at about the same rates as operated in past years, particularly last year, and they expected that the response would not be very different from what it was a year ago. In fact, the response has been very much greater. The Committee have only a certain amount of money voted by this House at their disposal.
Is the Minister aware that this offer was made in the form of a definite percentage of the expense, and that the Committee are breaking faith with the farmers by not implementing their promise?
I would not blame the Committee in that way. This House has voted certain moneys towards this end. The Committee had to work within a certain amount of money. They anticipated they would be able to offer certain rates of assistance for specified operations, but at the end of the day the response was so great that they had to reduce the rates for specific operations. The total amount of money which is being paid this year is at least as great as last year.
If there was a mistake, was not the mistake made by the Committee, and if so, why should the consequences of that mistake be visited on the unfortunate farmers?
I do not admit that a mistake was made. I said that the Committee could not have anticipated that they would get such a response. The amount of grant cannot be definitely offered until we get the amount of the response.
Would my hon. Friend agree that if a certain amount of money is voted to a Committee and if the Committee appeals to farmers to give certain returns, and the response to the appeal has been so great that in effect it has halved the amount to be given, is there not a moral obligation on the Government to meet that situation? There is no argument against that.
In view of the most unsatisfactory answer, I give notice that I shall raise the matter on the Adjournment.
Artificial Limbs (Supply)
asked the Minister of Pensions what is the average period which elapses between an order for an artificial leg being placed with the suppliers at Roehampton and the leg being ready for wear; and what the effect on these delays will be of the assumption of responsibility by his Department for the supply of limbs under the National Health Service.
The time taken to supply artificial limbs in normal cases is about ten weeks. In individual cases the surgical condition of the amputation stump may involve a longer period. It is difficult to forecast the additional demand which will arise under the National Health Service, but so far as can be foreseen the demands on the contractors will be below their wartime production. I do not, therefore, anticipate that there will be undue delays.
Is my hon. Friend aware that there are cases in which it takes as long as five months to supply legs, and can he assure the House that the changes brought about by the National Health Service will not result in its being impossible to reduce these periods of delay.
I would not like to give any assurance, because it depends on the nature of the individual cases. I can assure my hon. Friend that the new responsibility will not add to any delay.
Will not the fact that the Government are setting up a virtual monopoly and removing competition greatly increase the amount of delay, because all effective competition will be done away with?
The hon. Member has entirely misread the facts of the situation.
Civil Defence (Legislation)
asked the Prime Minister whether he will now give particulars of the Government plans for civil defence against air attack; how soon recruiting and training will begin; when legislation will be introduced; and whether our Allies and the Government of the United States are being consulted.
I am not yet in a position to give detailed answers to these questions, but I can assure the hon. Member that all aspects of the problem of civil defence are under examination and in particular that legislation for dealing with certain points is in course of preparation.
Would the Prime Minister say whether he is satisfied that the Home Office rather than the Ministry of Defence is the appropriate Department to direct civil defence, especially in view of the Army's share in it, to which Field-Marshal Montgomery referred on Saturday? Can the right hon. Gentleman also say whether any progress has been made in devising protection against radio-activity?
I should require to have notice of the second part of that supplementary question. In reply to the first part, it is the responsibility of the Home Office.
Will one of the duties of the newly-appointed Chancellor of the Duchy of Lancaster at £5,000 a year be to defend the country against gas attacks?
Was the speech made by Field-Marshal Montgomery on this subject at the weekend submitted to the Government before being made? May I further ask the Prime Minister whether there would be any need for air-raid precautions if we were not preparing, or other nations did not believe that we were preparing, to drop atomic bombs on them?
So far as the training side is concerned, has a decision yet been reached as to whether or not the training is to be of a select few specialists or nation-wide?
I would rather have a Question about any details put on the Order Paper.
Industrial Productivity (Panels)
asked the Lord President of the Council if he will publish a list of sub-committees appointed by the Committee on Industrial Productivity, giving the terms of reference of each subcommittee, and the names and qualifications of the chairmen and members.
I have been asked to reply. Yes, Sir. I am circulating in the OFFICIAL REPORT the terms of reference of each of the four Panels of the Committee on Industrial Productivity, the formation of which my right hon. Friend announced on 18th December last, together with the names and qualifications of the chairmen and members.
Are any further sub-committees or panels, being considered?
There are a number of working groups but no formal panels.
Can the details of the working groups be published as well?
I will ask my right hon. Friend about that.
Following is the information:
COMMITTEEE ON INDUSTRIAL PRODUCTIVITY
1. PANEL ON TECHNOLOGY AND OPERATIONAL RESEARCH
Chairman : Sir William Stanier.
Mr. G. B. Blaker: Treasury (Economic Affairs).
Mr. S. A. ff. Dakin: Board of Trade.
Mr. J. Davidson Pratt: Association of British Chemical Manufacturers.
Dr. C. Gordon: Board of Trade.
Dr. H. Hollings: Gas, Light & Coke Co.
Dr. P. Dunsheath: F.B.I.
Mr. L. H. C. Tippett: British Cotton Industry Research Association.
Professor Willis Jackson: London University.
Mr. J. R. Womersley: National Physical Laboratory.
Lieut.-General F. G. Wrisberg: Ministry of Supply.
Mr. E. P. Harries: T.U.C.
Mr. T. Williamson: T.U.C.
Professor T. U. Mathew: Birmingham University.
Joint Secretaries :
Dr. W. L. Francis: D.S.I.R.
Mr. E. D. T. Jourdain: Lord President's Office.
Terms of Reference :
To consider the part which the results of technical research can play in increasing industrial productivity and the means whereby technological improvements can best be applied; To define so far as may be practicable any human problems which may emerge from the foregoing study for remission to the Panel on Human Factors.
To review the principles and methods of operational research as applied to Industrial Productivity, in consultation with other Panels, to recommend how to encourage the spread of such techniques, and to advise on the initiating of special projects.
2. PANEL ON IMPORTS SUBSTITUTION
Chairman : Professor S. Zuckerman: University of Birmingham.
Mr. F. H. Braybrook: Shell Petroleum Co.
Mr. F. A. Burchardt: Oxford Institute of Statistics.
Mr. S. A. ff. Dakin: Board of Trade.
Mr. C. G. Eastwood: Colonial Office.
Dr. H. J. T. Ellingham: Royal Institute of Chemistry.
Major F. A. Freeth: I.C.I. Ltd.
Dr. C. Gordon: Board of Trade.
Mr. R. L. Hall: Economic Section, Cabinet Office.
Dr. R. P. Linstead: Chemical Research Laboratory.
Dr. J. L. Simonsen: Colonial Products Research Council.
Mr. F. W. Smith Central Economic Planning Staff.
Professor A. R. Todd: Cambridge University.
Dr. N. C. Wright Ministry of Food.
Joint Secretaries
Mr. J. L. Croome: Central Economic Planning Staff.
Mr. E. D. T. Jourdain: Lord President's Office.
Mr. A. L. Thorogood: Lord President's Office.
Terms of Reference
To review, in consultation with Departments, private and University research organisations, industrial research and trade associations, etc., the possibilities of reducing the demand for materials and other goods, which may be expected to be in short supply over the next few years or whose import might give rise to balance of payment problems; (a) by the use of substitutes; (b) by making better use of the waste products of agriculture and industry; (c) by the development of alternative sources; (d) by the more efficient use of materials, e.g. by modifying specifications and by avoiding waste; and to advise the Committee on Industrial Productivity as to problems requiring immediate attention, indicating, where possible, the priority with which they should be approached.
3. PANEL ON HUMAN FACTORS.
Chairman Sir George Schuster.
Mr. G. B. Blaker: Treasury (Economic Affairs).
Dr. C. B. Frisby: National Institute of Industrial Psychology.
Mr. L. Moss: Social Survey.
Mr. John Neill: F.B.I.
Mr. E. M. Nicholson: Lord President's Office.
Mr. J. Tanner: T.U C.
Mr. M. D. Tennant: Ministry of Labour & National Service.
Brigadier A. Torrie: War Office.
Dr. S. Wyatt: Medical Research Council.
Mr. L. O. Russell: British Institute of Management.
Dr. A. T. M. Wilson: Tavistock Institute of Human Relations.
Secretary : Mr. A. R. M. Murray: Lord President's Office.
Terms of Reference
To advise the Committee on Industrial Productivity regarding the directions in which productivity could be increased by the application of research into the human factors in industry; and to make recommendations for further researches in this field where called for.
4. PANEL ON TECHNICAL INFORMATION SERVICES
Chairman : Dr. A. King: Lord President's Office.
Dr. B. J. A. Bard: F.B.I.
Professor J. D. Bernal: London University.
Mr. O. F. Brown: D.S.I.R.
Sir Alfred Egerton: Secretary, Soryal Society.
Mr. B. Fullman: Aslib.
Mr. E. E. Haddon: Ministry of Supply.
Dr. J. E. Holmstrom: I.C.I. Ltd.
Sir Herbert Howard: Imperial Agricultural Bureaux.
Mr. B. G. Lane: Board of Trade.
Mr H. T. Pledge: Science Library.
Dr. W. E. Pretty: Admiralty.
Mr. H. D. B. Wood: Board of Trade.
Joint Secretaries
Mr. B. Agard Evans: Ministry of Works.
Mr. E. D. T. Jourdain: Lord President's Office.
Dr. D. J. Urquhart: D.S.I.R.
Terms of Reference :
To review existing information services for distributing scientific and technical information, to consider what improvements can be made to ensure a rapid and wide dissemination of such information to industry, and to make recommendations to the Committee accordingly.
National Finance
British Claims, Yugoslavia
asked the Chancellor of the Exchequer whether he is in a position now to make a statement as to the settlement of claims on behalf of British interests with the Yugoslav Government.
The matter is still under discussion with the Yugoslav Delegation in London.
Does that really mean that it is under active discussion or just under discussion?
Active discussion.
Imported Sterling Notes (Seizure)
asked the Chancellor of the Exchequer what steps are being taken to prevent the bringing into this country of pound and ten shilling notes purchased from banks and other sources in New York at a heavy discount under the official rate.
Travellers, except those from Eire and the Channel Islands, are not allowed to bring more than £5 in sterling notes into this country. Any notes in excess of this amount are seized and only in exceptional circumstances are they refunded. Each traveller is required to declare the amount of sterling notes he is carrying and a false declaration may lead to arrest and prosecution. The import of sterling notes in any other manner except from Eire and the Channel Islands is prohibited. Incoming postal packages and letters are subject to examination for currency offences and any sterling notes found in them are seized.
Is the right hon. and learned Gentleman satisfied that the theory which he has enunciated is being carried out? Is he aware that on the arrival of many steamers from America enormous quantities of these notes which have been displayed during the voyage get through without query or examination?
Obviously, I am not aware that they get through. They would be stopped if they were found.
Under what powers does the right hon. and learned Gentleman confiscate any moneys that may be over the limited amount? Is there any appeal when there is solid ground for believing that there has been a genuine mistake made by people who have had their money confiscated under this totalitarian Government?
Perhaps the hon. Member will put that Question on the Order Paper.
I have tried to do so, but they will not allow me.
Is the right hon. and learned Gentleman aware that large amounts of these notes are brought by air into Southern Ireland and then brought here from Southern Ireland?
I am not aware of that.
Will the right hon. Gentleman see to the tightening up of the machinery?
Tobacco Duty Relief Tokens
asked the Chancellor of the Exchequer if he will consider reissuing an old age tobacco book to Mr. F. Potts, Myrtle Cottage, Hastingleigh, Kent, whose original book was destroyed by fire when his house was burnt down on 20th February last.
As my right hon. Friend the Financial Secretary stated in reply to the Question from the hon. Member for Canterbury (Mr. Baker White) on 13th May, books of tobacco duty relief tokens lost through accident or theft cannot be replaced because this would promote abuse of the concession.
Would the right hon. and learned Gentleman do me the kindness of moving his mind forward and imagining that he himself might be in the future an old age pensioner in similar circumstances? What would he think if his successor in office returned such an answer?
I should think that he had given the right answer.
The Chancellor's reply is so unsatisfactory that I should like to raise the matter on the Adjournment.
Japan (Payments Agreement)
asked the Chancellor of the Exchequer whether he will make a statement on the recently concluded payments agreement to regulate trade between the sterling area and occupied Japan; and whether such agreement includes Japanese cotton textiles.
Arrangements have been concluded with the Supreme Commander for trade between the United Kingdom and Colonies (excluding Hong Kong) and Japan to be conducted in sterling. These arrangements can be extended to any other member of the sterling area who wishes to participate. Sterling acquired by the Supreme Commander, in excess of the amount which he can reasonably expect to be able to spend in the near future, will be convertible into dollars; and this must be taken into account in considering proposals to purchase from Japan. But I hope that the new arrangements may lead to a balanced trade in sterling with Japan at a higher level than would otherwise be possible. For the time being purchases of American-cotton textiles have had to be excluded from these arrangements as S.C.A.P. has reserved the right to require dollar payment for them, at least in part. The reason is that the raw cotton, from which the textiles are manufactured, has been, and to some extent may continue to be, supplied from the United States and financed by dollar loans.
Why has Hong Kong been left out of this? Does Hong Kong agree to that? Has Hong Kong been consulted? Secondly, is the right hon. and learned Gentleman aware that the delegation from this House which went to Japan in November were definitely informed then that the raw cotton from the United States was nearly finished and that when it was finished we would be allowed to deal on a new basis, and why has the Government, therefore, in that case given way? Lastly, arising out of the question of trade in the sterling area, will there be any sterling loan issued from this country or the Commonwealth, and what then will be the position of those who hold previous sterling Japanese bonds, etc.?
Hong Kong has been excluded for the present owing to the leakages of sterling which are taking place from there. On the question of cotton and textiles, nobody has given way. We have not been able to come to an agreement. Perhaps the hon. Gentleman would put a Question on the Order Paper on the third matter.
Is the Chancellor satisfied with the theory that if the raw material which is to be processed in Japan comes from a certain country, it remains a product of that country?
No, I am not satisfied. On the other hand, the people who have got the decision as regards dealing in Japanese goods may take that view and insist upon it.
Tourist Travel, Belgium
asked the Financial Secretary to the Treasury whether he will now make an announcement regarding facilities for holiday travel in Belgium.
I am afraid that this is not possible in present circumstances.
Will the Minister bear in mind that if he delays much longer, summer will be over?
The delay is not necessarily all on our side. It takes two to make a bargain of this kind.
War Damage
asked the Financial Secretary to the Treasury if he is aware that in areas where bombing occurred serious cracks and settlements are now appearing in houses due to these explosions; and what action he proposes to take to compensate the sufferers for this condition.
The War Damage Commission consider each case on its merits but advise me that in their experience damage of this kind occurring years after any bomb fell is in general attributable to causes other than war damage. At this late date, therefore, they do not feel justified in admitting a claim unless convincing evidence is produced that the damage has been caused by bombs.
Will not the Minister get his Department to look into this matter, because the conditions will get worse than they are now? This is a definite responsibility of His Majesty's Government. A promise was made, and this must be done.
European Economic Situation (Publication)
asked the Financial Secretary to the Treasury whether he will take steps to secure supplies for sale in this country or arrange for the reprint here of the recent publication of the Economic Commission for Europe of the United Nations entitled, "A Survey of the Economic Situation and Prospects of Europe."
Supplies are expected within a few days and will be put on sale by the Stationery Office.
Trade and Commerce
British Industries Fair
asked the President of the Board of Trade if he will make a statement on the results, so far as ascertainable, of the contribution made by the British Industries Fair to the expansion of British export trade.
As my right hon. Friend explained in answer to the hon. Member for Orpington (Sir W. Smithers) on 25th May, it is difficult to give the precise value of the British Industries Fair to our export trade. There were less overseas buyers than in 1947, as has happened at other commercial fairs, and they showed greater discrimination, but my impression is that import restrictions abroad were the main reason why many more firm orders could not be placed. Many exhibitors have remarked on the usefulness of the contacts with old and new customers at the Fair. I am awaiting an appreciation by the Birmingham management, and will send it to the hon. Member when it is available.
Is not the hon. Gentleman aware of the immense interest taken in the Birmingham section of the Fair by people from all parts of the world; further, is he prepared to make some communication to our commercial secretariats overseas and our representatives in the Colonial Service of the value of the Fair in expanding our export trade?
That is already being done.
Is the Minister aware that many of the exhibitors at the two London sections were most dissatisfied' with the orders they received, and that they regard it as an indication of the slump that is inevitably coming? Will the Minister do something about it?
Imported Doors
asked the President of the Board of Trade why he is permitting the import of 40,000 doors from Sweden when the joinery trade in this country is finding it difficult to keep its employees fully occupied.
The import off doors from Sweden is in accordance with the policy on imports of less essential goods which my right hon. Friend described on 18th December last in reply to my hon. Friend the Member for Barrow-in-Furness (Mr. Monslow).
Does not the Minister think that it is time to review that policy in view of the short time being worked in the British joinery trade?
This has repercussions on all trades concerned. In order to allow an industry to carry on, very often we have to take some of these traditional imports of less essential goods.
Exports to U.S.A. (Report)
asked the President of the Board of Trade if he has examined the report on "The Market for United Kingdom Consumer Goods in the United States," a copy of which has been submitted to him; and whether he proposes to take steps to assist British exporters to remedy the defects in their sales organisation, which the report reveals.
Yes, Sir, I am arranging for the report to be considered by the industries concerned working jointly with the Board of Trade.
Scientific Publications (Paper Allocation)
asked the President of the Board of Trade whether, in view of his recent decision to increase the volume of scientific books and journals which may be imported into this country from overseas, he is proposing to take any parallel action to arrange for an equivalent increase in the provision of scientific books and journals in this country and to ensure that there is an adequate supply of paper for this purpose.
As my right hon. Friend informed the House in the Debate on the Board of Trade Vote on Tuesday last, the allocation of paper for periodicals is being increased from July. An increase is also being given for books and, as I stated in reply to a Question by my hon. Friend the Member for Bexley (Mr. Bramall) on 27th May, we are satisfied that no important educational books need be held up for lack of paper.
Tourists (Old Coaching Inns)
asked the President of the Board of Trade what steps the British Tourist and Holiday Board are taking to advertise and improve conditions in our old coaching inns whose background is so attractive for foreign visitors.
I am consulting the British Tourist and Holidays Board on this matter and will write to the hon. Member as soon as possible.
Will the Minister see that these inns have more beer to sell?
Bottle-Labelling Machines (Import)
asked the Minister of Supply if he will cancel outstanding licences for the import of automatic bottle-labelling machines, in view of British manufacturers' ability to supply identical or similar machines.
My right hon. Friend the President of the Board of Trade is responsible for the issue of import licences, but I am not prepared to recommend the cancellation of outstanding licences.
As some machines are being imported from Denmark, is it not desirable to cancel these licences when British firms are able to supply them?
That question has been receiving attention. Any further applications for licences will be given serious consideration.
Questions
Royal Air Force (Aircraft, Tel-Aviv)
asked the Secretary of State for Air why four British R.A.F. Spitfires flew low over Tel-Aviv on 22nd May, at a time when Egyptian Spitfires were bombing the town.
No R.A.F. aircraft flew over Tel-Aviv at any time on 22nd May.
Is the Minister aware that this information comes from a number of reliable newspapers in this country, including the Sunday "Observer," whose reporter stated that he himself was present at the time? Therefore, would the Minister look into the matter again?
I am not responsible for what appears in the newspapers. Even newspaper reporters may be under a misapprehension.
Will the right hon. Gentleman encourage British fighters to do standing patrol to prevent British aerodromes from being bombed?
Will the Minister give an assurance that this is not just a mistake in the date? Can he give an assurance that these Spitfires did not fly over at any time round about this date?
No, Sir. The authorities in Palestine were asked whether the statement that our fighter aircraft had flown over Tel-Aviv on this particular date was correct. The answer was "No."
Can the Minister tell us exactly what he thinks is in the mind of the hon. Gentleman in putting this Question?
Fuel and Power
Coal Exports
asked the Minister of Fuel and Power how much coal has he contracted to export for 1948; to which countries under trade agreements; and if he is satisfied with the progress so far, and that the total amounts promised will be available.
The global tonnage of coal covered by trade agreements for 1948 is over nine million tons, to which should be added seven million tons of bunkers and bunker depots abroad. I am sending the hon. Member a list of the countries concerned. While coal exports so far have been encouraging, further progress must depend on the successful negotiation by the National Coal Board of commercial contracts for the sale in these foreign markets of the various grades and qualities of coal available.
Can the Minister say whether the sales abroad so far are up to the expectations of the National Coal Board and his Department?
Yes, Sir.
Does the Minister mean by his reply that private firms who wish to sell coal abroad in the normal way are not to be allowed to do so?
No, it does not mean that at all.
Could the details which the Minister promised to send to me be included in the OFFICIAL REPORT?
indicated assent.
Oil Tanks, Haifa
asked the Minister of Fuel and Power if it was by his instructions that the oil tanks in Haifa have been emptied; and if he wi11 make a statement
No such instructions have been given by His Majesty's Government, nor, according to my information, have the tanks at Haifa been emptied.
Would my hon. Friend say if the supply of oil to tanks in Haifa has ceased, or if in fact the pipeline serving this area has been tapped in Transjordan?
Intermittent pumping of crude oil down the pipeline is still being conducted, and shipments are being made as opportunity occurs.
Questions
Illegal Trawling, Iceland
asked the Secretary of State for Foreign Affairs if he has considered the case, particulars of which have been sent to him, of Captain George Reid of Aberdeen, skipper of s.t. "Craigielea," who was recently convicted in Iceland of illegal trawling and fined Kr. 105,000, equivalent to about £4,400; and if he will investigate the case and make urgent representations to the Icelandic authorities with a view to the remission or reduction of this penalty before further steps are taken to recover it.
I understand that an appeal has been lodged in this case which is therefore sub judice.
Orders of the Day
Finance (No. 2) Bill
Considered in Committee.
[Major MILNER in the Chair]
Part I.—(Customs and Excise)
CLAUSE 1.—(Tobacco.)
3.30 p.m.
Page 2, line 10; the Chancellor of the Exchequer.
On a point of Order. Is not the Amendment in my name being called—in page 1, line 17, leave out from "effect," to end of Clause, and add "including Parts I and II of the First Schedule to that Act in this Act."
I have not selected the hon. Member's Amendment.
Does that mean that we are to be burdened with this heavy tax without any questions being asked?
I beg to move, in Clause 1, page 2, line 10, at the beginning, to insert:
"Subject to the provisions of Subsection (5) of this Section."
This is a drafting Amendment, paving the way for a further Amendment to be moved a little later on, when we ask the Committee to delete lines 24 to 35 and to insert a new Subsection (5).
I think it would be for the convenience of the Committee if we could discuss these two Amendments together, and I think we ought to be given an explanation of the next Amendment. If we accept this one, we are committed to accept the following one, if we take this as consequential.
I agree that it would be convenient to the Committee if the Amendment which has just been moved were discussed along with the second Amendment in the name of the Chancellor of the Exchequer to leave out lines 24 to 35.
The explanation is that the effect of the words at present in the Clause which we wish the Committee to delete is to exempt all stocks of manufactured tobacco if they have left the premises upon which they were manufactured. Looking at these words, my right hon. and learned Friend came to the conclusion that they go too far. As the Clause is drafted, they let out the manufacturer who is also his own distributor, and, if the goods had actually left the factory and had gone to one of his warehouses, the goods would not be caught.
The effect of the new Subsection is to exclude, first of all, tobacco exported before the Bill receives the Royal Assent. The reason for this is a book-keeping one. It seemed to us to be unnecessary that the increased duty should be paid and that, almost immediately afterwards, we should have drawback claims in respect of it. The new Subsection will also exclude the case in which a manufacturer holds goods made by another manufacturer. In this case, he is obviously acting not as a manufacturer, but as a wholesaler. The third case which we wish to exclude is that of a manufacturer who holds goods as a retailer, where he is both manufacturer and retailer, and where the goods are not at his place of manufacture but in the place where they are to be sold by retail, that is, in retail premises. Then, too, quite naturally and properly, we want to exclude goods which happen to be in transit between manufacturer and buyer, provided that those goods have been completely manufactured, although not necessarily packed in their final cartons.
I think the right hon. Gentleman has explained these Amendments, and it seems to me, from what he has said, that these are necessary provisions, but, not having had the explanation at an earlier stage, under our new methods of procedure, I should like to reserve our rights at the next stage in case there is any further comment which we wish to make.
I ought to inform the right hon. and gallant Gentleman that I am not proposing to call the next Amendment in his name and that of his right hon. and hon. Friends—in page 2, line 10, to leave out Subsection (4).
Amendment agreed to.
I beg to move, in page 2, to leave out lines 24 to 35, and to insert:
"(5) Duty shall not be chargeable under the last preceding Subsection— b ) of this Subsection to have been fully prepared for sale by retail if, according to the ordinary course of business of the person in whose ownership or possession it was or to whom it was in transit, it had still to be subjected to some further process (other than packing) before being sold by him."
On a point of Order. May I ask if the previous Amendment, in the name of my hon. Friend the Member for the Isle of Thanet (Mr. Carson), which raises an extremely important point about Imperial Preference, has not been selected—in page 2, line 23, at end, to insert:
"( c ) except in so far as in regard to tobacco derived from Empire sources the provisions of the First Schedule shall apply."
That Amendment falls, because of the Chancellor's Amendment. I informed the right hon. Gentleman that I was not able to call it.
No, with great respect, Major Milner; the Amendment of my hon. Friend is quite a different point.
I have not been able to select that Amendment. There is an Amendment on the same subject in the name of the hon. Member for the Isle of Thanet over the page which I propose to call.
On a point of Order. May I ask what is the procedure in this matter? You have just announced to the Committee, Major Milner, that you had previously informed the Tory Party Whips, no doubt—[HON. MEMBERS: "No."] You have just said you informed them. Major Milner. [ Interruption. ] You have just said so. In the case of the hon. Member for West Fife (Mr. Gallacher) and myself, no such information was imparted.
I gave precisely the same information to the right hon. Member for West Bristol (Mr. Stanley) as I gave to the hon. Member for West Fife (Mr. Gallacher).
Further to that point of Order—
The question of my selection or non-selection of Amendments cannot be discussed. The position now is that the Amendment to page 2, line 10, which has been moved by the Financial Secretary, has been passed by the Committee. I was now proposing to put the Question to leave out lines 24 to 35, and, assuming that the Committee agrees to leave out those lines, I propose to call the Amendment in the name of the hon. Member for the Isle of Thanet (Mr. Carson)—in page 2, line 35, at end, insert:
"or (iii) on any tobacco subject to preferential duty."
Question, "That the words proposed to be left out stand part of the Clause," put, and negatived. Motion made, and Question proposed. "That those words be there inserted."
I have on the Order Paper an Amendment in page 2, line 35, at end, to insert: consider it and make even a mild concession, I should be perfectly prepared to withdraw the Amendment.
The arguments in favour of such an Amendment are obvious. Three main arguments come to my mind. First, so far as we are concerned in England, it would mean a great easing of the ordinary person's weekly budget. A large part of the population, rightly or wrongly, smoke either cigarettes or pipes, and the amount they spend on this pleasure figures very largely in their budget day by day and week by week. If this Amendment were carried it would also reduce the penal direct taxation that is imposed on the people of this country.
As I said in the Second Reading Debate, I think this is one of the most unfair indirect taxes and it is surely becoming utterly excessive and utterly unreasonable. The second point, apart from helping us in this country, is that it will very considerably help the Empire producers of tobacco and it will be an enormous encouragement to the tobacco industry in the Empire. The margin of preference, which at the present time is 1s. 6½d. per pound leaf, had some value when cigarettes were mainly 1s. for 20. But it has very little value indeed at the present time, since they have risen by such an enormous amount. I think the ordinary person is apt to feel that if he has to pay such a fantastically and ridiculously high price for his cigarettes as 3s. 6d. for 20 for the standard brands, he may as well pay the whole amount rather than get what he quite erroneously considers to be an inferior brand at a very little lower price. Therefore, the more the duty on tobacco rises, the less value is there in the present margin of Empire preference.
I realise, of course, that there is not nearly enough Empire tobacco to go round and at the moment we could not produce a quarter of our needs by drawing on Empire supplies. At the same time, we have to look forward, and in looking forward, we want to encourage the industry to expand and to help us in years to come to meet the maximum of our demand from Empire sources. The third point, quite obviously, is the future saving of dollars. In my opinion we shall not be flush with dollars for a good many years to come and it is surely necessary, therefore, to resort in every way we possibly can to long-term planning which will lessen the drain on our valuable dollar resources. I think this is an excellent example of how we can lessen the drain by still smoking and yet helping the Empire sources of tobacco in every way we possibly can.
I understand it has been said by the Government that it will be difficult to do so because of agreements we have made regarding preference margins. I have not been able to find the authority on which that is said, and I shall be grateful if the right hon. Gentleman will tell us. I have looked up the trade agreement with America of 1938—Ammand Paper 5882—and the only reference to tobacco in that is this on page 27, which I would like to read to the Committee:
3.45 p.m.
I cannot see any promise there. It said the margin might be brought down, as in fact it was brought down, from 2s. 0½d. per pound leaf to 1s. 6½d. The only other reference I can find to this matter was in April, 1943, in the Budget speech of Mr. Kingsley Wood, when the rate of preference was brought down from 2s. 0½A. to 1s. 6½d. That was on the 12th April, and in column 971 of the OFFICIAL REPORT, he said:
"In connection with the Tobacco Duties, I made it clear in my Budget Speech last year that the preference on Empire tobacco would be reviewed in the light of the undertaking given in the 1938 Trade Agreement with the United States of America, whereby His Majesty's Government agreed to consider the possibility of reducing the margin of preference on Empire tobacco when the 10 years guarantee under the Ottawa Agreements expired in 1942."
"It is now proposed to reduce the present preference margin of 2s. 0½. per lb. on tobacco leaf by 6d., and proportionately on other tobacco, and the reduction will be affected by an increase in the Empire rates of duty. All these changes will take place from tomorrow."—OFFICIAL REPORT, 12th April, 1943; Vol. 338, c. 971–2.]
I cannot see that that binds us either. I cannot see where we are bound, or how we are bound, not to increase the Empire preference rate and I am quite certain that now is the time to increase it. Even it we were bound by the agreement, we could not be expected in 1938 to visualise the position in which we were to find ourselves after a major war. It was not thought of when the agreement was made. I feel we have a perfect right to review the whole matter again and to see whether some increase in Empire preferences could not be made. I hope the Chancellor will consider this. It seems to me it fulfils three objectives: it helps us, it helps the Empire, and it helps our dollar resources.
It gives me great pleasure to support the proposed Amendment, so convincingly and eloquently dealt with by my hon. Friend the Member for the Isle of Thanet (Mr. Carson). I cannot remember the exact number of millions of dollars we are spending on American leaf and American prepared tobacco, but I think it is in the neighbourhood of £24 million worth of dollars a year. As my hon. Friend has shown, here is one concise and precise way by which we can reduce that vast expenditure. My hon. Friend has touched upon the point of the advisability of making this change now, in view of the encouragement it would give to the South African producer. This is not the time to touch on politics of the Empire, but surely if there was ever a time at which we should demonstrate to South Africa our friendship and our desire to help her, it is now. I will go no further on that point.
My hon. Friend raised the question as to why the Chancellor might not accept this Amendment and, of course, the suggestion has been made that it is because there are strings tied to the Marshall Aid plan. We have been assured on many occasions, both in public and in this House, by Ministers of the Crown, that there are no such strings involved, and it would seem, therefore, that there is no obstacle in the way of the acceptance of this Amendment.
There is one further point, and that is the possibility of the people of this country not desiring to smoke the South African produce as much as they desire to smoke the American produce. That is simply a matter of taste, and many of the older Members of the Committee will recall that before the War of 1914–18 it was practically unknown for anyone to smoke a Virginian cigarette or, indeed, Virginian tobacco; most of it was Turkish. One could scarcely buy Virginian cigarettes in the shop. The 1914–18 war changed all that and from 1918 to 1939 we were practically a Virginian-smoking people. That taste could equally be changed again and, indeed, it is being changed, because we all know that following the recent agreement between Turkey and Greece we are mixing in Virginian tobacco a considerable quantity of Turkish and Greek tobacco.
There is no reason why South African tobacco should not be used similarly. I feel it is essential, as the Chancellor has said time after time, that we should reduce our dollar expenditure. If the people of this country still demand the same amount of smoke, then this Amendment provides an opportunity of changing that dollar expenditure to expenditure within our own area. For these reasons, combined with those so well advanced by my hon. Friend, I hope the Chancellor of the Exchequer will accept the Amendment.
I support what my hon. Friend the Member for the Isle of Thanet (Mr. Carson) has said. I think it was the fact that my hon. and gallant Friend the Member for Sevenoaks (Colonel Ponsonby) and I put down to the First Schedule a series of Amendments consequential on this Amendment of my hon. Friend the Member for the Isle of Thanet that led to some confusion earlier. What I want to ask the Chancellor is, whether he will apply to Empire tobacco the same principle he appears to have applied to Empire wines. In his Budget speech the right hon. and learned Gentleman said:
"The Empire wine countries have, however, made out what seems to me a good case that, although the margin of preference on their heavy wines has been continued at the amount of 4s. a gallon—at which it stood before the war—this difference has become proportionately of much less value in relation to the present rates -of duty. We therefore agreed, at Geneva, that this margin should be raised to 10s. a gallon. The practical effect of this is that the rates on heavy wines from South Africa, Australia and other Empire countries will remain unchanged at the present level."—[OFFICIAL REPORT, 6th April, 1948; Vol. 449, c. 64.]
It is on this principle—that we believe we should retain the preferential rates as they were before the introduction of this new Budget—that my hon. and gallant Friend and I put down the series of consequential Amendments to the First Schedule. I urge upon the Chancellor most seriously that he should consider that the preferential rates existing before the Budget should be maintained. If he does not agree, perhaps he will explain why there is this difference between the treatment of Empire tobacco and of Empire wines.
I should like to support this proposal to increase the preference on Empire tobacco, and to call the attention of the Committee to the history of that preference. Before 1931 the percentage preference was 25 per cent. It fell after that date to 21 per cent., that is to a preference of 2s. 0½. of a duty of 9s. 6d. In 1943, as the result of the agreement made with America in 1938, the actual preference was reduced from 2s. 0½d. to 1s. 6½d. Now, with the new duty of 58s. 2d. that gives a preference percentage of 2.6 per cent., which, of course, is utterly useless as a preference.
I have just been in Southern Rhodesia where I talked to some of my grower friends who pointed out to me in restrained language that such a small preference was no encouragement at all and that it would be futile when tobacco was more plentiful. When I suggested to them what, possibly, the right hon. and learned Gentleman will suggest to us today, that we were now taking most of their crop anyway, they explained that although that was quite true, given a worthwhile preference they could quite possibly increase their present 70 million lbs. to the 100 million lbs. level. I gather that the same goes for Nyasaland and that given a proper encouragement, they too could bring up their 19 million lbs. to a quantity a good deal bigger.
There are two questions on that I should like to ask the Chancellor of the Exchequer. The first question is, Would he like to restore some of the old preference? The second question is, If he would like to, is he able? Or is he so tied up by the trammels of the Geneva and Havana Agreements that he is unable to do so? I have to address a small Empire meeting next week, and I should like a clear answer to those two questions in advance from the right hon. and learned Gentleman. We have, I think, every right to ask the first question, because many right hon. and hon. Gentlemen opposite have made it clear for a long time that they put more faith in fancy international organisations than in the Commonwealth and Empire. On the other hand, the Foreign Secretary has several times lately pointed out that we can be prosperous only as the centre of a great Empire. I should very much like to know which of those two voices is correct as regards an Empire preference of this kind. Would the Chancellor of the Exchequer like to improve this preference?
As to the second question, Could he he improve the preference if he would? I gather from studying Article 17 of the Havana Agreements that not only is it difficult for him to improve it, but that if the duty falls below 35s. 6d. he has got to reduce the preference to a "bob." Is that so? In my more optimistic moments I imagine that our representatives must have left some loophole, some weak link, in the shackles of Havana and Geneva, through which we can escape from intolerable conditions of this kind. I use the word "intolerable" because the one thing we have in our favour in a pretty grim situation is the fact that we are a member country of a great Commonwealth, and the Motherland of a fine Empire; and we should at this present time be strengthening all the bonds we have with that Empire rather than doing the other thing. The bonds of trade are some of the strongest we can forge. The flag follows trade just as trade follows the flag. I should like an answer to that question too.
As regards America, I feel that the Government and we in this Committee should try to discover what the American administration really wants. Do they want to rule out a preference of this kind as some return for that disastrous Loan or for favours to come. We should put to them whether, at a time like this when the world is divided into two camps, the camp of the Red Czar and the democratic camp, they want to see our Commonwealth and Empire a really strong virile organisation, and whether they desire to see this island freed from the need to live in their charity. In both these questions preferences of this kind play a big part.
My right hon. and learned Friend cannot accept this Amendment. Nor could he accept one which asks for a lesser sum to be inserted than the one already prescribed in the Bill. What the Amendment asks is that the preference on tobacco leaf should be as large as 50s. a lb. At the moment, as has been stated, it is 1s. 6½d. In 1938, when the Agreement was made with the United States of America, it was agreed in principle, as the hon. Member for the Isle of Thanet (Mr. Carson) pointed out, that that preference should be reduced by about 25 per cent. America then asked for an immediate reduction in the preference margin but it was pointed out that, under the Ottawa Agreement of 1932, the then subsisting preference must go on until 1942. It had to run for 10 years. Therefore in 1942—the hon. Gentleman read out the relative passage from the speech of the Chancellor of the Exchequer of that time—the Government of that day decided that the preference should come down to 1s. 6½d. to take effect from 1943. That is the preferential rate at the present time.
4.0 p.m.
The question is asked, why my right hon. and learned Friend cannot now alter the preference in order to give a wider margin to Empire tobacco growers, in view of the fact that the duty now is so very high, and that what appeared a good preference margin in 1938—and, perhaps, to some people even in 1942—is nothing like what it should be with the duty at its present level. The answer is that he is bound by the agreement on tariffs and trade which was come to at Geneva in October of last year. A commitment was then entered into not to increase preferences above their present level. Hon. Members will see on page four of the relative report an agreement there set forth of which the operative words state that the maximum margin of preference shall not exceed the pre- ferential rate in force on 10th April, 1947. The preferential rate on that date was 1s. 6½d.
Would the right hon. Gentleman make it clear that this is the first Geneva agreement that has bound us; that we were not bound before in any way by the 1938 agreement or by the speech of the late Sir Kingsley Wood?
I suppose that in one sense that is true; but there was quite obviously an agreement with the Americans that the margin would be altered as and when it became possible. I was not in the Government at that time, and it is not for me to say how the mind of a previous Chancellor of Exchequer worked; but there obviously must have been some arrangement, and I imagine that the late Sir Kingsley Wood implemented it by common agreement in his Budget of 1943. At any rate, that is the situation, and the margin now is 1s. 6½d. Under the Tariff and Trade Agreement, made at Geneva last October and debated in this House in January last, that preference cannot be changed.
The only other point is about the tobacco grown in Northern and Southern Rhodesia and in Nyasaland. We are very anxious to get all the tobacco we can from those areas. I think that it is generally known in all quarters of the Committee that the manufacturers here and the growers there have been in consultation and have come to an agreement whereby the manufacturers here will definitely take a minimum supply from the growers out there during the next five years. I also understand that they are to meet year by year to make further agreements. If, in addition, His Majesty's Government can do anything to assist the two sides in this matter, they will be only too willing to do so.
As I think the Committee will understand, it is impossible for us to make any change in the preferential rate, in view of the commitment at Geneva. I hope, therefore, that the Committee will reject the Amendment without a division.
If a new administration comes into power in America, as is quite possible this Autumn, and if that administration, being of a Republican character, alters the tariff system in the States towards us, should we then be relieved of the terms of the Geneva Agreement.
The supposition is that a Government of another complexion would cease to honour the agreement come to by its predecessor. That is a hypothetical question which I cannot answer.
I quite understand the explanation which the right hon. Gentleman has given that the Geneva Agreement now covers this sort of case and, therefore, alters the position from what it was when we last debated this subject. We have, of course, to remember that, while this is one consideration, if we go on increasing this tax the value of preference becomes so negligible that it is no good to anyone. After all, when the Geneva Agreement was made, and during the period of time while the ideas were under discussion in the Government, the tax on tobacco was not what it is now. It was increased in the Autumn Budget and has been increased again now, and, therefore, the preferential position is quite different.
The question to which I think we ought to get some sort of answer is this: What steps, if any, are to be taken, if as the result of all this encouragement of Empire development and greater production of this, that or the other thing takes place, to secure the absorption of that extra production into this market? It may well be that at the moment, owing to a period of shortage, whether it is actual commodity shortage as in the case covered by the Groundnut Scheme, or because of dollar shortage which influences our purchases of United States tobacco—in the period of shortage the problem does not arise. Supposing that there is a great increase in tobacco reported in Rhodesia, or Nyasaland or elsewhere, if there is no effective preference how are we to be certain that the growers will be able to market what they produce?
The whole idea of Imperial preference was to knit together the imperial markets, and if we are not going to knit them together by that kind of nexus is there any other method which the Government have in mind to deal with this question? It is not a question for today, but it is a question which we have to think over seriously if the results of the agreements made at Geneva and elsewhere are that there is to be no Imperial preference, or if it has to be so small as 2.66 per cent. as in the case of tobacco. That is not sufficient inducement for growers to go all out. If there was a little more, no doubt they could produce more, but it is not so easy as all that. I do not know if the Government would like to express their views about that today.
indicated assent.
It would be very helpful if the right hon. and learned Gentleman would say something about that. I do not think that I would advise my hon. Friend to divide the Commission on this Amendment because, as I understand it, owing to the alterations already made in this Clause it does not make sense. It may be that I have misunderstood him. I gather that this Amendment is to be added to the end of the words we have just inserted on the motion of the Chancellor of the Exchequer. If that is right, then it only deals with a very small section of the tobacco, and if it were passed it would be stupid. It would not mean anything at all. [ Interruption. ] If I am right, it does not make any sense as a result of what we have already done this afternoon. We should obviously not want to put the Commission into such a stupid situation, but we should reserve the right of raising the question again on the next stage, particularly if what the Chancellor of the Exchequer has to say does not seem to us to be satisfactory.
Perhaps I can assist the right hon. and gallant Member and the Commission. We are at present discussing the insertion of the words set out in the Chancellor of the Exchequer's Amendment under paragraphs ( a ) and ( b ), and we are considering at the same time the insertion of the Amendment of the hon. Member for the Isle of Thanet (Mr. Carson), as paragraph ( c ).
It might make sense but, of course, what has happened is that the major Amendment, which really covers the problem, has not been selected. What has been selected is the minor Amendment, which covers only one small fraction of the problem.
On a point of Order. Do I understand, Major Milner, that you have called the Amendment standing in my name in page 2, line 23, at the end, to insert:
"( c ) except in so far as in regard to tobacco derived from Empire sources the provisions of the First Schedule shall apply."—
or my Amendment in page 2, line 35, at the end, to insert:
"or (iii) on any tobacco subject to preferential duty."
I am calling the Amendment in page 2, line 35, at the end, to insert:
"or (iii) on any tobacco subject to preferential duty."
as an Amendment to that standing in the name of the Chancellor of the Exchequer, in page 2, to leave out lines 24 and 25, and to insert the new Subsection (5), which has already been moved by the Financial Secretary.
In those circumstances, I beg formally to move as an Amendment to the proposed Amendment, in line 13 at the end, to insert:
"or ( c ) on any tobacco subject to preferential duty."
The right hon. and gallant Member for Gainsborough (Captain Crookshank) suggested that I might say a few words on this question of tobacco from Southern Rhodesia. As the Committee will appreciate, at the present time these questions of preference are wholly irrelevant in any question of buying and selling tobacco in the world. The great preference for Southern Rhodesia is that they will sell for sterling, whereas we have to buy for dollars from America. Therefore, as long as the dollar shortage lasts, which will not be merely a matter of a year or two, we are prepared to buy all we can from Southern Rhodesia.
In order to facilitate that process, and in order to give the Southern Rhodesian growers a certainty as to the future, as my right hon. Friend has said, agreements have been entered into between manufacturers here and growers in Southern Rhodesia to take a minimum quantity—which is a very large proportion of the Southern Rhodesian crop, as much as they could get—every year for five years; and year by year they will meet in order to extend that for a further year. It really covers a perpetual period of five years ahead for which there will be a long-term contract for buying Rhodesian tobacco.
That is much the most satisfactory way of securing the market for the Southern Rhodesian tobacco growers, and it will secure to us as large a volume as possible of tobacco which can be brought within the sterling area. I think that is the only way, and much the best way, of substituting what used to be done by a large preference, and which could not be done now by a large preference—it would make no difference one way or the other—but which can be done by some such arrangement as has been entered into.
I agree with the Chancellor that, under existing conditions of trade, preference is not really a suitable instrument for securing what we want to secure. What some of us are worried about, though, is that in the future, under the Geneva and Havana Agreements, a time may come when we shall be prohibited from carrying on this agreement—which, as I understand it, is not a Government agreement but a trade agreement—if, in fact, American tobacco was cheaper than Rhodesian tobacco.
No, I do not think there is anything that would prohibit manufacturers in this country from continuing to buy tobacco from Rhodesia if it suited the taste of the people of this country, or if for any other reason they thought it a good commercial proposition to buy it.
I should like to ask a question on the agreement with Rhodesia. Is it possible to say whether the price is negotiated annually, and whether whatever procedure is in force will go on in the five-year periods to which the right hon. and learned Gentleman referred.
That is a matter which has been arranged between the manufacturers and growers. It has nothing to do with the Government. Even if I knew the circumstances, which I do not, I do not think it would be wise to discuss them here.
I welcome what the Chancellor has just said about the agreement between Southern Rhodesia and the buyers. I quite realise that this may not be the ideal moment to discuss preference, but the matter has been raised, both by my hon. Friend the Member for the Isle of Thanet (Mr. Carson), who put down the Amendment, and by my hon. and gallant Friend the Member for Totnes (Brigadier Rayner), who took it considerably further than it had been developed previously. I do not wish to go into the question of preference at any length, but as one who has spent a very large part of my life in trying to get this matter arranged, I must say, quite frankly, that many of us feel that the value of Imperial Preference cannot be met by the Chancellor, on one of his occasional visits to the House of Commons, getting up and saying that as between one part of the Empire and this country an arrangement has been made by buyers and growers for a period of five years. While we welcome that, it is a very small thing compared with what could be done if tobacco growing throughout the whole Empire was properly developed. That is the point I wish to raise now.
4.15 p.m.
I feel that on this occasion we are in danger of being rather fobbed off—if I may put it in that way without wishing to be unkind—with something which is very nice as far as the two sections of the trade are concerned, but is comparatively small when we consider the immense possibilities of developing tobacco growing throughout the whole Empire, which might be assisted in the way we suggest. Earlier, my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) referred to the diminution in the value of preference because of the ever rising tax. When there was a tax of comparatively small dimensions, the 1s. 6d. preference was of great value. It is now a very small thing indeed. The Chancellor quite rightly referred to his wish to do everything he can to avoid using sterling for buying North American and dollar products. Surely a wider view could be taken. After all, this dollar position may not be a matter of a few years, but may go on for a long time. In spite of the agreement, it would be impossible, from the American point of view, for us to say to them, "We do not wish to go on buying from you in our present position, which is very difficult for our taxpayers. We wish, in the interests of the world, to develop the whole resources of our Empire." For that reason we believe that the best thing to do is fully to implement a tariff in order to develop that policy.
I rise to support the Amendment of the hon. Member for the Isle of Thanet (Mr. Carson). I do not want to keep the Committee for long. I had hoped to say a good deal, but as the big guns on both sides have already been fired, and as we have had an answer from the Government, there is no point in my saying much more than that I associate myself with the remarks of my hon. Friend the Member for Torquay (Mr. C. Williams) on the importance of the principle of Imperial Preference. I am a little disappointed at the Government reply, because I think that we might at least have heard that, although nothing could be done on this occasion, every possible opportunity would be taken in the future to step up Imperial Preference. I speak with a very open mind on the question of tobacco, because I loathe all forms of tobacco, whether from the Empire, the United States or anywhere else. Nobody can say that I am prejudiced. It is purely on the Imperial Preference side that, at this late moment in the proceedings, I support the Amendment.
One very important point that needs clarification is being passed over. The Chancellor of the Exchequer said we should buy all we can from Africa. I think the real issue is whether we shall buy all they can sell. That is an important distinction. As my right hon. Friend the Member for West Bristol (Mr. Stanley) has said, what we on this side are afraid of is that when the world shortage of tobacco changes to a world surplus there may well be a situation in which, under the International Trade Charter, the International Trade Organisation may require us to buy not from South Africa but from, say, America. The question from my right hon. Friend has not been answered. It is no answer to say that a manufacturer of tobacco or cigarettes is quite entitled to pay more than the market price. That does not get anywhere because it means that the African tobacco will not be sold because it will have to be sold at a much higher price than American tobacco. We want to pin down the Chancellor of the Exchequer and ask him specifically whether we shall be free to put back Imperial Preference on tobacco if and when the present—I agree irrelevant—considerations for preference cease. It is most important that we should have a reply to that question.
I thought that my right hon. and learned Friend answered that point. He did not underline it to save the feelings of hon. Gentlemen opposite. Two things stand out a mile: first, that the preference would have been greater if a previous Government—not a Labour Government—had not reduced it by nearly 25 per cent. Secondly, the arrangement between manufacturers here and growers there is one of private enterprise; the Government are not coming in to engage in bulk buying in any shape or form. We are doing what I thought hon. and right hon. Gentlemen opposite wanted the Government to do—that is to leave these matters to the free play of private enterprise.
May we have an answer to the question whether or not we shall be debarred, under the arrangements made by the present Government, from re-introducing Imperial Preference on tobacco if and when market considerations make that the only way of handling it?
It is impossible for me to indicate what may happen in the future. I can speak only of what has happened so far and what is happening now. We have helped the two sides to come together. They have agreed with each other on the amount they will take over the next five years. They will extend that agreement year by year in future. The Government have said that if and when and where, at any time, they can be of any assistance to either party, they will be happy to do what they can to assist.
The situation today is that we are not free to widen the margin of preference by other agreements. That is the position, as I understand it, which arose in 1942, during the war, as an emergency measure. Perhaps the right hon. Gentleman will correct me if I am wrong.
It was provisionally agreed to in 1938 and implemented by the late Sir Kingsley Wood as Chancellor of the Exchequer in 1942/43.
It was agreed to first of all for a special purpose. It then became a war measure in 1942 under the Coalition Government. That is the agreement which exists today. The 1938 agreement has been set aside by that of 1942. That is where we are bound—by the war measure of 1942, to which I object.
Would the right hon. Gentleman say what are the words in the 1938 agreement—I have read out the only relevant part—which bind us in any way?
That seems to be immaterial. Obviously I do not know because I was not in the Government at the time and do not know exactly what transpired. What is evident is that some sort of an arrangement was made. The Americans expressed the view that the preference should be narrowed and I imagine that the spokesman for the Conservative Government in 1938 agreed but said, "We cannot do it now because of the Ottawa agreement. It cannot, therefore, be done until 1943." In 1942, honouring the agreement which was obviously come to in 1938, the change was made and we have not altered it. The position is as it was in 1942.
The right hon. Gentleman is basing the whole of his statement on some sort of agreement in 1938. He says he was not there and does not know. Either there was a definite agreement, in which case it was made and written down and he must have access to the words; or it was an understanding in which case we are certainly not bound by it now. That is the point I wish to make. He continually refers to the 1938 matter. He says he does not know what it was. What business has the Chancellor of the Exchequer to come here and refer to a question of that kind when he has not the haziest idea of what he is referring to?
Can the right hon. Gentleman explain how it is that in practice the Government have widened the preference rate on wines but say they cannot do so on tobacco?
That also was provided by the Geneva agreement. Perhaps we may come to it, if hon. Members are so minded, when we reach that stage of our proceedings.
Amendment to the proposed Amendment negatived.
Proposed words there inserted.
Further Amendment made: In page 2, line 40, leave out "the last preceding Subsection," and insert "Subsection (4) of this Section."—[ Mr. Glenvil Hall. ]
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
I would like to point out to the Financial Secretary one point which has already arisen under these proposals and to ask him to look into it to see whether it can be put right. Subsection (4) states that, the additional duty will be charged on tobacco in the ownership or possession of a manufacturer. Those two things are not necessarily the same, as the following example will show. A cigar manufacturer pointed out to me that for 20 years he has been making cigars for one of his clients who has not his own storage accommodation. The cigars had been paid for promptly and taken out for the trade as and when required. Merely because the merchant has not his own storage facilities, certain of the cigars, for which he has paid, now rest in the manufacturer's warehouse, according to a custom that has lasted for some 20 years with the manufacturer. He is being charged this extra tariff on the cigars which are in the possession but not the ownership of the manufacturer. This question has, I believe, been raised with the Inland Revenue, but their answer is that they can do nothing unless there is an alteration made in the Bill. I do not know how it can be done, but this does make a difference as between the merchant who has his own storage facilities and the merchant who has not. The merchant who leaves his cigars with the manufacturer merely for storage purposes, in accordance with a custom of 20 years' standing, will now have to pay something which his competitor does not have to meet. The Government should look into this with a view to putting right the injustice.
4.30 p.m.
We had an Amendment down to leave out Subsection (4) which was not called. It was put down merely in order to find out a little more from the right hon. Gentleman. The imposition of the duty before the tobacco is sold is something quite new. I wish to make it clear in raising this point that it is not a result of any complaints we have had from the trade. As I understand it, they are quite agreeable to the new procedure. In the past, the duty was levied on the tobacco only as it was sold; now it is to be levied where it lies as from a certain date. In the past when there has been a windfall accruing to the tobacco companies as a result of an increase in the duty, the custom has been to set it aside as a reserve against the day when the reverse process happens, when, of course, there is a loss on the sale of the cigarettes and tobacco already in the shops and upon which the higher rate has been paid.
What is to happen in future when there is a drop? Are the Government considering making up any losses which may occur in the future, in view of the fact that they are now preventing manufacturers from benefiting from any increase? I ask that question because these losses may be extremely substantial. I trust that the Government do not hope that the Tobacco Duty will remain at its present very high level for ever more. It is a terrible thing for those who smoke, of which there are a great many, to find the fantastic prices of all forms of tobacco as a result of the last two Budgets—and tobacco was not particularly cheap before that. I wonder whether it is appreciated how much money is estimated to come in from the Tobacco Duty this year. It is £577 million, which is more than enough to pay the Votes for the Health Service, insurance and housing, as well as the Ministry of Labour and Town and Country Planning Votes, and the Imperial and Foreign Office Votes.
It is a staggering figure, and it is hardly surprising that it is not a very popular move to raise the cost of smoking. I am wondering whether the right hon. Gentleman is able to give us any idea of the effect this increase has had on smoking generally. After all, it is getting on for two months since the proposal was first made. I think the Committee would be interested to know whether there has been any diminution which looks like being permanent in the amount of smoking which is taking place. Whenever there is an increase in the Duty all the people who are going to give up smoking do so for a week or two and then gradually begin to purchase tobacco again.
Go back to bad habits again.
They are not bad habits from the point of view of the Chancellor of the Exchequer, for without them he would not get this £577 million. We should like to know whether a longer time has elapsed before smoking has returned to its pre-Budget level, or whether there has been a permanent diminution in the amount of smoking.
We take exception to this rise in the Tobacco Duty, and we voted against it on the Report stage of the Resolution. Under the new procedure it was impossible to give any reasons at that stage, but the right hon. Gentleman was conscious of them from the various statements made during the Budget Debates and on Second Reading of the Finance Bill. It is our considered view that all public expenditure is too high, and that because it is too high taxation is too high, although taxation in this year is more than enough to cover the expenditure in other directions. We consider that if expenditure were brought down taxation could be brought down, and that there would be no reason for this increase, which represents £17½ million this year on Customs and £2 million on Excise. If there had been better housekeeping, as we had often said, we believe that this increase would have been unnecessary, and for that reason we shall certainly vote against this Clause.
My hon. Friend the Member for Mile End (Mr. Piratin) and myself had an Amendment down for the rejection of this Duty, which was not called. I remember many years ago going to see Horace Golden, the illusionist, who presented an object for the audience to see; there was then a puff of smoke and it was gone. The Chancellor of the Exchequer gave us a repeat performance of Horace Golden. He offered the workers certain concessions in his Budget, they put out their hands for them, but they disappeared in a puff of smoke.
I should like to impress upon the Members on this side of the Committee that this tax has become a monstrous one and has taken on an essentially class character whether the Chancellor meant that or not. It is a tax which the rich can afford to pay and the working classes cannot afford to pay. There are certain workers who continue smoking, but the poorer class of workers are faced with a situation in which the smoking of a pipe of tobacco is almost impossible. I myself have seen elderly men whom I have known from my youth surreptitiously picking up "fag ends" off the street. That is not something which somebody has told me, but something I have seen for myself. I have seen one man, who made it possible for Labour Members to sit in this House and who was one of the pioneers of the Labour Movement, pick up cigarette ends in the street to use for his pipe.
An appalling situation has been created by this tax. All of us felt that the Autumn tax was the limit. Then the "master of austerity" comes along. I do not know what his intentions are, whether it is to save dollars or to save our souls, but I notice that he has been appearing recently with the Archbishop of Canterbury. I do no know whether that has had any effect upon his attitude to this question, but I know that it is impossible for the ordinary working man and woman faced with this tax to continue to smoke. If in a family there is a man and his wife and a son and a daughter, all of whom smoke a few cigarettes what is it going to cost in a week? If they smoke the ordinary amount of cigarettes, I assume it would come to a £1 a week. [An HON. MEMBER: "It would be much more."] I do not know, because I do not smoke cigarettes; I smoke black twist. I often hear about Victorian days. I do not know whether they were good days or bad days, but at the end of the Victorian period I could get an ounce of black twist and a clay pipe for 3d. and I was paying tax at that time.
A few years ago I had an unusual experience. In my home town, Dobies of Paisley made the finest black twist in the country. When I was in Canada a few years ago I was able to get black twist made by Dobies of Paisley at 9d. an ounce and at that time it was 2s. 6d. an ounce at home. Now it is 3s. 6d. an ounce. It is an absolutely impossible situation. Take the position of elderly people who, are not old age pensioners. They are not given the tobacco concession, and they have to pay the full amount for it. It is the same with the disabled soldiers, the men to whom we pledged our all. Everything was going to be done for them when they came back, and now these disabled soldiers, if they want to smoke, have to pay 3s. 6d. an ounce for black twist. I do not know the price of other brands.
In addition to the disabled ex-soldiers there are the long-term hospital cases where the wife or the mother at home is making every kind of sacrifice in order to make things as easy as possible for the husband or son in the hospital. Yet this heavy penalty is imposed on them of having to pay this additional tax. A number of Members on this side of the Committee at an earlier stage in the Session made an appeal for the old age pensioners, and in addition appealed for the disabled soldiers and the long-term hospital cases. When any kind of concession is made it is always the minimum concession instead of being broad-minded and humanitarian in a way which would cover all those in need. This concession was given solely to the old age pensioners and the others were left out. I want to make an appeal to Members on this side of the Committee to bring pressure to bear upon the Chancellor so that an end can be made of this extra tax, and if it cannot be withdrawn altogether, at any rate to force the Chancellor to withdraw it from the disabled soldiers, from the long-term hospital cases and from the elderly people of 65 and upwards who do not happen to be old age pensioners. I appeal to hon. Members on this side of the Committee to use what power and influence they have with the Government and width the Chancellor to get this concession extended to those whom I have mentioned.
4.45 p.m.
Those who felt a hardship on the afternoon of that day in April when the Chancellor introduced his Budget must today feel a hardship which is more intensified, because, since the Chancellor introduced his Budget, there has taken place an increased financial stringency throughout the country, which we in this Finance Bill ought not to leave out of our minds for a moment when we are considering the new tax increases. When he introduced this extra tax on tobacco the Chancellor of the Exchequer justified it, not by saying it was going to save us any dollars, because a cessation on the buying of American tobacco had already taken place and we were drawing on stocks, but by saying it was to increase the Budget surplus for this year on which he hoped to rely to bring about deflation.
A Budget surplus only aids deflation when it is applied to the Government debt. We have had three months of this and the debt has not been reduced to any appreciable extent. The Budget surplus is not what is producing the deflationary situation; it is something that took place in the country before that day, and the Chancellor's argument for introducing the extra tax on tobacco cannot be related to that situation at all and must be felt by the country to be increasing the burden at the present time. For the first time in my life, and probably also for the last, I agree with the hon. Member for West Fife (Mr. Gallacher). He is on the side of the producer, the person who is feeling this extra taxation burden very acutely, as we are on this side of the Commission. That is why we are going to repeat what we did on the Report stage of the Budget Resolutions, and vote against this quite unnecessary increase in duty.
I can assure the hon. Member for West Fife (Mr. Gallacher) that in Lancashire he would have seen many more people picking up cigarette ends from the gutter in 1932, 1933 and 1934 than he would today. I listened to the hon. Gentleman with a little amusement, knowing something of his skill in oratory, when he said that he had smoked a pipe for 47 years. It may explain something of his demeanour, because in my view he has still some of the atmosphere of the Victorian era about him. Nevertheless, I agree with every word that he said.
The hon. Member can believe me when I say that never in my experience did I see ordinary respectable workers during the period to which he has referred picking "fag ends" off the ground. I see them doing it now.
I certainly do not accept that. My experience is completely the reverse, as I think is the experience of most hon. Members on this side of the Commission. Nevertheless, I agree substantially with everything that the hon. Member said, and it would be regrettable if this Clause were allowed to pass without some mild comment from this side of the Commission. The decision of the Chancellor of the Exchequer to increase the tobacco taxation was accepted on this side of the Committee with loyalty and in the country with resignation, but certainly no one anywhere greeted it with enthusiasm. [ Interruption. ] I thought I said indirect taxation and I certainly meant it if I did not. We as a body are committed to the principle of direct taxation rather than indirect taxation, and the proportion of indirect taxation in the present financial year is very high indeed.
Reference has been made on the other side of the Commission to the magnitude of the figures. We are asking now for something like £1,000 million in taxation on tobacco and drink in the course of a year, which is equivalent to a sum of £2 a week for every family in the country. It cannot be borne in an even proportion. The hon. Member for West Fife speaks of this duty as a class tax. There are large sections of the community who cannot possibly afford anything like their share of the tobacco which is available. The hon. Member has spoken about the very special class of disabled soldiers who get £2 5s. a week full pension and about blind people and persons in hospital. I want to call the attention of the right hon. Gentleman to a still wider class than those.
We congratulate ourselves rightly on the work of this Government and upon their maintaining full employment. We can point with a good deal of pride to the very much better conditions existing today compared with those which prevailed in 1932 and 1933. That attitude can be carried too far. It is a great mistake to regard the shocking conditions which prevailed under Tory Government as a measure by which we should estimate our achievements now. I tell the Committee, conscious of what I am saying and knowing it is a disagreeable thing to have to say, that in Lancashire today wages are still very low. In the textile industry there are many workers who do not get £5 a week. In my constituency, unskilled engineers, working full-time, get £4 11s. a week. Their wives, forced to work in the same shop, get £1 a week less. Both of them, taking that money home, cannot afford the smokes and the drinks they used to have when they had full work and when these things were available—in the years that are past.
An undertaking was given, or something in the nature of an exchange of undertakings, in regard to the stabilisation of prices and wages. Any increase in the price of beer and tobacco is, in my view, a breach of that undertaking. Beer and tobacco are two items which might be regarded as luxuries, but I do not regard them in that way. Tobacco is a solace, and a very great solace in old age. Perhaps I might refer to my predilections. I would quote a verse from Kipling, who wrote: I certainly cannot do it today, with cigars at five shillings a time. The result upon me is that I find myself getting more intensely irritable than I was in those days.
I do not want my right hon. Friend to think that the fake prosperity in the West End of London, where incomes are enjoyed in inverse proportion to the value of the recipients' services to the community, has any relationship to the position in the industrial areas. People are having a better time in the industrial areas than they have had for many years, except during the war. I am talking in terms of money wages. Nevertheless, they are still not getting anything like what one would call a substantial, generous and proper standard of life, giving them proper amenities. A weekly wage of £4 11s is not enough today for an unskilled engineer, with cigarettes at 3s. 6d. a packet and beer at 1s. 2d. or 1s. 4d. a pint.
I would ask my right hon. Friend to consider these matters and to say that we have now reached the peak of indirect taxation and that, in the next two Budgets, he will take very substantial steps to reduce it, so as to give back to the poorer sections of the community some of the advantages of which they have been deprived for a long time.
I would reinforce the remarks which have fallen from the last three speakers. The hon. Member for West Fife (Mr. Gallacher) made what I should regard as an admirable Tory speech. He referred to the tobacco tax as a class tax. I do not entirely disagree with that definition, although in my judgment it would be much better to call it a means tax. It is a fact that the poorer workers of the country cannot afford tobacco today.
I live in an agricultural constituency. When I wander on Saturday evenings into the local, as I always do, I am literally ashamed to buy a packet of Player's cigarettes when I know that my friends, the fellows sitting around the bar, cannot afford to buy one for themselves. In fact, so ashamed am I that I have made an arrangement with the landlord to supply me privately. The hon. Member for Oldham (Mr. Hale) spoke about people picking up "fag ends" in 1932 and 1933. I am not disputing what he said, but he will remembers that there was a considerable difference in the price of tobacco in those years from the price in 1948. That increase of price owing to tax adds considerable strength to the very cogent arguments adduced by the hon. Member for West Fife.
Perhaps the hon. Member will forgive me for interrupting, but I would point out that the average income in 1932 was 31s. a week. Unemployment pay was 10s. for a man and 5s. for the wife. If the hon. Member works that out he will find that the cost of tobacco in proportion to the income was not very much lower then than it is now.
I am well aware that under this Socialist Government the value of the £ has rapidly depreciated, and that the incomes of the people today are worth even less than they were in the days to which the hon. Member has referred. It has been pointed out that the Tobacco Duty brings in £577½ million a year. That is a very remarkable achievement, but we must bear in mind the economy which the Chancellor of the Exchequer exercises in the matter of tobacco.
Only today a Question appeared upon the Order Paper about an old age pensioner whose house had been burnt down. He lost his house, his furniture, his clothes. He escaped by a window. His tobacco book was also consumed. Could I get the Chancellor of the Exchequer to give the old gentleman a new tobacco book? No. We must bear in mind that the Chancellor of the Exchequer has an economical side to his nature, and today even that must be praised, I suppose, up to a point. I have no wish to enlarge upon that case, as the matter will be thoroughly raised a little later on if I am lucky in the Adjournment lottery.
Taking the country and the workers as a whole, I say that the present tax on tobacco is too high. Tobacco is one of the few amenities of the workers, particularly in the rural areas. The tax is altogether excessive at its present figure. I shall certainly vote against the Clause.
The hon. Member for Louth (Mr. Osborne) asked me why the words of some cigars and warehoused them with a manufacturer and who might, therefore, be caught by the provisions of the Subsection. I would like to have fuller details of the case which the hon. Member has in mind as, from what he says, the Subsection appears to cover this kind of case. If he will look at the new words which have been inserted in the Bill, he will find that they exclude from the increased duty cases which were not the products of any operation carried out by any manufacturer in whose ownership or possession they were. If the operation was carried out by someone else, then the case which the hon. Member envisaged is covered. I do not want to spend much time dealing with this point. If the hon. Member will let me have details, we can see whether this is the sort of case which can be covered, or is covered already.
5.0 p.m.
Of course, it is true that the Tobacco Duty is a very swingeing duty. No one has denied that, but many hon. Members forget that tobacco costs dollars. We have, therefore, to do two things: to save dollars and to raise revenue. When my right hon. and learned Friend rearranged taxation in his Budget, he had one particular object in mind. That was to increase incentives by giving reliefs and allowances in direct taxation; but it meant that he had to make up by other means, that is, by indirect taxation, the revenue he lost.
The right hon. and gallant Member for Gainsborough (Captain Crookshank) asked me if I could indicate whether the extra 2d. which was added in the Budget of 6th April had had any effect on consumption? I have made inquiries, and I am sorry to say that it is much too early yet for us to know whether the extra 2d. has had any appreciable effect. But we do know that when the shilling was put on last year, consumption dropped for the time being by at least 50 per cent.; since then it has gradually climbed up, and it is now about 20 per cent. below the March, 1947, level.
The right hon. and gallant Gentleman also asked me whether, if tobacco were in the possession of manufacturers at 5 p.m. on some future Budget day when the duty went down, my right hon. and learned Friend would be willing to consider granting some sort of relief to them to meet the added burden which would fall on them. Of course, I cannot anticipate what may be said or done on any future occasion; but I would like to remind the Commission that, when the duty was increased, the manufacturers put up their prices, and they obviously made pretty considerable sums on the stocks which were in their possession and which they sold at the enhanced price. It was announced by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) that we had come to an agreement with the manufacturers—
Does the right hon. Gentleman mean the Chancellor of the Duchy of Lancaster?
Yes, if the right hon. Gentleman prefers me to refer to my right hon. Friend in that way, I am very willing to do so. My right hon. Friend the Chancellor of the Duchy of Lancaster indicated at that time that the manufacturers had agreed to earmark the extra profits which then accrued to them to cover any loss which might eventuate if the tax on tobacco should go down in the future. I understand that the extra incidence of taxation which will fall upon them and which on this occasion they cannot pass on, will not be very great; I should be immensely surprised if it made any appreciable inroad into the profits which the manufacturers undoubtedly made, and acknowledged that they were making, when the duty was raised a year ago. Therefore, there can be no question that what is done in this Bill should be accepted as a complete write-off, or any write-off whatever, of the profits which were then made and which the manufacturers agreed to set off against any reduction. It is part of what they may have to find out of those profits, and our information is that the amount will be negligible
I think I have covered the main points that have been raised. It is quite obvious that my right hon. and learned Friend cannot agree to take off this extra 2d. After all, the 2d. is relatively small, as I indicated on Second Reading. One has only to smoke one cigarette less in 21 to cover the extra tax completely. Therefore, as it is imperative at this juncture that money should be raised, I am sure that the Committee will agree that what my right hon. and learned Friend here suggests is reasonable and even modest.
Has the Minister nothing to say about the disabled soldiers, long-term hospital cases and old people who are not old age pensioners. Is nothing to be done about them at all?
We are bound by what is administratively possible. The Chancellor of the Duchy of Lancaster enabled old age pensioners to get some benefit when the extra 1s. was put on, and the Chancellor of the Exchequer has extended that benefit by another 2d. Unfortunately, that is as far as we can go. An old age pensioner can obviously be recognised by his book, but hardship would be very difficult to define. It would be administratively impossible for any scheme to be devised to give special relief to the classes of people whom my hon. Friend the Member for West Fife has in mind.
I think most of my hon. Friends on this side of the Committee would agree that there was nothing very comforting in the speech which the Financial Secretary has just addressed to us. I feel sure that the right hon. Gentleman did his best with the information available to him, although I should have thought it would have been quite possible in the course of this somewhat protracted Debate for the Financial Secretary to find out in some greater detail the replies to many of the cogent remarks which have been addressed to him from this side.
The only comforting speech that I heard from the other side during the last three quarters of an hour was that of the hon. Member for West Fife (Mr. Gallacher). I join at once with my noble Friend the Member for South Dorset (Viscount Hinchingbrooke) in saying that it was a remarkable performance on the part of the hon. Member in his desire to embarrass the Government. Unlike my noble Friend, who said that he had never heard the hon. Gentleman do so well before, I must carry my congratulations a little further, because on more than one occasion recently I have agreed with a good deal of what the hon. Member for West Fife has said in his desire to make things very awkward indeed for the Government. This afternoon he won almost universal praise from this side for what he said, except, so far as I am concerned, when he endeavoured to introduce into the discussion the accusation of class bias with regard to this duty. My hon. Friend the Member for Ashford (Mr. E. P. Smith) said that there was something in what the hon. Gentleman said. I think my hon. Friend will agree, after further reflection, that this is not really a class tax.
I said that it was a means tax.
I would prefer to describe it as a vicious imposition levied generally on all sections of the community. Of course, I agree that there are many people in this country who find it well-nigh impossible to pay the duty, and who in consequence are having to do without what has become for them almost a necessity of life. Particularly does that apply to the old people, those who are not in possession of a pension, and, of course, disabled ex-Service men. They have my wholehearted sympathy. Particularly do I sympathise with them, because I am not a smoker. Therefore, any words that I may utter may have a little additional weight in this respect. I thought that the hon. Member for Oldham (Mr. Hale) in his criticism of what was said by the hon. Member for West Fife (Mr. Gallacher) in his comparison of the difficulties or facilities, whichever way we look at it, of the working classes of today and 1932, completely failed to make his point. However, I agree with what he said when speaking on behalf of a great industrial county such as Lancashire. I agree with him, speaking on behalf of those who dwell in the countryside, the agricultural workers, who are also finding this crushing imposition in the additional Tobacco Duty very hard to sustain.
My right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) referred to the enormous amount of money which this tax is bringing in, estimated to be £577 million in a year. This money is being gained at the expense of very large sections of the community, and if they had not to pay this crushing burden for what I have already described as almost a necessity of life, a good deal of that money might have been put into National Savings. I should have thought that would have appealed to the Chancellor of the Exchequer, but perhaps the working classes, or very large sections of the community, no longer have sufficient faith in His Majesty's Ministers to invest in that form of security in the way they once did. I must say no more about that. [ Interruption. ] I can assure hon. Gentlemen that I could go on for some considerable time, but I have no—
May I point out to the hon. Gentleman that he can only go on so long as he does not repeat himself and keeps to the question?
I do not intend to repeat myself, Mr. Beaumont. I want to leave that aspect of the tax and say that I object to the tax on other grounds as well. No attempt is made to secure the treatment of tobacco on the level of Imperial Preference which we think is desirable and necessary. No attempt is made under the Clause to foster the growing of tobacco in the Empire or in this country. For those reasons, the crushing nature of the tax and the lack of incentive through Imperial Preference, I have great pleasure in supporting the rejection of this Clause.
I wish briefly to avail myself of the opportunity this year, to protest as I did last year, against the fantastic and completely unfair tobacco tax. We were assured in the Budget Debate last year by the right hon. Gentleman the Chancellor of the Duchy of Lancaster that his sole motive for increasing the tax was to save dollars and that he was assuming that as a result of the tax the consumption of tobacco would decrease. That is an argument which we all appreciate.
I do not think that the late Chancellor said that it was the only motive. He did say that it was the principal motive but there were other motives, some of which were much more important.
It will be within the recollection of the Committee that the former Chancellor made it quite clear that his desire for revenue from that source was secondary and that his main intention was to reduce the consumption of tobacco. We all know there was a sharp decline in consumption immediately after the Budget. We also know that it gradually climbed back to the same level of consumption. Therefore, the tax has failed in its primary object.
5.15 p.m.
It is true that in his recent Budget speech the present Chancellor did not lay such emphasis on the need for conserving dollars. He told us, with a rather wintry smile, that he wanted to give the smoker a further reminder. Judging by the condition of the shelves in the tobacconists at the moment in many parts of the country, and allowing for the faults in distribution, it appears that the further irritation has failed to save dollars and failed to reduce consumption. Meanwhile, this glaring example of departure from traditional Labour Party policy continues. In this field we have rationing by price. That is something which hundreds of thousands of supporters of our party simply do not understand. It is up to hon. Members on this side of the Committee to put this point of view more frequently and remind the Chancellor of the fact.
It may well be said, "It is all very well but what are you going to do about it? We agree that the revenue we are to get from this increase is insignificant compared with the irritation it creates in the community." I am prepared to believe that. If it is impossible to devise a scheme of rationing, which I would much prefer and in favour of which I argued last year, as did my hon. Friend the Member for Eton and Slough (Mr. Levy) and others—I remember that when I put a point about rationing the Chancellor's predecessor said that it would mean hordes of officials—can the Government say that it is only possible to spend a percentage of dollars on tobacco, and give an optimum figure which is to be spent on tobacco and let that amount go on the market at a price which is fair and which would give the vast majority of people and, in the main, the supporters of the Labour Party a chance of getting tobacco and cigarettes at a far more reasonable price than is possible at the moment? Whether we like it or not, even at present day prices the better and more popular brands are going under the counter. For those reasons, and knowing how anxious the Commission are to come to a decision, I will sit down, but I find myself completely unable to support this Clause if it goes to a Division.
I find myself in great difficulties over this Clause. I propose not to vote against the Chancellor on this Clause, and I hope that in announcing that I am not actually adding to his difficulties with various hon. Members behind him. I would not like to add point to their influence on him in what may very well be a wrong course. What really shocked me was the tacit assumption of the hon. Member for Oldham (Mr. Hale) that tobacco and drink are necessarily part of everybody's budget and that they ought to be part of everybody's budget. [An HON. MEMBER: "Of course they are."] If that is his argument, he ought to review his views about the cost of living subsidies because if smoking tobacco is part of the ordinary cost of living of everybody, it is sheer nonsense for this House to tax one part of the cost of living in order to subsidise another; that would be merely transferring from one pocket to another.
I want to make it quite clear that so far as I am personally concerned, indirect taxation is bad. It is much worse in the case of the extra 1½d. on a letter from a poor pensioner to his mother or daughter, taking the view of the hon. Member for West Fife (Mr. Gallacher). However, it has justification in matters like smokes and drink which are, and ought to be, optional. If we are to have indirect taxation, the correct field for it is definitely optional subjects like smokes and drink. I am impressed by the argument of the Financial Secretary that it means only one cigarette being saved out of 21, and for that reason I should like to make it clear that I shall not oppose the Chancellor on this occasion.
Question put, "That the Clause, as amended, stand part of the Bill."
The Commission divided: Ayes, 277; Noes, 131.
Division No. 159.] AYES. [5.21 p.m. Acland, Sir Richard Collins, V. J. Griffiths, D. (Rother Valley) Adams, W. T. (Hammersmith, South) Colman, Miss G. M. Guest, Dr. L. Haden Alexander, Rt. Hon. A. V Comyns, Dr. L. Guy, W. H. Allen, A. C. (Bosworth) Cook, T. F. Haire, John E. (Wycombe) Allen, Scholefield (Crewe) Cooper, Wing-Comdr. G Hale, Leslie Anderson, A. (Motherwell) Corlett, Dr. J. Hall, Rt. Hon. Glenvil Anderson, F. (Whitehaven) Cove, W. G. Hamilton, Lieut.-Col. R Attewell, H. C. Cripps, Rt. Hon. Sir S Hannan, W. (Maryhill) Austin, H. Lewis Grossman, R. H. S. Hardy, E. A. Awbery, S. S. Dalton, Rt. Hon. H. Harrison, J Ayles, W. H. Davies, Rt. Hn. Clement (Montgomery) Henderson, Joseph (Ardwick) Ayrton Gould, Mrs. B Davies, Ernest (Enfield) Hobson, C. R. Bacon, Miss A. Davies, Harold (Leek) Helman, P. Balfour, A. Davies, Haydn (St. Panoras, S.W.) Holmes, H. E (Hemsworth) Barstow, P. G Davies, R. J. (Westhoughton) Horabin, T. L. Barton, C. Davies, S. O. (Merthyr) House, G. Battley, J. R. Deer, G. Hoy, J. Bechervaise, A. E. Delargy, H. J. Hubbard, T. Benson, G. Diamond, J. Hudson, J. H. (Ealing, W.) Berry, H. Dobbie, W. Hughes, Hector (Aberdeen, N.) Beswick, F. Dodds, N. N. Hughes, H. D. (W'lverh'pton, W.) Bing, G. H. C. Driberg, T E. N. Hynd, H. (Hackney, C.) Binns, J. Dugdale, J. (W. Bromwich) Hynd, J. B. (Attercliffe) Blackburn, A. R. Dumpleton, C. W. Irvine, A. J. (Liverpool) Blenkinsop, A. Ede, Rt Hon. J. C. Jay, D. P. T. Blyton, W. R Edwards, Rt. Hon. Sir C. (Bedwollty) Jaeger, G. (Winchester) Bowles, F. G. (Nuneaton) Evans, Albert (Islington, W.) Jeger, Dr. S. W. (St. Pancras, S.E.) Braddock, Mrs. E. M. (L'pt, Exch'ge) Evans, E. (Lowestoft) Jenkins, R. H. Braddock, T. (Mitcham) Evans, S. N. (Wednesbury) Jones, D. T. (Hartlepool) Brook, D. (Halifax) Ewart, R. Jones, D. T. (Hartlepool) Brooks, T. J. (Rothwell) Fairhurst, F. Jones, P. Asterley (Hitchin) Brown, T. J. (Ince) Farthing, W. J. Kendall W. D. Bruce, Maj D. W. T. Fernyhough, E. Kenyon, C. Buchanan, Rt. Hon. G. Field, Capt. W. J. Key, Rt Hon,. C. W Burden, T W. Fletcher, E. G. M. (Islington, E.) Ginley, J. Burke, W. A. Foot, M. M. Kirkwood, Rt. Hon. D. Butler, H. W. (Hackney, S.) Forman, J. C. Lang, G Byers, Frank Fraser, T. (Hamilton) Lawson, Rt. Hon. J J Callaghan, James Freeman, Peter (Newport) Lee, F. (Hulme) Carmichael, James Ganley, Mrs. C. S. Leonard, W Castle, Mrs. B. A. George, Lady M. Lloyd (Anglesey) Leslie, J. R. Champion, A. J Gibbins, J. Lever, N. H. Chater, D. Gibson, C. W. Levy, B. W. Chetwynd, G. R. Gilzean, A. Lewis, J. (Bolton) Cluse, W. S. Goodrich, H. E. Lewis, T. (Southampton) Cobb, F. A. Gordon-Walker, P. C. Lipson, D. L. Cocks, F. S. Granville, E. (Eye) Lipton, Lt.-Col. M Choleric, W. Greenwood, A. W. J (Heywood) Longden, F Collindridge, F. Grey, C. F. Lyne, A. W McAdam, W Popplewell, E Thomas, I. O (Wrekin) McAllister, G. Porter, E. (Warrington) Thomas, George (Cardiff) McEntee, V. La T Porter, G (Leeds) Thorneycroft, Harry (Clayton) McGhee, H. G Price, M. Philips Tiffany, S McGovern, J Pritt, D N Timmons, J Mack, J. D. Pride, D. J Titterington, M F. Mackay, R. W. G. (Hull, N W.) Randall, H. E Tolley, L McKinlay, A. S Ranger, J. Tomlinson, Rt. Hon G McLeavy, F. Rankin, J. Turner-Samuels, M Mainwaring, W. H Reid, T. (Swindon) Ungoed-Thomas, L Mallalieu, E. L. (Brigg) Ridealgh, Mrs. M. Usborne, Henry Mallalieu, J. P. W. (Huddersfield) Roberts, Goronwy (Caernarvonshire) Vernon, Maj. W. F Mann, Mrs. J. Roberts, W. (Cumberland, N.) Viant, S. P. Manning, C. (Camberwell, N.) Robertson, J J. (Berwick) Wadsworth, G Manning, Mrs. L. (Epping) Ross, William (Kilmarnock) Walker, G. H. Marquand, H. A. Royle, C. Wallace, G. D. (Chislehurst) Marshall, F. (Brightside) Salter, Rt. Hon Sir J. A. Wallace, H. W. (Walthamstow. E) Mellish, R. J. Scollan, T. Warbey, W. N Messer, F. Scott-Elliot, W. Watkins, T. E Middleton, Mrs. L. Shackleton, E. A. A Watson, W M Millington, Wing-Comdr. E. R Sharp, Granville Weitzman, D. Monslow, W Silverman, J. (Erdington) Wells, P. L (Faversham) Moody, A. S Silverman, S. S. (Nelson) Wells, W. T (Walsall) Morley, R. Simmons, C. J. Westwood, Rt. Hon. J. Morris, Hopkin (Carmarthen) Skeffington-Lodge, T. C Wheatley, Rt. Hn. J(Edinburgh, E) Morrison, Rt. Hon. H (Lewisham. E) Skinnard, F. W White, C. F. (Derbyshire, W.) Mort, D L. Smith, C. (Colchester) Whiteley, Rt. Hon. W. Moyle, A. Smith, H. N (Nottingham, S.) Wilcock, Group-Capt. C. A. B Nally, W. Snow, J. W. Wilkins, W. A. Naylor, T. E. Sorensen, R W Willey, O. G. (Cleveland) Neal, H (Claycross) Soskice, Sir Frank Williams, D. J. (Neath) Nichol, Mrs M. E. (Bradford, N.) Sparks, J. A. Williams, J. L. (Kelvingrove) Nicholls, H. R. (Stratford) Stamford, W Williams, R W (Wigan) Noel-Baker, Capt. F. E. (Brentford) Steele, T Williams, W. R. (Heston) Noel-Baker, Rt. Han. P J. (Derby) Stross, Dr. B. Wills, Mrs E. A Noel-Buxton, Lady Stubbs, A. E. Wise, Major F. J. Oldfield, W. H Summerskill, Dr Edith Woodburn, Rt. Hon A Oliver, G. H. Swingler, S Wyatt, W Orbach, M. Sylvester, G. O Yates, V. F Paling, Will T (Dewsbury) Symonds, A. L. Young, Sir R. (Newton) Parker, J. Taylor, H B. (Mansfield) Younger, Hon. Kenneth Parkin, B. T. Taylor, R. J (Morpeth) Paton, Mrs. F. (Rushcliffe) Taylor, Dr. S (Barnet) TELLERS FOR THE AYES: Perrins, W. Thomas, D. E. (Aberdare) Mr. Pearson and Mr. Richard Adams.
NOES. Agnew, Cmdr. P. G. Erroll., F. J. MacLeod, J Amory, D. Heathcoat Fraser, H. C. P. (Stone) Macmillan, Rt. Hon Harold (Bromley) Assheton, Rt. Hon. R. Fraser, Sir I. (Lonsdale) Macpherson, N. (Dumfries) Astor, Hon. M. Galbraith, Cmdr. T. D Maitland, Comdr. J W Baldwin, A. E Glyn, Sir R. Manningham-Buller, R. E Baxter, A. B. Gomme-Duncan, Col A Marshall, D. (Bodmin) Beamish, Maj. T. V. H Grant, Lady Medlicott, Brigadier F Beecheman, N. A Gridley, Sir A Mellor, Sir J. Bennett, Sir P. Grimston, R. V. Moore, Lt.-Col. Sir T Boles, Lt.-Col. D. C (Wells) Harden, J. R. E. Morrison, Maj. J. G. (Salisbury) Bossom, A. C. Hare, Hon. J. H. (Woodbridge) Morrison, Rt. Hon W. S (Cirencester) Boyd-Carpenter, J. A. Harvey, Air-Cmdre. A. V. Mott-Radclyffe, C. E Bromley-Davenport, Lt.-Col. W Henderson, John (Cathcart) Noble, Comdr. A H P Buchan-Hepburn, P G T Hinchingbrooke, Viscount Odey, G. W Butcher, H. W Howard, Hon. A. O'Neill, Rt. Hon. Sir H Carson, E. Hulbert, Wing-Cdr. N. J Osborne, C Challen, C. Hurd, A Peake, Rt. Hon. O. Channon, H. Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Peto, Brig. C H. M Clifton-Brown, Lt.-Cot. G Hutchison, Col. J. R. (Glasgow, C.) Pickthorn, K. Conant, Maj. R. J. E. Jeffreys, General Sir G Poole, O B. S. (Oswestry) Corbett, Lieut.-Col. U. (Ludlow) Keeling, E. H. Prior-Palmer, Brig. O Crookshank, Capt. Rt. Hon. H F C Kingsmill, Lt.-Col. W. H Raikes, H. V. Crowder, Capt. John E Lamoert, Hon. G. Ramsay, Maj. S Cuthbert, W. N. Lancaster, Col. C. G Rayner, Brig. R Darling, Sir W. Y. Legge-Bourke, Maj. E. A. H Reed, Sir S. (Aylesbury) Davidson, Viscountess Lennox-Boyd, A. T. Reid, Rt. Hon. J. S C. (Hillhead) De la Bere, R. Lindsay, M. (Solihull Renton, D. Digby, S. W. Lloyd, Selwyn (Wirral) Roberts, Emrys (Merioneth) Dodds-Parker, A. D Low, A. R. W. Roberts, H. (Handsworth) Donner, P. W. Lucas-Tooth, Sir H. Robinson, Roland Dower, E. L. G. (Caithness) MacAndrew, Col. Sir C Ropner, Col. L Drewe, C. McCallum, Maj. D. Sanderson, Sir F Duncan, Rt. An. Sir A. (City of Lond.) McCorquodale, Rt. Hon. M. S. Scott, Lord W. Duthie, W. S. Macdonald Sir P (I of Wight) Smith, E. P. (Ashford) Eccles, D. M. McFarlane, C. S. Smithers, Sir W Eden, Rt. Hon. A. McKie, J. H. (Galloway) Snadden, W. M Elliot, Rt. Hon. Walter Maclay, Hon. J S. Spence, H. R Stanley, Rt. Hon. O. Thornton-Kemsley, C. N. Williams, C. (Torquay) Stewart, J Henderson (Fife, E.) Thorp, Brigadier R A. F Willoughby de Eresby, Lord Stoddart-Scott, Col. M Turton, R. H Winterton, Rt. Hon. Earl Studholme, H G Vane, W. M. F. York, C Taylor, C. S (Eastbourne) Ward, Hon. G. R. Taylor, Vice-Adm. E. A. (P'dd't'n, S.) Webbe, Sir H. (Abbey) TELLERS FOR THE NOES: Teeling, William Wheatley, Colonel M. J. (Dorset, E.) Sir Arthur Young and Thorneycroft, G. E. P. (Monmouth) White, Sir D. (Fareham) Brigadier Mackeson.
Clause, as amended, ordered to stand part of the Bill.
CLAUSE 2.—( Beer. )
Motion made, and Question proposed, "That the Clause stand part of the Bill."
5.30 p.m.
Before the Commission agrees to Clause 2, we ought to have some explanation of the reason for the additional duty on beer. The incidence of that duty will fall almost exclusively on the lowest income groups. Concessions given in the recent Budget in regard to Income Tax will enable middle income groups to pay the extra id. a pint on beer for even more pints than the most Gargantuan appetite can consume, but the man on £5 or £6 a week, married, with a family, is getting no extra benefits. The additional taxation falls heavily on him and on people in that income group. We have to remember that in many instances the public house is the club where men and women meet for social converse, to discuss various matters, to make, renew and cement friendships, but, with beer at the cheapest Is. a pint, and in some cases 1s. 4d., 1s. 6d., or 1s. 8d. a pint, those in the lower income groups have not the entrance fee to these places where they can indulge in a little social converse and so alleviate to some extent the general monotony of their lives.
There was some excuse for placing the extra duty on tobacco. The excuse was that it was necessary to diminish smoking in order to save dollars. But we do not spend dollars on the manufacture of beer. Beer is now mainly composed of water and we do not import water, so that excuse in regard to tobacco cannot hold in regard to beer. It may be said that the additional taxation is imposed in order to mop up purchasing power, but a much fairer way would have been through the instrument of Income Tax. In the early days of the Socialist movement, we used to say that we preferred direct taxation to indirect taxation because indirect taxation was nearly always oppressive taxation and fell most heavily on the poorer sections. In a Budget in which we have been giving abatements in many instances to payers of direct taxes, we have in a number of instances, like the additional tax on beer, increased the burden of indirect taxation. Is there any necessity to mop up purchasing power from people whose income is only £5, £6 or £7 a week? At present I do not think there is any real fear of inflation. The signs today are much more deflationary than inflationary and if this duty has been imposed in order to check inflation, a much better instrument would have been found by some adjustment of Income Tax.
I appeal to my right hon. and learned Friend the Chancellor of the Exchequer to reconsider this impost, which bears very hardly indeed on the lowest income groups in the country. The Chancellor of the Exchequer holds a high place, he has wealth, and a great name. No one in this Commission grudges him any of those three things. He has earned them by his own great and conspicuous abilities, but I put it to him that from the ivory tower of personal austerity in which he dwells he ought not to overlook the fact that the majority of people in this country have none of those things but seek in the simple pleasures of life some solace to the mediocrity of their existence. One of the simple pleasures of life is to have a glass of beer and to converse with friends. I beg my right hon. and learned Friend to think twice and not to inflict additional taxation for unnecessary reasons on the simple pleasures of the poor.
I do not wish to join issue with the hon. Member for Southampton (Mr. Morley) on his description of how the Chancellor of the Exchequer proposes to mop something up with beer. That seems a feat which even the ingenuity of the Chancellor in praising his own exploits has not yet led him to claim. I speak as an ordinary Member of Parliament of the Conservative Party which, naturally, is more typically representative of a large number of people who work with their hands than are hon. Gentlemen opposite. I am not quarrelling with the Chancellor over this Clause, but I feel in common decency bound to bring to the Chancellor—who is so far remote from most of the people in this country—the feeling among certain industrial workers in my constituency.
The right hon. and learned Gentleman is appealing for more production. I have the honour to represent a certain number of shipyard workers in my division. They are very industrious and, naturally, in South Devon we build better ships of their size than are built anywhere else in Great Britain. Some of these men come from the North. I am not saying that that they are right, but many say that an occasional glass of beer, within reason, is a great aid to them in their production. Hon. Members opposite represent large shipping industries. I am not attempting to argue the merits of whether "beer is good for you" or not, but I ask the Chancellor to look at the practical point of view of the men engaged in that great industry. That is their outlook in the main.
Many electors in my constituency are in His Majesty's Set vices, and many are engaged in the mercantile trade as merchant seamen. A large proportion of men who are serving in the Navy want the Chancellor to know that at the present time they feel, when they come ashore after a long voyage, that the present price of beer is very high. I do not know where the Chancellor stands on the matter of the consumption of alcohol. I do not myself take beer, I do not happen to like it, but I think that the Chancellor ought to know that strong complaints have come to me from all quarters connected with the Services and from seamen who are helping so much with transport work today, that the quality of modern beer is not very good. I do not know whether the Chancellor has heard that before. He is so aloof that we do not know whether he hears of these ordinary everyday matters in life. That is why, before we pass a Clause of this sort, we should know that a large number of people think that in this Clause we are placing a heavy tax on an inferior commodity.
I have given examples of two classes of workers in my Division who have naturally supported me very strongly because they are sensible people. There are many others whom I could instance. Let me refer to the intense desire we have to get on with the construction of houses. I do not want some hon. Gentlemen opposite to get up and say, "Do you think beer is good for you or not?" I am not dealing with that aspect of the matter. I am stating what my constituents think. I do not want to start trouble for the Chancellor of the Exchequer among the ranks behind him, where some people look as though they are rather preparing for it. Men in the building industry have often got to work away from their homes in places where they cannot have canteens. They find that their beer, when they get it, is a very high price. That is entirely due to the Chancellor of the Exchequer. I tell them—and I cannot proceed to explain to the right hon. and learned Gentleman as I should to them—that he, and even more his predecessor, are squanderbugs. I cannot deal with that here, but that is one of the reasons why this Clause appears as it does today.
I have covered two or three sections of the community. Unlike so many hon. Gentlemen opposite, I am not here to represent sectional interests. There is another section of the community for whom, although I have not a great number in my Division, I have a sincere sympathy, as I think everyone on this side of the Committee has. They are people who have not many chances of the ordinary luxuries of life, but they are people who in Scotland, England and Wales enjoy an occasional night, with a glass of beer and a chat and perhaps a pipe in their local pub. That to a large extent constitutes their social life, and it will be greatly handicapped by the Chancellor of the Exchequer. I see that the right hon. and learned Gentleman smiles. I rather think it is not a smile of sympathy with these poor people but indicates his indifference to so much which goes on around him in this world.
I have made this protest not so much against the principle of this Clause as against the details, and because, unless some Members of this Committee get up and really say what they think about this high level of taxation of beer, there will be a tendency on the part of the Chancellor and others to keep piling on additional taxation quite regardless of whether it is necessary to have all this money or not. For that reason, although I do not necessarily say that I shall vote against this Clause, I think that this form of taxation is extremely heavy and very burdensome. I do not say that it is heavier and more burdensome than any form of direct taxation. I am not inclined to regard this Clause particularly as worse than or better than some other Clauses. It is just one of many Clauses in regard to which I can congratulate the Chancellor on one point; that is that so far as this Clause and the commodity with which it deals are concerned, he has kept up the uniform nature of his Budget of being thoroughly bad all round.
5.45 p.m.
I regret that this Clause is contained in the Finance Bill. This point of view was made clear in earlier Debates, but I would like to add a word to what the hon. Member for Southampton (Mr. Morley) has so ably said. He has indeed covered the main arguments. The one thing which the Chancellor cannot claim in this matter, as he may attempt to claim in the case of tobacco, is that it is a question of saving dollars. We make our own beer, and we make the best beer in the world. In fact, we send beer to America, and the right hon. and learned Gentleman cannot claim that his aim here is to save dollars.
The only purpose of this increased tax is to try to get more money in order to have a bigger surplus, as the Chancellor informed us in his Budget speech on 6th April. The question arises, from whom is the money obtained? This point has been dealt with by the hon. Member for Southampton, and I will not go into any greater detail. The money will come from rich and poor people but in the main from the poor, for the greatest consumers of beer are the working classes. The hon. Member for Torquay (Mr. C. Williams) said that he himself does not prefer beer. Maybe he prefers some kind of spirits.
No.
Far be it from me to tread on the toes of anyone who happens to be a teetotaller. I have that problem in my own party. On the other hand, if the hon. Gentleman has a desire for whisky, brandy or gin, he is in the position of being able to have a glass from time to time.
I have no desire or preference in the matter. We on this side of the Commission really believe in good wholesome British-made food and good wholesome British-made drink.
It is out of Order to discuss the habits of individual Members. I would also point out that we are not discussing the quality of beer, we are discussing an increased tax on beer.
All that I was aiming to indicate in my kind reference to the hon. Member for Torquay was that beer drinkers among the well-to-do can, if they wish, afford to buy whisky. The working class cannot. Their only solace, to use the expression of the hon. Member for Southampton, is beer. I do not think it is wise, but that is by the way. I myself am a most moderate drinker. In my calculation, the amount of money to come from each working class family to provide about £34 million which the Chancellor will get from this additional tax is about 1s. a week. It might be said that that is not much. Nor is the tax on tobacco, which is just a few pence per week. Nor are the additional electricity charges which amount to a few pence per week. There are all the other charges which only amount to a few pence a week. I must make these points in order to get the matter in its right perspective.
It is all right so long as the hon. Member mentions them, but he cannot argue them.
I do not need to argue them. We are all aware of their existence; they have not to be proved.
This is one further step in the direction of increasing the burden on the lower paid section of the working class and particularly on the section of working people and others, such as old age pensioners and people of that kind who have a low income. It is for this reason that I would like to see opposition to this Clause. I hope that the Chancellor of the Exchequer will accept the very moderate and well put request made by the hon. Member for Southampton. It he can do so he will bring pleasure to all kinds of people. If he cannot do so there should be opposition to this Clause.
I do not wish to detain the Commission by repeating again on this Clause, or on the next Clause, the arguments deployed by my right hon. and gallant Friend the Member for Gains-borough (Captain Crookshank) on the Clause dealing with tobacco. I merely wish to say that the same considerations apply on all three of these Clauses and we take the same course.
As my hon. Friend the Member for Southampton (Mr. Morley) implied, it is not strictly true that dollars do not enter into this in any shape or form. If the brewers take barley, as they undoubtedly do, to brew their beer, we have to import barley to make good that deficiency, and that costs dollars. It has been said that this is an imposition on the poor man's drink. I do not want to argue that, because it is a matter of opinion whether the middle class and upper class people drink beer or not. My information and my experience is that all classes drink beer, if they like it, irrespective of what their income happens to be.
It is a question of how we are to find the revenue which has to be raised by my right hon. and learned Friend. I would remind the Commission that he has given Income Tax reliefs of no less £103,500,000. £50 million of these have gone to widen the range of income charged at 6s. in the £. He has also given £4,500,000 in allowances to raise the rate of relief on earned income to married women in employment. If the majority of those married women are not working class women, I do not know who they are. So far as indirect taxation is concerned, my right hon. and learned Friend has reduced taxation on certain essential items. The reductions did amount to about £24 million, but certain changes have since been made and the figure is now slightly different. The working classes will share in that relief.
Therefore, we have to remember that very large reliefs have been given in which I am glad to think that the working classes share and in which, in some directions, they have a major share. The loss of income from these concessions has to be made good, and it has been suggested that beer drinkers might be willing to bear another 1d. per pint. As I have said, it is only a question of drinking one pint less in 15 or 16. If we take a balanced view, the Committee will agree that the penny is not excessive. It is one way of helping to raise the revenue which has to be made good.
One of the arguments from the Minister has been that a reduction in other forms of revenue had to be met from other channels, one of which was beer. Will he not concede the point that he is passing over taxation of £5 million to non-Income Tax payers which would otherwise have been paid by Income Tax payers alone? Would he give an answer to that?
I am glad to say a word in support of the Government in its resistance to the arguments of hon. Friends of mine and hon. Gentlemen on the other side of the Committee. It is a strange combination that we see just now, the hon. Member for Southampton (Mr. Morley), the hon. Member for Torquay (Mr. C. Williams) and now the hon. Member for Mile End (Mr. Piratin) all in agreement—
No.
Yes, all in agreement on this general question of the merit of beer being such as to warrant the removal of the tax upon it. It is only from that point of view that I wish to say a few words. The most astonishing contribution has been from the hon. Member for Mile End. He speaks as a Communist on behalf of the working classes. He has got his leadership and his advice as to how this matter ought to be dealt with, from the great working class leaders in Russia, for it was Lenin who made the statement that it was through drink that one found the way back to capitalism. Whatever may have been his intention in the advocacy—
The hon. Member for West Ealing (Mr. Hudson) has quoted Lenin, so he states, but I do not know the book or page. I should like the Committee to give me agreement in my hope that on more occasions he will equally quote him and equally follow him.
I happen to be a student of Lenin, perhaps even a better student than the hon. Member for Mile End—
I do not see the name of Lenin appearing on the Order Paper.
I am dealing only with that aspect of the matter which brings it into association with the problem of taxation. It is that only that we are discussing. Lenin disapproved of alcohol, and indicated that it was an object for restriction, taxation, and removal, precisely because it was an enemy, and not a friend, of the working classes, on behalf of whom the hon. Member for Mile End pretends to be speaking. If the hon. Member has any doubts on this matter, and about the books he mighty read on what has been said about the question, I recommend to him a pass- age in a very heavy tome published by the International Conference against Alcoholism that was held in London a few years before the war when a very lengthy contribution was made on behalf of the Russian Embassy. In that statement the hon. Gentleman will find that and similar quotations which condemn the regarding of alcoholic beverages, under any set of circumstances, as a friend of the working classes.
I think the hon. Member will admit that he is getting wide of the Clause. We are dealing only with the additional charge.
I am indicating that an object which is so much the enemy of the workers can very well stand an additional charge. It is from that point of view that I argue the matter. I have only one other point to add.
On this point the Financial Secretary did not make as strong a reply as he
might have done to my hon. Friend the Member for Southampton, who, on the one hand, deplored the fact that beer, the solace of the working class, bears this heavy burden, and, on the other hand, described it as a very innocent drink, consisting almost entirely of water. Well, then, no great harm is done, because people who like water can get it for nothing at all. As for the issue that there is some serious obstacle about dollars involved, I would add this point to what the Financial Secretary has said. If barley were not produced to the extent that it is in this country, as a result of the extreme demand that the brewers are able to make for it, the land could be engaged in producing wheat and other commodities. To that extent the wheat need never be imported at all. So the dollars do come into it, very considerably.
Question put, "That the Clause stand part of the Bill."
The Commission divided: Ayes, 275; Noes, 130.
Division No. 160.] AYES. [6.0 p.m. Acland, Sir Richard Binns, J. Cobb, F. A Adams, Richard (Balham) Blenkinsop, A. Cocks, F. S. Adams, W. T (Hammersmith, South) Blyton, W. R Coldrick, W. Allen, A. C. (Bosworth) Boardman, H Callindridge, F. Anderson, A. (Motherwell) Bowles, F. G. (Nuneaton) Collins, V. J. Anderson, F. (Whitehaven) Braddock, Mrs. E. M. (L'pl, Exch'ge) Colman, Miss G. M Attewell, H. C. Braddock, T. (Mitcham) Comyns, Dr. L. Awbery, S. S. Brook, D. (Halifax) Cook, T. F. Ayles, W. H. Brooks, T J. (Rothwell) Cooper, Wing-Comdr. G. Ayrton Gould, Mrs. B. Brown, T. J. (Ince) Corlett, Dr. J. Bacon, Miss A. Bruce, Maj. D. W. T. Cove, W. G. Balfour, A. Buchanan, Rt. Han. G Cripps, Rt. Hon. Sir S. Barstow, P G Burden, T W. Crossman, R. H. S. Barton, C Butler, H. W. (Hackney, S.) Dalton, Rt. Hon. H. Battley, J R. Byers, Frank Davies, Rt. An. Clement (Montgomery) Bechervaise, A E. Carmichael, James Davies, Ernest (Enfield) Benson, G Champion, A. J Davies, Harold (Leek) Berry, H. Chater, D. Davies, Haydn (St. Pancras, S.W.) Beswick, F. Chetwynd, G. R Davies, R. J. (Westhoughton) Bing, G. H. C. Cluse, W. S Deer, G Delargy, H. J. Lee, F. (Hulme) Royle, C Diamond, J Leonard, W Scollan, T Debbie, W. Leslie, J R Scott-Elliot, W. Dodds, N. N. Levy, B. W. Shackleton, E. A A Driberg, T. E. N. Lewis, J. (Bolton) Sharp, Granville Dugdale, J. (W. Bromwich) Lewis, T (Southampton) Silverman, J. (Erdington) Dumpleton, C. W. Lindsay, K M. (Comb'd Eng Univ.) Silverman, S S. (Nelson) Ede, Rt. Hon. J C. Lipson, D. L Simmons, C J Edwards, Rt. Hon. Sir C. (Bedwellty) Longden, F Skeffington, A M Edwards, N. (Caerphilly) Lyns, A. W Skeffington-Lodge, T C Evans, Albert (Islington, W.) McAdam, W Skinnard, F. W Evans, E. (Lowestoft) McAllister, G. Smith, C. (Colchester) Evans, S. N. (Wednesbury) McEntee, V. La T Smith, H. N (Nottingham, S) Ewart, R. McFarlane, C. S Snow, J. W. Fairhurst, F. McGhee, H. G Solley, L J. Farthing, W. J McGovern, J Sorensen, R W Fernyhough, E. Mack, J. D. Soskice, Sir Frank Field, Capt. W. J. Mackay, R W. G. (Hull, N.W.) Sparks, J. A. Fletcher, E. G M. (Islington, E) McKinlay, A S Stamford, W Foot, M M MacMillan, M K. (Western Isles) Steele, T Forman, J C Mainwaring, W H Stross, Dr B Fraser, T. (Hamilton) Mallalieu, J. P W (Huddersfield) Stubbs, A. E Freeman, Peter (Newport) Mann, Mrs. J. Summerskill, Dr. Edith Ganley, Mrs. C. S. Manning, C. (Camberwell, N.) Swingler, S. George, Lady M. Lloyd (Anglesey) Manning, Mrs. L (Epping) Sylvester, G. O Gibbing, J. Macquand, H. A. Symonds, A L Gibson, C. W. Marshall, F. (Brightside) Taylor, H. B. (Mansfield) Gilzean, A Mellish, R. J Taylor. R. J (Morpeth) Goodrich, H. E Messer, F. Taylor, Dr S. (Barnet) Gordon-Walker, P. C Middleton, Mrs. L. Thomas, D E. (Aberdare) Granville, E. (Eye) Millington, Wing-Comdr E R Thomas, Ivor (Keighley) Greenwood, A. W J (Heywood) Monslow, W Thomas, I O (Wrein) Grenfell, D. R Moody, A. S Thomas, George (Cardiff) Grey, C. F Morgan, Dr. H B Thorneycroft. Harry (Clayton) Griffiths, D (Rother Valley) Morris, Hopkin (Carmarthen) Thurtle, Ernest Griffiths, W. D. (Moss Side) Morrison, Rt. Hon H (Lewisham, E) Tiffany, S Guest, Dr. L. Haden Mort, D. L Timmons, J. Guy, W. H Moyle, A. Titterington M F Haire, John E. (Wycombe) Nally, W Tolley, L Hale, Leslie Naylor, T E Tomlinson, Rt. Hon G Hall, Rt. Hon. Clenvil Neal, H (Claycross) Turner-Samuels, M Hamilton, Lieut.-Col R Nichol, Mrs. M E. (Bradford, N.) Ungoed-Thomas, L Hardy, E. A. Nicholls, H R. (Stratford) Usborne, Henry Harrison, J. Noel-Baker, Capt F. E. (Brentford) Vernon, Maj W F Hewitson, Capt M Noel-Baker, Rt. Hon. P J. (Derby) Viant, S P Hicks, G Noel-Buxton, Lady Wadsworth, G Holman, P Oldfield, W. H Walker, G H Holmes, H E (Hemsworth) Oliver, G. H Wallace, H W (Walthamstow, E) Horabin, T L Orbach, M. Warbey, W. N House, G. Paling, Rt. Hon. Wilfred (Wentworth) Watkins, T E Hoy, J. Palmer, A. M F Watson, W. M Hubbard, T Parker, J. Wells, P L (Faversham) Hudson, J. H. (Ealing, W.) Parkin, B. T Wells, W T (Walsall) Hughes, Emrys (S. Ayr) Paton, Mrs. F. (Rushcliffe) Westwood, Rt Hon J Hughes, Hector (Aberdeen, N.) Paton, J. (Norwich) Wheatley, Rt Hn J (Edinburgh, E) Hughes, H. D. (W'Iverh'pton, W) Pearson, A White, C F (Derbyshire, W) Hutchinson, H. L. (Rusholme) Perrins, W White, H (Derbyshire, N.E) Hynd, H. (Hackney, C.) Popplewell, E. Whiteley, Rt Hon. W. Hynd, J. B (Attercliffe) Porter, E (Warrington) Willey, O. G (Cleveland) Irvine, A. J. (Liverpool) Porter, G. (Leeds) Williams, D. J (Neath) Jay, D. P. T Price, M Philips Williams, J L (Kelvingrove) Jeger, Dr S W (St. Pancras, S. E.) Proctor, W. T Williams, R W (Wigan) Jenkins, R H Pryde, D. J. Williams W R. (Heston) Johnston, Douglas Pursey, Cmdr. H Wills, Mrs E A Jones, D. T. (Hartlepool) Randall, H E Wise, Major F J Jones, P. Asterley (Hitchin) Ranger, J Woodburn, Rt Hon A Keenan, W. Rankin, J Wyatt, W Kendal, W D Reeves, J Yates, V F Kenyon, C Reid, T (Swindon) Young, Sir R (Newton) Key, Rt Hon C W Ridealgh, Mrs. M Kinley, J. Roberts, Emrys (Merioneth) TELLERS FOR THE AYES: Kirby, B. V. Roberts, Goronwy (Caernarvonshire) Mr. Joseph Henderson and Kirkwood, Rt. Hon D Robertson, J J (Berwick) Mr. Hannan. Lang, G Ross, William (Kilmarnock)
NOES. Amory, D. Heathcoat Boyd-Carpenter, J A Clarke, Col. R S Assheton, Rt Hon. R Bromley-Davenport, Lt.-Col W Clifton-Brown. Lt -Col G Astor, Hon. M. Buchan-Hepburn, P. G T Cole, T L. Baldwin, A E Butcher, H. W Conant, Maj R J E Baxter, A. B Butler, Rt. Hon R. A. (S'ffr W'ld'n) Cooper-Key, E. M Bearish, Maj. T. V. H Carson, E. Corbett, Lieut.-Col. U. (Ludlow) Boles, Lt.-Col D. C (Wells) Channon, H Crookshank, Capt Rt Hon H F C Crowder, Capt. John E Law, Rt. Hon. R. K Renton, D. Cuthbert, W. N Legge-Bourke, Maj. E A H Roberts, H. (Handsworth) Darling, Sir W. Y Lindsay, M. (Solihull) Robertson, Sir D. (Streatham) Davidson, Viscountess Lloyd, Selwyn (Wirral) Robinson, Roland De la Bère, R Low, A. R. W. Ropner, Col. L Digby, S. W Lucas-Tooth, Sir H Sanderson, Sir F Dodds-Parker, A. D MacAndrew, Col Sir C Scott, Lord W. Dower, E L G (Caithness) McCallum, Maj. D. Smith, E. P. (Ashford) Drewe, C. McCorquodale, Rt. Hon. M S. Smithers, Sir W Duncan, Rt. Hn Sir A. (City of Lord) Macdonald. Sir P (I of Wight) Snadden, W. M Duthie, W. S. McFarlane, C. S. Spence, H. R. Eccles, D. M. Mackeson, Brig. H. R Stanley, Rt. Hon O Elliot, Rt. Hon. Walter McKie, J. H. (Galloway) Stewart, J Henderson (Fife, E.) Erroll, F J. Maclay, Hon. J S. Stoddart-Scott, Col. M. Fletcher, W. (Bury) Macmillan, Rt. Hon. Harold (Bromley) Taylor, C. S. (Eastbourne) Fraser, H. C. P. (Stone) Macpherson, N. (Dumfries) Taylor, Vice-Adm. E. A. (P'dd't'n, S) Fraser, Sir I. (Lonsdale) Maitland, Comdr. J W. Teeling, William Galbraith, Cmdr. T. D Manningham-Buller, R. E Thornton-Kemsley, C. N Glyn, Sir R. Marshall, D. (Bodmin) Thorp, Brigadier R. A F Gomme-Duncan, Col. A Medlicott, Brigadier F Turton, R. H. Grant, Lady Mellor, Sir J. Vane, W. M. F. Gridley, Sir A. Moore, Lt.-Col. Sir T. Wakefield, Sir W. W Grimston, R. V. Morris-Jones, Sir H. Walker-Smith, D. Hannon, Sir P. (Moseley) Morrison, Maj. J. G. (Salisbury) Ward, Hon. G R. Harden, J. R. E. Mott-Radclyffe, C. E Webbe, Sir H. (Abbey) Hare, Hon. J. H. (Woodbridge) Odey, G. W. Wheatley, Colonel M. J. (Dorset, E.) Harvey, Air-Cmdre. A. V. O'Neill, Rt. Hon. Sir H White, Sir D. (Fareham) Hinchingbrooke, Viscount Orr-Ewing, I. L Williams, C. (Torquay) Howard, Hon. A Peake, Rt. Hon. O. Williams, Gerald (Tonbridge) Hulbert, Wing-Cdr. N. J. Peto, Brig. C. H M Willoughby de Eresby, Lord Hurd, A. Pickthorn, K. Winterton, Rt. Hon. Earl Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Poole, O. B. S. (Oswestry) York, C Hutchison, Col. J. R. (Glasgow, C.) Prior-Palmer, Brig. O. Young, Sir A. S. L. (Partick) Jeffreys, General Sir G. Raikes, H. V. Joynson-Hicks, Hon. L. W Ramsay, Maj. S TELLERS FOR THE NOES: Keeling, E. H. Rayner, Brig. R. Commander Agnew and Lambert, Hon. G. Reed, Sir S. (Aylesbury) Mr. Studholme. Lancaster, Col. C. G. Reid, Rt. Hon. J. S. C. (Hillthead)
CLAUSE 3.—(Spirits.)
Motion made and Question put, "That the Clause stand part of the Bill."
The Commission divided: Ayes, 287; Noes, 125.
Division No. 161.] AYES. [6.12 p.m. Acland, Sir Richard Byers, Frank Edwards, Rt. Hon. Sir C. (Bedwellty) Adams, Richard (Balham) Carmichael, James Edwards, N. (Caerphilly) Adams, W T. (Hammersmith, South) Castle, Mrs. B. A. Evans, Albert (Islington, W.) Allen, A. C. (Bosworth) Champion, A. J Evans, E. (Lowestoft) Allen, Scholefield (Crewe) Chater, D. Ewart, R. Anderson, A. (Motherwell) Chetwynd, G R Fairhurst, F. Anderson, F. (Whitehaven) Cluse, W. S Farthing, W. J. Attewell, H. C. Cobb, F. A. Fernyhough, E. Austin, H. Lewis Cocks, F. S. Field, Capt. W. J. Awbery, S. S. Coldrick, W Fletcher, E. G M. (Islington. E) Ayles, W. H. Collindridge, F. Follick, M. Ayrton Gould, Mrs. B Collins, V. J Foot, M M. Bacon, Miss A. Colman, Miss G. M Forman, J. C. Balfour, A Comyns, Dr. L. Fraser, T. (Hamilton) Barstow, P. G Cook, T. F. Freeman, Peter (Newport) Barton, C Cooper, Wing-Comdr. G. Gallacher, W Battley, J. R. Corlett, Dr. J. Ganley, Mrs. C. S. Bechervaise, A E Cove, W G. George, Lady M Lloyd (Anglesey) Benson, G. Cripps, Rt. Hon. Sir S Gibbins, J. Berry, H. Grossman, R. H S Gibson, C. W. Beswick, F. Daggar, G Gilzean, A. Bing, G. H. C Dalton, Rt. Hon. H. Glanville, J. E. (Consett) Binns, J. Davies, Rt. Hn. Clement (Montgomery) Goodrich, H. E. Blenkinsop, A. Davies, Ernest (Enfield) Gordon-Walker, P. C. Blyton, W. R Davies, Harold (Leek) Granville, E. (Eye) Boardman, H. Davies, Haydn (St. Pancras, S.W) Greenwood, A. W. J. (Heywood) Bowles, F. G. (Nuneaton) Davies, R. J. (Westhoughton) Grenfell, D. R. Braddock, Mrs. E. M. (L'pl, Exch'ge) Davies, S. O. (Merthyr) Grey, C. F. Braddock, T. (Mitcham) Deer, G. Griffiths, D. (Rother Valley) Brook, D. (Halifax) Delargy, H. J. Griffiths, W. D. (Moss Side) Brooks, T. J. (Rothwell) Diamond, J. Guest, Dr. L. Haden Brown, T. J. (Ince) Dobbie, W. Guy, W. H. Bruce, Maj. D. W. T. Dodds, N. N. Haire, John E. (Wycombe) Buchanan, Rt. Hon. G. Driberg, T. E. N. Hale, Leslie Burden, T W. Dugdale, J. (W. Bromwich) Hall, Rt. Hon. Glenvil Burke, W. A. Dumpleton, C. W. Hamilton, Lieut.-Col, R Butler, H. W. (Hackney, S.) Ede, Rt. Hon. J C. Hardy, E. A. Harrison, J. Morley, R. Sorensen, R W Hewitson, Capt M Morgan, Dr. H B Soskice, Sir Frank Hicks, G. Morris, Hopkin (Carmarthen) Sparks, J. A Holman, P Morrison, Rt. Hon H (Lewisham. E) Stamford, W Holmes, H E. (Hemsworth) Mort, D L Steele, T. Horabin, T L Moyle, A Stross, Dr. B. House, G. Nally, W Stubbs, A. E. Hoy, J. Naylor, T E Summerskill, Dr. Edith Hubbard, T Neal, H. (Claycross) Swingler, S Hudson, J. H. (Ealing, W.) Nichol, Mrs. M. E. (Bradford, N.) Sylvester, G O Hughes, Emrys (S. Ayr) Nicholls, H. R (Stratford) Symonds, A L Hughes, Hector (Aberdeen, N.) Noel-Baker, Capt. F. E. (Brentford) Taylor, H. B. (Mansfield) Hughes, H. D. (W'lverh'ipton, W.) Noel-Baker, Rt. Hon. P J. (Derby) Taylor, R. J. (Morpeth) Hutchinson, H. L. (Rusholme) Noel-Buxton, Lady Taylor, Dr. S. (Barnet) Hynd, H. (Hackney, C.) Oldfield, W H Thomas, D. E. (Aberdare) Hynd, J. B. (Ailercliffe) Oliver, G. H Thomas, Ivor (Keighley) Irvine, A. J. (Liverpool) Orbach, M Thomas, I. O. (Wrekin) Jay, D. P. T. Paling, Rt. Hon. Wilfred (Wentworth) Thomas, George (Cardiff) Jeger, Dr. S. W. (St. Pancras, S.E.) Paling, Will T. (Dewsbury) Thorneycroft, Harry (Clayton) Jenkins, R. H. Palmer, A. M. F Thurtle, Ernest Johnston, Douglas Parker, J. Tiffany, S. Jones, D. T. (Hartlepool) Parkin, B. T. Timmons, J. Jones, P. Asterley (Hitchin) Paton, Mrs. F. (Rushcliffe) Titterington, M. F Keenan, W. Paton, J. (Norwich) Tolley, L. Kendall, W. D Pearson, A. Tomlinson, Rt. Hon. (Bedwellty) Kenyon, C Perrins. W. Turner-Samuels, M. Key, Rt. Hon. C W Piratin, P Ungoed-Thomas, L. Kinky, J. Popplewell, E Usborne, Henry Kirkwood, Rt. Hon. D Porter, E. (Warrington) Vernon, Maj W F Lang, G. Porter, G. (Leeds) Viant, S. P Lee, F. (Hulme) Price, M Philips Wadsworth, G Leonard, W. Priil, D N Walker, G. H. Leslie, J. R. Proctor, W. T Wallace, H. W. (Walthamstow, E.) Levy, B. W. Pryde, D. J. Warbey, W. N Lewis, J. (Bolton) Pursey, Cmdr. H Watkins, T. E. Lewis, T. (Southampton) Randall, H. E Watson, W M. Lipson, D. L. Ranger, J. Wells, P. L. (Faversham) Longden, F. Rankin, J. Wells, W. T. (Walsall) Lyne, A. W. Reid, T. (Swindon) Westwood, Rt. Hon. J. McAdam, W. Richards, R. Wheatley, Rt. Hn. J. (Edinburgh, E) McAllister, G. Ridealgh, Mrs. M White, C F. (Derbyshire, W.) McEntee, V. La T Roberts, Emrys (Merioneth) White, H. (Derbyshire, N.E.) McGhee, H. G. Roberts, Goronwy (Caernarvonshire) Whiteley, Rt. Hon. W. McGovern, J. Robertson, J. J. (Berwick) Willey, O. G. (Cleveland) Mack, J. D. Ross, William (Kilmarnock) Williams, D. J. (Neath) Mackay, R W. G. (Hull, N.W.) Royle, C. Williams, J. L. (Kelvingrove) McKinlay, A. S Scollan, T. Williams, R. W. (Wigan) MacMillan, M. K. (Western Isles) Scott-Elliot, W. Williams, Rt Hon. T. (Don Valley) Mainwaring, W. H Shackleton, E. A. A Williams, W. R. (Heston) Mallalieu, J. P. W. (Huddersfield) Sharp, Granville Wills, Mrs. E. A. Mann, Mrs. J. Silverman, J. (Erdington) Wise, Major F. J. Manning, C. (Camberwell, N.) Silverman, S. S. (Nelson) Woodburn, Rt. Hon. A Manning, Mrs. L. (Epping) Simmons, C. J. Wyatt, W. Marquand, H. A. Skeffington, A. M Yates, V. F. Marshall, F. (Brightside) Skeffington-Lodge, T. C Young, Sir R. (Newton) Mellish, R. J. Skinnard, F. W. Zilliacus, K Messer, F. Smith, C. (Colchester) Middleton, Mrs. L Smith, H. N. (Nottingham, S.) TELLERS FOR THE AYES: Millington, Wing-Comdr. E. R Snow, J. W. Mr. Joseph Henderson and Monslow, W Solley, L. J. Mr. Hannan.
NOES. Amory, D. Heathcoat Cuthbert, W. N. Hannon, Sir P. (Moseley) Assheton, Rt. Hon. R. Darling, Sir W. Y. Harden, J. R. E. Astor, Hon. M. Davidson, Viscountess Hare, Hon. J. H. (Woodbridge) Baldwin, A. E. De la Bère, R. Harvey, Air-Cmdre. A. V. Baxter, A. B. Digby, S. W. Hinchingbrooke, Viscount Boles, Lt.-Col. D. C. (Wells) Dodds-Parker, A. D. Howard, Hon. A. Boyd-Carpenter, J. A. Dower, E. L G (Caithness) Hulbert, Wing-Cdr. N. J Bromley-Davenport, Lt.-Col. W Drewe, C. Hurd, A. Buchan-Hepburn, P. G. T. Duncan, Rt. Hn. Sir A. (City of Lord) Hutchison, Lt.-Cm. Clark (E'b'rgh, W) Butcher, H. W. Duthie, W. S. Hutchison, Col. J. R. (Glasgow, C) Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n) Eccles, D. M. Jeffreys, General Sir G. Carson, E. Elliot, Rt. Hon. Walter Joynson-Hicks, Hon. L. W Channon H. Erroll, F. J. Lambert, Hon. G. Clarke, Col. R. S. Fletcher, W. (Bury) Lancaster, Col. C. G. Clifton-Brown, Lt.-Col. G Fraser, H. C. P. (Stone) Law, Rt. Hon. R. K. Cole, T. L. Fraser, Sir I. (Lonsdale) Legge-Bourke, Maj. E. A. H Conant, Maj. R. J. E. Galbraith, Cmdr. T. D. Lindsay, M (Solihull) Cooper-Key, E. M. Gomme-Duncan, Col. A. Lloyd, Selwyn (Wirral) Corbett, Lieut.-Col. U. (Ludlow) Grant, Lady Low, A. R. W. Crookshank, Capt. Rt. Hon. H. F. C. Gridley, Sir A. Lucas-Tooth, Sir H. Crowder, Capt. John E. Grimston, R. V. MacAndrew, Col. Sir C. McCallum, Maj D Peto, Brig. C. H M Taylor, Vice-Adm E A (P'dd't'n, S) McCorquodale, Rt. Hon. M. S Pickthorn, K. Teeling, William Macdonald Sir P (I of Wight) Poole, O. B. S. (Oswestry) Thornton-Kemsley, C N McFarlane, C S. Prior-Palmer, Brig. O. Thorp, Brigadier R A F Mackeson, Brig H R Raikes, H V Turton, R H. McKie, J H. (Galloway) Ramsay Maj. S Vane, W. M. F. Macmillan, Rt. Hon Harold (Bromley) Rayner, Brig R Wakefield, Sir W W Macpherson, N (Dumfries) Reed, Sir S (Aylesbury) Walker-Smith, D. Maitland, Comdr J W Renton, D Ward, Hon. G. R. Manningham-Buller, R. E Roberts, H. (Handsworth) Webbe, Sir H. (Abbey) Marshall, D (Bodmin) Robertson, Sir D. (Streatham) Wheatley, Colonel M J. (Dorset, E.) Medlicott, Brigadier F Robinson, Roland White, Sir D. (Fareham) Mellor, Sir J Ropner, Col L. Williams, C (Torquay) Moore, Lt.-Col. Sir T Scott, Lord W. Williams, Gerald (Tonbridge) Morris-Jones, Sir H Smith, E. P. (Ashford) Willoughby de Eresby, Lord Morrison, Maj J G (Salisbury) Smithers, Sir W Winterton, Rt Hon. Earl Morrison, Rt. Hon W S (Cirencester) Snadden, W. M York, C Mott-Radclyffe, C E. Spence, H R Young, Sir A. S. L (Partick) Odey, G. W. Stanley, Rt. Hon. O O'Neill, Rt Hon. Sir H Stewart, J. Henderson (Fife, E.) TELLERS FOR THE NOES: Orr-Ewing, I. L Stoddart-Scott, Col. M. Commander Agnew and Peake, Rt. Hon. O Taylor, C. S (Eastbourne) Mr. Studholme.
CLAUSE 4.—( Wines. )
I beg to move, in page 3, line 41, at the end, to insert:
His second objective was not so clearly stated and, in fact, was not specifically referred to at all, but the impression left was that it was the restoration of the Empire Preference on heavy wines. He made it quite clear that on heavy wines of foreign origin there would be an increase in the rate of duty, that the increase in the rate of duty would be greater in the case of wines coming from foreign countries than in the case of wines coming from Empire countries; and in that way the Empire Preference in the case of heavy wines was slightly increased and was restored to what it had been before the war. The right hon. and learned Gentleman said that heavy wines had made out a good case for the restoration of their preferential rate and it had, therefore, been agreed at Geneva that the margin of Empire Preference in their case should be raised to 10. a gallon. I quote the right hon. and learned Gentleman:
What we particularly seek to know tonight is why, if the heavy wines were able to make out a satisfactory case, the light wines were not also able to make out a satisfactory case for the restoration for their Preference? So far as the trade is aware, so far as the growers are aware, and so far as the consumers are aware, there is absolutely no difference which can account for the different attitude which the Chancellor of the Exchequer adopts towards the sweet wines by comparison with that adopted towards the light wines.
The position with regard to light wines is now very remarkable indeed, and I hope the Commission will allow me to quote the actual rates of duty, in a comparison between the prewar position and the present position. The prewar Empire light wines suffered a duty of 2s. per gallon. The prewar foreign light wines suffered double that duty, or 4s. per gallon. The present rate of duty on the Empire light wines is 23s. per gallon and the present rate of duty on the foreign light wines is 25s. per gallon. Consequently, the 2s. Empire Preference has been retained throughout the period, but instead of being a 50 per cent. Preference, as it was before the war, it has now reached the almost derisory point of being about an eight per cent. Preference. If I may put it in another way, the rate of duty on the foreign light wines has been increased since before the war by no less than six times, but the rate of duty on the Empire light wines has been increased since before the war by no less than 11½ times.
I think the Committee will ask where this Empire Preference has gone; and still more, if the sweet wines or the heavy wines are able to make out a case for the restoration of their Preference, surely the light wines are at least in as good a position, if not an even better position, to make out such a case. I hope, therefore, that the Committee will take these figures into account, because the question of Imperial Preference is one of very vital moment at the present time. The Commission is probably already aware of the anxiety for the restoration of preferential rates which has been expressed by many of the Dominion statesmen, particularly in Australia, which is the country from which a very large proportion of the Empire wines come. Perhaps I may remind the Commission of what was said by Mr. Spender in Australia recently:
6.30 p.m.
Mr. Spender was expressing the greatest anxiety as to what was to be the future of the Imperial Preference system. I think we have here an important instance, even if not a very major one from the point of view of the amount of money which is involved to the Treasury, in which, at least, a certain degree of confidence can be restored as to what is the Government's attitude towards Preference. Therefore, I hope the Commission will accept this Amendment, which merely seeks to restore the same percentage of the Imperial Preference rate to these light wines as was available to them before the war. It really cannot be accepted as a reasonable attitude that we should increase the duty on foreign light wines six times and yet increase the duty on the Empire light wines by very nearly double that amount—11½ times.
I should like to support the Amendment that has been so well moved by my hon. Friend. I think he has put the whole case for this Amendment with marked restraint and with supreme conviction. His Amendment is designed to restore the preference on the products of the Empire light wine industry. The Empire growers have been making a great effort during the past 10 or 15 years to develop this light wine trade. In South Africa, as the right hon. and learned Gentleman will be aware, they have rather specialised in heavy wines, and, apparently, they have been successful in their negotiations with the Treasury. I believe it to be true that when the South African Government became fearful that the gold industry of South Africa might decline, they decided to extend the development of the wine industry so as to provide a counter balance in the Dominion's economy. In Australia they specialised on the light wines. It would appear that, for some unknown reason, the Australian growers have not been as successful in their efforts as the South African growers have been in theirs.
Therefore, it seems to us that the same restraint is imposed on us in regard to the duties on wines as has been imposed on us in regard to the duties on tobacco, and that, owing to this Geneva Agreement, our hands are tied. I should like the right hon. and learned Gentleman to tell us whether this is a restraint, a special attack on the light wine industry, due to any terms in the Geneva Agreement. Or is it
due to any arrangement that we made with the French? It seems to me that whatever our obligations may be to our Allies, our French friends, our chief obligations and our chief loyalties should be to our Imperial friends. That is the broad principle which should guide all our taxation policy. While not seeking to make any suggestions on the exact preference which should be granted, I should be grateful if the Chancellor would give us some hope that the points which have been expressed by my hon. Friend and me will have some weight in his decision.
I oppose the Amendment. In the ordinary way I am a strong supporter of Imperial Preference—a very strong supporter. I yield to no other hon. Member in the Commission in that respect. However, I think that in this instance Imperial Preference would do harm. I do not agree that it would be a good thing for this country to have an increased consumption of these wines. After all, when we are talking of preferences we have to think not only of the people to whom we are giving the preference, but also of those against whom the preference is made. The hon. and gallant Member for Ayr Burghs (Sir T. Moore) conceded a large part of my case. He conceded that the Australians had not been successful in the production of light wines. I believe that wine is a good thing, and I should like to see the people of this country drinking far more wine than they do. Because of that, I want them to have access to good wines. I feel that if they have Empire products instead of those of Burgundy, Bordeaux and other parts of France, wine will not be so popular in this country as it ought to be.
I have another angle on this, too. I hope to see our French friends before very long in the same economic and political set-up as ourselves and our kinsmen in the overseas Dominions. I feel very strongly about that. That was why I took the risk of offending my party by attending the Hague Conference. I do not want to hurt France. Therefore, I think we shall be doing the right thing if we reject this Amendment. Moreover, I should like to see my right hon. and learned Friend at a later stage—possibly next year—go further and take steps to reduce the duty on and the price of all wines.
I am afraid it would be quite impossible to accept this Amendment for the simple reason, to start with, that we are bound by the Agreement at Geneva not to do so. In other words, at Geneva, as regards the heavy wines, there was agreement by other countries that we should make this adjustment in the preference, and as regards the light wines that we should not. It is quite impossible to take any single item out of a very complicated agreement such as we had at Geneva and say that this is right or this is wrong. This was set off against other considerations, and it was agreed by Australia, it was agreed by South Africa, it was agreed by everybody, as the best way of dealing with the total situation.
The facts are that the vast majority of the wine that comes from the Empire is heavy wine, and the amount of light wine is very small indeed. Our light wines are drawn substantially from Europe. We always have drawn them from Europe, and, as my hon. Friend the Member for South Nottingham (Mr. N. Smith) said, I hope we shall go on drawing them from Europe. That is really the natural source. Apart from the fact that, I believe, light wines do not travel very well for very great distances. This Agreement was come to, and I think the Commission should regard it as on the whole a satisfactory Agreement. It did not increase the preference on a very small part of the trade: it did on what was the bulk of the trade. I think all the Dominions and Commonwealth countries supplying us with wines were really very gratified at the result.
The hon. Member for Chichester (Mr. Joynson-Hicks) pointed out what a very small percentage 2s. was now of the total price. But that is what happens to specific duties. If one agrees to a specific duty, thinking that is the best way of dealing with the matter, one takes a gamble, and if the price goes down the preference is good, but if the price goes up the percentage of the preference becomes smaller. We cannot switch suddenly from a specific to an ad valorem duty because the price happens to be against us. Owing to the Geneva Agreement, of course, we cannot increase that specific preference merely by unilateral action of our own. Therefore, I must ask the Committee to reject this Amendment.
In response to what the right hon. and learned Gentleman alleged about the comparatively small quantity of light wines which come from Australia, I would point out that the last available figures, for the year ending June, 1946, show that there were upwards of 500,000 gallons, which is by no means an unsubstantial quantity, at any rate, from the point of view of the people who had to produce it. I find it very difficult indeed to understand how the Government can justify the fact of allowing benefit to accrue to the heavy wine growers without regard to the growers of the light wine in Australia, who are bound to suffer.
Amendment negatived.
I beg to move, in page 3, line 42, at the beginning, to insert "Subsection (1) of."
It may be for the convenience of the Commission if we consider this Amendment together with the two subsequent Amendments.
I think that it will facilitate discussion to take this group of Amendments together, as they deal with very much the same subject.
The first two Amendments deal with the fortification of Empire produced wines when they arrive in this country. The purpose of the Amendments to Clause 4 is to alter the provisions of the Customs Consolidation Act, 1876, and the Spirits Act, 1880, in so far as those two statutes prohibit the use of British flavoured or compounded spirits for fortifying wines in a warehouse. If an Amendment of this nature is not accepted one or two firms in this country who are importers of this wine, and who are in the habit of using compounded spirit will be precluded under the terms of Section 95 of the 1876 Act from obtaining the new duty free concession to use up to 10 per cent. proof spirit for fortification.
I would point out to the Commission that importers of Empire and Foreign wines are already under the existing regulations allowed to use up to 10 per cent. duty free spirits of certain types for fortification. As this concession is being extended by Clause 5 to British wine pro- ducers, it is very desirable that the Chancellor of the Exchequer should proceed a little further and allow the importers of Empire wines to use duty free British flavoured or compounded spirits for the process of fortification. I understand that so far as the Home produced wines are concerned, the Chancellor of the Exchequer has in recent months received representations from the National Association of British Wine Producers, asking that they be allowed to add to their products 10 per cent. of duty free proof spirit by way of fortification.
Hitherto the practice has been to use duty paid spirits, and this has placed the producers of home wines in a less favourable position than the producers of foreign and Empire wines because, in spite of the higher rates of duty paid for these imported beverages, the latter have had the advantage over their British competitors in that for some time past they have been able to fortify their wines after arrival in this country with up to a maximum of 10 per cent. duty free proof spirit, the spirit being generally of foreign origin.
6.45 p.m.
The present Finance Bill puts that situation right and covers the case of most of the firms engaged on this type of business, but it so happens that one or two firms engaged in the home production of wines are excluded from the scope of the Clause because of the special methods which they use in the production of their goods, and unless the Amendment is accepted, in the words I have put down to Clause 5, it would seem that these particular firms will be penalised by being put at a disadvantage in competition in this particular branch of trade with the other producers of British wines.
I am thinking particularly of a well known Scottish business which has been engaged in the production of certain cordials for over Too years. This firm not only have a very considerable home trade but a very valuable export trade. They have found that for reasons of quality—I stress that word—it has been necessary to use compounded spirits for the production of green ginger wine in preference to the use of an essence. This particular firm use root ginger as the flavouring element which is infused in spirit which has to be withdrawn from bond, and the duty has to be paid by the company. Nearly every other firm which produces ginger wine uses an essence for flavouring purposes and after the flavouring they fortify it, using a plain spirit and not a compounded spirit. That is where the present difficulty arises.
These firms which use the essence will, under the term of the Finance Bill, now be permitted to make use of up to 10 per cent. duty free proof spirit for fortification, but the one or two firms which use a compounded spirit will not get any benefit. Therefore, I am asking the Chancellor of the Exchequer to accept this Amendment which will allow compounded spirit to be used without payment of duty. In view of the fact that it carries out the dual function of flavouring and fortifying agent. This is a difficult matter, and perhaps I may conclude by pointing out the very considerable difference in duty which this change in the law means.
Under the Finance Bill as it stands, firms that use British wine fortified with 10 per cent. duty free spirit will pay in British wine duty 22s. 6d. per gallon and will not pay spirit duty at all, so that the total duty is only 22s. 6d. per gallon, whereas the firm I have in mind, using British wine fortified with 10 per cent. British flavoured compounded spirit, will pay a wine duty of 22s. 6d. and a spirit duty of 19s. 2d., making a total of 41s. 8d. per gallon, which obviously puts them at a very marked disadvantage to their competitors. Unless the Amendment is accepted, this firm will have to alter its process of manufacture, with loss of good will and with damage to trade both at home and overseas. I hope that the Chancellor of the Exchequer will accept the Amendment. I understand that this matter has been the subject of discussions between representatives of the firm and the Commissioners of Customs and Excise. The wording of Section 95 of the Customs Consolidated Act, 1876, is now, I think, recognised by the Commissioners as being obsolete, and I do not believe that anyone can find any serious objection to the proposed change.
The hon. and gallant Gentleman has explained to the Committee in some detail, but very clearly, his object in moving this Amendment. I, on behalf of my right hon. and learned Friend, have great pleasure in saying that we accept it. How this difference between British and foreign flavouring grew up, with a preference given to foreign flavouring, I do not know; it obviously dates back to at least 1876, and I understand that it probably dates back a good deal further than that. It is time that we brought Britain up to the level of other countries in the flavouring of its products. While I have great pleasure in accepting this and the following Amendment, it would be unwise and wrong of me to indicate what may happen to the later Amendment in Clause 5, page 4, line 9, to leave out from "spirits" to "with" in line 10. It may be that the hon. and gallant Member, finding my right hon. and learned Friend amenable on this may find him equally amenable on that.
Amendment agreed to.
Further Amendment made: In page 3, line 43, at end, add:
"(3) So much of Section ninety-five of the Customs Consolidation Act, 1876, as relates to the mixing of spirits with wines in a warehouse and so much of Section seventy of the Spirits Act, 1880, as relates to the use of spirits for fortifying wines in a warehouse shall apply to British flavoured or compounded spirits as they apply to other spirits."—[ Lieut.-Commander Hutchison. ]
Clause, as amended, ordered to stand part of the Bill.
CLAUSE 5.—(Sweets.)
I beg to move, in page 4, line 9, to leave out from "spirits" to "with" in line 10.
I thank the right hon. Gentleman for what he said previously. I have already covered all the ground, and I hope that his benevolence will extend to this Amendment, too.
We accept this Amendment.
Amendment agreed to.
I beg to move, in page 4, line 13, to leave out "thirty-two," and to insert "forty."
The object of this Amendment is to put wines manufactured in this country in the same position with respect to the privilege of fortification as wines imported into this country, either from the Empire or from foreign countries. As the Financial Secretary will recollect, this subject was raised during the Committee stage of the November Finance Bill, when it arose by reason of the fact that, for the first time, a differential duty, differentiating between heavy and light wines, was imposed on British produced wines. On that occasion it was pointed out that, as that principle was being applied to British produced wines, it was only logical that the privilege of fortification with duty-free spirits, which foreign wines then possessed but British wines did not possess, should also be extended to British produced wines. The right hon. Gentleman will recollect that he then gave a proper undertaking to consider the matter.
When the Chancellor introduced the present Budget he led certainly me, and I believe other hon. Members, to believe that he had accepted that view in full. In his Budget speech he said:
It is, on the face of it, a little difficult to understand why that differentiation has been made. It is possible that the right hon. and learned Gentleman may refer to certain conversations since the Financial Secretary's undertaking last November, which have taken place with the National Association of British Wine Producers, to which most, if not all, producers of British wines belong. It is perfectly fair to say that during those conversations the figure of 32 as the maximum was agreed; but, as I am sure the right hon. and learned Gentleman will fully appreciate, it was quite impossible for his officials who took part in those conversations to disclose to the wine producers that, in fact, this Budget would carry with it very substantial increases in the Duty on British wines. It was, of course, in ignorance of that—and very proper ignorance, because the right hon. and learned Gentleman's officials would have been quite wrong to disclose the information—that the producers of British wines accepted the figure of 32.
Under this Bill an increase of 6s. a gallon in the Duty is imposed. That, of course, has the result of raising the price to the producers of British wines very substantially: it puts a good many of them in financial difficulties, and means that they have to compete on a different quality basis than they had originally expected. Consequently, the figure of 32 as a maximum—which was, I think, accepted with some unwillingness, on the basis of previous legislation—has really become quite out of date in view of the proposal to increase the Duty.
Although I am not—and indeed I should be out of Order were I to do so on this Amendment—contesting the increase, it is very remarkable to notice that the duty on British wines, which stood at 1s. 6d. a gallon in 1939, has now been raised to 30s. 6d. a gallon. That is an increase, if my mathematics is right, of something in the nature of 2,000 per cent. It is, therefore, perhaps not unreasonable if those who produce what is intended to be a moderately priced beverage, suited to the purses of those who cannot afford expensive foreign wines, feel that they are entitled at least to the same privilege with respect to fortification as is given in the case of imported wines.
I have no doubt the Chancellor is aware that letters have been sent to him from the National Association of British Wine Producers, who have put to him, I think very clearly and forcibly, the reasons why in their view the figure should be the same for British as for foreign wines. Perhaps I should add that this Amendment asks for the figure of 40, which I submit is the right figure because it is also the figure for imported wines. I understand that in practice, for technical reasons which I am not competent to discuss, it would be unusual for the privilege, were it granted, to be exercised very much above 35 or 36; but it certainly would be desired to exercise it above the present figure of 32. Although it is unlikely that it will be exercised much above 36, it seems logically and administratively tidier to make the figure 40. The right hon. and learned Gentleman has had these representations put to him, and I am perfectly certain that he and those who advise him have given them full consideration.
Perhaps I may be permitted to say in this connection, as I raised this matter last Autumn, that I have no personal connection with or interest in this trade. My concern is solely that much the largest firm in this trade is located in my constituency, where it gives employment to a considerable number of people. The case stands simply on equality of treatment for a British product as compared with either Imperial or foreign products. A little earlier today we have heard about the values and virtues of Imperial Preference, and I should be the last man to underrate them. We must recollect that this country is also part of the Empire and that a British product is entitled to at least the same consideration as either the Imperial or foreign product. I hope that the right hon. and learned Gentleman will accept that reason and point of view.
7.0 p.m.
I am very sympathetic with the view put forward by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). This matter, however, was carefully discussed and agreed with the interests concerned; that for technical and trade reasons, 32 was the desirable figure. It was adopted on that basis and, I think, with the full knowledge of the trade that, had it been put up to 40, it would inevitably have put up the tax on British wines from 30s. 6d. to 40s. If this Amendment were adopted it would have the effect of putting up the tax on British wines from 30s. 6d. a gallon to 40s. As part of this arrangement, which covered wines and many other things, with Empire countries, they agreed to the maintenance of the 9s. 6d. protective margin for the British on the basis that the fortification was to a lower standard, as indeed, then it was. If it were put up now to the same standard they would indubitably deal with it as a breach of the undertaking then given and they would rightly ask that the tax should be equated between the Empire wines and the British wines. The whole matter was discussed at Geneva, when British wines, Empire wines, and Foreign wines and all the rest were taken into consideration. We could not go back on that undertaking, and I do not think it would be of advantage to British wine producers if we were to do so. We believe that the alteration, to which they are quite entitled, which was put into effect in 1945, giving the right of fortification at a figure of 32, will meet their case. There might be an exceptional case in which they might want to go higher but on the whole, for the technical and trade reasons I have mentioned, we think they will be satisfied.
The Chancellor has put a very good case for accepting the Amendment that if the fortification goes up the tariff also immediately goes up.
indicated dissent.
I am sorry, I should have said the tax goes up. I see no case for preferential treatment of domestic wine as regards tax. As far as the consumer is concerned this is a special case. First of all, he wants French wine; if he cannot get it he wants some other Continental wine. Secondly, he wants Imperial wine and, thirdly, domestic wine. In most matters I would advocate a great degree of Imperial domestic preference. That being the case the only virtue in domestic wine is that it should have a high fortification content, if that is the right technical term. It will then have at least that merit. The Chancellor has put the case unwittingly and I support the Amendment.
As the Chancellor has gone perhaps the Financial Secretary will answer my questions. Why were not the producers of British wines told about the Geneva Agreement, because the negotiations with them took place afterwards? The practical figure which British producers would like is 36. They would be content if the figure were raised from 32 to 36. If that were done would it have the effect described by the Chancellor of putting up the duty?
I am not sure that I caught the hon. Member's second question. I certainly cannot support the implications of his first. So far as I know, the British industry knew what was going on at Geneva and were well aware of the discussions taking place, not only between British representatives and those from other Commonwealth countries, but as between them, singly and jointly, and other countries which manufacture and export wine. What my right hon. and learned Friend has said is true; it was there agreed that the desire of the British wine industry to fortify should be permitted.
However, members of the Commonwealth felt that, if that were done and if the home industry were given an extensive preference as a result, then that would be unfair to them in view of the markets which the Empire wine industry had built up. As my right hon. and learned Friend indicated, the wine industry in this country therefore agreed that it did not wish to fortify up to 40 per cent. proof, and that something like 32—a figure which is less than at which Empire products are allowed to fortify—would suit them. At this rate the duty would amount to 30s. 6d. instead of 40s. and the home wine producers would gain because they were taking a smaller percentage by way of fortification. The gain of 9s. 6d. per gallon would suit them. The Government agreed, and we have implemented, therefore, what we thought was the general wish.
I think the right hon. Gentleman will appreciate that the agreement was on the understanding of the position as it existed before the Budget. Is he aware that the Association has written two letters to his right hon. and learned Friend since the Budget, dated 14th and 28th April, in which they put their view that, in the new circumstances created by the increase of duty, the question of the figure of fortification must arise again in the light of the altered position?
If we are to keep faith with the other nations in the Commonwealth, and if fortification were allowed to go up to the figure of 40 as suggested in the Amendment, then obviously the duty would have to go up by another 9s. 6d.
Why not?
Because, as I understand it, the trade here does not want to pay another 9s. 6d. a gallon for the difference between 32 and 40. I am not in the wine trade and am speaking from information given to me when I say that 32 suits most people. I admit, however, that there are one or two firms who feel they would like the right to go above 32; but there was general agreement amongst a majority of those concerned that a duty of 30s. 6d. and the right to fortify up to 32 degrees would suit them. That is what is indicated in this Clause of the Bill.
We are leaving this matter in an unsatisfactory position. The arguments advanced by the right hon. Gentleman, with the exception of the Geneva argument, do not seem at all satisfactory. His remarks are based on an agreement with the trade which quite clearly was reached under a misapprehension—a perfectly proper misapprehension as to the rate of duty; an agreement which, since the new and higher duties have been published, the trade themselves have expressly repudiated. The obstacle to accepting this Amendment falls entirely to the ground.
We then come down to the theme which crops up so often—"Well, we would not mind doing the right thing, but we have stopped them doing the right thing because of what happened at Geneva." I cannot find, from anything I have heard from the trade, that the trade knew about the Geneva Agreement or that it was ever raised during the discussions at the Treasury. I rise now, so that we may make up our minds what we shall do at a later stage, to ask the right hon. Gentleman for the reference in the Geneva Agreement to this particular matter. I ask him to read the exact terms to the Commission whereby, in this not unimportant matter, we are signing away our liberty.
The right hon. Gentleman, I am sure inadvertently, indicated that the trade were aware of these limitations. May I, therefore, read to him one sentence from the letter which the Association wrote to the Chancellor of the Exchequer on 28th April? The letter states:
I am not pretending to say that the Agreement does not contain such a provision, but the right hon. Gentleman should know of it because he is relying upon it. Perhaps he will also answer the point made by my hon. Friend the Member for Twickenham (Mr. Keeling). If there really are some such objections as those to which the right hon. Gentleman has referred, do they also apply to raising the figure to 36 degrees? I am assured that a very considerable volume of trade is affected between the 32–36 zone, and that not much of practical importance exists above the figure of 36. I only used the figure of 40, as I said, from the point of view of administrative tidiness. I hope that the right hon. Gentleman will tell us whether these objections tie the figure down to 32 degrees. I cannot believe that there is anything binding, because the right hon. Gentleman has referred to negotiations with the trade subsequent to the Geneva Agreement, and if there were something binding then they could hardly have negotiated the figure, because the right hon. Gentleman's Department, if they were to negotiate at all, must have had some freedom of movement.
HANSARD will show whether what I am now saying is right. I do not think that I said there was anything in black and white at Geneva—
Yes—
7.15 p.m.
which definitely binds this country not to fortify sweets beyond 32 degrees. If I did give that impression to the Committee, I apologise, because I had no intention of so doing. What I wanted to say was that there was an undertaking given in the discussions and negotiations which took place, that if British wines were allowed for the first time to be fortified in the way that Empire and foreign wines are fortified, and if the fortification were increased to a degree equal to that of Empire and foreign wines, then obviously the preference rates given on Empire wines, and in the past on sweets, should be equated. That is the situation, and working on that basis the question arose whether it was possible to permit what British wine manufacturers have long proposed to the Government they should be allowed to do, and that is, to fortify. It was thought that there was something to be said for the British wine industry being allowed to do this. I received more than one deputation on behalf of my right hon. and learned Friend, and I was convinced that there was something in this, and that it was unfair not to allow the British wine industry to fortify their wines.
It was agreed that they should fortify, and the question which arose was how far they could be allowed to fortify without impinging the understanding with our sister Dominions on this matter. I was not present at the discussions in Geneva. I am merely holding a brief in this matter. It was agreed, by those who had something to do with all this when it was going on, that 32 degrees was permissible. If they wanted to go above that figure, say, to the figure of 40 suggested by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), then quite obviously the matter would have to be looked at, and our sister Dominions would demand with reason, that the duty should be 40s. instead of 30s. 6d. Forty shillings is the amount that they have to pay. That is the situation, and I think that it is perfectly clear and straightforward. I must ask the Committee, therefore, to resist the suggestion that the degree of fortification should be increased to 40, because it would undoubtedly raise a demand from Australia and South Africa that at least 9s. 6d. should be added per gallon.
I regard the position now as extremely unsatisfactory. I am sure that the right hon. Gentleman had no intention of doing so, but he certainly gave us the idea that the arrangement was part of the Geneva Agreement. Because I wanted to check the actual terms of the Agreement I asked him to refer me to the exact Clause, and it was then that we discovered that this did not appear in the Agreement at all, and that it was as a result of some private conversations which went on.
It was a general understanding.
General understanding or private conversation. I do not suppose that the conversations at Geneva took place in public, for they certainly have not been published. We do not know who made the arrangements and we do not
know the terms. But far more important than this minor point that we are debating is that we are beginning to wonder how many secret, informal undertakings which are binding have been made at Geneva and do not appear in the public documents. We are entitled to think that everything which bound this country in tariff matters had appeared in the legal documents. We now find that this is not so.
We still do not know the terms because they have not been made public. Surely these informal conversations were reduced to writing, or were they not? Can the right hon. and learned Gentleman say? They were not? He has no idea? I come to this point that we have here an undertaking which was not made public, and which has never been reduced to writing, but the trade are asked to come and negotiate upon it with the Treasury. We are entitled to ask were the trade at that time ever informed that this undertaking had been given? Any discussion of a figure over 32 was not permissible because we had already barred our right. We are entitled to know about this, and in view of the extremely unsatisfactory conditions disclosed I shall advise my hon. Friends to vote in favour of this Amendment.
Question put, "That thirty-two stand part of the Clause."
The Committee divided: Ayes, 293; Noes, 112.
Division No. 162.] AYES. 7.23 p.m. Acland, Sir Richard Braddock, T. (Mitcham) Grossman, R. H. S. Adams, Richard (Balham) Bramall, E. A. Daggar, G. Adams, W. T. (Hammersmith, South) Brook, D. (Halifax) Dalton, Rt. Hon. H. Alexander, Rt. Hon. A. V Brooks, T. J. (Rothwell) Davies, Ernest (Enfield) Allen, A. C. (Bosworth) Brown, T. J. (Ince) Davies, Harold (Leek) Allen, Scholefield (Crewe) Bruce, Maj. D. W. T. Davies, Haydn (St. Pancras, S.W.) Anderson, A. (Motherwell) Buchanan, Rt. Hon. G. Davies, R. J. (Westhoughton) Anderson, F. (Whitehaven) Burden, T. W. Davies, S. 0. (Merthyr) Attewell, H. C. Burke, W. A. Deer, G. Austin, H. Lewis Butler, H. W. (Hackney, S.) de Freitas, Geoffrey Awbery, S. S. Byers, Frank Delargy, H. J. Ayles, W. H. Callaghan, James Dobbie, W. Ayrton Gould, Mrs. B Carmichael, James Dodds, N. N. Bacon, Miss A Castle, Mrs. B. A Driberg, T. E. N. Balfour, A. Champion, A. J Dugdale, J. (W. Bromwich) Barstow, P. G Chater, D. Dumpleton, C. W. Barton, C. Chetwynd, G. R Ede, Rt. Hon. J. C. Battley, J. R. Cluse, W. S Edwards, Rt. Hon. Sir C. (Bedwellty) Bechervaise, A. E Cobb, F. A. Edwards, N. (Caerphilly) Benson, G. Cocks, F. S. Edwards, W. J. (Whitechapel) Berry, H. Coldrick, W. Evans, Albert (Islington, W.) Beswick, F. Collins, V. J. Evans, E. (Lowestoft) Bing, G. H. C. Colman, Miss G. M. Evans, S. N. (Wednesbury) Binns, J. Comyns, Dr. L. Ewart, R. Blenkinsop, A Cook, T. F. Fairhurst, F. Blyton, W. R. Cooper, Wing-Comdr. G. Farthing, W. J. Boardman, H Corbel, Mrs. F. K. (Camb'well, N.W.) Fernyhough, E. Bottomley, A. G. Corlett, Dr. J. Fletcher, E. G. M (Islington. E) Bowles, F. G. (Nuneaton) Cove. W. G. Follick, M Braddock, Mrs. E. M. (L'pl, Exch'ge) Cripps, Rt. Hon. Sir S Foot, M. M. Forman, J. C. McAdam, W Silverman, S. S. (Nelson) Fraser, T. (Hamilton) McAllister, G. Simmons, C. J Freeman, Peter (Newport) McEntee, V La Skeffington, A. M. Gallacher, W. McGhee, H. G. Skeffington-Lodge, T C Ganley, Mrs. C. S. McGovern, J. Skinnard, F. W George, Lady M. Lloyd (Anglesey) Mack, J. D. Smith, C. (Colchester) Gibbins, J. McKinlay, A. S. Smith, H. N. (Nottingham, S.) Gibson, C W. Maclean, N. (Govan) Snow, J W. Gilzean, A. McLeavy, F. Solley, L. J. Glanville, J. E. (Consett) MacMillan, M. K. (Western Isles) Sorensen, R. W Granville, E. (Eye) Mainwaring, W H Soskice, Sir Frank Greenwood, A. W. J. (Heywood) Mallalieu, E. L. (Brigg) Stamford, W Grenfell., D. R Mallalieu, J. P. W. (Huddersfield) Steele, T Grey, C F Mann, Mrs. J Stewart, Michael (Fulham, E.) Griffiths, D (Rother Valley) Manning, Mrs L. (Epping) Stress, Dr. B. Griffiths, W. D. (Moss Side) Marquand, H. A Stubbs, A. E Guest, Dr. L Haden Marshall, F. (Brightside) Swingler, S Guy, W H Mellish, R. J. Sylvester, G. O Haire, John E (Wycombe) Middleton, Mrs. L Symonds, A. L Hale, Leslie Monslow, W Taylor, H. B. (Mansfield) Hall, Rt. Hon Glenvil Moody, A. S Taylor, R. J. (Morpeth) Hamilton, Lieut.-Col. R Morley, R. Taylor, Dr. S (Barnet) Hannan, W (Maryhill) Morgan, Dr. H. B Thomas, D. E. (Aberdare) Hardy, E. A. Morris, Hopkin (Carmarthen) Thomas, I. O. (Wrekin) Harrison, J. Mort, D. L. Thomas, John R. (Dover) Hastings. Dr. Somerville Moyle, A Thomas, George (Cardiff) Henderson, Joseph (Ardwick) Naylor, T E Thorneycroft, Harry (Clayton) Herbison, Miss M Neal, H. (Claycross) Thurtle, Ernest Hewitson., Capt M Nichol, Mrs M. E. (Bradford, N.) Tiffany, S. Hicks, G Nicholls, H. R. (Stratford) Timmons, J. Hobson, C R Noel-Buxton, Lady Titterington, M. F Holman, P O'Brien, T. Tolley, L Holmes, H E (Hemsworth) Oliver, G. H Turner-Samuels, M. Horabin, T L Orbach, M Ungoed-Thomas, L. House, G. Paling, Rt. Hon. Wilfred (Wentworth) Vernon, Maj W. F Hoy, J Paling, Will T (Dewsbury) Viant, S. P Hubbard, T Parker, J. Wadsworth, G Hudson, J. H. (Ealing, W.) Parkin, B. T. Walker, G. H Hughes, Emrys (S. Ayr) Paton, Mrs. F (Rushcliffe) Wallace, G. D (Chislehurst) Hughes, Hector (Aberdeen, N.) Paton, J. (Norwich) Wallace, H W (Walthamstow, E) Hughes, H. D. (W'lverh'pton, W.) Pearson, A. Warbey, W. N. Hutchinson, H L (Rusholme) Peart, T. F Watkins, T. E. Hynd, J. B. (Attercliffe) Perrins, W. Watson, W. M. Irvine, A. J. (Liverpool) Poole, Cecil (Lichfield) Weitzman. D. Irving, W J. (Tottenham, N) Popplewell, E. Wells, P. L. (Faversham) Jay, D. P. T Porter, E. (Warrington) Wells, W. T (Walsall) Jeger, Dr S W (St Pancras, S.E.) Porter, G (Leeds) Westwood, Rt. Hon. J. Johnston, Douglas Pritt, D N Wheatley, Rt. An. J. (Edinburgh, E.) Jones, D T (Hartlepool) Proctor, W T White, C. F. (Derbyshire, W.) Jones, P Asterley (Hitchin) Pryde, D. J. White, H. (Derbyshire, N.E.) Keenan W Pursey, Cmdr. H Whiteley, Rt. Hon. W. Kenyon, C Randall, H E Wigg, George Key, Rt Hon. C. W. Ranger, J Wilcock, Group-Capt. C. A B. Kinghorn, Sqn -Ldr E Rankin, J Willey, O G. (Cleveland) Kinley, J Reid, T. (Swindon) Williams, D. J (Neath) Kirkwood, Rt Hon. D Richards, R. Williams, J. L. (Kelvingrove) Lang, G Ridealgh, Mrs. M Williams, R. W (Wigan) Lawson, Rt Hon. J J Roberts, Emrys (Merioneth) Williams, Rt. Hon. T (Don Valley) Lee, F (Hulme) Roberts. Goronwy (Caernarvonshire) Williams, W. R (Heston) Leonard, W Roberts, W. (Cumberland, N.) Wills, Mrs E A Leslie, J R Robertson, J J. (Berwick) Wise, Major F. J. Levy, B. W. Ross, William (Kilmarnock) Woodburn, Rt. Hon. A Lewis, J (Bolton) Royle, C Wyatt, W. Lewis, T (Southampton) Sargood, R Yates, V. F. Lindgren, G. S Scollan, T Young, Sir R. (Newton) Lipson, D L Scott-Elliot, W. Lipton, Lt.-Col. M Shackleton, E. A. A. TELLERS FOR THE AYES: Longden, F Sharp, Granville Mr. Collindridge and Lyne, A. W Silverman, J (Erdington) Mr. Wilkins.
NOES. Agnew, Cmdr P G Challen, C Digby, S. W Anderson, Rt. Hn. Sir J (Scot. Univ.) Channon, H Drewe, C. Assheton, Rt. Hon. R. Clarke, Col. R. S. Duthie, W. S. Astor, Hon M Clifton-Brown. Lt.-Col G Eccles, D. M. Baldwin. A E Cole, T. L. Elliot, Rt Hon. Walter Bennett, Sir P Corbett, Lieut.-Col. U. (Ludlow) Fletcher, W. (Bury) Boyd-Carpenter, J. A. Crookshank, Capt Rt. Hon H. F. C Foster, J. G. (Northwich) Buchan-Hepburn, P G. T Crowder, Capt. John E Fraser, Sir I. (Lonsdale) Butcher, H. W Cuthbert, W N Fyfe, Rt. Hon. Sir D. P. M Butler, Rt. Hon R A (S'ffr'n W'Id'n) Darling, Sir W Y Galbraith, Cmdr. T D Carson. E De la Bère, R Gomme-Duncan, Col. A Grant, Lady Macpherson, N. (Dumfries) Shepherd, W. S (Bucklow) Grimston, R. V. Manningham-Buller, R. E Smith, E. P. (Ashford) Henderson, John (Cathcart) Marsden, Capt. A. Smithers, Sir W. Holmes, Sir J Stanley (Harwich) Marshall, D. (Bodmin) Snadden, W. M. Hope. Lord J. Mellor, Sir J. Spearman, A. C. M Howard, Hon. A Moore, Lt.-Col. Sir T Spence, H. R. Hurd, A Morrison, Maj. J. G. (Salisbury) Stanley, Rt. Hon. O Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Nield, B. (Chester) Stewart, J. Henderson (Fife, E.) Hutchison, Col. J. R. (Glasgow, C.) Obey, G. W. Strauss, H. G. (English Universities) Jeffreys, General Sir G. O'Neill, Rt. Hon. Sir H Studholme, H. G. Keeling, E H Orr-Ewing, I. L. Teeling, William Lancaster, Col. C. G Osborne, C. Thornton-Kemsley, C N Law, Rt. Hon. R. K Peto, Brig. C H M Thorp, Brigadier R A F Legge-Bourke, Maj. E. A. H Pickthorn, K Turton, R. H. Lindsay, M. (Solihull) Pitman, I. J. Vane, W. M. F. Linstead, H N Ponsonby, Col. C E Wakefield, Sir W. W Lloyd, Selwyn (Wirral) Poole, O. B. S (Oswestry) Walker-Smith, D. Low, A. R. W. Prior-Palmer, Brig. O Ward, Hon G R. Lucas, Major Sir J. Raikes, H. V. Wheatley, Colonel M. J. (Dorset, E) MacAndrew, Col Sir C Rayner, Brig. R. Williams, C. (Torquay) McCallum, Maj. D. Reed, Sir S. (Aylesbury) Williams, Gerald (Tonbridge) McCorquodale, Rt. Hon. M. S. Renton, D. Winterton, Rt. Hon Earl Macdonald. Sir P (I. of Wight) Roberts, H. (Handsworth) York, C. McFarlane, C. S. Robertson, Sir D. (Streatham) Young, Sir A. S L. (Partick) Mackeson, Brig. H. R Robinson, Roland MacLeod, J Ropner, Col. L. TELLERS FOR THE NOES: Macmillan, Rt. Hon. Harold (Bromley) Scott, Lord W. Major Conant and Major Ramsay.
Clause, as amended, ordered to stand part of the Bill.
CLAUSE 6.—(Security and pre-entry.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
7.30 p.m.
We ought to have some explanation of what this Clause is about, and of what the Government's intentions are. At the moment those matters are not at all clear.
This is a very simple Clause. It seeks to do what I am sure all Members in all quarters of the Committee wish to see done. It is required under general Customs law that goods exported on drawback shall be entered with the Customs in the prescribed manner and that security shall be given when required before the goods are shipped. That is obligatory. If, by any chance, through inadvertence or for any other good reason, goods are shipped without being entered, the Customs authorities have no method whereby they can relieve the exporter of his liability.
It is obvious that, in modern times, documentary evidence or evidence of some other kind is sometimes quite sufficient and that it is unnecessary that goods should be entered in the prescribed form. The Clause gives the Customs some elasticity to waive the requirements in cases in which it would obviously be a piece of red tape to insist upon them. Already, under certain enactments, the Customs have discretionary power with regard to certain kinds of goods, which include, I believe, silk, sugar and hydrocarbon oils.
The right hon. Gentleman has told us that discretionary power has existed for some time past in regard to certain goods. Could he give the Committee a list of the goods to which it now applies? Have any been left out in connection with this Clause? The modern tendency is for Ministers to come forward with lists of goods, and it might be of advantage to the Committee to know what goods are affected by the Clause to waive this duty.
We are not waiving duty on any goods.
The right hon. Gentleman said we were.
Nonsense. We are giving the Customs latitude to permit goods to be exported without being entered for drawback in certain cases in which satisfactory evidence of a kind other than that presented by the Act of 1876, is available. We think that the time has come to make this change.
What goods are they?
The kind of goods exported includes tobacco and wines. Quite a number of classes of goods are exported. Under the general law they have to be entered in the prescribed form. If, through inadvertence, they are not entered, drawback cannot by law be given by the Customs. We think that that position is a little unfair and that the Customs should have the right to waive the requirement if they are satisfied that no attempt has been made to do down the Revenue.
That is exactly what the right hon. Gentleman said just now. He has told me in his second speech more or less what he told me in his first. I understood him the first time. We are faced with the astonishing position that he has been able to give us an indication of two or three of the classes of goods on which Customs are to have power to waive the regulations. I thank the right hon. Gentleman very much indeed upon having made two speeches which were more or less in keeping with each other.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
CLAUSE 7.—(Imperial preference for sugar, etc.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
I should like to point out that this Clause embodies the kind of Amendment that we suggested two years ago. We then asked that the preference on sugar should be extended to four years, and we moved an Amendment to that effect on 19th June, 1946. The Government then said that it was impossible to deal with these matters except upon a two-year basis. We are very glad to find that in this important matter at least the Government have come to their senses.
:: Why have the Government extended this preference until August, 1952? Is it because they have accepted the policy of the right hon. and gallant Member for Gainsborough (Captain Crookshank) and his friends?
I was fortunate enough to visit the sugar plantations in Queensland last year and the sugar plantations in Natal this year. The plantation owners attach tremendous importance to this preference and also to its continuity. The Committee will be aware that a great deal of money is put into the extension of the sugar plantations. It is vital to the plantation owners that they should know where they are going, not necessarily for two or four years only, but in the future. At the moment, consumption in those countries absorbs pretty well the entire production. The planters are looking to the time when they will have an exportable surplus. I am glad that the Government have seen their way to tell the planters where they will stand in the next four years. I hope that the Government will be in a position to extend the preference for a much longer period, as has been done in the case of tobacco.
I congratulate the Government most sincerely on the fact that they, have extended this preference for four years. I am one of those who remember the speeches made by the former Chancellor of the Exchequer, who I gather has now been duly dealt with, on the subject of how wicked it was to have any form of preference at all anywhere. I congratulate the Government on having learned something at last from the Conservative Party who did so much to build up the unity of the Empire.
I noticed a minute or two ago an interesting remark from one of the Members of the lesser group of the Liberal Party who, no doubt, would like the preference to go back rather than be extended. I have no doubt that had the hon. and learned Member for Carmarthen (Mr. Hopkin Morris) spoken a little longer he would have declared his opposition to this Clause. Of course, it may be that they have no definite party line on this matter of Imperial Preference for sugar, and it may be that, like the Socialist Party, they have learned something, and have abandoned all their non-preference speeches. Perhaps today they are coming into the open and will support the Government on wholehearted preference.
I congratulate the Financial Secretary on having done something on which I can praise him. The right hon. Member for Dumbarton Burghs (Mr. Kirkwood) may not have advanced quite into line with the Front Bench opposite; I notice he is looking extremely agitated, as is the hon. Member for Kirkdale (Mr. Keenan), who may dislike it because he is very old fashioned. There is no earthly reason why the Government should not be right on this occasion just for once because, after all, not long ago they were acting in combination with Members of my party in carrying on this very proper, sensible and useful method of preference which does so much to build up the British Empire.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
CLAUSE 8.—(Key industry duty.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
The object of this Clause, as far as I understand it, is to pro vide that the Key Industry Duty, as extended by the Finance Act, 1946, shall not come to an end on 19th August, 1948, but shall continue in force for a period of three years from that time. As far as I can remember, Part I of the Safeguarding of Industries Act, 1921, had as its main purpose the protection of the British home producer, and its object was to ensure that the British producer could sell his goods at home at an economic price and would not be affected by dumping. The situation has changed since 1921, and we are now in an entirely different set of economic circumstances.
I would like my right hon. Friend to give his reason why he thinks it desirable at this stage that the Key Industry Duty should be retained on any grounds whatsoever. Subsection (2) provides:
My interpretation of those words is that when applications are made to the Board of Trade, if they so desire, they recommend to the Treasury that they make an order for exemption or reduction. In practice this works in a somewhat different way. If a formal application is made to the Board of Trade it is necessary to show the Board of Trade that the incidence of the duty makes the price of the export products so high that it is impossible to sell them abroad. In addition, should the Board of Trade so recommend that a drawback be allowed in certain circumstances, it is still necessary for the Treasury to introduce a Statutory Instrument. We have been told so often by Government spokesmen that it is vitally necessary to produce at the lowest cost possible, and that any tendency towards increased costs which will be reflected in the price of a finished commodity is inflationary and may affect us seriously in maintaining our export markets.
Why then at this stage, when every import is subject to the strictest control, should it be necessary to have a Key Industry Duty which has the effect of increasing the price of the basic raw material and thus of the finished goods, and so affecting our export markets? I do not doubt for a moment that the Government have some reasonable explanation to offer but I have never heard it offered. I trust that in these circumstances my right hon. Friend, or whoever is to reply, will make it abundantly clear that there is a very good reason for retaining the Key Industry Duty and perpetuating it for a further three years.
Surely there is a considerable difference between the Key Industry Duty and the ordinary Safeguarding of Industry Duty. I cannot quote the relevant Act directly, but surely the whole point is that the Key Industry Duty is based upon security requirements which touch not just the general life of the nation but some particular and important point. That is quite different from the general argument about safeguarding which I certainly do not want to open up.
The Key Industry Duty today operates on some essential raw materials which we import from the United States of America, and which have no relation to security whatsoever.
I am not so sure about that. One of the reasons I rose to my feet was to ask the Government if they could give us some explanation of what they have in mind. The first part of the Clause extends the Key Industry Duty for three years. Incidently in 1946, which was the last year in which it was extended, it was extended, for only two years, and we thought that was too short a period, but on that occasion the Government would not accept our view. However, on this Clause, just as they did on the last Clause, they have turned round to accepting the suggestions which we made.
In the second part of the Clause, as a result of agreements, they take power to abolish the duty. I would like to know whether this covers everything, or whether it is a specific commitment. The Financial Secretary was very vague as to what agreement or undertaking existed. Who knows the answer to that? It is very important that one should know what duties the Government expect either to reduce or to abolish. This Key Industry Duty is, from its very name if nothing else, of supreme importance. I hope the right hon. Gentleman will take this opportunity of explaining to us what is intended by this Clause.
:: The right hon. and gallant Member for Gainsborough (Captain Crookshank) is quite right, of course. The Key Industry Duty was imposed in 1921 to protect industries which were regarded as vital for defence; it was renewed in 1926 for 10 years, again in 1936 for 10 years with some additions and amendments, and it was renewed from 1946 to 1948. We now propose to renew it for a further three years. One of our chief purposes in doing so is to enable a study to be made of the possibility of simplifying a tariff which is rather complicated at present since we have both the Safeguarding of Industries Act and the Import Duties Act running parallel.
Another reason for doing all this is to give to the various Departments concerned—and there are many—an opportunity to study the list of items in the light of new scientific developments which took place during the war and which have taken place since the war. The hon. Member for Bolton (Mr. Lewis) suggests that all these duties might be abolished, but that is going very far. It may be that in modern times some of them may not be regarded as vital for defence, but this can be examined during the three years.
Can the hon. Gentleman say if it is necessary to obtain an import licence for any one of these requirements to be imported? If so, have not the Government absolute and complete control over this? Does that not make these duties a piece of obsolete machinery?
I am not quite certain of my dates but I fancy that this might run longer than the Act which governs the import licensing procedure at the moment. Though we have at the moment these powers, I think I am right in saying that they expire under statute before the end of the three years.
Subsection (2) empowers the Treasury to reduce or. remove any of these duties in accordance with trade agreements but not merely in accordance with representations which might be made to the Board of Trade by some interested party. It says:
I am sure that the Committee cannot be very happy about the hon. Gentleman's explanation. All that he has said is that the Government are completely enmeshed in the machinery of the operation of tariffs and do not know what to do about it, but that they have all the power in the world. The imposition of many import tariffs at this moment is having a grave effect on exports for which the raw materials are imported in influencing the price of the exported goods. One very simple illustration is that of linseed oil which bears a 15 per cent. ad valorem import duty. Before the war the price of linseed oil was £40 per ton, though it had been very much lower. The 15 per cent. import duty would therefore mean £6 per ton. Today, when we can buy only from the Argentine, the price is £200 per ton and the ad valorem import duty means that manufacturers using linseed oil have to pay £30 per ton on the basis of 15 per cent. To the extent that this affects our export trade, it is bad. I ask the Minister to confer with the Chancellor and see whether we can simplify this, not in four years' time, when it will probably be too late, but now, in 1948.
I do not want unduly to labour this point, but my hon. Friend's statement was wholly inexplicable to me. He did not seem to appreciate that the vital raw materials to which he referred, which might in certain circumstances be essential to war industry, are today the very commodities which are being used in the production of goods for export. Amongst other things, therefore, there is a strict import licensing control, whereby the Government or the Board of Trade in particular are not prepared to allow any commodities to be imported into this country unless they are absolutely vital to our economic life or our export trade. It seems abundantly clear this is the only control which is required. However, should they then, after having given their permission for these essential materials to come into the country, impose on these imported materials a substantial key industry duty, it has no effect other than to increase the price of the raw material, which is reflected in the price of the finished goods sold abroad.
In respect of the application of this duty, in practice it is not quite up to date. The practice of the Board of Trade in this matter is, quite rightly, to consult interested home producers and then come to a decision whether or not they should recommend to the Treasury that action should be taken either to reduce the duties, to lift them altogether or to maintain them. My hon. Friend has given us no explanation whatsoever to justify the maintenance or continuance of this duty, particularly when all raw materials and other goods coming into this country are subject to the strict import licensing control to which I have referred. I had hoped that he would have been able to say a little more to satisfy those hon. Members who have made certain references to this matter and who, like me, cannot understand the point of view which he expressed.
I want to reinforce what the hon. Member for Bolton (Mr. J. Lewis) has said. There may be many reasons for imposing taxation, but to impose taxation for a period of three years to enable the Government to study the complexity of the problem is no reason at all. A tax should never be imposed until study has been made. To impose a tax first and then continue it for a period of three years without knowing what the complexities of the situation are and without study having been made is an extraordinary thing. The position is so complicated that the Government do not really know where they are. It is an extraordinary situation for a Government to impose a tax in the dark upon the taxpayer for three years.
The Government are not imposing a tax here at all. We are only saying that in the case of certain taxes, which are already imposed by an Act of Parliament, the Treasury may have power to vary them subsequent to agreement. The Clause does not propose the total abolition of key industry duties. That would be substantial Budget policy and it is not in the Budget this time at all. I am not suggesting that it ought or ought not to be.
This Clause says that the duty shall be continued for three years and therefore it is an imposition. It is part of the Finance (No. 2) Bill, and is imposed for the next three years. That is an imposition by the Treasury on the taxpayer.
The hon. Gentleman made a good point on Subsection (2) about having regard to trade agreements, but that Subsection continues the Safeguarding of Industries Act, 1921. Some of us thought the procedure under that Act was bad, but before the tax was imposed there was a public inquiry and a report was made on every article subject to the tax. The level of the tax was known to the House and passed by the House on each occasion. Here the proposal is that it shall not come to the House at all but that, in pursuance of a trade agreement, the level of the tariff shall be varied by a Treasury order without a decision of the House. We hand the power completely to the Treasury. If there can be any worse canons of taxation than that which the hon. Gentleman recommended to the Committee I cannot imagine what they are—that the House should hand over its power to the Treasury to do as it pleases about the level of tariffs.
Compare that argument with the argument about preferences. I think there is something in the argument that the preference should be continued for four years, for it is better, if there is recourse to a tariff, that it should be for a known period. Here, however, the level can be varied according to Treasury representation. It is the worst possible form of trading taxation that can be imposed, and this is what the Government recommends to the Committee and asks it to accept. The Committee should look at this form of taxation independently of the proposals to continue the safeguarding of industry, not only with a close scrutiny but with scepticism.
8.0 p.m.
The hon. and learned Member for Carmarthen (Mr. Hopkin Morris) and his hon. Friend the Member for Buckrose (Mr. Wadsworth) should have studied this Clause. They are in serious danger. They are actually attacking the main part of this Clause which is the Safeguarding of Industries Act, 1921, almost one of the last Acts of the last Liberal Prime Minister, Mr. Lloyd George. The hon. and learned Member is a member of the Liberal Party, and I am surprised at a true Liberal Member attacking that policy.
The hon. Member should get his history right. It is true that Mr. Lloyd George was then Prime Minister, but he was not Prime Miniser of a Liberal administration.
No, but he was the great head of that administration, and he was the most autocratic Prime Minister we have had.
The hon. Member is forgetting the right hon. Member for Woodford (Mr. Churchill).
I am being led astray; let me get back to the Clause. As the Paymaster-General said, this has already been lengthened on two occasions by ten years. We are now lengthening it for a period of under three years. I doubt if that is adequate, because the hon. Member's main argument in favour of the Clause was the fact that it was necessary for the Government and the civil servants to think out the tariff policy safeguarding the key industry licences, which to my mind is the worst form of all, and has to be worked out by a given date. I doubt whether the Government will have worked out anything at any time anywhere, but they are exceedingly unlikely to achieve any concrete proposal to combine the whole method of tariffs in one organised system.
Although this Clause does not go far, I will support it heartily, but I regret that there was not some higher authority present to listen to the speech of the hon. Member for Bolton (Mr. J. Lewis), who made the most deliberate attack on Government policy as regards the regulation of industry. He said that this was really dealing with raw materials for manufactured articles, but I doubt that.
I hesitate to interrupt the hon. Gentleman in case it has the effect of causing him to speak longer than he originally intended, but when he says he doubts that raw materials which might be involved are used for the manufacture of goods for export, he should really know more about the subject and should be more vitally concerned with the industry question from the point of day to day administration. In that case he might hesitate before making such a statement.
I always hope to learn from hon. Gentlemen opposite and if the hon. Member says that I should not talk about raw materials, I would not doubt it meant some raw materials but I took the Minister's answer to mean that this was not necessarily a change in the main raw materials. I think the Minister agrees with me that this is not a duty on raw materials.
What about chemicals?
There seems to be a dispute between the two Benches opposite. I do not want to carry this on endlessly, but when there is a conflicting position arising between the Minister and his supporters it is only right that someone on this side should point out that the Government do not know where they are. For that reason, the only thing we can do is to accept this Clause with a reservation that it will not do what we want. It would have been better if it had been carried on for more than three years. After all, that period was recommended by an hon. or right hon. Member on the Conservative Front Bench, and for that reason I shall have considerable pleasure in voting for the Government in the event of their mutineers or the small section of the Liberal Party below the gangway carrying this matter to a Division. Having said that, I would ask the Government to be quite sure that, between now and when a Division takes place on this subject, they do not turn round and give way to the powerful pressure which is being put on them by the dying relics of prehistoric Free Trade, so aptly instanced by the hon. Member for Bolton.
Would the Paymaster-General clear up the point as to what raw materials are concerned here, and whether the Government expect to have during the next year or two any of these orders abolishing or reducing the key industry duties? It is important we should know what is in the mind of the Government. The hon. Gentleman said that it would only arise as the result of agreements. That is obvious from the Clause, but agreements mean that the Government will have been in contact with some other countries on this subject, and I would like to be satisfied that duties imposed for reasons of national security are not being argued about without our knowing it. I should like to know whether there are any discussions going on, or whether this is put in as a general precaution that, at some time or other, the Government may want to enter into discussions.
I can assure the right hon. and gallant Gentleman that the
Clause was put down to simplify the procedure for implementing the Geneva Agreement made in December last. I am not aware of any discussions going on at the present time. Indeed those who enter into this kind of discussions have had as much as they could do lately to deal with the complicated Geneva Agreement. The words are put into the Clause to cover any future agreement other than Geneva for obvious, tidy reasons and no more than that. Subsection (3) provides that any order made in consequence of this power will have to be laid before the House of Commons, and that any order removing or reducing the duty in consequence would be subject to annulment in pursuance of a Resolution of this House, and any amending order, the effect of which was to restore the rate of duty, would also be subject to an affirmative Resolution of the House.
I take it from what the Paymaster-General has said that the Government have done this automatically, and have not thought much about it at this stage.
Question put, "That the Clause stand part of the Bill."
The Committee divided: Ayes, 359; Noes, 7.
Division No. 163.] AYES. 8.11 p.m Acland, Sir Richard Braddock, Mrs. E. M. (L'pl, Exch'ge) Dagger, G Adams, Richard (Balham) Bramall, E. A. Dalton, Rt. Hon. H. Adams, W. T. (Hammersmith, South) Brook, D. (Halifax) Darling, Sir W. Y. Agnew, Cmdr. P. G Brooks, T. J. (Rothwell) Davies, Ernest (Enfield) Alexander, Rt. Hon. A. V Brown, T. J. (Ince) Davies, Haydn (St. Pancras, W.) Allen, A. C. (Bosworth) Bruce, Maj. D. W. T. Davies, R. J. (Weathoughton) Allen, Scholefield (Crewe) Buchanan, Rt. Hon. G Davies, S. O. (Merthyr) Alpass, J. H. Burden, T. W. Deer, G. Anderson, A. (Motherwell) Burke, W. A. de Freitas, Geoffrey Anderson, F. (Whilehaven) Butcher, H. W. De la Bore, R. Assheton, Rt. Hon. R. Butler, H. W. (Hackney, S.) Delargy, H. J. Attewell, H. C. Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n) Digby, S. W. Austin, H. Lewis Callaghan, James Dobbie, W. Awbery, S. S. Carmichael, James Dodds, N. N. Ayles, W. H. Carson, E. Drewe, C. Ayrton Gould, Mrs. B Castle, Mrs. B. A. Driberg, T. E. N. Bacon, Miss A. Champion, A. J Dugdale J. (W. Bromwich) Bafour, A. Chater, D. Dumpleton, C. W. Barstow, P. G. Chetwynd, G. R Duthie, W. S. Barton, C. Cluse, W. S. Eccles, D. M. Battley, J. R. Cobb, F. A. Edelman, M. Beamish, Maj. T. V. H Cocks, F. S Edwards, Rt. Hon. Sir C. (Bedwellty) Bechervaise, A. E. Coldrick, W Edwards, N. (Caerphilly) Bellenger, Rt. Hon. F. J. Cole, T. L. Evans, Albert (Islington, W.) Bennett, Sir P. Collins, V. J. Evans, E. (Lowestoft) Benson, G. Colman, Miss G. M Evans, S. N. (Wednesbury) Berry, H. Comyns, Dr. L. Ewart, R. Bing, G. H. C. Conant, Maj. R. J. E. Fairhurst, F. Binns, J. Cooper, Wing-Comdr. G. Farthing, W. J. Blenkinsop, A. Corbet, Mrs. F. K. (Camb'well, N.W.) Fernyhough, E. Blyton, W. R. Corlett, Dr. J. Fletcher, E. G. M (Islington, E.) Boardman, H. Cove, W. G. Fletcher, W. (Bury) Bottomley, A. G. Cripps, Rt. Hon. Sir S. Follick, M. Bowden, Fig. Offr. H. W. Crookshank, Capt. Rt. Hon. H. F. C Foot, M. M. Bowles, F. G. (Nuneaton) Crossman, R. H. S. Forman, J. C. Boyd-Carpenter, J. A. Cuthbert, W. N. Foster, J. G. (Northwich) Fraser, Sir I. (Lonsdale) McGovern, J. Sharp, Granvitle Fraser, T. (Hamilton) Mack, J. D. Shawcross, C. N. (Widnes) Freeman, Peter (Newport) Mackeson, Brig. H. R Shepherd, W. S. (Bucklow) Fyfe, Rt. Hon. Sir D. P. M McKinlay, A. S. Shurmer, P. Gage, C. Maclean, N. (Govan) Silverman, J. (Erdington) Gallacher, W. McLeavy, F. Silverman, S. S. (Nelson) Ganley, Mrs. C. S Macmillan, Rt. Hon. Harold (Bromley) Simmons, C. J. Gibbins J. MacMillan, M. K. (Western Isles) Skeffington, A. M Gibson, C. W. Mainwaring, W. H. Skeffington-Lodge, T. C Gilzean, A. Mallalieu, E. L. (Brigg) Skinnard, F. W. Grant, Lady Mallalieu, J. P. W. (Huddersfield) Smith, C. (Colchester) Greenwood, A. W. J (Heywood) Mann, Mrs. J. Smith, E. P. (Ashford) Grenfell, D. R. Manning, Mrs. L. (Epping) Smith, H. N. (Nottingham, S.) Grey, C. F. Manningham-Buller, R. E. Snow, J. W. Griffiths, D. (Rother Valley) Marquand, H. A. Solley, L. J. Griffiths, W. D. (Moss Side) Marsden, Capt. A. Sorensen, R. W. Guest, Dr. L. Haden Marshall, F. (Brightside) Soskice, Sir Frank Guy, W. H Mellish, R. J. Stamford, W. Haire, John E. (Wycombe) Mellor, Sir J. Stanley, Rt. Hon. O. Hale, Leslie Middleton, Mrs. L. Steele, T. Hall, Rt. Hon. Glenvil Monslow, W. Stewart, J. Henderson (Fife, E.) Hamilton, Lieut.-Col. R. Moody, A. S Stross, Dr. B. Hannon, W. (Maryhill) Moore, Lt.-Col. Sir T. Stubbs, A. E. Harnnon, Sir P. (Moseley) Morley, R. Studholme, H. G Hardy, E. A. Morgan, Dr. H. B. Sylvester, G. O. Harrison, J. Morrison, Rt. Hon H. (Lewisham, E.) Symonds, A. L. Hastings, Dr. Somerville Mort, D. L. Taylor, H. B. (Mansfield) Henderson, Joseph (Ardwick) Moyle, A. Taylor, R. J. (Morpeth) Herbison, Miss M. Naylor, T. E. Taylor, Dr S. (Barnet) Hewitson, Capt. M Neal, H. (Claycross) Teeling, William Hicks, G. Nichol, Mrs. M. E. (Bradford, N.) Thomas, D. E. (Aberdare) Hobson, C. R. Nicholls, H. R. (Stratford) Thomas, I. O. (Wrekin) Holman, P. Nield, B. (Chester) Thomas, John R. (Dover) Holmes, H. E. (Hemsworth) Noel-Baker, Capt. F. E. (Brentford) Thomas, George (Cardiff) Holmes, Sir J. Stanley (Harwich) Noel-Baker, Rt. Hon. P. J. (Derby) Thorneycroft, Harry (Clayton) Horabin, T. L. Noel-Buxton, Lady Thurtle, Ernest House, G. O'Brien, T. Tiffany, S. Hoy, J. Odey, G. W. Timmons, J. Hubbard, T. Oliver, G. H. Titterington, M. F Hudson, J. H. (Ealing, W.) O'Neill, Rt. Hon. Sir H Tolley, L. Hughes, Hector (Aberdeen, N.) Orbach, M. Turner-Samuels, M. Hughes, H. D. (W'lverh'pton, W.) Paling, Rt. Hon. Wilfred (Wentworth) Turton, R. H. Hulbert, Wing-Cdr. N. J. Paling, Will T. (Dewsbury) Ungoed-Thomas, L Hurd, A. Palmer, A. M. F Vane, W. M. F. Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Parker, J. Vernon, Maj. W. F Hynd, J. B. (Attercliffe) Parkin, B. T. Viant, S. P. Irving, W. J. (Tottenham, N.) Paton, Mrs. F. (Rushcliffe) Walker, G. H. Jay, D. P. T. Paton, J. (Norwich) Walker-Smith, D. Jeger, G. (Winchester) Pearson, A. Wallace, G. D. (Chislehurst) Jeger, Dr. S. W. (St. Pancras, S.E.) Peart, T. F. Wallace, H. W. (Walthamstow, E) Johnston, Douglas Perrins, W. Warbey, W. N. Jones, D. T. (Hartlepool) Peto, Brig. C. H. M. Watkins, T. E. Jones, J. H. (Bolton) Pitman, I. J. Watson, W. M. Jones, P. Asterley (Hitchin) Poole, Cecil (Lichfield) Weitzman, D. Joynson-Hicks, Hon. L. W. Poole, O. B. S. (Oswestry) Wells, P. L. (Faversham) Keeling, E. H. Popplewell, E. wells, W. T. (Walsall) Keenan, W. Porter, E. (Warrington) Westwood, Rt. Hon. J. Kenyon, C. Porter, G. (Leeds) Wheatley, Rt. Hn. J. (Edinburgh, E.) Key, Rt. Hon. C. W. Prior-Palmer, Brig. O. Wheatley, Colonel M. J. (Dorset, E.) Kinghorn Sqn.-Ldr. E. Pritt, D. N. White, C F. (Derbyshire, W.) Lang, G. Pryde, D. J. Whiteley, Rt. Hon. W. Law, Rt. Hon. R. K. Pursey, Cmdr. H. Wigg, George Law son, Rt. Hon. J.J Ramsay, Maj. S Wilcock, Group-Capt. C. A. B Lawson, Rt. Hon. J.J. Randall, H.E. Willey, F. T. (Sunderland) Lee, F. (Hulme) Ranger, J. Willey, O. G. (Cleveland) Lennox-Boyd, A. T. Rankin, J. Williams, C. (Torquay) Leonard, W. Rayner, Brig. R. Williams, D. J. (Neath) Levy, B. W. Reid, T. (Swindon) Williams, Gerald (Tonbridge) Levy, B. W. Richards, R. Williams, J. L. (Kelvingrove) Lewis, J. (Bolton) Ridealgh, Mrs. M. Williams, R. W. (Wigan) Lewis, T. (Southampton) Robens, A. Williams, Rt. Hon. T. (Don Valley) Lindgren, G. S. Roberts, Goronwy (Caernarvonshire) Williams, W. R. (Heston) Linstead, H. N. Roberts, H. (Handsworth) Wilis, Mrs. E. A. Lipton, Lt.-Col. M. Robertson, Sir D. (Streatham) Wise, Major F. J. Lloyd, Selwyn (Wirral) Robertson, J. J. (Berwick) Woodburn, Rt. Hon A Longden, F Robinson, Roland Wyatt, W. Low, A. R. W. Ropner, Col. L. Yates, V. F. Lyne, A. W. Ross, William (Kilmarnock) Young, Sir A. S. L. (Partick) McAdam, W. Royle, C. Young, Sir R. (Newton) McAllister, G. Sargood, R Younger, Hon. Kenneth McCorquodale, Rt. Hon. M. S. Scollan, T. McEntee, V. La T. Scott-Elliot, W. TELLERS FOR THE AYES: McFarlane, C. S. Segal, Dr. S. Mr. Collindridge and McGhee, H. G. Shackleton, E. A. A Mr. Wilkins.
NOES. Byers, Frank Morris-Jones, Sir H. TELLERS FOR THE NOES: George, Lady M. Lloyd (Anglesey) Roberts, Emrys (Merioneth) Mr. Wadsworth and Granville, E. (Eye) Roberts, W. (Cumberland, N.) Mr. Hopkin Morris. Lipson, D. L
Clause ordered to stand part of the Bill.
CLAUSE 9.—(Provisions consequential on Geneva Agreement.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
I would like to ask why some terms of the Geneva Agreement have been implemented in the Finance Bill and why others are apparently left for subsequent implementation by regulation under this Clause? Why is it that all the terms have not been implemented at once and why are some left for subsequent implementation?
The answer is that it is due to the type of legislation under which some of these duties are imposed. The full rate of duty can, under the Act be varied by order but not a rate of preference which was fixed at a certain percentage. That applies particularly to silk and artificial silk, where the preferences were fixed at five-sixths of the full rate.
I understand more or less that if the duties are raised there has to be an order brought before the House, but what happens if the duties are dropped or lowered? Does there then have to be an order for that to be done or is it done automatically? It seems to me to be rather important that the Committee should be made aware, if a duty is dropped as to the reasons why it has been dropped under these agreements. I feel sure that someone on the Government Front Bench will be able to answer on that point.
That is covered under Subsection (4) of the Clause which says:
"An order under this section shall be made by statutory instrument…"
which is the common form of such a Clause and is similar to the provision in the previous Clause.
If the duty is dropped is that covered under Subsection (4)? I am quite well aware that if the Government increase a duty they will have to take the action specified in Subsection (4), but is it within the power of the Government to drop a duty completely without bringing an order before the House? That is a point which I think should be known by some official of the Treasury or by the Law Officer. I am sorry if it is a rather difficult question. It seems to be taking some time to answer, although I should have thought it was a rather simple matter. We have just had a Debate on the dropping of certain duties and there was a certain amount of feeling as to the duty either dropping or rising. I am asking the Government to verify the point, which has not been made clear up to now, whether in the event of a duty being lowered or dropped any information is to be given to the House, and whether the House is to have a chance of voting on the matter. If the Government are prepared with their answer now I will certainly give way.
Yes, if any change of the duty is to be made, whether it is lowered or removed, an order has to be laid before the House.
I thank the Paymaster-General and I very much appreciate the fact that he is seized of that point. It is essential that before we pass on we should know where we are on each individual Clause. The fact remains that until I asked that question there was apparently no one on the Government Front Bench who had the haziest idea of the position. [HON. MEMBERS: "Oh."] If hon. Gentlemen do not understand I will inform them that it is the common duty of a Government, when they bring before the Committee a Clause dealing with their financial position, to have some knowledge of what they are asking the Committee to do. Lack of such knowledge may be all very well for hon. Members opposite but there are still independent Members in this Committee who expect the Government to know what they are doing, and who expect the Government Front Bench to be able to answer a comparatively easy question such as that which I put to them. I have no doubt that the fact that the Government were caught and did not know the answer has only made their rather sour-tempered back benchers more cross than usual.
When the Financial Secretary was discussing Clause 1 he said it would be appropriate to take the question of the Geneva Agreements in so far as they affected preferences. I do not think that he or the Chancellor of the Exchequer has given an answer to my right hon. Friend the Member for West Bristol (Mr. Stanley) on this question of whether this Government or this nation is in any way bound not to reintroduce preferences under agreements of the Geneva character. It is a most important point and the answer of the Chancellor of the Exchequer that any individual who buys Imperial goods can charge what price he likes over the price in the Imperial market is not really answering the question because that does not obtain the sale for the Imperial product which we are seeking to achieve.
I take it that the hon. Gentleman is asking whether under the general agreement entered into at Geneva there is a power to raise preferences. The answer is "No."
The point I raised on the Tobacco Duty was a rather different one. It was that if a preference either disappeared or was involved should we be able by some means or other to discriminate between the Empire product which we had encouraged and dollar products. The right hon. Gentleman gave me an answer which was not entirely satisfactory, and I might raise the matter at a subsequent stage.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
Clause 10 ordered to stand part of the Bill.
CLAUSE 11—(Prunes)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
8.30 p.m.
This Clause sweeps away the duty on prunes. I think we should say a word about prunes. They are now a very respectable food, to be had at breakfast, dinner and supper by young and old. As the Committee probably knows, they were not always respectable. In Shakespeare's time prunes were a very disreputable form of food. As everyone will remember who has read Scene 1, Act 2, of "Measure for Measure" where the lady who longed for prunes—
But surely the prune achieved Victorian respectability when it was associated with prisms?
I agree. I do not know. the quotation from "Little Dorrit." The Imperial Preference is swept away, and what I wish to ask the Chancellor is whether he thinks that is wise? It is quite true that we get part of our prunes from California, but these are hard currency prunes, and no doubt it is part of the arrangement made at Havana that we agreed to sweep away Imperial Preference. Before the war we did get a certain amount of prunes from South Africa and Australia. That supply fell way in the war and I rather think we have concentrated on getting other dried fruits, raisins and currants, from these Dominion countries.
*** Would the right hon. Gentleman care to let us know why we are not getting prunes from the Empire since the war, and whether, in his opinion, there is now a possibility of stimulating the supply of prunes from sterling sources? I think we ought to be careful before we open the doors to a large import from the United States, because it will cost us many dollars. I understand we spent 12 million dollars last year on prunes from California. Presumably if import licences are granted the prunes will come in even more freely this year, since they will not have to pay duty. Perhaps we could have an explanation on the prune trade.
This Clause, like others we are discussing, is really merely a machinery Clause to implement the Agreement which the Committee has already approved. As the hon. Member for Chippenham (Mr. Eccles) knows very well, at the Geneva negotiations tariffs on many important commodities were bartered, as it were, against all other kinds of commodities by a large number of countries assembled together. One cannot argue the particular case of prunes without starting to explain the whole advantage we gained from the complete Geneva Agreement. What we have got is a reduction of American tariffs and other tariffs which hampered our export trade, and in return, in full association with the Dominions, we agreed to this, among other Clauses. I am afraid I cannot tell the hon. Member what are the prospects of increasing the quantity grown in the Colonial Empire.
Not a very satisfactory reply. This is a matter of very considerable importance. The amount of dollars involved in this harmless but to me rather distasteful fruit is 12 million. Twelve million dollars, translated into oil, or tobacco, or petrol, or whatever it may be, is a very substantial amount, and the mere fact that this House had a one-day discussion on the Geneva Convention as a whole does not preclude us from taking every opportunity that arises to find out details of any particular transaction. So far as I can make out, this alteration in the preference is really more or less recognising something which has already happened, because, for some reason or other, the increase in Imperial as opposed to foreign, that is largely American, imports of prunes which we had in the years up to the war seems, during the war years to have been completely reversed, and imports from the sterling areas which might have been of great value to us even before this arrangement seem almost to have come to an end. I think the Committee is entitled to ask why it is. Is it not possible now when above all, far more than before the war, we want imports of this kind to come from the sterling rather than the dollar areas, to do something to recapture the sterling imports we had before the war?
I am sure the right hon. Gentleman will realise that a duty of 7s. per cwt. on prunes is not going to make any very great difference to the direction of trade. In fact, of course, we are trying to increase the importation of dried fruit of all kinds from more sterling areas. As he knows, with the new arrangements we have with South Africa and Australia, and so forth, we are bringing large quantities of dried fruit here. But this particular adjustment, which I do not think will do much one way or the other to alter the direction of trade, was part of the Geneva concessions. It was one which people who sell prunes thought would be of value to them and we did not think, nor did the Dominions, that it was going to have any material effect on the trade. The result was that we gave this concession in order to get many other concessions.
The fact that the Chancellor says that it is only a small matter shows quite clearly the position we are in. Here we are taking away a preference to the Dominions which, although it means only 7s. per cwt., does mean something. We have carefully built up in Africa, and also to a certain extent in Australia, the possibility of a terrific development in sending dried fruit to this country. It is also a thing which can affect other parts of the Empire. This trade was developed before the war. During the war the balance against these shipments and other matters was completely changed against the Empire and against our other Dominions. Here is a small item which the Paymaster-General has said was only a machinery matter implementing, as the Chancellor says, a small matter in connection with the Trade Agreement.
I admit it is not a very big point, but it is one which has gone on with a series of small matters on various things affecting preferences, and the net effect must be very considerable. For that reason, I would emphasise that the encouragement of what may be only small trade here and there within the Empire could be made into a permanent saving of dollars. We are doing something which I think is wrong, from the dollar saving point of view and other points of view as well. I do not mind in the least that the Chancellor of the Exchequer mutters at me on this subject. I am not interested in that. I believe that this is one of several Clauses which are fundamentally bad and unsound. From the Imperial point of view, the dollar point of view and from the practical point of view in the long run this Clause is not going to be a good thing.
We do not get many chances of recording our opinions of high policy and procedure at Geneva, but we have today an accumulation of small items, all making for the whittling away of Imperial Preference and the aggrandisement of the dollar. My hon. Friend the Member for Torquay (Mr. C. Williams) said that one could not divide or make a major issue on all these small Clauses, but I should not feel that I was doing my duty if I sat down under this—[ Interruption. ] It is quite incomprehensible to hon. Members opposite that an insignificant back bencher should think he has any right, or any duty to his constituents or his conscience, to make a protest. I should say that I was not doing my duty if I did not make my small protest against the policy pursued by the Government of repeatedly surrendering and whittling away our fiscal independence, of which this is an example. It is late in the day to protest. I tried in 1945. When the matter went to Geneva it was one of a high policy and we could not speak, but if we do not speak here when we get the opportunity we are failing in our duty.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
CLAUSE 12.—(Table Waters.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
We cannot let this Clause go by without tendering to the Chancellor, on behalf of all the soda water drinkers in this Committee, our most respectful and grateful thanks for what he has done. My thanks, perhaps naturally, are rather diluted, but it is a very pleasant gift that he is giving to a certain hard-pressed section of the community. It is one which I know he will enjoy very much himself. Hon. Members will recollect the broadcast in which the Chancellor invited us to take part in parlour games. I have a pleasant idea now of the Chancellor of the Exchequer and the Chancellor of the Duchy of Lancaster sitting down together playing snakes and ladders, with the right hon. and learned Gentleman now able to provide free soda water. I am sure that the whole Committee will join with me in expressing our heartiest appreciation.
I am sorry to disagree slightly with my right hon. Friend the Member for West Bristol (Mr. Stanley) on this matter. I agree entirely with all his good wishes to the Chancellor for pleasant parties, but I am not sure that in a time when other people are asked to carry very heavy burdens it is right to relax a burden of this kind, small though it may be. I think the right hon. and learned Gentleman said it was hardly worth collecting. There are a lot of Government officials. It ought not to be very difficult to collect this small duty. I have found it a little difficult to explain to people why the Chancellor has suddenly made this remission in favour of this sort of beverage. I want the Chancellor to realise that it is not necessarily always right for him to make small gifts of this sort. Although on this occasion he has the full and whole-hearted support of my leaders on the Front Bench, I would remind him that it is not necessarily true that everyone in the country feels entirely happy at the fact that he has relieved a small but prosperous industry of this Duty when other people have to bear heavy burdens. Some people wonder how the Chancellor made this curious selection.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
CLAUSE 13.—(Pool betting duty.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
8.45 p.m.
In the Finance (No. 2) Act, 1947, the Chancellor of the Exchequer, in his wisdom or otherwise, decided to impose a Pool Betting Duty so that in respect of all sums invested on a greyhound racecourse totalisator there should be deducted a sum equal to 10 per cent. by way of taxation. In this Bill he has imposed a further duty known as the Bookmakers' Licence Duty whereby the bookmakers will be called upon to pay certain sums in respect of their operations at licensed tracks. I propose to devote my remarks to the question of the costs of administration. I hope that I shall have your permission, Mr. Beaumont, even though my remarks may also impinge on certain matters which might be better discussed on Clause 14. I desire to deal with the question of the costs of administration of these duties in respect of both these Clauses.
We cannot discuss two Clauses at the same time.
I appreciate that. The point would be the same in both cases. I will try to confine my remarks to Clause 13. In respect of the Pool Betting Duty, it is obvious that the promoters are in a somewhat different position to those people who collect Entertainment Duty at the pay box of a theatre or at the entrance door of any premises where any other type of sport or entertainment is taking place. These greyhound racecourse promoters will be tax collectors on a grand scale, having regard to the large amounts which they have been bound to collect on behalf of the Government and bearing in mind the special provisions which they will have to make and the precautions which they will have to take when collecting this money. The Sixth Schedule of this Bill provides for severe penalties on the promoters in the event of any bookmaker operating in a licensed track who has not paid his licence duty or in the event of any betting tax evasion by trickery or otherwise.
In these circumstances, I feel that my right hon. and learned Friend, who is eminently fair in these matters, will concede that there may be a case—I do not rate it higher than that—for reimbursing promoters or the licensed occupiers of a course, as they are referred to in the Bill, for the costs which they must incur as a result of the provision of this Clause and Clause 14. To give an example, I have been able to obtain some figures from the largest greyhound racecourse in the country where there is a large totalisator in operation and approximately 140 bookmakers. The question of additional staff costs is not an important matter, but in order to deal with the collection of these duties in the necessarily short time available and having regard to the shortage of accommodation, it may be necessary to provide special constructions. I think they are entitled to know who will pay for that? If a special building is required who will provide the money?
There are also other factors such as fidelity insurance, cash in transit insurance, staff pensions, rents and rates, all of which have a direct bearing on the costs of the tax collection by the promoters of these establishments, on behalf of the Government. It may be said—perhaps quite rightly—that the promoters have indicated that they are willing to carry out this function on behalf of the Government. Nevertheless, I feel that there is a duty upon the Government to ensure that if any private organisation acts on their behalf and incurs considerable expense, they should themselves give careful consideration to reasonable applications for reimbursement.
Then there is the question of security. Very large sums of money will have to be carried through crowds to places of safety. If these people carry their own money it is their duty to look after it. If they lose it they are losing what belongs to them, but in this case it will be public money, money belonging to the Customs and Excise, which will be carried and in respect of which special security measures will be necessary. This might involve, in certain cases, the introduction of a very large number of their own police for their protection, in order to ensure the safety of the tax money collected on behalf of the Government. In respect of Pool Betting duty, to which this Clause refers, we find that, if we allocate the Administration expenses as between Pool Betting Duty and the operator's deduction, in the 22 weeks since the tax was introduced at this particular stadium, the Pool Betting Duty expenses were £33,734 and the operators deduction amounted to £20,408, so that 40 per cent. of the expenses involved in running the totalisator can, in certain circumstances, be applied to the collection of this tax.
Section 3 of the Racecourse Betting Act permits the deduction, for the benefit of the promoter, of such amounts as the Racecourse Betting Control Board may from time to time determine either generally or in respect of each particular race. My main object in suggesting to my right hon. and learned Friend is that he should examine the situation to see if it is possible to increase the amount allowed under that Act to cover the cost of administration, is because in other circumstances, it might result in the public being called upon to bear a deduction of greater than 16 per cent. which is made up from 10 per cent. in respect of the Pool Betting Duty and 6 per cent. which the promoters are entitled to deduct under that Act. I feel that there it is reasonable for my right hon. and learned Friend to examine this matter, because I am quite sure, having regard to the present circumstances, that, if there is any further increase in the amount collected by the promoters in these circumstances, the cost of administration must increase and the Chancellor may concede that there is a reasonable case.
There is one final point. Assuming for a moment that the promoters have to bear all these expenses and my right hon. and learned Friend, in his wisdom, reexamines the whole question of gambling and the betting tax, which most certainly requires further consideration, and if he decides to drop this form of taxation there may be quite substantial costs already involved in respect of which no reimbursement may be obtained. I appreciate that he will not be in a position to give me an answer tonight, and I do not ask him for any undertaking now, but merely that he will examine the position and see if it is possible to make some further statement on Report stage.
I want to say a word or two about football pools. I am not so much concerned to protect the promoters, as my hon. Friend the Member for Bolton (Mr. J. Lewis) apparently is to protect the promoters of dog racing. What I am concerned about is to protect the punter. I had hoped that, when the Government decided to do what most of us thought should have been done long ago, and regulate gambling, they might as well have faced up—
I hope my hon. Friend will realise, when he talks of protecting the promoters, that these large organisations are capitalised by means of public subscriptions, and that it is the public who are substantially the proprietors.
That may be, but that is not my experience. You should try to get in on this racket, and see how difficult it is.
I am wondering if the hon. Member for Kirkdale (Mr. Keenan) intends that to be an invitation to the Chair.
I did not intend the remark to be addressed to you, Mr. Beaumont, I referred to the hon. Member for Bolton, who made the remark to me. I am concerned about the fact that we have not made up our minds on what is to be done to control what, quite obviously, we must control—the gambling industry of this country. The football pools seem to me to be the real business which the Government should tax, but all that they have done is to increase the tax from 10 per cent. to 20 per cent. not at the expense of the promoter, but at the expense of those who gamble week by week in the football pools. I am of the opinion that the football pools have no right to be selected out for this 20 per cent. tax as against anybody else.
Even with this 20 per cent. it appears to me that the football pool punter is not getting what he is entitled to get, and that there is no restriction on the percentage which a football pool promoter can retain as his share of the pool. Now that we are taking 20 per cent. of the amounts invested in the football pools, I think there should be some attempt to regulate the promoters and keep them down to six, seven or eight per cent. It is true that the larger pools are better conducted than the smaller ones, and I am rather glad that the Chancellor has now brought in some of the pools which escaped his notice six months ago. I hope the Government will make up their mind about gambling and that they will do something for those people whom they are now taxing.
I would like them to look at the question of the taxation of all forms of gambling, so that those who indulge in gambling may get some protection, and so as to prevent the football promoter from exploiting the punter to any great extent, as I believe he can do at present. There should be some restriction on the amount which he is able to take. None of us will grumble about the amount of the tax, although I think that, in comparison with other forms of gambling, 20 per cent. is an exception. If the Government can do anything to restrict the amount which the promoter may take, the average punter will be more satisfied.
I am sure that, on reflection, my hon. Friend the Member for Kirkdale (Mr. Keenan) will not expect me, in the discussion on a Clause of this kind, which deals with the duty to be levied, to go into the whole question of how much or how little the promoters of football pools should be allowed to keep. I do not think I can deal with that matter, and I am not at all clear that, if I tried to do so, I would be in Order.
My hon. Friend the Member for Bolton (Mr. J. Lewis) as I understood him, was anxious that the Chancellor should make some provision to reimburse the promoters on totalisator dog race tracks for administrative expenses which they would incur in collecting the 10 per cent. duty which falls upon them. [Interruption.] I think I have stated his case broadly. I could not help thinking that the hon. Member was going in for very special pleading, because the whole yield of the Pool Betting Duty is £15 million, though the increase of 10 per cent. on football pools which will bring in another £6 million.
That is not, relatively, a very great sum to collect for the State when we realise and remember that employers in this country collect under Schedule E by way of P.A.Y.E. very many millions and do not get administrative costs at all. We have also to remember that theatres and cinemas collect very large sums in entertainment tax, and that wholesalers, where Purchase Tax applies, also have to collect taxes for the State. It seems to me a little far-fetched—I put it no higher—for my hon. Friend to suggest that the Chancellor of the Exchequer should make special provision in order to assist the promoters of greyhound racing associations and, in particular, to reimburse them for the administrative costs which, if all accounts I hear are true, they are very well able to bear.
The main point I was attempting to make is that, if there is to be reimbursement, it should not be deducted from the public. If it is necessary to put up special buildings in this respect, would my right hon. Friend say who is to pay for them, because I know some cases in which it is necessary for them to be erected?
Question put, and agreed to.
Clause ordered to stand part of the Bill.
CLAUSE 14.—( Bookmakers' licence duty. )
9.2 p.m.
I now intend to call the Amendment in the name of the hon. and gallant Member for Central Hull (Captain Hewitson), in page 8, line 6, column 3, leave out "£12," and insert "£6." It may be convenient for the Committee if other Amendments in the name of the hon. and gallant Member for Central Hull were discussed together, if that is agreeable.
On a point of Order. Is it in Order to discuss the whole question of duties on the first of these Amendments?
Yes, if there is no objection.
Further to that point of Order. One Amendment deals with a refund and others deal with a rather particular question as to what should be charged on a particular race.
Instead of having the Debate on the Question "That the Clause stand part of the Bill" as a general one, we could have it in some way at the beginning. I am sure that some hon. Members want to talk on the subject generally.
Does not the first Amendment deal with horses as well as dog tracks?
There are two totally distinct questions, but I am in the hands of the Committee.
We are satisfied so long as we do not repeat the discussion on the Question "That the Clause stand part of the Bill."
Am I correct in assuming, Major Milner, that you are not proposing to call the Amendment in my name to discriminate between horses and dogs?
I am afraid the hon. and gallant Member's Amendment would impose a charge and is, therefore, out of Order.
What about the Amendment standing in the name of the hon. and gallant Member for Antrim (Major Haughton) and myself—in page 7, line 44, leave out
"at which a totalisator is operated."
That Amendment is also out of Order.
I am a little confused—[HON. MEMBERS: "Speak up"]—hon. Members will hear before I am finished—[HON. MEMBERS: "We want to hear now."] Do I take it that the whole of the Amendments standing in my name to column 3 are before the Committee?
All the Amendments in the name of the hon. and gallant Member are now open to general discussion. If he wishes to deal with them in two parts he may do so, having regard to the fact that they are on two different questions, but he should do so in one speech.
I beg to move, in page 8, line 6, col. 3, to leave out "£12" and to insert "£6."
I would like at the outset—I hope hon. Members can now hear me—to say that the mental activities which put this particular duty in the Bill are on a loser, like Percy the Pelican who escaped from Whipsnade a few days ago, because it is quite evident that whoever was responsible for placing this Clause in the Finance Bill knows nothing about the practical side of dog-track betting. We can say without any hesitation that the Chancellor of the Exchequer himself does not know anything at all about it. He told us so. One cannot visualise the Chancellor of the Exchequer standing in the queue with a half-crown in his hand waiting to get on to trap four. I do not think he would know how.
These Amendments seek to reduce the duty by one-half. I have during the last two or three days had an examination of the bookmakers of the dog track in Hull and only one in five could possibly pay the duty as set out in the Bill. I do not think it is in the mind of the Chancellor to place on the bookmaker on the dog track a burden which he cannot possibly afford to pay. The small man could not afford to pay it. The large people could afford to pay it. The people in the large rings could afford to pay, but the people in the small rings could not possibly afford to pay the duty proposed by the Chancellor. I think he would admit that.
The title of the Clause—"Bookmakers' licence duty"—at the outset, is something which is not true and which is not intended. It is not meant that the bookmaker will pay this duty. It is meant that this will be passed on to the man who is putting his odd shilling on the dogs and it has been suggested in a previous speech from the Treasury Bench that the bookmaker should shorten the odds to recompense himself so as to pay this duty. Anyone should know that when betting opens a dog may be in the betting at 6–1 against. When the flag goes up—and that is the point at which the price is fixed—it may be 6–4 on. [Interruption.] The Chancellor is laughing. I hope he has an easy mind. I hope he does something about it. The point is that when the flag goes up that is the price which fixes the starting price for the dog, and after the flag goes up it is impossible for a bookmaker to start fixing the odds to recompense himself for the duty he has to pay.
Another suggestion is that when a man or woman wins, the bookmaker should deduct from the winner 10 per cent. so that the bookmaker can collect the amount of the duty. If that is seriously suggested by the Front Bench, it is not an honest method. Bookmakers are looked upon on the dog track as semi-illegal organisations. If it is in the mind of the Treasury to use the bookmakers as tax collectors, let them go one step further and legalise betting and put the thing on a legal and orthodox basis. As I have said, the whole set-up of this Clause is not honest. The Chancellor of the Exchequer knows that the small bookmaker cannot afford to pay this tax. He also knows that within a year the majority of these small bookmakers will be out of business. It is possible that he will say that this is an experiment—that he is going to try it for one year to see what happens; that he has every sympathy with the small man; but I would like to suggest that the Chancellor's sympathy does not make a noise in the frying pan. In one year it will be too late, for many of these men will be out of business.
These Amendments, while agreeing to an attempt to operate the scheme, ask the Chancellor to reduce the tax by half. If he will do that, the people who will have to operate this tax will make a very genuine effort to put it into operation. We ask the Chancellor to look on this with a kindly eye. He has not been very kind of us so far with a view to this experiment—because I am quite sure that he will say that it is an experiment—being given a chance to prove a success.
You, Major Milner, have ruled that other things may be taken into consideration. I ask permission to turn an eye to column 4. Here again the Chancellor is betting against odds. It seems that the races will be taken in multiples of two, paying on the next even highest the whole of the way. Surely Whitehall could work out something very simple. If eight races are to be run, why not divide it into eight. If seven are to run pay for seven, if nine are to run pay for nine, and if ten are to run pay for ten. Instead of that the Chancellor wants something for himself. He taxes the next highest even number. Why is he not generous; why does he not say the next lowest? The commonsense way would be to say one for one. That is the method and it is a simple one.
This matter affects the lives of many small men and it is a backdoor method of trying to impose a new tax on the ordinary workman—because it is the ordinary workman who attends the dog races—the man who goes there with his half-crown or 5s. There is justice in the appeal that is being made. If the Chancellor will agree to the suggestion that the tax be reduced by half and that the meeting be charged meeting for meeting, he can be assured of a ready response in trying to make this tax work. If he does not do that, he will put the majority of the small people out of business, and I do not think that is what he wants to do.
19.15 p.m.
After the Chancellor announced the tax on bookmakers I was approached and made some inquiries. For the first time in my life I went to three race meetings to see exactly how the whole thing worked. Meanwhile, I was stopped on the road, got some tips and lost my money. If the Financial Secretary argues that we can so arrange the odds that a bookmaker can collect this tax, he is living in a world of fantasy. When the names of the dogs appear on the board the prices are put against them. When the flag goes up—as the hon. and gallant Member for Central Hull (Captain Hewitson) has stated, the price may be evens—it is impossible for the bookmaker to adjust his book, particularly when the price has been given to the punter. If he is an honourable bookmaker he must pay on the price given when the bets are laid. To ask bookmakers to arrange the odds to meet this tax is asking the impossible.
The other method suggested is that the bookmaker should deduct from the punter when the latter collects his winnings. I should not like to be the bookmaker on a dog track who tried to deduct from the winnings of a bet this tax for the Chancellor. He would have a very rough time. I have been to the White City and I say it is an impossible task. The tax has been put on so that the bookmaker will not be given an unfair advantage over the totalisator, but it must be remembered that the totalisator loses nothing at all; 10 per cent. goes to the Treasury, 6 per cent. goes on expenses; it is the punters' money and nothing is lost. A bookmaker, however, standing on his own, stands to lose his own money in the betting that takes place.
I went through the books of bookmakers in my own district. Ours is only a little course where miners and other people train and run their own dogs. It is known in "dog" language as a "flapping" course, yet we are to pay the same tax in a little mining village as does the White City in London. The Houghton-le-Spring bookmaker has to pay exactly the same tax, although the betting he takes is nothing in comparison with that at the Wood Green and White City courses in London. In addition, as I have already said, the totalisator loses nothing whereas the bookmaker is liable to lose his money.
It took me six hours to examine the books of three bookmakers. I found that a disabled soldier who sank his gratuity in a bookmaking business has been averaging £12 a meeting over the last six months. That figure was arrived at after calculating the losses and winnings over the period. He has had two stands, which means that he would have to pay a£30 tax; therefore, he goes out immediately the tax comes in. There is another case of an ex-miner suffering from nystagmus who started a book. He averaged £19 a meeting, and he will pay £30 duty, with the result that he will lose per meeting. Another man who has just got a stand averaged £6 over the six months, and he will have to pay £6 for his stand. It means of course that he will get nothing when this duty is applied.
It means that many hundreds of small bookmakers are going out of business because of this duty. I agree that there has to be a tax, and this method we are proposing will go a long way towards helping the small man. If the Amendments are not accepted, it will mean that the big bookmakers will be able to get all the betting. I ask the Chancellor of the Exchequer, after long investigation and not as a betting man, to reconsider this matter and to prevent the small man being ousted from his livelihood.
I cannot understand how this Amendment will achieve the results which are desired. I too have been in contact with a large number of bookmakers in my constituency, all of whom do not operate on local tracks. They vary from the small type of bookmaker to the large bookmaker, who, it has been said, may gain as a result of this Clause. As I understand it from the facts and figures which have been circulated, the chief complaint against the proposals of the Chancellor of the Exchequer is that he is asking bookmakers for so much money that they have no chance whatever, on recent experience, to pay it.
It does not appear to me that cutting the proposals in half will tackle the problem. As I understand it, the problem which faces the Chancellor of the Exchequer is that in order to live up to the Labour Party's conception of justice it was important to tax bookmakers as well as the totalisator. It was not so much that he wished to tax the bookmakers and the totalisator, as the men and women who did the betting. From what many of us have heard from our constituents in discussing this matter, it is quite clear that the licence charge is so great that there is no chance of the bookmaker passing it on to the men and women who place their bets with him. I cannot understand how it was that the Financial Secretary was able to tell the House on Second Reading:
I am not standing here arguing that there should be no tax on betting, but I am very concerned, because the Chancellor appears to be imposing a great injustice on a very small class of the community. I am sure this Committee does not want without explanation to let pass through proposals, which seem from all that we are told about them by men who should know and indeed who live on bookmaking, to be unjust, for the bookmakers cannot in any way pass on the effects to the betting public. It may have escaped the Chancellor's notice that there are differences between totalisators and bookmakers. He and I were educated at the same establishment and we have small knowledge if any of greyhound racing tracks. However, I have taken the trouble to discuss this with people who know. It is quite obvious, as the hon. Member for Houghton-le-Spring (Mr. Blyton) stated so clearly, that totalisators run no risk at all. The bookmakers in this run a great risk, and hon. Members who have received particulars of the effects of the tax on these bookmakers may have noticed the comparatively large number of bookmakers who do not make any profit at all in a year. Of one type there are 17 per cent., of another 15 per cent., and so on, while a very much larger percentage make a very small profit.
The Chancellor is dealing with totalisators on the one hand and bookmakers on the other, and they are two entirely different things. I do not think he has taken that fully into account in proposing this Clause. I only ask that we should have a full explanation of the mathematical calculations which have gone into the working out of this Clause, and I hope that as a result of the objections which have reached the right hon. and learned Gentleman and the speeches of the hon. Member for Houghton-le-Spring and the hon. and gallant Member for Central Hull (Captain Hewitson), the Chancellor will be able to tell us either that he is going to reconsider this tax or that he will give the Committee satisfactory evidence to show that his right hon. Friend was right when he said that this tax could be passed on.
9.30 p.m.
The Clause that we are now discussing represents one more rather muddle-headed attempt on the part of the Exchequer to deal with this problem of betting. The first endeavour was to impose a tax on totalisators. It was realised that by virtue of the tax on the tote some advantage might accrue to the bookmakers. We are now discussing the imposition of a tax on bookmakers, and be it noted that any tax on bookmakers would tax only those who practise where the totalisator is in operation.
As my hon. and gallant Friend the Member for Central Hull (Captain Hewitson) pointed out, bookmakers on a dog track start at a very considerable disadvantage compared with the tote and bookmakers working outside, because they have to give odds which, as the money comes in, inevitably tends to reduce them to starting price odds. The bookmaker in his own office and paying starting-price odds takes no risk as to opening prices whatsoever, and also avoids the tax which the Chancellor now seeks to impose. One effect of this will certainly be more street betting and more business diverted into starting-price offices.
The number of licensed greyhound racecourses in the country at present is about 200, of which 20 to 25 per cent. either have no tote or find it difficult or, in quite a number of cases, impossible to cope with the totes they have already ordered. Those racecourses and dog tracks at which no totalisator is in operation will be attended by bookmakers who will not be subject to any tax at all under the Clause. I am credibly informed that negotiations are already in progress between the bookmakers on the small dog tracks on the one hand and the managements of those small dog tracks on the other as the result of which the bookmakers will subscribe money to help to keep the track going in return for which the management will either close down the tote or not operate it. The effect of that arrangement, which is quite legitimate in the law as it stands, will be that no tax will be paid by the bookmaker attending those courses and no revenue will accrue to the Government because the tote will not operate. Furthermore, these tracks at which no totes will operate will compete with tracks where totalisators do operate, and not having to pay any tax, they will be able to offer better odds than on the larger and, in most cases, better managed tracks.
Less than 20 per cent of the bookmakers attending dog tracks—some 3,500 of them I am told—will be able to pay this tax. The immediate effect of it will be to put them out of business. If the Chancellor says that it is in accordance with public policy or the policy of the Government that this class of the commu- nity should be put out of business in the national interest, this is the way to do it, but if his object is merely to produce revenue—I take it that is his object—this Clause will defeat its own object. I believe that the Treasury anticipate a revenue of £10 million a year from the totalisators on greyhound tracks and some £5 million a year from the bookmakers on the dog tracks who will be liable to the tax. My forecast, for what it is worth, and it may not be worth much, is that nothing like £5 million will be obtained by this tax. The Chancellor ought to think again before coming to a conclusion on this matter. It is rather unfair.
If my hon. and gallant Friend the Member for Central Hull twitted the Chancellor of the Exchequer on his innocence in these matters, it is only right that I should mention the fact that he has openly confessed that he is innocent. He said on a previous occasion that he was a child in these matters, and I hope that since then he has adopted a more adult view of this problem, because he said himself that it was necessary to produce an equitable form of tax, equitable both compared with the totalisator and as between the bookmakers themselves. This tax does nothing of the kind. It segregates the totalisator on the dog track and the totalisator on the horse track; it segregates the bookmakers on the dog track where the tote operates from the bookmakers on the dog track where the tote does not operate; it segregates betting on horses from betting on dogs. The whole proposition confirms me in the view I have formed that this is a messy and muddled way of raising revenue, and of attempting to deal with all the questions that lie behind the proposal under discussion.
Like other hon. Members, I have been approached by several bookmakers to deal with this matter, and I thought it was not right to take up their case without looking rather fully into the matter, investigating the accounts of several of them and, in one or two cases, looking through the certified figures. The result has convinced me that the type of bookmaker prevailing in my division must be put out of action by this tax. There may be cases in London of large tracks where firms can carry the charge but, speaking from my own knowledge, it cannot be so among the type of bookmakers I represent. There seems to me to be no chance at all that they can pass on the tax by a manipulation of odds. Any attempt to do it would either force betting into the hands of street bookmakers or of the big bookmakers or into the tote.
If that be so, the idea of getting a large revenue from this source of taxation is an entire delusion. It would be interesting to know how the estimate of £3 million in this year and £5 million in a full year is built up. It is no answer for the Chancellor to say that if the medium-sized bookmakers are shut down, the tote will benefit and we shall, therefore, get the revenue that way, because that would be incorrect budgeting. It would mean putting forward figures for revenue items of bookmaking which will not be realised, and the fact that another item is thereby accidentally bumped up does not justify the Budget estimate of £5 million. I hope, therefore, that the Chancellor will be able to show in some detail how this figure is arrived at.
While I sympathise with the Amendment I would say again, speaking from my rather limited investigation, that I doubt whether a reduction of the tax to the figure mentioned would be adequate to save the bookmakers from extinction. I take a rather serious view of it. In my opinion it is not right or justifiable to put men out of action and kill their businesses merely to raise a little more national income. It is wrong as a precedent. If I am told as a matter of policy that bookmakers or small bookmakers are a useless class, that we would do better without them, I would understand the point of view though I would not agree with it. In that case I would say legislate, regulate them, and abolish them, and so forth, but do not put forward a fiscal Measure to collect revenue and, when charged with doing something which will not help the revenue, say, "Never mind, we are better without them."
I am not suggesting that the right hon. and learned Gentleman would take that view, but some people would. Some would say that an injustice of this kind is tolerable because they think the sufferers under it are not socially a very valuable class. To my mind people carrying on a lawful trade have a right to live and to tax them out of existence is pure oppression. I could not see my way to support the Clause, and I will support the Amendment even with grave misgivings, because I very much doubt its adequacy to deal with the grievances in any case in my constituency.
I should remind the Committee that when we debated the proposed duty on dog race totalisators last autumn there was considerable pressure from all quarters of the Committee that this tax should be extended to bookmakers. At that time, the National Greyhound Racing Society definitely took the view that, unless something was done to institute a comparable duty on bookmakers, the proposed tax on totalisators might have a serious adverse effect on the totalisators under their management. On top of that, it was obvious—and hon. Members in all quarters of the Committee will bear me out—that there was a great deal of feeling on the part of the public that, when taxation was as high as it is and an attempt was made by my right hon. Friend the present Chancellor of the Duchy of Lancaster to skim off some of the money which went in gambling, then of all the people the bookmakers should not be exempted. Therefore, my right hon. and learned Friend has attempted in this Budget to meet what he and I thought to be the hope of the great majority of people.
The question then arose of how the duty should be levied? The object in view was, by some means or other, to levy on bookmakers who use dog race courses where totes are in existence, something comparable to the 10 per cent. which the totes have to pay. Those of us who were in the House, and those of us who were not in the House but have read the records, will know that the right hon. Member for Woodford (Mr. Churchill) tried to tax bookmakers in 1926. It is now realised, by him no less than by others, that he made a mistake. He tried to tax them on turnover. It was quite obvious that it would be absurd for us to try to levy a tax in the same way.
We had to find some other method of reaching the same end, that is, of putting the bookmakers in the rings on dog race tracks on all fours with the totalisators—[ Laughter ]—on the same footing. I do not know whether that is a very much better phrase.
At any rate, I think the Committee realise what we had in mind. We made inquiries. The hon. Member for North Blackpool (Mr. Low) said that he had been going into this matter thoroughly and obviously he had been visiting bookmakers who had been instructing him on the subject. I realise that other hon. Members have been spending part of their Whitsuntide holiday in that happy way. We too have been making inquiries and have met much the same kind of gentlemen.
9. 45 p.m.
Perhaps we have been able to go further than they have. We have been able to examine the turnover of a very wide selection of bookmakers on at least 24 representative courses, taking not one ring, but all rings. We came to the conclusion that, if something like 10 per cent. was to be levied, the scales laid down in this Clause are approximately right. I will not say for one moment they are completely right and accurate for every bookmaker who goes into a ring. Obviously that would be impossible. One bookmaker is more fortunate than another, or has a face which people trust more than another. Therefore, of two bookmakers who go into the same ring and pay the same £48 to go there, one may have a considerable turnover and a number of bets placed with him and the other may not. But we cannot legislate for that. As far as we can, we have to take typical cases and legislate for the general rather than the particular.
With the scales that are laid down—and I want to admit it straight away—it may well be that certain bookmakers may go to the rings, have, for them, an unfortunate day and come away not as rich as they were when they went. On the other hand, the luck will be in their favour on other days. If this were not so sometimes, they clearly would not go at all.
I think I said on Second Reading that we were not hitting at the bookmakers here. If bookmakers make a profit, we hope to catch them on their Income Tax returns. What we are trying to do here is to get at the betting public. On the earlier occasion, I expressed the view, which I think is not unfair, that the licence duty which bookmakers pay when they enter the rings could be passed on to the betting public. [ Interruption. ] Oh, yes; perhaps I may be allowed to make my speech in my own way. I am not an expert in these matters. I had better confess that straight away. But from inquiries I have made, I am sure that it is possible to "shorten the odds." That was the phrase that I used the other day. Having met more than one representative of the bookmaking fraternity in the last few months, I have formed a conclusion that they are well able to take care of themselves when they get into a ring, and that most of them, at any rate, are able to see that they do get their money back by adjusting the odds they give.
If bookmakers do not want to shorten the odds in that way, it is quite possible for them to arrange that, when someone comes to them having won, they should pay out with a deduction of 10 per cent. There is nothing to prevent this in this legislation: in fact, so far as we are concerned, we are quite willing that bookmakers should use this method. [HON. MEMBERS: "Oh."] That is done on the tote—
rose —
No. The hon. Gentleman has made his speech and, if I may, I would like to make mine. So long as the means are fair, it is open to the bookmaker for him to reimburse himself either by shortening the odds or making a percentage deduction from the winnings.
Would the right hon. Gentleman the Financial Secretary, or the Chancellor of the Exchequer accept an Amendment substituting for this tax a tax of a percentage of the winnings to be deducted statutorily from the winnings?
That has been considered. As a matter of fact, that point was mentioned to me when I met the bookmakers quite recently. One has to remember that bookmakers, like the stars, vary in magnitude. Some are honest, some are less honest. It is obvious that, if we begin to make statutory regulations or to put certain things into a Bill, it will mean that we shall get, as we got in 1926, the decent, honest, straightforward bookmaker abiding by the law, and others, not so honest and not so straightforward, evading the law. We want, if we can, to avoid that.
My right hon. Friend has suggested that the bookmaker might shorten the odds or deduct 10 per cent. from the winnings. What is to prevent the bookmaker from shortening the odds and then deducting 10 per cent. from the winnings, thereby robbing the public?
Here again I was about to say—and it is these interruptions which are preventing me from reaching the point I wish to make—that the point was put to me that the State itself should lay down these regulations and obligations, and that bookmakers would then abide by them. It had been suggested in the course of our discussions that the bookmakers as a body should lay down rules and regulations for reimbursing themselves.
The essential point to which I wish to come is that, if when a man makes a bet, the bookmaker tells him at the time that in order to reimburse himself for the licence which he has had to pay to come into that ring, he intends to make a percentage deduction from winnings, there is no harm in that and nothing wrong. I suggested to the representative bookmakers whom I saw on behalf of my right hon. and learned Friend that they should themselves get together to clear up and safeguard their own interests in this matter, if they felt that without so doing they would not be able to pass on the duty which they had had to pay as legitimately as they should be able to. It seems to me that their salvation is in their own hands. They have only to get together to find a way out.
May I deal with another point which was put by my hon. and gallant Friend the Member for Central Hull (Captain Hewitson)? He had some hard things to say about the proposal in the Bill that, where at any meeting there were more than eight races, and there was an odd number, say nine, ten would be charged for. He thought that that was sharp practice on the part of my right hon. and learned Friend. The reason why that provision was put in was twofold. First, we understand that it practically never happens that nine races are run; the number is either eight, 10, 12 or even 16. The other reason was to prevent a needless complication of the provisions to cover events which rarely, if ever, arise.
However, in case it can be shown, as it may some time be shown, that at any given race meeting it was desired to run nine or 11 races, my right hon. and learned Friend is willing to amend this Clause, perhaps when we reach the next stage, in order to ensure that, whatever number of races, the same percentage charge shall be that laid down for whatever the odd number might be. That will go a long way to meet the viewpoint of my hon. and gallant Friend and of my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton). It is, I know, a point on which the betting fraternity are very keen, and it is one which they desire to see altered.
I think that I have answered, as far as I can, the points which have been raised. It is quite obvious that there is a great difference of opinion as to how the bookmakers on these particular tracks should be reached. I can assure the Committee that, with the best will in the world and with every desire to do justice to the bookmakers, my right hon. and learned Friend has come to the conclusion that this is the only way.
The right hon. Gentleman referred to the fact that in a previous Debate a general desire had been expressed that if the greyhound totalisator was taxed the greyhound track bookmaker should be taxed. Of course, it is not part of the case against this provision in the Bill that greyhound bookmakers should not be taxed at all, and it is no defence of this particular tax to say that they ought to be taxed if the totalisator is taxed. The right hon. Gentleman made no attempt whatever to justify those airy words which he used when presenting the Finance Bill, namely, that all the bookmaker had to do was to shorten the odds by 10 per cent. He seemed to admit just now that he had not the slightest idea what shortening the odds meant. That seems to me a rather remarkable confession on the part of somebody who is trying to justify this provision. It would be as reasonable for somebody to discuss temptation who had never had any amorous experience. Either the right hon. Gentleman has never been to a racecourse, or he has never betted, or he must be a lightning calculator of a quality which I do not think he has shown so far in this Committee.
I will read an extract from an account in a sporting paper of the betting at a particular meeting. This, I think, will establish my point quicker than anything else. The paper said:
10.0 p.m.
Several hon. Members on both sides of the Committee have put forward pleas on behalf of the bookmaker, but there are wider objections to this proposal, and I appeal to the Chancellor to reconsider the whole matter. I sympathise with the effort he has made to rectify an admitted anomaly whereby the totalisator on the dog track was bearing a very heavy burden—many people say it was too heavy—whereas the bookmaker, in competition with the totalisator, was exempt. He has made this effort to clear up the Latter, but the whole trouble has been caused by the fact that the Exchequer put this special Duty on the totalisator at dog tracks. That is the basis of the difficulty.
All the complications have arisen from that unfortunate basis. The totalisator is now levied with the original 6 per cent. for management expenses, plus 10 per cent. tax, making 16 per cent. in all. The figures, since the tax was originally levied, have shown that it has had an unfortunate effect on the totalisator. It is driving money away from the totalisator, as hon. Members indicated it would, to the bookmakers. I ought to mention that an hon. Member opposite asked a question recently, and the reply seemed to contradict what I have just said, because the figures given showed that the takings from the totalisator in February and March were £700,000 and £729,000, respectively, which would seem to indicate that the takings had gone up. As a matter of fact, the explanation is that in March, there were the same number of meetings as in February, plus a Bank Holiday meeting, and when that is taken into account—
I am sorry to interrupt the hon. Member but this is a question of bookmakers' licences, and the matter he is raising appears not to be in Order.
I am sorry if I am straying, but in imposing the original duty it was decided that the totalisator should be taxed as a separate thing. What I am trying to lead up to is that the nature of this particular levy has come about simply because the Government will not face straight away the whole question of taxing betting. I believe that the present proposal will defeat the object which it is intended to achieve.
The Financial Secretary said a moment ago—and I took down his words—that the bookmakers have only to get together to find a way out, and that is exactly what they will do. I do not believe that this will drive bookmakers out of business. It will not do that, but what it will do is to drive them to those undesirable unlicensed tracks. I hold in my hand a sheaf of advertisements for some of these small meetings held on a farm, and I have a newspaper cutting from a provincial paper about one of them. I had better not mention the newspaper because I do not want to advertise the track. It says: there to see that everything was in order. They said:
I suggest that if the Minister investigates at the smaller tracks he might find the proposed levy will have the effect which has been indicated from several parts of the House. For those reasons, which I think go far beyond the particular view-point of the bookmaker, I suggest that the Chancellor of the Exchequer should reconsider this whole matter and even withdraw the Clause until, in the next Budget, he can tackle the whole question of a betting duty and not try to do it in a piecemeal fashion like this. In adopting the present method he is only piling up one anomaly on top of another.
The Chancellor of the Exchequer cannot be under any illusions about the way this Debate has gone. I have heard nobody supporting the Clause as it stands.
They are afraid to support it.
That is a most remarkable, and very unlikely, explanation. It seems in all quarters of the Committee—behind him, as much as from this side—that the general view is that it will be punitive in its effect on a particular group of bookmakers. It is not all bookmakers, but this certain number who go to a certain kind of greyhound racing track. I hope, therefore, if I may echo the closing words of the hon. Member for Central Hackney (Mr. H. Hynd), that the right hon. and learned Gentleman will reconsider the whole matter between now and the Report stage of the Bill.
Perhaps even tonight he would like to amplify what the Financial Secretary to the Treasury has told us. Not for the first time, the Financial Secretary remarked that the intention of the Chancellor of the Exchequer and the Government was that the bookmakers—that is, these particular bookmakers—should pass this duty on to the public. Once again he repeated that the way they could do it was by shortening the odds, but tonight he has added a very strange alternative, that they might deduct 10 per cent. from the winning bets before they paid out. I do not think anyone who has had any great experience of this sort of race meeting could think this is a practical suggestion at all—a milling mob of the lucky winners around a rather distracted bookmaker not quite sure how he is going to come out of the race himself, yet solemnly taking off 10 per cent. before he pays out; surely that is a pleasant joke and nothing more than that.
This cannot be intended as a suggestion. If it were a suggestion I hope the Chancellor of the Exchequer will confirm it and explain exactly how he envisages that transaction will take place, and, perhaps, he will also explain exactly how the shortening of the odds is to take place sufficiently well to enable—which I understand is his intention—these particular bookmakers to stay in business. It is admitted that the Government do not want to drive them out. If they did, there are other ways of doing it. It is admitted that they want the bookmakers to go on earning their honest livelihood in the way they have chosen for themselves.
I think possibly in the realms of mathematical theory it is conceivable that one could so arrange the books that one could pass this on by shortening the odds, but it would not be done by the kind of bookmaker we are talking about at the dog racing tracks. I am not decrying them or their ability, but this is something of a very complicated nature and there could not be very many people successful in doing it. I think it is probably true that in the cheaper rings at the dog races the bookmakers themselves very rarely get their books worked out on any conclusively profitable basis. It is not worked out with mathematical exactitude.
The Chancellor is trying to tackle a problem which is very difficult—we all recognise that—and which has baffled us before. It is true that we had the 1926 tax. The estimate of what it was hoped to get was not reached, the original rate of the tax had to be reduced, and eventually the tax had to be withdrawn altogether. It was a tax trying to get money out of betting. There have been investigations, a Royal Commission and every kind of discussion as to how this could be done, granted that it ought to be done. Up to recent years, there has not been unanimity on that; a great many people in this country would not consent at all to a tax being levied on anything so evil and wicked as betting. Possibly, now public opinion has changed; possibly, owing to the growth of the evil, people who before would not touch the dirty thing, now think that it is so bad that it had better be touched before it makes more trouble. There is a different atmosphere for dealing with the problem now than there was 10 or 20 years ago. That is not to say that it is a good idea to deal with it in such a way that it is going to create hardship or injustice on a group of our fellow citizens.
These bookmakers—very rightly, no one can complain—have been very generous in the amount of information which they have given to hon. Members and in the opportunities which they have afforded to hon. Members of checking up. I hope that as a result of a wider knowledge not only gained by hon. Members but by the Chancellor and his colleagues, that he will really not insist on the tax in the form in which it is in the Bill. If he would give us some explanation of how he thinks either the 10 per cent. is to be collected off the one who bets or how the odds are to be shortened, I am sure that the bookmakers, if no one else, would be most grateful. We too would be interested.
We are coming very soon to take a decision on the first Amendment, and I would advise my hon. Friends to support it because it halves the evil so far as the bookmakers are concerned. For the rest, we shall have to see how we get along and what, if any, views the Chancellor of the Exchequer expresses. Of course, there is still the further stage of the Bill. I think that it is a pity, and we see it now for the first time in this Bill, that by having dropped the Report stage of the Budget Resolutions, we could not earlier on have had a compact Debate as last year and in every other year but this one on a particular subject and so have given guidance to the Chancellor within the desires expressed in his Budget speech. We could as a House on the Report stage have given him guidance which might have brought a better Clause into the Bill. Now we have a Clause already in the form before us, and it is only today that we have the opportunity of getting the first reaction which makes the work of the next stage of the Bill all the more important. I hope that the Chancellor of the Exchequer will give us some further elucidation on this subject.
I do not think I can add a great deal to what my right hon. Friend has said as regards this tax. I think that the general proposition that we should tax betting in some form is now accepted. It was accepted last year by the House when the Budget was passed which put a tax on dog totes, and there was then a very general expression of opinion that something ought to be done with regard to the bookies on dog tote courses in order to equalise the burden as between the two. I have attempted in this Clause to set out a method of doing that. It is limited to that particular purpose. I think that every one would also agree that it was no good going back to the method of 1926 to try to collect taxes in that way. It seemed generally to be agreed by all the experts we consulted that licensing was the best method and that it should be done in a series of grades for the different enclosures so that the tax would be graded according to takings.
10.15 p.m.
That being so, the only question remaining concerns the figures which have been put in the columns relating to the different enclosures. I am bound to say that I cannot accept the statements of the bookmakers on what those figures should be. I do not think we can ever accept the figures of the person who is going to be taxed as to what is the right tax. That is why we made our own independent investigations to arrive at a figure which seemed to us equitable with the tax being imposed on the totalisators. Despite the gloomy prognostications of those who will suffer from the tax, they will not suffer quite as badly as they seem to think. They are not likely to go out of business because of this tax.
The right hon. and gallant Member for Gainsborough (Captain Crookshank) asked how we could shorten the odds in order to recover the tax. I suppose that every bookmaker has some idea of his cost of living; he knows what he wants to make in order to get along. He does not make up his books with a view to having no surplus or he would very soon go out of business. He may be a man with a high standard of living who expects to make a large surplus; he may be a smaller man who expects to make a smaller surplus. That surplus, however, must meet his expenses—the car in which he drives to the race meeting, his assistants or whatever else there may be. In other words, he must have an idea of his costs and he must make his book to cover his costs and have something over in addition.
In future, this tax will be one of the items of his costs. He will have to pay it as part of his business and to make up his book on the basis that it is an item of cost. There is no question of Calculating the profit made for every race. Book- making is sometimes a matter of profit or loss, sometimes good luck, sometimes bad luck; but by and large and over the year these gentlemen, I understand, are capable of so calculating things that they come out with a profit at the end.
Are we right in deducing from the Chancellor's argument that the man with a small overhead would be able to offer better odds than the man with a bigger overhead?
That is always so, of course. If a bookmaker were prepared to make no profits at all during the course of the year, obviously he could pay away more by way of profits.
Let the right hon. and learned Gentleman go and see for himself tomorrow.
I have been on many race-courses and I have seen many bookmakers. I believe they are perfectly capable financiers to deal with this kind of problem.
I would like to put before the Chancellor the case I have in mind of a flapping track with an attendance of 600 on Saturday afternoons and 750 on Saturday evenings, with an average betting allowance per person of 15s. A man with four bookmakers has to pay tax of £48 a week. Can the right hon. and learned Gentleman give any indication of the amount of shortening the odds that would be necessary?
I do not understand why he should pay £48. Am I to understand that there are more than two enclosures?
There are two rings. There is an afternoon and an evening meeting, which count as separate meetings.
If there are two separate meetings the bokmaker would receive two separate lots of bets. If he goes into the dearer enclosures and can afford it—he pays £24. If he goes into the cheaper enclosures he pays £6. In the circumstances which the hon. Member for Oldham (Mr. Hale) mentions, I imagine it would be the cheaper enclosure, otherwise he would not be able to make the amount of money required. In those circumstances we do not see any reason whatsoever why we should go back on the figures which have been put down. We believe they are equitable as between the totalisator and bookmakers and that the tax will show that bookmakers can so adjust their businesses as to pay these sums and also continue making a living.
May I ask two questions in regard to the somewhat naive suggestion made by the Financial Secretary that the bookie should invite the winner voluntarily to subscribe 10 per cent. of his winnings?
The hon. and gallant Member must not misquote me. I never made anything like the suggestion he is now asserting I made.
Surely it is within the recollection of the Committee that the right hon. Gentleman was asked to make this 10 per cent. reduction, and he said that the suggestion had been made to him that the bookie should invite the winner—[HON. MEMBERS: "No."] I was certainly under that impression, and I thought that that was the implication behind the right hon. Gentleman's statement. I wish to ask what is the technique that is to be employed? Is the winner to be encouraged by saying: "Give this to a good, kind Government which has done so much for you," or is he to be hit on the head? My second question is what is to happen about the loser? We are talking all the time about the winners, but there are losers, believe me. Is the loser to be given 10 per cent.?
The answer to the question about the loser is that the bookie gets all the money anyway. As regards the winner, if the bookmaker wished to do anything of this kind he would presumably put up a notice in the enclosure to the effect that in order to pay the licence, 10 per cent. would be deducted from all winnings.
Will the Chancellor of the Exchequer, between now and Report stage, consider introducing some Amendment to give bookmakers a legal right to deduct 10 per cent.?
The answer is that the bookmaker does not require it. He has only to put up a notice stating the conditions under which contracts are made with him.
rose —
I hope that the Committee will soon be willing to come to a decision.
It is pretty obvious, listening to the speeches of the Chancellor of the Exchequer and the Financial Secretary, that the one thing they know nothing about in any shape or form is betting; that is to say, betting on a sports track, as against a little gamble at the Treasury, which is quite a different thing. The Financial Secretary said that the earlier tax which was imposed by the present Leader of the Opposition was unsuccessful because it was on turnover. But he is calculating this tax on turnover. Whereas the earlier tax was on the exact turnover of each bookie, this tax is on the turnover of all the bookies put together, which cannot be so accurate and cannot produce the results which are imagined. Already that turnover is fading away, and therefore the Government are not getting the tax from the tote or the bookies. I was one of those who supported the idea that if the "tote" were taxed, the bookies should be taxed also. When I saw what they had to pay, I was astounded and when I first saw the figure of £48 I had to look closely to see was that the tax per year? To my great astonishment it was a tax per meeting, and, therefore, the bookies in the No. I enclosure pay practically—5,000 a year.
The Financial Secretary says that we must get a little cream—that I think was the word he used—from the bookies. What about their Income Tax and their Surtax? He gets all that, and, no doubt, he has worked out the exact amounts by which those sums will be reduced, because of this further—5,000 which they will have to take off their Income Tax. He worked out in a most extraordinary and ingenious or ingenuous way how the bookie is going to be better off, because when he has paid the licence duty the bookie has finished with the Treasury. The entrance fee to the owner's track is no longer paid and that places him on his pitch without any more to pay. There is the joyful pleasure of paying this 10 per cent. by some process not yet arrived at, but theoretically the right hon. Gentleman says the bookie is better off. In practice, of course, he is nothing of the sort.
What always impresses me about betting is that the officials in the Treasury, who presumably work these things out, think they are clever, but the people who bet are cleverer still. As soon as regulations are made cleverer minds get to work on how to get round them. The Chancellor spoke of the bookies who keep within the law. Certainly they keep within the law, but there are plenty of methods of evading the consequences of the law and still keeping within it. We have mentioned the practice of buying out the "tote" at certain meetings and there are other ways, as, for instance, the expensive bookies selling out in the No. 1 enclosure and going across to the cheaper ring. This tax is playing right into the hands of the starting price bookies, now increasing in number every day. They are handing out dog track telegrams stamped with numbers, because, as hon. Members who bet know, in dog racing the betting is on the number of the dog. These are already arranged for so that instead of going to the totalisator and buying a ticket, they go to the telegraph office and hand in a form, which is much easier. All hon. Members who bet know that a bet with a telegraph stamp is "on" up to the time of "off."
I ask the Chancellor of the Exchequer to realise who are the people in this Committee who are complaining about this matter. We heard from the hon. and gallant Member for Central Hull (Captain Hewitson) and the hon. Member for Houghton-le-Spring (Mr. Blyton), who moved and seconded the Amendment—two hon. Members whom I do not think I have heard before—a simple and sincere appeal. I welcome such speeches, which are in sharp contrast to the rhetoric of some hon. Members on the other side of the Committee who speak so often about so little. These two hon. Members represent a great number of people in this country. For people who go in for betting there may not be any written laws, but generally speaking these people have a pretty shrewd notion of what is fair and what is not, of what is right and proper, and of what is not quite just. All these people realise that this is a penal tax which will defeat its own object, and I ask the Chancellor to listen to words of common sense—I am not referring to myself but to others who have spoken on this matter—before this Bill becomes law.
10.30 p.m.
I have given an undertaking to my constituents to raise a point on this, and though I regret imposing myself on the Committee at this late hour, I must do it. I am a little surprised that the hon. and gallant Member for Chertsey (Captain Marsden) has not heard the many high quality speeches delivered hitherto by my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton), or the speeches of my hon. and gallant Friend the Member for Central Hull (Captain Hewitson). With all that they have said I agree.
I want to say this to the hon. and gallant Member for Chertsey. Not one word has been said in support of this tax. When the Finance Bill is before the Committee, hon. Members supporting the Government deem it to be their duty to support that Bill, and they deem it to be their duty to go into the Lobby, frequently in most unhappy cases, to support Supply to His Majesty. Obviously, the King's Supply must be maintained. But on an occasion like this, of a small trifling tax of doubtful importance, it is the manifest duty of my right hon. Friend to have regard to the views of the Committee and give an indication that he will reconsider the matter.
When this matter was discussed some two years ago, I suggested to the then Chancellor of the Exchequer, that he should consider the method used in Australia. It is a very effective method. There is a turnover tax and betting is by ticket on printed forms, and there is a licence duty. The bookmakers welcome this taxation, although it is a burden upon them, because it cuts out the dishonest and useless competitor. It is a very satisfactory method, and is worth trying here.
What is the proposal before the Committee? I do not accept what the hon. and gallant Member for Chertsey said about the payment of the tax. My view is that the bookmaker makes little enough contribution to taxation, little enough contribution to the welfare of the community, and he rarely makes any contribution to me, because my few modest investments are singularly unfortunate. But we have no right to say that because we do not specially approve of a form of occupation that we are going to use the method of taxation to stamp it out. Even if there are people who are so simple as to think that the bookmaker is likely to make a substantial contribution to industry and that his efforts will increase turnover, that is a matter for the Minister of Labour. Taxation is not a method for dealing with that.
I raise the simple case put by the hon. Member for Houghton-le-Spring of the small greyhound track. Oldham leads the world in many endeavours, but not very successfully in greyhound racing. I make no apology for that. The track there is not a large one. The average attendance is small, and the three or four bookmakers attending its Saturday meetings cannot attend meetings at other tracks because they also are on Saturdays. These bookmakers are either workers in industry doing a little bookmaking in their own time, or it is more than likely that they are people who are not fit to take on another job and who take up this comparatively easy method of making a living. The tax they have to pay is £48 for the two meetings.
The Chancellor of the Exchequer has said that all they have to do is to go into the cheap enclosure; that is, go away from the people with money. How are they going to increase their turnover by leaving the place where the people with the money are? A second suggestion, which I do not think is practicable, is that they can shorten the odds to cover this money. It may be that on the Derby course, with a large number of runners, the odds can be shortened; but I am dealing with the small tracks with four or five dogs running in each race. In such cases it is impossible to shorten the odds to get in revenue of this kind.
I ask the Chancellor of the Exchequer to consider the manifest state of opinion expressed in this Amendment. I will say quite frankly that I have no interest in this matter. I have been to race meetings, and never was I so bored until I came to this House. I have my own forms of amusement. Will the Chancellor of the Exchequer really give this matter further consideration and find out what really is the available betting turnover at these small meetings and whether this tax is really practicable? I am sure the information can be obtained, and made available. Otherwise, ways will be found of evading this tax. It may be possible for the bookmaker to stay outside the course and take bets, or perhaps he can have a runner on the course or even someone signalling to him from inside. Again, perhaps three or four bookmakers may join together and share the expense of the tax. On the whole, this tax is ill considered and I ask the right hon. Gentleman to indicate that he will give it further consideration.
I am bound to say that I agree with the hon. Member for Oldham (Mr. Hale) that neither the Chancellor of the Exchequer nor the Financial Secretary has made a case for this tax. There is one point which I want to raise in connection with the explanation of the Financial Secretary. I gathered that he said that his right hon. and learned Friend the Chancellor of the Exchequer went to the National Greyhound Racing Association to obtain advice as to how the tax should be worked out. If that is the case, it is rather out of line with our usual practice, because the National Greyhound Racing Association are responsible for and run the "totes," and it is not usual to go to an organisation running a certain activity in order to ask how a trade rival should be taxed. I feel that that is not the least unsatisfactory point in the suggested tax.
The hon. and gallant Gentleman should really have listened to what I said. If he desires to criticise, it would be far better for him to have listened to me. I did not say anything of the sort.
I wish to deal only with one small point. The Chancellor of the Exchequer indicated in his speech that the way in which the bookmaker would pass this tax on to the public would be by the larger bookmakers taking it out of the odds. Can one imagine what complete chaos would arise with the larger bookmaker offering odds of 5 to 4, the medium bookmaker offering 2 to 1, and the smaller man offering 3 to 1? I started my interest in this particular matter while at school by making a "book," and this lesson in elementary mathematics was the only one I learned. This shows how far from reality is the knowledge of the subject possessed by the Chancellor of the Exchequer and the Financial Secretary. Possibly they think that the 10 per cent. will be deducted by the bookmakers having a large sack beside them with the notice attached "Snips for Cripps"? That one remark of the Chancellor of the Exchequer that the bookmaker can vary his odds according to overheads shows how far removed from reality he is.
The only thing upon which there seems to be unanimity in this discussion is on the doubts which have been expressed from all side of the Committee. I wish to throw another doubt into the arena. I do not think that the Chancellor of the Exchequer will get his money with the rates of tax he is levying under this Clause. I listened with rapt attention to the Chancellor of the Exchequer and his right hon. Friend the Financial Secretary giving lessons to the bookmakers on how to get my money, and I can think of no one better qualified to do that, but if the Chancellor wants to get revenue from the bookmakers he will find he will not get it by imposing such a tax that the bookmakers will be driven out of business; or, that they will be forced to try to resort to all kinds of devices to get the money away from the course. I ask the Chancellor to consider whether he has not over-taxed in this
matter; or to accept the Amendment, which is a means of making a more reasonable chance of his getting the money he wants. The bookmaker might not think it worth his while to set up a large and complicated organisation for the purpose of getting money away from the course if the tax were different. I ask the Chancellor to accept the Amendment, or to table something which will meet the point on Report stage.
Question put, "That '£12' stand part of the Clause."
The Committee divided: Ayes, 269; Noes, 105.
Division No. 164. AYES. 10.42 p.m Acland, Sir Richard Deer, G. Hynd, H. (Hackney, C.) Adams, Richard (Balham) de Freitas, Geoffrey Hynd, J. B. (Attercliffe) Adams, W. T. (Hammersmith, South) Diamond, J. Irvine, A. J. (Liverpool) Allen, A. C. (Bosworth) Dobbie, W. Irving, W. J.(Tottenham, N) Allen, Scholefield (Crewe) Dodds, N. N. Jay, D. P. T. Alpass, J. H. Donovan, T. Jeger, G. (Winchester) Anderson, A. (Motherwell) Driberg, T. E. N. Jeger, Dr. S. W. (St. Pancras, S.E) Anderson, F. (Whitehaven) Dugdale, J. (W. Bromwich) Jenkins, R. H. Attewell, H. C. Dumpleton, C. W. Johnston, Douglas Austin, H. Lewis Dye, S. Jones, J. H. (Bolton) Awbery, S. S. Edelman, M. Jones, P. Asterley (Hitchin) Ayles, W. H. Edwards, N. (Caerphilly) Keenan, W. Ayrton Gould, Mrs. B Edwards, W. J. (Whitechapel) Kenyon, C. Baird, J. Evans, Albert (Islington, W.) Key, Rt. Hon. C. W Balfour, A. Evans, E. (Lowestoft) Kirkwood, Rt. Hon. D. Barstow, P. G Evans, S. N. (Wednesbury) Lang, G. Barton, C. Ewart, R. Lee, F. (Hulme) Bechervaise, A. E. Farthing, W. J. Leonard, W. Bellenger, Rt. Hon. F. J Fernyhough, E. Lever, N. H. Benson, G. Field, Capt. W. J. Levy, B. W. Berry, H. Fletcher, E. G. M. (Islington, E.) Lewis, T. (Southampton) Beswick, F. Follick, M. Lindgren, G. S. Bing, G. H. C. Foot, M. M. Lyne, A. W. Binns, J. Forman, J. C. McAdam, W. Blenkinsop, A. Fraser, T. (Hamilton) McAllister, G. Bottomley, A. G. Freeman, J. (Watford) McEntee, V. La T Bowden, Fig. Offr. H. W. Freeman, Peter (Newport) McGhee, H. G. Bowles, F G. (Nuneaton) Gaitskell, Rt. Hon. H T. N Mack, J. D. Braddock, Mrs. E. M. (L'pl, Exch'ge) Ganley, Mrs. C. S. McKinlay, A. S Bramall, E. A. George, Lady M. Lloyd (Anglesey) McLeavy, F. Brook, D. (Halifax) Gibbins, J. MacMillan, M. K. (Western Isles) Brown, George (Belper) Gibson, C. W. Mainwaring, W. H. Brown, T. J. (Ince) Gilzean, A. Mallalieu, E. L. (Brigg) Bruce, Maj. D. W. T. Gordon-Walker., P. C Mallalieu, J. P. W. (Huddersfield) Buchanan, Rt. Hon. G. Granville, E. (Eye) Mann, Mrs. J. Burke, W. A. Greenwood, A. W. J. (Heywood) Marquand, H. A. Butler, H. W. (Hackney, S.) Grey, C. F. Marshall, F. (Brightside) Byers, Frank Griffiths, D. (Rother Valley) Middleton, Mrs. L. Callaghan, James Griffiths, W. D. (Moss Side) Mitchison, G. R Champion, A. J. Guest, Dr. L. Haden Monslow, W Cobb, F. A. Guy, W. H. Moody, A. S. Cocks, F. S. Haire, John E. (Wycombe) Morley, R. Coldrick, W. Hall, Rt. Hon. Glenvil Morrison, Rt. Hon. H. (Lewisham, E.) Collindridge, F. Hamilton, Lieut.-Col. R. Mort, D. L. Collins, V. J. Hannan, W. (Maryhil1) Moyle, A. Colman, Miss G. M Hardy, E. A. Nally, W. Comyns, Dr. L. Harrison, J. Neal, H. (Claycross) Cooper, Wing-Comdr. G. Hastings, Dr. Somerville Nicholls, H. R. (Stratford) Corbel, Mrs. F. K. (Camb'well, N.W.) Henderson, Rt. Hon. A. (Kingswinford) Noel-Baker, Capt. F. E. (Brantford) Corlett, Dr. J. Henderson, Joseph (Ardwick) Noel-Baker, Rt. Hon. P. J. (Derby) Cove, W. G. Herbison, Miss M. O'Brien, T. Cripps, Rt. Hon. Sir S Hobson, C. R Oliver, G. H. Crossman, R. H. S. Holman, P. Paling, Rt. Hon. Wilfred (Wentworth) Daggar, G. Holmes, H. E. (Hemsworth) Paling, Will T. (Dewsbury) Dalton, Rt. Hon. H. Horabin, T. L. Palmer, A. M. F Davies, Rt. He. Clement (Montgomery) Hudson, J. H. (Ealing, W.) Parker, J. Davies, Ernest (Enfield) Hughes, Hector (Aberdeen, N.) Parkin, B. T. Davies, Haydn (St. Pancras, S.W.) Hughes, H. D. (W'Iverh'pton, W.) Paton, Mrs. F. (Rushcliffe) Paton, J. (Norwich) Skinnard, F. W. Warbey, W. N. Pearson, A. Smith, C. (Colchester) Watkins, T. E. Perrins, W. Smith, H. N. (Nottingham, S.) Weitzman, D. Platts-Mills, J. F. F Snow, J. W. Wells, P L. (Faversham) Porter, E. (Warrington) Solley, L. J. Wells, W. T. (Walsall) Porter, G. (Leeds) Sorensen, R. W. West, D. G. Pritt, D. N. Soskice, Sir Frank Westwood, Rt. Hon. J. Proctor, W. T. Stamford, W. Wheatley, Rt. Hn. J. (Edinburgh, E) Pursey, Comdr. H Steele, T. White, C. F. (Derbyshire, W.) Randall, H. E. Stewart, Michael (Fulham, E.) White, H. (Derbyshire, N.E.) Ranger, J. Stress, Dr. B. Whiteley, Rt. Hon. W. Rankin, J. Stubbs, A. E. Wigg, George Reeves, J. Sylvester, G. O. Wilcock, Group-Capt. C. A. B Reid, T. (Swindon) Symonds, A. L. Willey, F. T. (Sunderland) Richards, R. Taylor, H. B. (Mansfield) Willey, O. G. (Cleveland) Ridealgh, Mrs. M. Taylor, R. J. (Morpeth) Williams, D. J. (Neath) Robens, A. Taylor, Dr. S. (Barnet) Williams, J. L. (Kelvingrove) Roberts, Emrys (Merioneth) Thomas, D. E. (Aberdare) Williams, R. W. (Wigan) Roberts, Goronwy (Caernarvonshire) Thomas, I. O. (Wrekin) Williams, W. R. (Heston) Robertson, J. J. (Berwick) Thomas, George (Cardiff) Wills, Mrs. E. A. Ross, William (Kilmarnock) Thorneycroft, Harry (Clayton) Wise, Major F. J. Royle, C. Thurtle, Ernest Woodburn, Rt. Hon. A. Sargood, R. Tiffany, S. Woods, G. S. Scollan, T. Titterington, M. F. Wyatt, W. Scott-Elliot, W. Tolley, L. Yates, V. F. Segal, Dr. S. Tomlinson, Rt. Hon. G Young, Sir R. (Newton) Shackleton, E. A. A Turner-Samuels, M. Younger, Hon. Kenneth Sharp, Granville Ungoed-Thomas, L. Zilliacus, K. Shawcross, C. N. (Widnes) Vernon, Maj. W. F. Shurmer, P. Wadsworth, G. TELLERS FOR THE AYES: Silverman, J. (Erdington) Walker, G. H. Mr. Popplewell and Silverman, S. S. (Nelson) Wallace, G. D. (Chislehurst) Mr. Wilkins. Simmons, C. J. Wallace, H. W. (Walthamstow, E.)
NOES. Amory, D. Heathcoat Hurd, A. Peto, Brig. C. H. M. Anderson, Rt. H. Sir J (Scot. Univ.) Hutchison, Lt.-Cm. Clark (E'b'rgh, W.) Pickthorn, K. Assheton, Rt. Hon. R. Hutchison, Col. J. R. (Glasgow, C) Pitman, I. J. Baldwin, A. E. Joynson-Hicks, Hon. L. W Poole, O. B. S. (Oswestry) Beamish, Maj. T. V. H. Keeling, E. H. Raikes, H. V. Birch, Nigel Kingsmill, Lt.-Col. W. H. Ramsay, Maj. S. Bromley-Davenport, Lt.-Col. W. Lambert, Hon. G. Rayner, Brig. R Buchan-Hepburn, P. G. T. Lancaster, Col. C. G Renton, D. Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n) Law, Rt. Hon. R. K. Roberts, H. (Handsworth) Carson, E. Lennox-Boyd, A. T. Robertson, Sir D. (Streatham) Clarke, Col. R. S. Lindsay, M. (Solihull) Ropner, Col. L. Clifton-Brown, Lt.-Col. G Linstead, H. N Scott, Lord W. Cole, T. L. Lipson, D. L. Smith, E. P. (Ashford) Corbett, Lieut.-Col. U. (Ludlow) Lloyd, Selwyn (Wirral) Snadden, W. M. Crookshank, Capt. Rt. Hon. H. F. C. Low, A. R. W. Spearman, A. C. M Crowder, Capt. John E. Lucas, Major Sir J. Spence, H. R. Darling, Sir W. Y. McCorquodale, Rt. Hon. M. S Stanley, Rt. Hon. O Digby, S. W. McFarlane, C. S. Stewart, J. Henderson (Fife, E.) Dower, E. L. G. (Caithness) Mackeson, Brig. H. R. Stoddart-Scott, Col. M. Drewe, C. McKie, J. H. (Galloway) Studholme, H. G. Duthie, W. S. MacLeod, J. Teeling, William Eden, Rt. Hon. A. Macmillan, Rt. Hon. Harold (Bromley) Thorp, Brigadier R. A F Erroll, F. J Macpherson, N. (Dumfries) Turton, R. H. Fletcher, W. (Bury) Maitland, Comdr. J. W Vane, W. M. F. Fraser, Sir I. (Lonsdale) Manningham-Buller, R. E. Wakefield, Sir W. W Gage, G. Marsden, Capt. A. Walker-Smith, D. Galbraith, Cmdr. T. D. Medlicott, Brigadier F. Ward, Hon. G. R. Gomme-Duncan, Col A. Mellish, R. J. Wheatley, Colonel M. J. (Dorset, E.) Grimston, R. V. Mellor, Sir J. Williams, C. (Torquay) Hannon, Sir P. (Moseley) Morris, Hopkin (Carmarthen) Williams, Gerald (Tonbridge) Hare, Hon. J. H. (Woodbridge) Morrison, Maj. J. G. (Salisbury) Willoughby de Eresby, Lord Harvey, Air-Cmdre. A. V. Nield, B. (Chester) York, C. Henderson, John (Cathcart) Noble, Comdr. A. H. P Young, Sir A. S. L. (Partick) Hinchingbrooke, Viscount Odey, G. W. Hope, Lord J. Orr-Ewing, I. L TELLERS FOR THE NOES: Howard, Hon. A. Peake, Rt. Hon. O Commander Agnew and Major Conant.
I beg to move, in page 9, line 18, at end, to insert: and the Border country there is an activity called hound trailing, though perhaps to be more accurate we should call it a country sport. It is a dog race, but it seems to me that the Committee in dealing with hound trailing, would wish to differentiate between it and the ordinary dog racing which is under con- sideration tonight. It takes place in the open country. The trail or track is set by a man taking round some cloth soaked in aniseed or some other chemical just as one might make a course for a point-to-point. A number of hounds, which belong in the main to farmers or farm workers or miners, will generally be released and go round the course. There will be a winner, and a second and the rest of it. There is betting and bookmakers are present, but very often, in fact usually, not more than a few hundred people are present. These meetings take place in the countryside, in fields in the mountains, and not a great deal of money changes hands. In every respect it is different from the dog races in the great centres of population.
I have not heard of a hound trail where there is a totalisator, and the Government's answer will be that no bookmaker at a hound trail will be put out as there is no totalisator. But who knows what developments will take place in totalisators. They may become smaller and more portable. They might conceivably have a hound trail associated with a point-to-point where there is a totalisator, and under paragraph ( c ) if a totalisator is present for any time of the meeting, it will count for this purpose. I ask that this essential country sport, which is so small and so different, will not be a "dog race" within the meaning of the Act, and therefore that the small men who act as bookmakers at these country meetings will not have to pay these duties, which are out of all proportion to the size of the meeting or the size of the betting that goes on.
I am sure that I can set the hon. Member's mind at rest. The hound trails described by him—and I accept his description—are not caught in any way by Clause 14. There are no enclosures and no tote and they do not conform in any way to the definition of a dog race meeting as laid down in the Betting and Lotteries Act, 1934. We desire to see, as he does, that they are exempt. I can assure him that they are and that his Amendment is superfluous.
I was at one of these hound trails in the North of England only a few days ago at which there was a totalisator. There was a Whitsuntide race meeting, but be- fore the meeting, a hound trail took place. I am only raising this point in case of difficulty, because it is quite clear that the hon. Member for Lonsdale (Sir I. Fraser) is quite right when he says that a great number Of these meetings do take place at some village right away from any large gathering or concourse; but now and again, as in the instance which I have mentioned, a hound trail takes place at a race meeting or some place where there is a totalisator. What is the position in that case?
The fact that a tote is there does not in itself bring it under Clause 14; other conditions would have to be satisfied before it could be said that Clause 14 bites on such meetings. It is not our intention that hound trails, which are a form of open air sport where betting is not the chief business, should be caught by this Clause, and I can assure the hon. Gentleman that my opinion is—and the advice given me is—that they are not caught. If, in future, it is found that they do get drawn within the ambit of the regulation, then obviously we shall have to deal with it; but I cannot conceive that that will happen.
I welcome the Financial Secretary's statement. There is a great deal of interest in this hound trailing and I am pleased to hear what the right hon. Gentleman has said about it. We do not believe that there is any connection between hound trailing and dog racing. Hound trailing is an old national sport and dog racing is largely for betting. We do welcome what he has said.
In view of the assurance given by the Financial Secretary and his clear and express intention not to bring this country sport within the Clause, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Motion made, and Question proposed, "That the Clause stand part of the Bill."
When I thought the Chancellor of the Exchequer was winding up the Debate on the Amendment in the name of the hon. and gallant Member for Central Hull (Captain Hewitson) I was only able to intervene to ask two questions, but I have one or two points to put which I think should be considered before we part with the Clause. I feel that the Chancellor should be aware of one or two simple facts before the Report stage, before which I hope he will reconsider this matter. I am returning to the question of dog racing. I happen to have in my constituency a small dog track. It is not one those big—
11.0 p.m.
I am sorry to interrupt the hon. and gallant Gentleman, but I would remind him that by general agreement we had a general discussion on that subject, and we should not now have a repetition of that Debate, in whole or in part, on consideration of the Question that the Clause stand part. I hope that, in the circumstances, the hon. and gallant Gentleman will curtail his remarks.
Nothing gives me greater pleasure than giving pleasure to you, Major Milner. That being the case, I shall defer my more precise remarks on this matter until the Report stage, unless, of course, in the meantime, the Chancellor has second thoughts, as I hope will be the case.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
CLAUSE 15.—( Entertainments duty on stage plays, etc. )
I beg to move, in page 9, line 36, at the end, to add: Revised rates of duty on cinematograph theatres. ) Among the proposed new Clauses is one in the name of my right hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood)—( Revised rates of entertainments duty on cinemas )—the intention of which is similar to that of my Amendment but it is not so extensive
. The first of the two features of my Amendment is that it will provide cheaper seats, particularly for the workers, those with the smaller pay and larger families. The second feature is that it proposes to put more money at the disposal of the exhibitors. The cinema, I think it will be agreed, is the most popular form of entertainment of the masses of the people of this country. I take it that the Chancellor's concern here—unlike his attitude towards tobacco—is not with the cutting down of consumption: I take it he is not concerned with cutting down the entertainment the people are able to get. The question of saving dollars does not arise on the tax of cinema seats. The saving of dollars is obtained by another and separate method. This tax is purely a revenue raising tax, with no other quality to commend it. It is a tax on people's entertainment.
We were all very pleased with the concession made to the living theatre. We wish it had been an even greater concession. At the same time we are anxious that a concession should be made, especially so far as the poorer people are concerned, in regard to cinema seats. This tax bears most heavily on the people who are paid the smaller wages, and especially on those with the largest families. The father, mother and children of a large family have to have a measure of entertainment, and the tax limits the amount of entertainment of those who are in most need of it.
I appeal earnestly to the Chancellor of the Exchequer and to the Financial Secretary—there is more hope from the Financial Secretary—to consider this question of cheaper seats from the point of view of the people who are so desirous of enjoying this form of entertainment. In the cinema there is not only entertainment. It is a powerful method of education and culture, and it is very important that we should have a highly prosperous and efficient film industry. From my point of view, the best method of securing that would be to nationalise the industry, but we have not reached that stage yet. One cannot dissociate the exhibition of films from the industry as a whole. Exhibition and production must be brought together and effectively coordinated.
For long enough exhibitors were in the habit of using sensational American films, and, so far as the quota was concerned, buying the cheapest British films. This was bad for the film industry, and very bad for the people of this country. Now we find film production in this country reaching a very high level, and it is very desirable that exhibitors should be encouraged to show the very best British films. I went the other night to see "Hamlet." This is a really great film. The technique is great, the cast is magnificent, and the presentation beyond praise. But we have to take account of the fact that, because of the situation that confronted exhibitors, the taste of this country has been determined by American films, and has not been at all of a high standard. In consequence we often get here cheap imitations of American films. This film in Leicester Square represents what might be called the highest, the classical form of English culture—I leave Scotland out as far as "Hamlet" is concerned—yet round the corner you have "Miss Blandish," an imitation of the lowest form of American gangsterism.
Perhaps the hon. Member will address himself more particularly to the Amendment.
I am making what I consider to be an important point in regard to this Amendment as it affects exhibitors. I should like to see the exhibitors placed in the position where they could show this film "Hamlet" in the cinemas of the poorer areas, where it would be of the greatest value, even if there were a financial loss on it. The position we are in is that it is possible that this lady, Miss Blandish, whom I have not seen and whom I have no desire to meet, will get a bigger showing from the exhibitors of Britain than this magnificent film of "Hamlet."
So in this Amendment, while I am concerned with the cheap seats for the ordinary working-class folk and their families, I am also concerned, as the Schedule will show, that more resources should go to the exhibitors on the understanding that the exhibitors, producers and others concerned with the film industry will get together and ensure that the best British films will be exhibited in British cinemas. That is my concern in moving this Amendment. I should like to see those concerned with the film industry get together in conference, as those associated with the living theatre did recently, and work out plans for ensuring that whatever money is available will be used for the purpose of building up a strong, independent British film industry which will put an end to the cheap and shoddy stuff that the people of this country have had to tolerate for so long.
I ask the Chancellor of the Exchequer, the Financial Secretary to the Treasury and the President of the Board of Trade to think over this matter very carefully. They have been talking a great deal lately about helping the British film industry. We have to remember that, in addition to the production side, there is also the exhibitors' side of the industry. No matter how good a film is, it cannot be shown successfully unless there are exhibition facilities, and one of the great difficulties in this country in recent years has been to get an effective showing for British films. It is because I am so anxious to see the industry built up that I ask the Chancellor of the Exchequer to accept the Amendment. If he does so, it will mean great encouragement to the film industry of this country.
I think it would be for the convenience of the Committee if, when we are discussing this Amendment, we also discussed the two new Clauses later on the Order Paper, the first in the name of the right hon. Gentleman the Member for Dumbarton Burghs (Mr. Kirkwood) and the second in the name of the hon. Member for Hampstead (Mr. Challen) both of which relate to revised rates of Entertainments Duty on cinemas.
11.15 p.m.
I do not associate myself with the hon. Member for West Fife (Mr. Gallacher) in his advocacy of the cinema exhibitors. I am concerned here with the working class folk who have to attend the smaller cinemas. I am not concerned with the big cinemas, because they are doing pretty well. It is the smaller localities with which I am concerned, places like those in my constituency of Dumbarton Burghs or in Clydebank or in Neath. I am asking here for a small concession for the working classes. In my new Clause I suggest that there shall be no rate of duty where the amount of payment, excluding the amount of duty, does not exceed 9d. Where the amount exceeds 9d. and does not exceed 1s., I suggest the tax should be 2d., and where the charge for admission exceeds 11d. and does not exceed 1s., the tax should be 3d. Finally, I suggest that where the admission charge 1s. and does not exceed 1s. 2d., the tax should be 4d.
It will be seen at once that it is just the working class we are dealing with here. The cinema is the entertainment of men and women, young and old, for all of whom we are seeking this concession. The last Chancellor of the Exchequer promised that if all went well, we would get this concession this year, but he is not here today to concede it. I ask those who are in authority to consider this, and to consider the amount of work being put in by the cinemas on behalf of the Government, freely and for nothing. There is hardly anything new the Government may bring forward that exhibitors are not prepared to put on the screen, and they have always done so. Having regard to all these facts, I hope the Financial Secretary will be able to give an assurance that some of these concessions, if not all that I ask, will be given to the folk whom I have the honour to represent.
There is very little difference between the Amendment and the new Clause we are considering. The right hon. Member for Dumbarton Burghs (Mr. Kirkwood) stops in his concession at 1s. 2d: the hon. Member for West Fife (Mr. Gallacher) goes up to 1s. 11d.—a difference of 9d. What is that? Something less than four cigarettes.
That 9d. may not be very much to the hon. Member but it is a tremendous amount to the folk I represent.
I always understood the right hon. Gentleman's friend, the hon. Member for West Fife, also spoke for the working classes. I cannot see very much difference between the Amendment and the new Clause. They are both attempting to lower the prices of cheaper seats in the cinema. I do not want to quarrel with the right hon. Member for Dumbarton Burghs; tonight I want to agree with him. I hope the Chancellor of the Exchequer will accept the new Clause and go far enough to accept the Amendment of the hon. Member for West Fife. I have a good deal of information about this, particularly from my own constituency. I am told by those who understand these things that during the past year—I am quoting from a letter from a cinema in St. Andrews:
There are two other reasons which make the Amendment really worth while. I agree with the hon. Member for West Fife—and I am glad to find myself in agreement with him tonight, for I so seldom am—that the film industry really must be supported. The distributive side of the industry must also have support. If we can relieve the distributive side of some amount of the taxes it has to pay, clearly it is left with more money in its pocket to buy better films and to give better shows to the general public. That would be to everyone's advantage. It would also be very much to the advantage of the British film industry as a whole. But I am more concerned still with the public.
I am very much in favour of differentiation between the tax on the living theatre and the tax on the cinema. I have no particular interest in the cinema, but, as some hon. Members know, I am particularly interested in the living theatre, and particularly the Savoy at present. I am very much in favour of the living theatre getting substantial benefit from differentiation in the tax. The proposals made by the hon. Member for West Fife and the right hon. Member for Dumbarton Burghs still maintain a substantial difference between the living theatre and the cinema. What is that difference? It is that up to the 1s. 6d. ticket, the theatre is to pay no tax. A 1s. 6d. ticket for a cinema, on the other hand, under this Amendment, would pay a 6d. tax. For the theatre, a 2s. 10d. ticket under this Bill pays only 1d. tax. For a cinema, a 2s. 10d. ticket under this Amendment would carry is. id. tax. The tax under this Amendment upon the cinema would be more than double the tax for an equivalent seat in the theatre. Therefore, I claim that hon. Members opposite have maintained here a substantial difference between the tax upon the living theatre and the tax upon the cinema.
There is one other point. The cinema really needs special consideration at this time, and indeed probably will need it for a long time to come, because while there is no doubt that the living theatre is the best entertainment—[HON. MEMBERS: "Question."]. It is a matter of opinion, and that is my opinion, from the cultural point of view. We know that in 90 per cent. of the towns and villages of Great Britain there is no theatre. Therefore, 90 per cent. of the people of Great Britain, working people and others, have no entertainment of that kind except the picture house. It is a great pity that we have not more theatres. I would do everything I could to assist the theatre. That is why I support the recent statement of the Chancellor of the Exchequer giving advantages to encourage extension of the theatre.
I would like to see the repertory theatre extended to a great many towns and villages. It saddens me enormously that in the whole of my constituency there is only one tiny living theatre. It is a great pity. In Dundee, there is no living theatre, except a tiny one, and it is a good point that, because there are so few theatres in the country, one must, in justice, offer picture-goers a reasonable deal. I suggest that the deal offered at the moment is not reasonable. The tax is too high and people are no longer able to afford the high prices resulting from tax. I do not know whether it is the beginning of deflation, but there is a tightening of the purse-strings in almost every direction. That is a fact. It is a new problem of the last few months, and it affects, of course, the poorer people as well as everybody else. There is an unanswerable case here for a reduction in the tax on the cinema ticket.
We have rather a long way to go to-night, and few hon. Members, if any, want to sit up until the small hours. Therefore, perhaps I should intervene now to indicate the Government's view on the Amendment. The Amendment seeks roughly to equate the duty levied on the cinemas to the new rates which are to be instituted for the living theatre. I think it is generally agreed that the living theatre is in a different category from the cinema; I think I carry the majority of hon. Members with me when I say that. By common agreement it has been decided by all of us that the living theatre should be given special rates of Entertainments Duty. In the old days, and until recently, the cinema was, in a sense, looked down upon, and nobody cared very much whether it found the incidence of Entertainments Duty a heavy burden or not; but in recent years it has been realised that the cinema can be a great centre for culture and entertainment of the highest kind, as well as of great educational value, and that we should assist the cinema industry to the utmost of our power.
The question then arises whether the present rates of Entertainment Duty militate against the cinema industry functioning to the full and fulfilling its proper function in a modern community. We have gone into this matter carefully, and only recently my right hon. and learned Friend met representatives of the C.E.A., the K.R.S., and the N.A.T.K.E., and discussed with them quite fully the situation as it exists now. The situation, quite clearly, is that the larger circuits, and many of the cinemas in cities and towns, are at the moment doing pretty well— [Interruption.] Yes, that is so. In certain localities it may be that they are not doing so well, and that is something which will have to be watched, but the incidence of the duty does not on the whole militate against the prosperity of the industry.
My right hon. and learned Friend has agreed with the industry that, in the coming year, discussions shall take place between His Majesty's Customs and representatives of the industry on the incidence of the duty, and the facts surrounding its incidence, to see what, if any, changes should take place in the next Budget, not necessarily changes in the duty but perhaps changes in the incidence of the various rates in various parts of the cinema. If we were to accept this Amendment, the cost would be prohibitive. It would cost anything between £15 million and £20 million, and my right hon. and learned Friend cannot possibly afford to give that away at this juncture.
11.30 p.m.
What would be the cost to the Exchequer if the Government were to accept the new Clause in the name of the right hon. Member for Dumbarton Burghs?
We have not reached that yet. It is impossible to say because it would probably mean a rearrangement by cinemas of seating capacity and the number of seats they allocate at any given price.
On a point of Order; surely your Ruling, Mr. Beaumont, was that we were taking in the new Clauses under this discussion?
Perhaps there has been a misunderstanding. In the discussion we were to take into consideration the new Clauses down in the names of the right hon. Member for Dumbarton Burghs (Mr. Kirkwood) and the hon. Member for Hampstead (Mr. Challen).
I thought you said Mr. Beaumont, that we would be discussing the new Clauses. The Financial Secretary has just said that we have not reached the new Clause, and that he would not be prepared to disclose the cost of the acceptance of the Clause.
There still seems to be a good deal of misunderstanding. I said that in debating this Amendment we would discuss the Clauses in the names of the right hon. Member for Dumbarton Burghs and the hon. Member for Hampstead.
If we are to discuss this matter in any intelligent form, are we not entitled to ask the Financial Secretary to give the figures of the effect of the new clauses which we are discussing?
I did answer that point. I said that it was impossible for me to give the figures because it would mean recasting, as far as we can ascertain, the seating capacity of cinemas. As far as we can judge and estimate this Amendment would cost between £15 million and £20 million. If we had to give an estimate of what it would cost to implement the two new Clauses which are being discussed in association with this Amendment, I would be quite unable to say at this juncture because it would mean, according to my advice, a certain recasting by the cinemas of their seating capacity. It would be difficult to give an estimate which would be of any use to the Committee.
Are not the cinemas now entitled to recast their seating capacity, and give more room to the cheaper seats at the expense of the dearer seats?
I believe a certain amount can be done. I do not know the exact procedure. But under the London County Council, the appropriate committee of the L.C.C. watches very closely the prices charged for various parts of the London cinemas. That is the position, and therefore I ask the Committee to resist this Amendment on the grounds that my right hon. and learned Friend cannot afford anything like the amount which it would cost him during the coming year. Conversations will take place between the Customs and Excise and the industry, and no doubt the matter will be raised next year, when we shall see where we are. Our opinion is that the cinemas are not doing too badly at the moment and could well afford to bear the tax at its present incidence.
I think the Committee will agree that the statement which the Financial Secretary has just made has thrown some light on the Government's view on this matter, and I have no doubt the industry will be delighted that these talks are to take place; but I am not at all sure that the ordinary member of the public will be quite so delighted.
I am glad to find myself in agreement with the hon. Members who were making a modest plea for the reduction and abolition of the tax on the 9d. seats—the 6d. seats pre-war. There was no tax on 6d. seats in 1935. We suggest that there should be no tax now—not next year or six months hence, but now—on the 9d. seats, and we suggest that there should be a modest reduction in tax up to the 1s. 6d. seats. The hon. Member for West Fife (Mr. Gallacher) goes considerably further and I do not agree with him. I think it would be asking too much of the Financial Secretary to give up the vast revenue from the 1s. 9d. seats. I think it is roughly million a year. In the present state of the nation, that is asking too much; but perhaps the Financial Secretary would give us an estimate of the revenue that would be lost if he acceded to the modest request of the right hon. Member for Dumbarton Burghs (Mr. Kirkwood). There is a suggestion that he would not lose £1,200,000 in a full year. That does not seem to me to be an awful lot in this vast Budget. I ask the right hon. Gentleman to give us some assurance that the Government will at least look at this matter before the Bill finally goes through.
The smaller cinema proprietor has a difficult job and he has carried on under great difficulty. His costs have gone up in every direction. Cinema seats which cost £1 before the war now cost £5. During the war years there was wear and tear, and these things have to be replaced. It is a rather crippling burden to the small cinema proprietor in the small industrial area.
There is one suggestion I would like to make. We have tried through the Films Act to encourage the showing of British films in British cinemas. There is one method which could be adopted through the machinery of finance to secure the same thing, namely, that the Government should give a tax rebate to cinemas showing first-feature British films; and, as to the live theatre, they should give a direct incentive to the British cinema industry. There is a parallel between the living theatre and the screen, because it is a fact that the British cinema industry employs more actors and actresses, more people of all kinds, than the living theatre in Britain could ever do. Moreover, the two things are very often the same and there is a constant interrelation between the two arts that should not be overlooked.
The right hon. Member for Dumbarton Burghs made a most pertinent statement when he pointed out that cinemas throughout the United Kingdom had done all they could during the war years and since to give the war-time Government and this Government every possible assistance in putting over all sorts of appeals on all sorts of subjects. I see the Secretary of State for Scotland on the Front Bench. The last time I was in a cinema in Scotland I saw on the cinema screen an appeal from the right hon. Gentleman on a matter of Government and national business. It was a perfectly legitimate appeal, but it was given space and time free by the cinema.
I remember also during the war the "Food Flashes" which appeared on every cinema screen and which were of immense help to the housewives. They were given free by the great cinema corporations and the small individual proprietors. The cost of all that Government advertising in the cinema cannot be reckoned at less than £2 million in a year, The cinema is unique as compared with the Press or any other form of advertising in giving that free advertising to the Government. The Financial Secretary would therefore set all our minds at rest if he would assure us that the Government will think again about this matter.
I support the Amendment moved by the right hon. Member for Dumbarton Burghs (Mr. Kirkwood). I cannot really accept the reply of the Financial Secretary, who first of all admits that he has not got the figures of what the concession would cost, and then chooses to reject the Amendment because of its cost. That seems to me to be quite illogical, and if we are to accept the figures—
The new Clause on the Order Paper in the name of the right hon. Member for Dumbarton Burghs (Mr. Kirkwood) has not been moved but only discussed. The Amendment under discussion is that standing in the name of the hon. Member for West Fife (Mr. Gallacher).
We are discussing the new Clause of the right hon. Member for Dumbarton Burghs along with the Amend- ment, and it was some time ago that the Financial Secretary replied to that. If the cost to the Chancellor of the Exchequer of what was suggested by the hon. Member for Rutherglen (Mr. McAllister) were, not £1,200,000, but something like £700,000, that would not be asking too much even as a gesture to the cinema-goer. We think that the larger halls are perfectly able to look after themselves: this really applies to the smaller type of cinema patronised by the poorer-paid section of the community. Undoubtedly in recent months there has been a very steady falling-off in the attendances at these cinemas, certainly due to the fact that money is getting tighter. There is not the constant overtime now that was worked during the war years, and the worker who has to pay the admission charge for his wife and children simply cannot afford to do it at present-day prices.
11.45 p.m.
I would remind the Financial Secretary and the Chancellor—and I do not believe for a moment that the Chancellor is quite so hard hearted as the hon. Member for West Fife (Mr. Gallacher) would have us believe—that on two successive occasions concessions have been made not only to the living theatre but also to football. Generally, none of those concessions has been passed on to the general public. There may have been some passing on to the public of the concession to the theatre, but in the case of football there has been no reduction in the admission charges. In this particular case, however, the cinema proprietors have made it quite clear that this concession, if granted, would be passed on to the public.
I would ask the Financial Secretary and the Chancellor, even if they cannot make a final decision tonight, to give further consideration to this matter between now and the Report stage, and to make this one gesture to the cinema, which has played some part in our national affairs, and to the people who patronise the cinema. Let them consider it between now and the Report stage, and then, perhaps, we could have the figures which the Financial Secretary has been unable to give us tonight, and so be able to make a proper decision.
The whole Committee will welcome the concession made to the live theatre, but we must be careful not to get taxation on the live theatre out of phase—I think that is the current phrase—with the taxation on the cinematograph theatre. The Financial Secretary mentioned in his remarks that the object of this Amendment was to get the tax roughly the same on the two forms of entertainment, but, of course, that is very far from being the case. The Committee will forgive me if I quote one or two figures. Where the entrance charge to a live theatre is no tax is imposed. On a 1s. seat in a cinema the tax is 3½d. This Amendment suggests that the tax should be 2d. Where the entrance charge to a live theatre 1s. 6d. the tax is to be 2d. At the present in the cinema the tax is 7½d. The suggested tax in the Amendment is 4d. And so on. Surely, we ought to bring this matter properly into phase.
In this connection I would stress what my hon. Friend the Member for East Fife (Mr. Henderson Stewart) said. For example, in my constituency there is no permanent theatre. Occasionally there are amateur entertainments, performances of opera or drama: but there is no permanent theatre. We must make things even in the different parts of the country, and not favour unduly the great centres of population. It is for that reason I support the Amendment.
It is not often that the hon. Member for East Fife (Mr. Henderson Stewart) and the hon. Member for West Fife (Mr. Gallacher) sing in harmony, and it is rarer still that I, too, join in with them; but I think a considerable case has been made for some consideration for the cinema distributing industry. I support the Amendment on behalf of the cinema production industry which will indirectly benefit. There is no doubt that a considerable drive has been made towards producing first-class British films and increasing the export of British films. The possibility of using taxation to help the cinema industry has been in the mind of two successive Chancellors of the Exchequer, because this is the third year in which it has been said that this is a question that would be considered.
The Financial Secretary has said that as soon as he saw a falling off in attendances he would at once step in and readjust the matter. I want him to satisfy himself that there has been no falling off already, with resultant disadvantage to the film production industry. My information is that the falling off has started, and that by delaying this for another year he may be delaying it for a considerable time. Therefore, I support the suggestion that between now and the Report stage we should hear more about it.
Every speaker who has supported the Amendment so far has been a Scottish Member, and as it is not quite a Scottish night and this matter affects English constituencies as well, I would like to support the hon. Gentleman in the plea that he has made to the Financial Secretary. I hope that he will be sufficiently courageous, having made a reasonable case, to divide the Committee, and impress on the Chancellor that this has to be done before the next Budget.
Briefly, the proposal is to reduce the duty on the cheaper seats. That is all. Everyone knows that in the smaller towns, and even in the large towns, and in the smaller cinemas in the larger circuits, there is a considerable falling off on certain nights in the cheaper seats, and the takings suffer considerably. If the right hon. Gentleman reduces the duty on these seats, it has been estimated that the tendency would be for more people to use the cheaper seats, so that the revenue to the Chancellor and to the proprietors would be about the same. I hope the hon. Gentleman will have the courage of his convictions, and that if we do not get a satisfactory assurance from the Financial Secretary he will divide the Committee.
Question put, "That those words be there added."
The Committee divided: Ayes, 19; Noes, 224.
Division No. 165. AYES. [11.53 p.m. Baldwin, A. E. Hutchison, Col. J. R. (Glasgow, C.) Medlicott, Brigadier F. Beechman, N. A Kendall, W. D. Renton, D. Byers, Frank Lambert, Hon. G Roberts, Emrys (Merioneth) Carmichael, James McGovern, J. Roberts, W. (Cumberland, N.) Darling, Sir W. Y. MacLeod, J Watson, W. M Davies, Rt. Hn. Clement (Montgomery) Macpherson, N. (Dumfries) TELLERS FOR THE AYES: Granville, E. (Eye) Marshall, D (Bodkin) Mr. Wadsworth and Mr. Henderson Stewart.
NOES. Acland, Sir Richard Corlett, Dr. J. Greenwood, A. W. J. (Heywood) Adams, Richard (Balham) Cove, W. G. Griffiths, D (Rother Valley) Alexander, Rt. Hon. A. V Crawley, A. Griffiths, W. D. (Moss Side) Allen, A. C. (Bosworth) Cripps, Rt. Hon. Sir S Guest, Dr. L. Haden Allen, Scholefield (Crewe) Grossman, R. H. S. Guy, W. H. Alpass, J. H. Daggar, G Haire, John E (Wycombe) Anderson, A. (Motherwell) Dalton, Rt. Hon. H. Hale, Leslie Awbery, S. S Davies, Ernest (Enfield) Hall, Rt. Hon. Glenvil Ayles, W. H. Deer, G. Hamilton, Lieut.-Col. R Baird, J. de Freitas, Geoffrey 'Hardy, E. A. Barton, C. Delargy, H. J. Henderson, Rt. Hon. A. (Kingswinford) Bechervaise, A. E. Diamond, J. Henderson, Joseph (Ardwick) Bellenger, Rt. Hon. F. J Dobbie, W. Herbison, Miss M. Beswick, F. Dodds, N. N Hewitson, Capt. M Blenkinsop, A Driberg, T. E. N. Hobson, C. R. Blyton, W. R. Dugdale, J. (W. Bromwich) Holman, P. Bowden, Fig Offr. H W Dye, S. Holmes, H. E. (Hemsworth) Braddock, Mrs. E. M. (L'pl, Exch'ge) Edelman, M. Hudson, J. H. (Ealing, W.) Bramall, E. A. Edwards, W. J. (Whitechapel) Hughes, Hector (Aberdeen, N.) Brook, D. (Halifax) Evans, Albert (Islington, W.) Hughes, H. D. (W'Iverh'pton, W.) Brooks, T. J. (Rothwell) Evans, S. N. (Wednesbury) Hand, H. (Hackney, C.) Brown, George (Belper) Ewart, R. Jay, D. P. T. Brown, T. J. (Ince) Farthing, W. J. Jeger, G. (Winchester) Buchanan, Rt. Hon. G. Fernyhough, E. Jeger, Dr. S. W. (St. Pancras, S.E.) Burke, W. A Field, Capt. W. J. Jenkins, R. H Butler, H. W. (Hackney, S.) Fletcher, E. G. M. (Islington. E.) Johnston, Douglas Callaghan, James Foot, M. M. Jones, D. T. (Hartlepool) Champion, A. J Forman, J. C. Jones, J. H. (Bolton) Chetwynd, G R Fraser, T. (Hamilton) Jones, P. Asterley (Hitchin) Cocks, F. S Freeman, J. (Walford) Keenan, W. Coldrick, W Freeman, Peter (Newport) Kenyon, C Collindridge, F Ganley, Mrs. C. S. Kirkwood, Rt. Hon. D Collins, V. J. Gibbins, J. Lang, G. Colman, Miss G. M Gibson, C. W. Lee, F. (Hulme) Comyns, Dr. L. Gilzean, A. Leonard, W. Cooper, Wing-Comdr. G. Glanville, J. E (Consett) Levy, B. W Corbet, Mrs. F K (Camb'well, N.W.) Gordon-Walker, P. C. Lewis, J. (Bolton) Lindgren, G. S. Popplewell, E. Thomas, I. O. (Wrekin) Lindsay, M. (Solihull) Porter, E. (Warrington) Thomas, George (Cardiff) Lipton, Lt.-Col. M Porter, G. (Leeds) Thorneycroft, Harry (Clayton) Longden, F. Price, M. Philips Tiffany, S. Lyne, A. W. Proctor, W. T Timmons, J. McAllister, G Pryde, D. J. Tomlinson, Rt. Hon. G Mack, J. D. Randall, H. E Turner-Samuels, M. McKinlay, A S. Ranger, J Ungoed-Thomas, L. Maclean, N (Govan) Reeves, J. Usborne, Henry McLeavy, F. Reid, T. (Swindon) Wallace, G. D. (Chislehurst) MacMillan, M. K. (Western Isles) Robens, A. Wallace, H. W. (Walthamstow, E) Mainwaring, W. H. Roberts, Goronwy (Caernarvonshire) Warbey, W. N Mallalieu, E. L. (Brigg) Robertson, J. J. (Berwick) Watkins, T. E Mallalieu, J. P. W. (Huddersfield) Ropner, Col. L. Weitzman, D. Mann, Mrs. J. Ross, William (Kilmarnock) Wells, P. L (Faversham) Manning, Mrs. L. (Epping) Royle, C Wells, W. T (Walsall) Marquand, H. A Sargood, R West, D. G. Mellish, R. J. Scollan, T Wheatley, Rt Hn. J. (Edinburgh, E.) Middletown, Mrs. L Segal, Dr S While, C. F. (Derbyshire, W.) Milchison, G. R Shackleton, E. A. A White, H. (Derbyshire, N.E.) Monslow, W Sharp, Granville Whiteley, Rt. Hon. W. Mort, D. L. Shawcross, C. N. (Widnes) Wilcock, Group-Capt. C. A B Moyle, A. Shurmer, P. Wilkins, W. A. Nally, W. Skeffington, A. M. Willey, F. T. (Sunderland) Neal, H. (claycross) Smith, C. (Colchester) Willey, O. G. (Claveland) Nichol, Mrs. M. E. (Bradford, N.) Smith, H. N. (Nottingham, S.) Williams, D. J. (Neath) Nicholls, H. R. (Stratford) Snow, J. W. Williams, R. W. (Wigan) Noel-Baker, Capt. F. E. (Brentford) Sorensen, R. W. Williams, W. R. (Heston) Oliver, G. H. Soskice, Sir Frank Wills, Mrs. E. A. Orbach, M Steele, T. Woodburn, Rt. Hon. A Paling, Will T (Dewsbury) Stewart, Michael (Fulham, E.) Woods, G. S. Palmer, A. M F Stross, Dr. B. Wyatt, W. Parker, J. Stubbs, A. E Yates, V. F. Paton, Mrs. F. (Rushcliffe) Sylvester, G. O Younger, Hon. Kenneth Paton, J. (Norwich) Symonds, A. L. Zilliacus, K Pearson, A. Taylor, H. B. (Mansfield) Peart, T. F. Taylor, R. J. (Morpeth) TELLERS FOR THE NOES: Perrins, W. Taylor, Dr. S. (Barnet) Mr. Simmons and Mr. Hannan. Platts-Mills, J. F. F. Thomas, D. E. (Aberdare)
12 M.
On a point of Order. I thought it was one of the established rules of the House that one's vote should follow one's voice. I happened to notice the behaviour of an hon. Member, but as he is not in the House at the moment I will not mention his name. I should like to have a Ruling from you, Mr. Beaumont. He said, "Yes," twice when the Question was put, and my hon. Friend sitting next to me and I both saw him go into the "No" Lobby and we saw him come out. [An HON. MEMBER: "How did you notice that?"] Because I was very interested to know how that particular Member was going to vote. I think it is quite out of Order to do what the hon. Gentleman did. I should like to know your Ruling for future guidance.
Certainly the vote ought to follow the voice and the voice binds the vote, but I find it impossible to say what happened in this particular caśe. I know nothing of the circumstances and know nothing about the pronunciation of the words.
Could you elucidate the last words?
I am not quite sure what tongue they might have been spoken in. The right hon. Gentleman seems to be mystified. I also am mystified about the occurrence.
There is nothing mysterious about it. I do not see the hon. Member here, so I thought it perhaps more courteous to ask for a general Ruling, to see whether it would be possible to have his vote disqualified. If you wish me to say who the Member is, I will do so, but I thought it was more in accordance with the usual practice not to mention names as the hon. Member is not here. That it happened, there is no doubt at all.
I am sorry that flippancy on my part has increased the confusion in this matter. The vote should follow the voice: that is the accepted rule.
(Dorset, Northern): I was expecting a personal statement from the hon. Member for West Fife (Mr. Gallacher) about why he did not vote.
That is entirely out of Order.
May I say that this consideration on the part of the Conservative Party for one vote is really out of Order, because they could have given us about I80.
(Edinburgh, South): Further to that point of Order, Mr. Beaumont. For my guidance, may I learn from you—
The matter which I have just dealt with was not a point of Order. Therefore, the hon. Member cannot raise anything further to that point of Order.
May I ask whether, if an hon. Member sees fit to put down an Amendment on some, point and speaks to it and it is seconded, and the hon. Member does not go into the Lobby to support his Amendment, that is in Order?
That is not a point of Order. It is for the hon. Member to take the action which he thinks fit. He may have been convinced by speakers in the Debate against his Amendment.
Motion made, and Question proposed, "That the Clause stand part of the Bill."
(Huddersfield): I want to raise one point which has not been raised before; that is the application of the Entertainments Duty to association football, particularly the professional side of the game. Both the Chancellor of the Exchequer and his predecessor in office have said that they wish to encourage this and other games—and quite rightly. Their method of doing so has been to approach the matter from the consumers' end by making the game cheaper through lowering the Entertainments Duty. I say that that is the wrong way to approach this problem. There was no great demand, so far as I know, for a reduction in the entrance money payable for soccer matches. No one seriously suggests that the price of is. 6d. is exorbitant for the pleasure of seeing the Arsenal on Saturdays, and such a price is a mere bagatelle for the pleasure of seeing Huddersfield Town. A much more important consideration in the attempts which are being made to encourage association football are not the consumers, but the producers; and the main producers of soccer are the players themselves. Most hon. Members who read only the popular Press may assume that all professional footballers are very well off.
The hon. Member is wide of the subject. We are now discussing the motion that the Clause stand part. He is dealing with the application of the Entertainments Duty on football matches and the reliefs granted in a previous Budget.
With respect, I would point out that the Clause does cover, I think, live entertainment also, including association football. My point is a very short one. It is that instead of encouraging the sport by reducing the Entertainments Duty, and so reducing the admission fee, we should do much better to encourage the sport by allowing what relief results from reduction of the tax to go to the benefit of the players. A scheme has been produced which, for want of a better name, I would call a pension scheme for players. Its purpose is to enable them, when they get thrown out of the game at the age of perhaps 35, to start a new life and to keep out of financial difficulty. I ask the Financial Secretary to give consideration to a proposal that the Entertainments Duty on association football shall be reduced provided that the proceeds of such reduction are paid by the clubs into a common fund which would be used to benefit the players.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
I would like at this stage to ask the Government what their intentions are for tonight. It is now after 12 o'clock on the first night of the discussions on the Finance Bill in Committee and we on this side are entitled, with a clear conscience, to ask how much farther the Government intend to go in view of the fact that, for the last three hours the Debate has largely been carried on by supporters of the Government. We are left with a considerable amount to do and I suggest that above all, it would be most improper at this time of the night to start on a discussion, which should begin after two or three Clauses, about the Purchase Tax. There is an Amendment on that subject to which a large number of hon. Members attach importance—that dealing with the treatment of drugs and medicines under the new proposals. Secondly, the stage has been reached when I think we have to look at Purchase Tax again to see whether, in view of financial and economic trends of the moment, we ought not to decide what its future is to be.
These are two important matters which loom ahead, and I submit, not to the Chancellor because he is not there, but to his right hon. Friend who is acting no doubt on his behalf, that discussions of this importance should not be taken so late at night. I should be perfectly willing to agree if the right hon. Gentleman would give an assurance—although this would mean sitting later than we should on the first night—that we should get to the end of Part I. We on this side would be satisfied with that.
We have no desire to keep the Committee sitting into the small hours, but the situation is that we have a pretty long Bill and we had hoped, and still hope, to reach Clause 23 before we separate tonight. The Government have allocated five days to this Bill. That is not an unreasonable period and we want, if we can, to avoid an undignified scramble and a very late sitting towards the end of our labours on the fourth or fifth nights. It struck us that we should have some sort of division of the Bill in mind in order that we could take the discussions in a dignified way and give full attention to the Bill. I agree that Clause 18 ends Part I of the Bill, and that that would appear a reasonable place at which to stop. But, if we spend a lot of time tomorrow or on Thursday on Part II, we shall be dealing with Income Tax late tomorrow. What is more, and what I expect appeals to right hon. and hon. Members opposite is that we shall have to crowd the discussion of the Special Contribution into the small hours of Friday morning.
No.
The right hon. Gentleman says "No," but he will agree that certain discussions have already taken place on this point, and Clause 23 is not an unreasonable target.
In discussing the matter with the right hon. Gentleman I said the first day always goes rather slowly, and I did not say more
12.15 a.m.
I withdraw, if the right hon. Gentleman says that nothing of the sort took place. But it does seem to us that we ought to get through Part II. It is true it deals with Purchase Tax, but surely we shall be dealing with what we have to say about Purchase Tax when we reach the Schedules. There may be some discussion on the question of drugs and medicines, and that is about the whole of Part II. Anyway, my right hon. and learned Friend is not here at the moment, but I know his views because I had a word with him before he left, and he is rather set on getting to Clause 23. [ Interruption. ] After all, he is in charge of this Bill, and it is his view that we should try to reach Clause 23 tonight. For the moment we must go on because, in my view, we must make such progress as we can tonight and reach Clause 23 if possible.
We entirely disagree with the right hon. Gentleman. His arguments were extremely weak. It would be perfectly possible to stop at the end of Part I without having to take the discussion on the Special Contribution in the late hours of Thursday. Quite the contrary; we could stop at the end of Part IV on Wednesday and begin the discussion of the Special Contribution at the beginning of Thursday. I should point out again that we on this side of the Committee, in view of the fact that we were given an extra day in the year as compared with the miserable short allowance in former years, have been only too anxious to co-operate. The right hon. Gentleman who has been here all the time tonight will admit that the greater part of the discussion recently, during the last three or four hours, has come not from this side of the Committee but the other side, and that is a matter over which obviously we could exercise no control. I certainly give serious warning to the right hon. Gentleman, although we have tried to co-operate hitherto, that if we are on the first night, in order to carry out this set programme, thrown out by the action of hon. Members opposite, he must not expect that co-operation.
We are most anxious to be as co-operative as we can. I appre- ciate that the Committee has a lot to do. We have the time allotted for the Committee and I am sure everyone will get through with as little trouble as is possible. I do not want to lay down any hard and fast rule. I am perfectly prepared to go as far as Clause 18 and adjourn, and I am sure that hon. Members opposite as well as my hon. Friends will co-operate in getting through the business.
In view of the very fair treatment the right hon. and learned Gentleman has given us, I can assure him, without obviously foregoing our rights to full discussion, of our co-operation, and I beg to ask leave to withdraw the Motion.
Motion, by leave, withdrawn.
CLAUSE 16.—(Relief for rural entertainments.)
I beg to move, in page 9, line 40, after the second "in," to insert, "a borough, urban district or."
Clause 16 is generally welcomed in the country districts as giving an opportunity of seeing the cinema in small halls without paying tax. It may surprise the right hon. Gentleman to hear that in some boroughs and urban districts falling within the conditions laid down in Clause 16, of numbers and the size and density of population, there are village halls or other buildings as the case may be. I have in mind Bishops Castle in South Shropshire, which is a very remote community, and falls within all the conditions in the Clause. It is not served by a railway and is far from a large town. It seems to me a great pity that such a community should be denied the concession offered in this Clause while other parishes which may easily be situated nearer to big centres are able to make use of the concession. There are small boroughs which fall within this category and it is, therefore, with confidence that I ask the Chancellor to accept this Amendment. He has nothing to lose by it and the people who will benefit halve something to gain. I can assure him that he will be backing a winner in accepting it at reasonable odds and he stands not to lose.
It seems to me that this is quite a reasonable request to make provided that it is clearly understood that the limitation as to size and so on in this Clause, as in other areas, is observed. If the hon. and gallant Gentleman will be good enough to withdraw it we will put down appropriate words at the next stage. There is some question whether these words cover the situation.
(Brecon and Radnor): May I ask whether the Chancellor is prepared to refund tax which has operated upon these people under this provision?
May I support this in the interests of the very small cinemas. I welcome very much the remarks made by the Chancellor of the Exchequer.
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
(Hitchin): I beg to move, in page 9, line 42, to leave out from "1933" to the end of line 46.
I would like to add my welcome to that of the hon. and gallant Member for Ludlow (Lieut.-Colonel Corbett) to this Clause. I hope that it will not be thought ungracious of me if I ask the Chancellor of the Exchequer to reconsider the limitations which have been imposed. My Amendment actually proposes no limitations at all. I am not absolutely set upon that particular point so long as those limits are reasonable. The limits are being imposed, I understand, because there are rural districts which have become so built up that they really rank as small towns, and in those districts there are a number of cinemas able to sustain the ordinary burden of tax. From inquiries which I have made, however, there are certain parishes of a kind which the Chancellor has certainly intended to assist by this concession but which will in fact come on the wrong side of the limitation which he proposes. One such instance is a large parish, that is to say, large in area, which certainly has more than 64 people to the square mile, but where all those persons are not concentrated in one place.
I am thinking particularly of a parish where there are two centres of population and where, for administrative convenience, the parish is one, though there were in fact two parishes which covered the centre of population and the country round about, within which there would be a concession of Entertainments Duty. There is only one hall which serves these two centres, and I am informed that on several occasions in the past a cinema proprietor from a nearby place has started to run a weekly performance there and the shows have had reasonably good attendances; but after taking into account Entertainments Duty, the renting of the films, advertising, travelling and other expenses, and the expense of setting up the equipment in the hall, there has not been a reasonable return to the proprietor. This parish has a population of 2,800 altogether and this is by no means an isolated case; there are other parishes in the country where similar conditions exist.
I observe from reading subsequent Amendments to this Clause that some hon. Members are proposing an increase in the size of the hall. Some parishes are the proud possessors of halls larger than the one seating 200 people which the Chancellor proposes. That has come about through various accidental reasons, such as the generosity of some lord of the manor. That means that the parish which happens to have a hall seating more than 200 is unfairly and unreasonably penalised. I feel that, in order to maintain these limits in their present form, the Chancellor of the Exchequer is asking for a certain amount of trouble from jealousies between one parish and another. In the parish which I have already mentioned, there is another one similar in character though not so large. It will be a matter of some difficulty to explain to the inhabitants of the first parish why they are not to have the concession which would enable them to have a weekly cinema, while the inhabitants of the second parish will be able to do so.
It might be convenient if further Amendments to this Clause were discussed at the same time, in which event I would have to make a saving for the Amendments in the names of the hon. Members for Knutsford (Lieut.-Colonel Bromley-Davenport) and Devizes (Mr. Hollis).
The hon. Member who has just proposed this Amendment will appreciate that as I have consented to the former Amendment, that puts this out of court completely. It would include every urban district, whatever its size. Therefore it is quite impossible now be cause the words "borough, urban district or …" would depend on the population for limitation and not the character of the area, and I think on the whole that is the better way of dividing it.
Moreover, whatever definition of size is put in, there are bound to be marginal cases. If one stipulates 3,000, then there is the case of the place with 3,200 people. I hope the Committee will agree to leave this as it is this year and let us look at it in the light of the experience we get in a year. If anyone wishes to propose some Amendment next year, then we shall be able to see and judge better from experience whether we have covered a substantial proportion of the cases where entertainment cannot be run unless some encouragement is given. I hope the Committee will feel that we have gone a long way and that next year we can see how the experiment has worked out.
12.30 a.m.
Do I understand that now the Chancellor is refusing to consider any amendment to leave out Subsection (1, b )?
indicated assent.
Well, really, what the right hon. and learned Gentleman has given with one hand towards encouraging amenities in rural areas he is taking away with the other. He has now said, "I am quite prepared to consider urban districts so long as the density of the population does not exceed 64 to the square mile." Consider such a small town as Montgomery, which provides a typical instance. It is the ancient capital of the county, with a population of 800. I do not suppose that the density of the population comes to more than 20 to the square mile. What have they got? They are two miles from the station. They have only an old town hall that holds 800. That is the one and only place at which there can be a cinema once a week. Yet the people there are the very sort of people we want to assist by taking amenities to them. Surely, the case of the Chancellor has been met by the very question of the density of the population?
Let me give one other instance. It is that of a rural parish. My predecessor in the representation of the county in Parliament, out of his generosity and his desire to give proper amenities, built a hall to which the farmers can go during market days. It will hold, roughly, about 600. That parish is to be penalised because of the generosity of that man's giving it a place where the villagers—and not only the villagers but people from the district surrounding the parish—can go for entertainments—concerts and similar entertainments. It is the only place at which they can enjoy entertainments greater in number and diversity in other places. Surely, the Chancellor can look into this again, because, as I said just now, what he has given with one hand he is now taking away with the other. He is perfectly protected by the density of population.
I should like to support what has just been said. I should think that the Chancellor has ample protection in the density of population. As regards the cinema in village halls, I think he is under-estimating the capacity of the type of village hall that was being built up to immediately before the war, and which is still expected to be put up in the villages. I have no doubt the National Council for Social Service has been consulted in the matter, but I wonder if this particular point has been properly discussed. I think the Chancellor will find that village halls seating less than 200 are very rare indeed. I happen to live in a village with a population of between 600 to 800 where a village hall was put up which, on the advice of the National Council for Social Service, has a seating capacity of about 300 or 350. That was the standard they took. So that not only in the case of the old town halls and buildings of that sort, but in the case of the new village halls, the limit of 200 is much too small a one to take.
I think that the strict provision in the Bill would have a very bad effect if persisted in even only for a year. It would tend to limit the type of village hall that is being put up now. At the moment most building is purely temporary, but even a temporary village hall made from huts can be larger than the 200 laid down here. In my own constituency village halls have been put up which are obviously within the intention of what is being done here, but which will not benefit if this limit is insisted upon. I believe that much the more satisfactory method would be to leave it to the test of the density of population. I am sure that the Chancellor will find that he has not included any of the type of entertainment that he would not wish to benefit, and that only by doing so will he cover all types of entertainment that he does wish to benefit.
There is clearly great approval in all parts of the Committee for what the Chancellor is doing in rural areas. The Amendment of my hon. Friend and myself is, I think, important in that it leaves out Subsection ( b ). There is a further point to the one that many halls will accommodate more than zoo people. That is that, in these days of economy, if a show is going to be put on in a parish, it is desirable that it should have as big an audience as possible, even if that means that people come in from some distance round. It would be better to have one show covering the whole population than two shows on successive nights. I would like, when the time comes, to move formally the Amendment standing in our names. We agree there has to be a limit, and in so far as we had any information at all, we were led to believe that, with the double qualification of the quantity of people in the parish and the maximum number of seats in the hall, an insignificant amount of help would be given under this Clause.
There is an extremely good idea in this Amendment. I am not sure who the author is, whether it is the right hon. and learned Gentleman or the editor of the "Countryman," but I read an article in the winter number of that periodical which made this very suggestions.
I read it, too.
I hope the right hon. and learned Gentleman gets a free copy. His suggestion that we shall have to see how this gets along is a correct one. It is always a question when you have a good idea of how to put it into legislation, and what is the best form of words for something on which we are all agreed—in this case, that there should not be any of these duties on little things in little places. The new definition which he is prepared to accept will ensure that these little places benefit. I am not quite sure whether seating capacity is the right test. Seating capacity and the number of seats are not the same thing. The seating capacity here is far more than the number of seats there are. We could have far more seats. It may be the test ought to be the number of seats normally provided. It might be the case that a village hall even on a crowded night would not be more than quarter filled because there were not the people in the neighbourhood.
Another test might be that the hall was not used regularly for particular forms of entertainment. For instance, there might be a cinema show in a village hall on one or two nights a week, and it would not be felt that it was being used normally for that purpose. I see a danger in not having some kind of test in this way. My hon. Friend the Member for Bath (Mr. Pitman) thinks that that is a good idea, but it is not what we are trying to get at in this Clause, because some people might come along with the idea of building a mammoth cinema in a place of less than 2,000 inhabitants, which would draw people from neighbouring villages. I do not know whether that is the kind of thing which should get the benefit of this rebate. I do not think it was what the right hon. and learned Gentleman started out to do. It might be desirable on other grounds, but not in this connection. We should think about this matter between now and the Report stage, but at this stage we should be prepared to accept what the right hon. and learned Gentleman said and see how the thing gets along.
Possibly 200 of a population of 2,000 is on the small side. I expect that figure has been arrived at by a rule of thumb method—by taking 10 per cent. It ought to be possible to get specimen cases from different parts of the country to see what happens in small towns and villages nowadays and estimate the figure from that. I should have thought that 300 or 350 would be a more reasonable proportion in these days when entertainment is something which only comes once a week or once a fortnight. Therefore, it is liable to attract a larger number than entertainments which are held every day of the week in bigger places. If the right hon. and learned Gentleman finds that he cannot get any of the information I have suggested between now and the Report stage he ought to have some kind of figure and some kind of test, because I agree with the hon. and learned Gentleman for Kettering (Mr. Mitchison) that unless we have a test it would have a wrong influence on the type of village halls that would be built in the future. Some words framed in another style could meet the situation, because we look to the time when, as a result of the various funds which are now in existence like those of the Rural Community Councils and the Carnegie people, there will be much greater development of rural life.
I am impressed by what various hon. Members have said with regard to the second limitation and I am most anxious that this should be effective. I do not want it to be just a gesture but something that is effective. I shall be glad to consider between now and the Report stage whether it would be best to get rid of this suggestion or have some other form of test and thus improve the scheme.
In view of what the Chancellor of the Exchequer has said, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause ordered to stand part of the Bill.
CLAUSE 17.—(Partial remission of mechanically propelled vehicles duty in certain cases.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
12.45 a.m.
This Clause appears to lay down that where a new licence is taken out remission is given. Where the licence was taken out on 1st January, remission is being given in similar circumstances. Would the right hon. Gentleman explain under what Clause of what Bill this is being done?
The hon. Member wants to know whether people who have already licensed their cars can get a remission under this Clause. Subsection 2 ( b ) and ( c ) meets that position. From 1st June those motorists, who will no longer be receiving supplementary, either because the amount of the standard ration is more than their present supplementary or because they decide they will not take the small additional supplementary to the standard and surrender their coupons, will be enabled, under Subsection 2 ( b ) and ( c ), to have the half standard rate upon the production of the necessary certificate from the Regional Petroleum Officer.
The Clause we are dealing with begins:
"Where, before such date as may be specified by order of the Treasury, a licence … is issued."
Therefore, it contemplates the future issue of a licence. What I am thinking of are the many motorists who took out licences from 1st January this year, the cases where licences have been issued. I understand from what the Parliamentary Secretary to the Ministry of Fuel and Power has said, it is in his view right that these motorists should get remission. I cannot see in this Clause where that is provided for, and to quote Subsection (2) (b) and (c) I do not think is the answer. They mainly deal with the conditions under which you qualify for a remission. I should have thought this clause ought to have started off:
"Where, before such date … a licence … is issued, or has been issued."
But it may well be that the Government have taken power under some other legislation, but I have not been able to find it.
I thought that I had put the case quite clearly. We might just refresh our minds. Motorists who have taken out full licences from 1st June will be enabled to have 50 per cent. rebate when the standard allowance is greater than the amount of supplementary they get before. Subsection (2) (b) and (c) lays down that anyone in receipt of this supplementary allowance and licensed for the full rates on 1st June who wishes to go on half rate licence can either wait until the whole period covered by the supplementary allowance expires or, if he prefers, surrender to the Regional Petroleum Officer his unused supplementary petrol coupons.
When he does that, the Regional Petroleum Officer issues to him a certificate entitling him to take out a half-rate licence, provided new coupons are surrendered pro rata to the remaining portion of the period, so that in either case refund in respect of full-rate licence can be obtained from the date when the half-rate licence began. Subsection (3) provides that refunds on unexpired current half-rate licences will be paid for at the appropriate half-rate. This is technically necessary because the section of the Finance Act referred to, which authorises these refunds, deals only with the refund of portions of the full annual duty and where the half rate only has been paid, then the refund must be on a similar basis. I am sorry for my lengthy reply, but I hope I have made this clear to the hon. Member.
It is quite obvious that we all have the same proposal in mind but I must confess that my laboured reading of the Clause does not enable me to give the same meaning to it as has been given by the hon. Gentleman. To me the operative words are, "the licence issued." I cannot see, therefore, how we can refer to the licence already issued. All we ask is that between now and the Report stage we can consult with the right hon. Gentleman, and just make sure that what is, in fact, our common objective is attained by the words of this Clause.
We shall certainly look at the language to make sure of that, but I think I can assure the Committee that it is already in the Bill. Under Section 18 of the 1924 Finance Act, an existing licence can be surrendered, and the procedure is that it will be surrendered under the terms of that Section and a further licence issued, under the Clause we are now considering, at half rate.
Question put, and agreed to.
Clause ordered to stand part of the Bill.
Clause 18 ordered to stand part of the Bill.
Committee report Progress; to sit again this day.
Petrol Allowances (Invalids)
Motion made and Question proposed, "That this House do now adjourn"— [Mr. Snow.]
12.52 a.m.
It is not my intention to keep the House long on this very important subject, but I feel that I am entitled to raise it because it is an important matter to people about whom we ought to be concerned. Since the abolition of the basic petrol ration, many difficulties have arisen and I have been approached with regard to two cases which I feel might receive the consideration of the Ministry of Fuel and Power, together with the cases of other people who are affected in a similar manner.
The position today is that if a person is fortunate enough to own a motor-car which is licensed, he can get extra petrol if he has a relative who may be a cripple or an invalid in order that he may take that relative into the country. But there are thousands of cripples, aged or infirm and invalids who will never possess a motor-car, and who are consequently denied the opportunity to enjoy the fresh air as other people can. I consider there are very great anomalies. The two cases which I had to bring to the notice of the Ministry had been turned down by the divisional office of the Ministry. That, I feel, is very often a great handicap to anyone who raises such a matter in this House. The Minister usually confirms the decision of the regional office, and the decision of that office naturally weighs very heavily against a person who tries to re-open a case.
One of the cases with which I am concerned is that of a lady who is an invalid. She had a friend who owned a car, and he had been taking her, perhaps once a week or once a fortnight, to see her friends or relatives. The period involved on each occasion may only have been two hours. She has now been deprived, not of that luxury, but of that necessity, and she is now unable to get out. The other case I took up with the Department was that of an old lady of eighty years who had no relative beyond a daughter, and no prospects of having a car. An insurance agent who called, I presume to collect the odd pennies each week, had been in the habit of taking her out during the week at a time which was convenient both to her and him. That was stopped because they were not allowed petrol to perform that very necessary function. I believe that these two cases were genuine, and I am satisfied that many hon. Members could find similar cases. I would not have raised these cases if I had not been satisfied that they were genuine and there could be confirmation from the local police they were genuine.
I should have no difficulty in my town, as a member of the watch committee, in getting the chief constable to send someone to see that applications were genuine. We owe a duty to the aged, the infirm, and the invalids. In my own town, as in others there are organisations which try to arrange outings from time to time. One could cite the Salford Police, who every year organise an outing for crippled chil- dren: and there are still plenty of kindhearted and generons motorists who are prepared to render a service to this sort of people. I am sure that hon. Members have seen instances where motorists have pulled up at bus queues to give a lift to somebody, usually people who were aged or crippled. I am making an appeal for those people.
The Ministry may say that there will be a flood of applications if they concede my request, and that there would be all kinds of anomalies; but if people set themselves out to get over the difficulties legally, we should not penalise them. They are deserving not only of sympathy, but of all the help we can give them. I want the Minister to take a sympathetic view. I should have thought that this Government would have gone out of its way to help the kind of people to whom have referred, not only because they are poor and cannot help themselves in the matter I have mentioned, but because we have always relied on these people in the past to help us reach the stage we have reached today. I ask the Minister to consider this matter kindly. I do not think there would be a great number of cases, but, in any event, I am certain the police would go out of their way to help these people. They have been generous always to these people, and they do everything possible to help them to get some enjoyment and get out in the sunshine like other normal people.
Precisely what was it that the hon. Member asked the regional officer to do in these cases?
In these two cases application was made to the regional officer for the petrol to enable these people to be taken out. It may even have been that only a unit a month was necessary—a matter of 35 miles motoring and they would have been satisfied.
I understand that it was declined because the crippled person was not a relative of the owner of the car?
Yes. I am informed that petrol is only given if the car-owner has a relative who is an invalid, and that it is necessary to produce a medical certificate. A medical certificate was produced in both these cases.
But we are all John Tamson's bairns!
I have been amazed to see the large number of cars on the roads, and have come to the conclusion that there must be hundreds of thousands owning cars and in possession of medical certificates who take out their relatives.
I have generally the same experience. I know quite a number of cases of people who have been in the habit of taking out old people who were not relatives, and who now do not get petrol. I realise it is difficult for the Parliamentary Secretary to meet this particular case, but there are many genuine cases which I could support.
1.3 a.m.
I admit right away that the hon. Member for South Salford (Mr. Hardy) raised this question with great feeling and sympathetic consideration. He is not only thinking about his own constituents, but feels very deeply on this question of invalid people getting fresh air and having brightness brought into their lives. I assure him, while I am not able to offer him anything tonight, that my attitude is not unsympathetic at all.
During the whole time that the average motorist has been without a basic ration, we have endeavoured at the Ministry to apply a code, regulations,—call them what you like—with great sympathy and great understanding of the personal cases of individuals. It is a very difficult thing in a community, where no individual circumstances are the same, to apply regulations or instructions to cover all the cases but as the schemes went on and as cases arose, we extended them all with the same objective in view, to relieve the impression of harshness to the individuals concerned. I assure the hon. Member that it is not really correct for him to say—and I hope this will disabuse his mind of any such impression—that, if the regional officer turns down these cases and they are referred to my hon. Friend or myself, we merely rubber stamp the decision.
That is my experience
I am sorry it is the hon. Member's experience. It is not the ex- perience of other hon. Members. Because of administrative arrangements, I deal with the bulk of the letters from Members of Parliament, and I can honestly say that every case is very carefully considered—personally considered—and no question of an overriding decision of the regional petroleum office ever enters into the consideration of the merits of the case. If it is a good case, if it comes within the general scheme laid down, no matter what the regional officer may have decided, the decision will, on review, go in favour of the applicant. The fact that a regional petroleum officer has made a decision does not in any way prevent us from really examining the case which a Member of Parliament has raised with us.
I make one point which is important because my hon. Friend is under a misapprehension. If there was an excursion organised by the police or any other body—an organised outing into the country—we would, as we have always done, make a specific allocation of petrol for that purpose. It is well known to the House that we are very generous in the supply of petrol in respect of ex-Service men who are disabled, and who have their special carriages, and also in respect of other people who are disabled and have to rely upon that mode of transport. They receive, by and large, as much petrol as they really require. It may not be as much as they desire—but as much as is needed.
At one stage we did agree that where a relative lived in the same house as the owner of a motorcar we would grant petrol for the owner to take out his relative, on production of a medical certificate. Many pleas were made that that was unfair if the relative lived a little distance away and that, for relations in similar circumstances, we ought to make some arrangement when they were not living in the same house as the car owner. So we extended it, and agreed that petrol would be provided to give invalids a few hours out in the fresh air and sunshine even if they lived away from where the motorcar was originally kept.
Now my hon. Friend wants us to extend that and to say that another motorist, a motorist who is a friend and who knows someone who is an invalid, shall be given petrol to take that invalid out. I accept the two cases that my hon. Friend has put forward and which I be- lieve to be perfectly honest—perfectly genuine—but I am certain that he would agree with me that you cannot legislate for odd cases. If we agree that any motorist may take any invalid and have petrol for that purpose—for what we call carriage exercise—then in fact we are saying to every single motorist that there is an allocation of petrol for him if he can find some poor old invalid who can be taken out. That would open wide the door to abuse. It would leave it wide open. It is inevitable that genuine cases should be affected. If there were a high standard of honesty, we should not need ration books. We would depend upon the honesty of individuals. It is very necessary that we should prevent abuse where it is possible.
That brings me to the last point, for I have tried to explain why it is impossible for us to grant this further extension to meet cases which my hon. Friend has put forward in all sincerity and earnestness. It was precisely considerations such as this, along with many others, that really compelled us to find ways and means of putting some motorists on the road with some petrol so that they could perform an errand of mercy if they chose to do so. My hon. Friend's position is met by the action taken by the Ministry and the Government in providing as from today the standard petrol ration which will enable people such as he has described to render some little service to their invalid friends.
rose —
My hon. Friend opposite will say that that is to deprive the motorist of pleasure motoring.
Very often now that motorist has less petrol than he had before.
That is not true, because, even allowing for the standard petrol deducted from the "E" and "S" holders, the amount of petrol will be precisely the same. Let us hope, as the months go by and the economic situation improves, that there will be more petrol available and a greater use made of motorcars by motorists for the purposes for which they ordinarily have their cars.
I am sorry I cannot do anything further, especially as I know that the hon. Member raised this question in sincerity and with great earnestness. Nothing would please me more than to make all sorts of concessions. The fact is, however, that there is not the petrol to give all these concessions. I agree that there may be more concessions as petrol does become available, for this type of hard case and for businessmen; and all these factors will be taken fully into consideration if there is any change of policy.
Is the hon. Gentleman aware that the Ministry of Food have made provision for some considerable time now for giving extra tea to old people and that the Ministry of Fuel and Power are giving extra coal to old people who need it to meet the requirements of their own households. Why, therefore, should there be any difficulties in yielding to a few people who are surely entitled to be considered and who are penalised because they are poor people and never have the prospect of owning a car?
That proves that where we are able to do something for old people, we do it. We can give them extra coal, and if we had the petrol we would give them extra petrol.
Question put, and agreed to.
Adjourned accordingly at Twelve Minutes past One o'Clock.