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Commons Chamber

Volume 488: debated on Thursday 7 June 1951

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House Of Commons

Thursday, 7th June, 1951

The House met at Half past Two o'Clock

The Clerk, at the Table, informed the House of the absence of Mr. SPEAKER from this day's Sitting:

Whereupon Major MILNER, The CHAIRMAN OF WAYS AND MEANS, proceeded to the Table and, after Prayers, took the Chair as DEPUTY-SPEAKER, pursuant to the Standing Order.

Private Business

Lancashire County Council (General Powers) Bill Lords (By Order)

Liverpool Extension Bill Lords (By Order)

Second Reading deferred till Thursday next.

Oral Answers To Questions

India

Food Shortage

1.

asked the Secretary of State for Commonwealth Relations what recent provision has been made to release shipping for the transportation of grain and other foodstuffs to India in connection with the threatened famine in Bihar.

I would refer my hon. Friend to the statement that I made in reply to Questions on 31st May. Since then we have assisted India in chartering four more ships from the North American and Australian runs, and another five ships for moving grain from China, representing in all a further 80,000 tons of shipping. So far, therefore, this year we have assisted India in chartering over 90 ships with a total tonnage of over 800,000 tons.

Is it correct that the amount of grain now available in Southern Bihar is considerable and that the transport difficulties, particularly in Northern Bihar, referred to recently in the House have been overcome? Further, has any technical assistance been requested from us by the Government of India?

To judge from statements made by Indian officials such as the High Commissioner in London and Ministers and officials in India, the situation seems to be better than it had once looked like becoming. I cannot, of course, answer about internal transport in India, but the Indian High Commissioner in London said the other day that the main difficulty was not to get food but to transport it from overseas, and that is the line on which we are now working.

When the right hon. Gentleman says that he has assisted in obtaining or chartering 90 vessels, does that mean that any financial burden has been assumed by His Majesty's Government, or is it just technical assistance?

No financial burden is being assumed, but these ships would, of course, otherwise have been used in the main for bringing to this country things which we very much want.

The right hon. Gentleman says that there is no financial burden. I take it that these are not exclusively British ships. Surely on the freight market, there must have been a substantial rise in freights as a result of the Indians coming into the freight market on this scale, whether the ships are English or foreign. Has not that affected our interests?

I did not say that it had not affected our interests, but, clearly, it is our duty to help another member of the Commonwealth in these ways. I am not sure whether it has put up freight rates or whether we have merely diverted important things which would otherwise have been brought here. I should be able to answer that question if notice were given.

9.

asked the Secretary of State for Commonwealth Relations what help he is sending to the Government of India to relieve the famine in Bihar where 20,000,000 people are threatened by death through starvation.

3.

asked the Secretary of State for Commonwealth Relations what requests he has received from the Government of India for assistance in the relief of Assam and Bihar who are experiencing a food famine.

I would refer the hon. Gentlemen to the reply I gave to the hon. Member for Leyton (Mr. Sorensen), the hon. and gallant Member for Macclesfield (Air Commodore Harvey) and the hon. Member for Orkney and Shetland (Mr. Grimond) on 31st May.

Could I ask the Minister two questions? Can he assure the House that everything this country could have done has been done to help in this case, and that the worst threat of mass famine has now passed?

I think I can assure the House that everything that His Majesty's Government could do has been done. Also, India has made it quite clear that our aid in chartering ships was the really vital help they needed. I cannot answer questions that should be addressed to the Government of India, but from public statements it is gratifying that the situation appears to be a great deal better.

Does the Minister agree with the contention in this question that 20 million people are threatened by death through starvation, and does not this conflict with the recent evidence we have had from the High Commissioner to which he has made reference? Secondly, whatever help my right hon. Friend is able to give—and we hope and expect it to be generous—will he resist tying to it any quid pro quo arrangements such as have been suggested from the other side? May we be assured that it will be given out of sheer good will and without any reference to bargaining?

I certainly cannot accept the figure of 20 million people. I repeat what I have already said, that there will be no bargaining in this matter. I should like to refer to part of a statement recently made by the Indian High Commissioner in India that exaggeration does as much harm as complacency in this matter.

Since my figure has been challenged, and that has been accepted by the Minister, may I ask him if he is not aware that it came from a report in the "Economist," a most responsible newspaper, whose figures are usually accepted by His Majesty's Ministers?

Whatever is accepted by His Majesty's Ministers, we are not responsible for internal events in India or for answering questions about them.

Ex-Officials' Pensions

2.

asked the Secretary of State for Commonwealth Relations what progress has been made in his discussions with the Government of India concerning the deduction of Indian income tax from pensions payable to ex-members of the Secretary of State's services in India and the Indian Army, who are now resident in the Channel Isles. Eire or the Colonies.

8.

asked the Secretary of State for Commonwealth Relations if he will make a statement on the position of the discussions with the Government of India regarding the deduction of income tax from pensions payable to former members of the Indian Army now residing in the Colonies or in the Channel Islands.

As a result of discussions with Indian officials, administrative arrangements are being made, subject to confirmation by the Government of India, under which that Government will levy tax on pensioners in the places named in broadly the same manner as they levy tax on pensioners resident in the United Kingdom. Thus, for instance, under the proposed arrangements, the Government of India would for the next few months provisionally tax the pension of a person resident abroad as if he had no income other than his pension. Details of the arrangements will be sent shortly to all persons who draw their pensions through the Commonwealth Relations Office or the High Commissioner for India.

Would not the right hon. Gentleman agree that this arrangement and any other arrangement that involves the payment of Indian income tax before the pension is received by the pensioner must impose hardship upon the pensioner? Is not the right hon. Gentleman under an obligation, which was assumed by the late Chancellor of the Exchequer in a statement to the House on 15th July, 1948, to see, in conjunction with the Indian Government, that he does everything possible to avoid inconvenience or hardship to the pensioners? What is he doing about that?

I am doing everything possible to avoid inconvenience to the pensioners. The new arrangements which I have just mentioned are the result of representations that I made to the Government of India. I hope that that answers the hon. Gentleman.

Is the right hon. Gentleman satisfied that these arrangements completely fulfil the pledge given at the time the services of these men were dispensed with?

I think that they satisfy the pledge and that we are doing everything we possibly can. We shall continue to do so.

7.

asked the Secretary of State for Commonwealth Relations if he will make representations to the Government of India to rectify the anomaly whereby certain former servants of the Crown in undivided India receiving pensions through the High Commissioner for India are less favourably treated than others who, with similar service records, receive pensions through the High Commissioner for Pakistan.

I take it that the hon. Member is referring to the decision recently taken by the Government of India (but not by the Government of Pakistan) to tax the pensions of certain former servants of the Crown. I do not think that I have grounds for making representations against this decision. It is within the legal competence of the Government of India; moreover many governments, including our own, follow the practice of taxing pensions paid from their revenues wherever the pensioner resides. I understand that, in the majority of cases, by the operation of relief granted by the United Kingdom Government, no increased burden of tax will fall on the pensioner.

Does the Minister consider it fair that people who rendered equal service to the Crown in undivided India should now receive unequal pensions merely because of the accident that some of them receive their pensions from the High Commissioner of Pakistan while others, less fortunate, receive their pensions from the High Commissioner of India?

I do not know that I am called on to express my view as to whether it is fair or not. But what I would say is that it is directly within the legal competence of the Indian Government to do this.

Whatever may be the legal competence of the Government of India, the right hon. Gentleman told us at the beginning of Questions that he hoped to save from death by starvation millions of Indians. Does he think it fair that they should reply to that by inflicting hardship on these ex-servants?

May I ask the Minister if he will refresh his memory in regard to the assurance given by the Prime Minister in this House on 10th July, 1947, in these words:

"… those concerned have the assurance of His Majesty's Government that they will receive the pensions to which they are entitled."—[OFFICIAL REPORT, 10th July, 1947; Vol. 439, c. 2458.]

I have no need to refresh my memory on this point, since I looked it up when the hon. Gentleman put down the Question. The reply of the Prime Minister was carefully framed at the time to cover an interim period pending the settlement with India of an agreement which was then concluded between us and the Indian Government.

Will the right hon. Gentleman revise his views on bargaining and remember that on the one hand, although lives have been in question, on the other hand the livelihoods of people who have won a gallant and honest pension in doing their job is under consideration?

I quite agree that various views can be held on pensions. I am prepared to continue representations and to do all I can to protect the interests of these pensioners, but I would not agree that I can deal with this in relationship to the question of help to India over their food shortage.

Bechuanaland

African Advisory Council

4.

asked the Secretary of State for Commonwealth Relations what is the composition of the African Advisory Council of Bechuanaland; how are its members chosen; how often does it meet; and what are its powers.

The African Advisory Council of Bechuanaland has no formal constitution. It meets under the presidency of the Resident Commissioner, usually once a year. Its members are chiefs and tribal representatives from areas both within and outside the main reserve. It is thus fully representative of African opinion in the Protectorate. Meetings are also attended by heads of Government Departments and by officers of the district administration. The Council is advisory and it is consulted on all important matters affecting African interests.

European Advisory Council

5.

asked the Secretary of State for Commonwealth Relations what is the composition of the European Advisory Council of Bechuanaland; how are its members elected; how often does the Council meet; and what are its powers.

The European Advisory Council of the Bechuanaland Protectorate consists of the Resident Commissioner who is ex-officio President, the Deputy Resident Commissioner, six other official members and eight elected members. The official members are appointed by the Resident Commissioner. The elected members represent eight electoral divisions into which the Territory is divided. All Europeans who satisfy the residence and property or income qualifications are entitled to be nominated for election to the Council and to be registered as voters. The Council usually meets twice a year and its function is to advise the Resident Commissioner on matters directly affecting the European residents of the Territory. It has no power other than that of tendering advice. I am sending my hon. Friend a copy of the Proclamation under which the Council was established.

Joint Council

6.

asked the Secretary of State for Commonwealth Relations whether he will consider the possibility of establishing a Legislative Council in Bechuanaland; and whether he will arrange for a party of senior officials and leading Africans to visit other British territories in East and Central Africa to study current developments in the growth of representative institutions.

The aim of His Majesty's Government is to develop representative and responsible institutions in the Bechuanaland Protectorate. A joint council, representative of the European and African Advisory Councils, has recently been established and will be consulted on matters of joint interest to the African and European communities. It would be premature to consider a grant of legislative powers to this body at this stage. I am considering the possibility of visits by representative persons from the Protectorate to other territories to study local African government and, in particular, district councils, which is the field most appropriate to the Protectorate's present stage of development.

How many of these district councils have yet been established, and what will be the speed, approximately, with which progress is made towards the legislative powers which my right hon. Friend has in mind?

Without notice I could not say how many district councils there are in the whole of the Bechuanaland Protectorate. It is difficult to say how quickly progress can be made towards getting legislative powers for such a body as this. It depends upon economic and social development, upon the desires and wishes of the members of the council, and matters of that sort; so I do not think I can give a date.

Could the Minister tell the House how many times the joint council to which he has referred has met?

The joint council has only recently been set up in response, I am glad to say, to representations from both the African and European Advisory Councils. It has met once or twice.

Commonwealth

Self-Government

10.

asked the Secretary of State for Commonwealth Relations what consultation takes place with members of the Commonwealth regarding any decision to establish self-government in a colony.

Whilst the United Kingdom Government alone carry the responsibility for internal constitutional developments in Colonies dependent upon the United Kingdom, we recognise the interest of the Governments of other members of the Commonwealth, and it is our practice to keep them informed of major developments in that sphere. Were any question of admission to full and independent membership of the Commonwealth to arise, all existing members would, following past practice, be consulted.

In view of the alarm and despondency recently expressed by responsible Ministers in the Union of South Africa and in Southern Rhodesia and Northern Rhodesia, there cannot have been any great discussion. Can we expect to hold the Commonwealth together if we dish out self-government to primitive peoples without proper and previous discussion with the Dominions most concerned?

We must make quite clear the distinction between the grant of responsible self-government within the Commonwealth, which is a matter for the United Kingdom Government and the territory concerned, and for them alone, and the question of becoming a full member of the Commonwealth, which is of course a matter for all members of the Commonwealth. All steps towards responsible self-government within the Commonwealth are a matter between us and the territory concerned, and we must make that distinction quite clear and abide by it.

Defence Talks

11.

asked the Secretary of State for Commonwealth Relations what replies were received from India, Pakistan and Ceylon in answer to the invitations inviting them to be represented at the Commonwealth defence talks which are to be held in London in July.

I take it that the Question refers to the meeting beginning on 21st June. It had never been contemplated that the Governments of India, Pakistan and Ceylon would attend this meeting, which is concerned with problems particularly affecting Australia, New Zealand, South Africa and Southern Rhodesia, and also Canada. No question of sending invitations to India, Pakistan or Ceylon arose. The Governments of India, Pakistan and Ceylon have, naturally, been informed of arrangements made for the meeting.

Does that answer mean that since the conference is to discuss Commonwealth security as a whole, we in the United Kingdom are under an implicit obligation to defend India and Pakistan against any external aggression and, in the case of Ceylon, under a treaty obligation to do so, but that these countries are not prepared to co-operate either to defend each other or to engage in any form of Pacific pact or world-wide Commonwealth pact?

It would be quite wrong to draw such conclusions from my answer. This is a particular meeting of certain members of the Commonwealth to discuss problems in certain areas and regions of the world that particularly concern them. That is the only conclusion that can be drawn from my answer.

Trade And Commerce

New Industries, Dover

13.

asked the President of the Board of Trade what steps his Department are taking to bring new industry to Dover.

By the establishment of new concerns and the expansion of existing firms, over 1,300 new jobs have been created in Dover and on the industrial estate at Richborough since 1945. My Department will continue to draw the attention of industrialists wishing to establish new projects to the possibilities of this part of the country.

Will the right hon. and learned Gentleman bear in mind that his efforts to bring fresh industry to Dover are being stultified from the employment point of view by the action of his right hon. Friend the Secretary of State for War in removing the Returned Stores Group from Dover? Will he make representations to his right hon. Friend about this?

I will certainly look into the matter, but I should not like it to be thought that our efforts were being stultified. The average percentage of unemployment in Dover in April of this year was 2.9; in the years 1934–38, it was 12.3.

British Films (Definition)

14.

asked the President of the Board of Trade whether he is aware of the dissatisfaction over the legal definition of the term, "British film"; and whether he contemplates making any changes with a view to giving more opportunity to British writers, producers and directors.

At my predecessor's request, comments on this and other provisions of the Cinematograph Films Acts have been submitted by the various trade organisations, and I am reviewing the whole question in consultation with the Cinematograph Films Council.

Will the President of the Board of Trade, when making his review, bear in mind the particular difficulties under which employees in the film industry are labouring and the fact that American films which are produced with a big distribution organisation behind them and have a world wide market do not really need the protection of the British quota?

Development Areas (Factories)

16.

asked the President of the Board of Trade the total cost of factory buildings, with services, which have been built by Government finance in the development areas and the number of people at present employed in these factories.

The total amount of Government expenditure under the Distribution of Industry Act, 1945, in connection with the provision of factory space for private industry in the development areas, during the period from mid-1945 to the end of March, 1951, was £41.13 million. This amount has been expended on the conversion of war-time factories to normal industrial uses; the building of new factories and extensions; the acquisition of land on which to erect these new factories; the provision of services and the development of the industrial estates and group sites which have been established or taken over since the war. At the end of March, 1951, 54,200 men and 54,800 women were employed in the factory space thus available. When these factories are in full operation it is hoped that a further 17,500 men and 16,000 women will be employed.

Has the right hon. and learned Gentleman gone into the reasons why the costs of providing factories are so high in relation to the total number of people employed? They are probably three or four times the normal cost in respect of industry in general.

These involve the development of estates in areas which have been largely left derelict by private enterprise and I am glad to say that they have helped to reduce unemployment in the development areas from 19 per cent. in 1938 to 2.7 per cent. in April of this year.

How much of the £41 million has been spent on new buildings and how much on reconversion of the old factories?

Is my right hon. and learned Friend aware that in the 1930's it was always recognised that to start large-scale industrial projects in the development areas would be very expensive, and that that was why we were left with poultry farms, market gardening and the repairing of typewriters?

British Textiles (Danish Market)

17.

asked the President of the Board of Trade if he is aware that Denmark has recently granted permits to Sweden, Austria, Germany and Switzerland for the importation of hosiery knitwear and general textile goods, but has refused these import licences to British manufacturers; and what steps he is taking to safeguard the traditional Danish market to British manufacturers.

I understand that under current arrangements the Danish authorities are granting licences for hosiery, knitwear and apparel from the countries named. Whilst actual imports from the United Kingdom into Denmark are at about last year's levels, there has been an interruption in the issue of licences. I hope, however, to hear very shortly what facilities will be forthcoming this year. Piece goods imported from O.E.E.C. countries are on open general licence though Danish importers have to pay a deposit.

Is the Minister aware that import licences have been refused partly because the Ministry of Food have refused to pay the price that Denmark requires for her foodstuffs, and will he consult his right hon. Friend to see whether we cannot purchase the goods from Denmark at reasonable prices so that they are prepared to take our textile goods in exchange?

I am very anxious to improve the mutual trading arrangements between Denmark and this country.

Argentine Agreement

18.

asked the President of the Board of Trade whether he will now make a statement on the terms of the recent agreement with the Argentine, so far as general commerce and trade is concerned.

As the answer is rather long I will, with the hon. and gallant Member's permission, circulate it in the OFFICIAL REPORT.

Can the Minister nevertheless say whether the Argentine is still short of sterling and, if not, whether any alleviations of the import restrictions have been given effect to because it was agreed in effect that such alleviations need not wait upon the signing of the Protocol?

That is a rather long question. If the hon. and gallant Member will look at my answer and if, after doing so, he considers there are any points which he wishes to raise, I shall be glad to talk to him about them.

Following is the answer:

The Protocol, which was signed in Buenos Aires on 23rd April last and is valid for 12 months, supplements the Trade and Payments Agreement with Argentina of 1949. The text has been published as Cmd. 8231. Article 9 suspends Schedules 1, 2 and 3 of the 1949 Agreement. It records that the two Governments had made a preliminary examination of possible United Kingdom-Argentine trade over the next 12 months and had instructed the Mixed Consultative Committee set up under the 1949 Agreement to continue this review in order to achieve a balance of sterling payments with trade at the highest possible level, taking into consideration the requirements of both countries. The two Governments agreed that while this review is taking place all facilities possible will be given for the continuance of the traditional trade between the two countries.

As my right hon. Friend the Chancellor of the Exchequer informed the House in a statement after Questions on 24th April, we have undertaken, under Article 12 of the Protocol, to be prepared to convert at the Argentine Government's request any excess in Argentine sterling balances above £20 million into third currencies including, in the last resort, dollars.

The Protocol, should remove many of the difficulties which have proved such obstacles to the smooth flow of Anglo-Argentine trade. It is now of great importance, particularly having regard to the provisions of Article 12, that exporters to Argentina should make every effort to draw full advantage from the improvement in commercial relations which the Protocol, has brought about. I hope that the discussions now taking place in the Mixed Consultative Committee in Buenos Aires will result in the early issue of Argentine import licences on a scale which will justify renewed confidence in the Argentine export market.

German Enemy Property

19.

asked the President of the Board of Trade whether he has yet received a report from the administrator appointed under the Distribution of Enemy Property Act, 1949.

I assume that the hon. Member refers to the Report of the Committee appointed to advise on the distribution of German enemy property. This Report has been received and is under consideration.

In view of the fact that this Act was passed in 1949 and the Government then said that the assets would be promptly distributed, when can we expect an Order in Council to carry into effect the advice of the Committee, as 17 months have gone by and nothing has happened?

As I am sure the hon. Member realises, the matter is one of very great complication. A Report was received in my Department on 9th March and I shall consider it as soon as I can.

Pottery Industry

21.

asked the President of the Board of Trade what further steps have been taken to implement the Working Party's Report on the Pottery Industry.

With my hon. Friend's permission, I will circulate in the OFFICIAL REPORT a summary of further steps which have been taken, since my predecessor replied to a similar Question by my hon. Friend on 25th October, 1949.

Following is the information:

  • 1. A total of over £3 million worth of building has been licensed since the war. Of this, over £2 million worth has been completed. Almost all potteries are now equipped with semi-automatic making machinery. About 150 tunnel kilns and ovens have been installed. Manufacturers have, when extending their buildings, used the opportunity to improve their flow production. (Recommendations 1, 7, 9.)
  • 2. The new Pottery (Health and Welfare) Regulations were introduced in 1950. (Recommendation 2.)
  • 3. The use of carton packing is increasing and is in fairly general use for certain purposes such as packing tea sets in the industry. (Recommendation 16.)
  • 4. The establishment of a Development Council is still under discussion. (Recommendation 30.)
  • 22.

    asked the President of the Board of Trade what action has been taken, or is intended, to increase the output of the pottery industry and pro vide the industry with its needs in man power and raw materials.

    Production capacity is being increased each year by provision of new buildings and modern equipment, and a new factory has been started in Durham. The shortage of lithographs has now been overcome, with the co-operation of the printers. Raw material supplies are for the most part satisfactory but my Department has been assisting with some, notably bone for bone china.

    Labour, particularly decorating labour, is still the main limitation on increased output for export. My right hon. Friend the Minister of Labour is co-operating with me in efforts to maintain the skilled labour force of the industry.

    Does my right hon. and learned Friend agree that, relatively speaking, the production of pottery is the country's best business proposition? If so, does he not think that a greater attempt than has been made in the past should be made to increase the manpower, and has he given consideration to the need for making an appeal to women who are not making a contribution to do so over a wider area than has been the case up to now?

    I will certainly give consideration to the last part of my hon. Friend's question. The industry has done very well and we are looking to it for still greater efforts in connection with our export trade.

    23.

    asked the President of the Board of Trade if he will work out a system of priority allocation so that when decorative pottery is available for the home market each person and area is treated as fairly as possible.

    I will bear the suggestion in mind, but it is much too early to adopt my hon. Friend's suggestion since there is no present prospect of the restrictions on home sales of decorated pottery being lifted.

    Will my right hon. Friend also bear in mind, that, in the interests of the country, the people of this country have now been denied decorative pottery for 10 years? When decorative pottery is available, will he see that working-class areas get equal treatment with people who shop in Regent Street and places like that?

    Yes, Sir. I will certainly have that in mind and I am sure that those who have been unable to get decorative pottery during the last few years will realise the great contribution which the export of that kind of pottery has made to the well-being of the country as a whole.

    Consumer Goods (Prices)

    24.

    asked the President of the Board of Trade how many increases in wholesale and retail prices have been authorised by him since 1st March, 1951.

    For most consumer goods for the control of which the Board of Trade is responsible, the maximum prices chargeable by wholesale and retail distributors are based on maximum percentage margins and they therefore increase automatically in the event of any increase being permitted in the manufacturer's maximum price. There have been 34 orders since 1st March, 1951, raising manufacturers' maximum prices, some of which deal also with distributors' prices. In addition, there have been seven orders relating only to distributors' over-riding maximum prices; but these cover the same ground as orders dealing with manufacturers' prices and are mainly for enforcement purposes.

    Would the right hon. and learned Gentleman be good enough to publish in the OFFICIAL REPORT the list of those 34 items, with the amount by which each item has been increased?

    If the hon. Member will put a Question down I will certainly publish that, but I think it would be impossible to get it into the OFFICIAL REPORT for today.

    So that we may get a comprehensive picture, at the same time as publishing that, for the guidance of the House and the public as a whole, will my right hon. and learned Friend consider publishing a list of those commodities not subject to price control where the price and profit margins have increased during the same period as that to which the Question refers?

    That would be a matter of utility and interest and it might take some time to compile it.

    Children's Clothing And Footwear (Prices)

    25.

    asked the President of the Board of Trade if his attention has been called to the increases in the prices of children's clothes and footwear in recent months; and what steps he proposes to take to protect the public.

    The prices of all children's utility clothes and footwear are already controlled. The rise in prices is almost wholly due to increases in the cost of cloth and leather which are the result of the rise in world prices of the basic raw materials. I need hardly say that we do not allow any increases in maximum prices unless we are satisfied that they are necessary to ensure an adequate flow of supplies to the shops. I hope that the new maximum prices which are now being issued will enable manufacturers to produce children's utility garments in greater quantities.

    Since it is generally believed that there has been gross profiteering in the manufacture and sale of these materials, will my right hon. and learned Friend publish in the OFFICIAL REPORT the profit margins and prices which are allowed?

    The profit margins and prices vary. The margins have not, in general, been increased at all. Increases are due, as I have said, to increases in costs of raw materials and, generally speaking, before any increase is permitted there is an accountant's investigation into the costs of production. One was carried out into the cost of children's underwear and nightwear and another is being undertaken in regard to certain kinds of children's outerwear.

    Will the right hon. and learned Gentleman agree that this rise in price is mainly due to the devaluation policy of the Government and other foolishness they have permitted in the past?

    Electrical Generating Equipment (Exports)

    26.

    asked the President of the Board of Trade whether he will reconsider export policy relating to electrical generating equipment for use independent of mains current, in view of mounting demand for such equipment in the United Kingdom.

    It is not possible to say what proportion of this generating equipment may have been suitable for mains supplies to small communities, but the value of exports of all electrical generating equipment for the first four months of this year has fallen below last year's figures by more than £1 million. It has not hitherto been thought necessary to restrict these exports which are of great importance to us, but I am looking at the whole position again in the light of current production demands as well as export needs.

    Does the right hon. and learned Gentleman realise the possibility of serious power cuts next winter, in view of the rising production and increased shifts in operation in factories? Would it not be advisable to recognise that every standby plant put into a factory is a direct contribution towards our power requirements?

    It is because I realise those circumstances that I am having the matter looked at afresh. I also realise the great importance of keeping up our export trade, especially in those goods in which we have a traditional trade to maintain.

    27.

    asked the President of the Board of Trade the value of electrical generating equipment, for use independently of mains current, that was exported to the Union of Soviet Socialist Republics during the 16 months ended 30th April, 1951; the value of electrical generating equipment for mains current exported to the Union of Soviet Socialist Republics in the same period; and whether there are any other classes of equipment contributing to the aggregate export value, including spares, of £6,467,844 during the 16 months ended 30th April, 1951.

    As I said in reply to the hon. Member's previous Question, it is not possible to say what proportion of this generating equipment may have been suitable for mains supplies to small communities, but of the total value of exports of generating equipment in the 16 months ended 30th April, 1951, of £6,467,844, £5,516,583 were accounted for by exports of diesel generating sets of a capacity less than 200 kw and although exact figures are not available, the majority of these sets are known to have been of 50 kw capacity.

    Does the right hon. and learned Gentleman really believe that £5,500,000 worth of small generators could have been used by Soviet Russia in connection with the felling of trees?

    The hon. Member perhaps does not realise that the total exports of this generating equipment are estimated to amount to a total capacity equal to about two-thirds of the output of the Brighton Power Station.

    28.

    asked the President of the Board of Trade whether any electrical generating equipment has been exported to China since the summer of 1950.

    United Kingdom exports of generating sets and generators (including parts) to China during the third and fourth quarters of 1950 and the first quarter of 1951 were valued at £17,470, £450 and £12,670, respectively. In April, 1951, the latest month for which figures are available, exports under this heading were £1,410.

    In view of the negligible amounts which have been exported direct to China, and the fact that exports to Russia last year were nearly double those of the previous year, it is not conceivable that a large part of the exports direct to Russia have been re-exported by Russia to China?

    I am glad to hear the hon. Member say that the exports to China were negligible. I see no reason to suspect that exports to Russia, which were not large in total generating capacity, as I have pointed out, have been sent to China. These exports were provided for the most part under the war-time civil supplies agreement.

    All-Night Cafes

    29.

    asked the Secretary of State for the Home Department whether his attention has been drawn to the suggestion of the Deputy-Chairman of London Sessions that all-night cafes should be closed in view of their connection with juvenile delinquency; and what action he proposes to take.

    Yes, Sir. The courts have certain powers to deal with undesirable premises of this sort under the Refreshment Houses Act, 1860, as amended by Section 26 of the Licensing Act, 1949. I have no reason to think that any amendment of the law in this respect is necessary at present.

    Would it not be possible, in co-operation with the Ministry of Food, to ensure that these all-night cafes operate only where they serve the needs of bona fide night workers, and where they do not attract undesirable night prowlers, many of whom are youngsters who finish up in court for one reason or another?

    May we have an assurance from the right hon. Gentleman that all night cafes nearer at hand will not be interfered with?

    Civil Defence

    Training

    32.

    asked the Secretary of State for the Home Department if he will make a statement as to what arrangements are being made for sectional and operational training for Civil Defence volunteers following their basic training; and what efforts are being made to maintain the interest and efficiency of all concerned.

    After basic training volunteers will have section training. The syllabus for this is in Training Memorandum No. 5 which was issued to local authorities on 8th May. During and after this training there will be practical exercises ranging from separate sectional exercises to those involving all sections of the local division and, where practicable, of adjoining divisions as well as Army units. In this way it is hoped to maintain the interest and efficiency of members of the corps.

    Will these practical exercises, which, I am sure, will do a lot to revive waning interest in Civil Defence, be started this summer?

    There have been some already, but in most local divisions it has not been possible to have them because there have not previously been enough men and women who have had their basic training.

    Us Atomic Tests

    35.

    asked the Secretary of State for the Home Department if he will approach the United States authorities to ensure that the results of tests being made at Eniwetok to ascertain the effects of atomic blast on structures and materials of various kinds will be made available to the civil defence authorities in this country.

    I do not think it is necessary to make a specific approach on this matter. I am confident that the close relations which have always existed between those concerned with Civil Defence in the United States and this country will ensure that the practical lessons to be derived from these tests in so far as they concern measures of Civil Defence will be made available to us.

    May I assume from that reply that the information will be available? If so, will it be made available to the Members of the House for the purpose of study?

    I should like to consider the second part of that question. As to the first part, the practical lessons will be made available.

    Fire Services (Organisation)

    40.

    asked the Secretary of State for the Home Department whether he will give an assurance that the existing organisation of the fire services is adequate for dealing with fires caused by enemy air attack.

    Emergency fire fighting arrangements must provide for the establishment of large reserves of fire service appliances and men and women near areas likely to be heavily attacked. Discussions have taken place with the local authority associations, in England and Wales and in Scotland, as to how these fire fighting reserves can be organised and on the arrangements to be made for dealing with the serious fires that might be expected to follow a heavy enemy attack. It has been decided that, to organise these reserves satisfactorily and to ensure that best use is made of fire fighting resources in the conditions likely to follow an air attack, there is no satisfactory alternative to the unified and central control of a nationalised service. The plans for this purpose will be worked out in consultation with the local authority associations. I should add that this conclusion relates solely to an organisation for war and that, while no pledge can be given which would bind any future Government or Parliament, the view of the present Government is that, if it should become necessary to put the fire service under national control for any future emergency, it should revert to local government control when normal conditions are re-established.

    Will the proposals which my hon. Friend has outlined involve legislation, and will the associations of local government authorities be accorded the closest possible consultation in the matter?

    Police Duties, Battersea

    33.

    asked the Secretary of State for the Home Department how many police are now stationed in the area adjacent to the Battersea Pleasure Gar dens and Fun Fair; and how many were stationed there before these were opened.

    Before the Gardens and Fun Fair opened the effective strengths of the stations directly concerned were 427 inspectors, sergeants and constables. These are now supplemented by temporary daily aid from other stations amounting to 171 inspectors, sergeants and constables.

    Does this mean that these are withdrawn from service in the remainder of the Metropolis or are they additional?

    Prisons

    Letters To Members

    34.

    asked the Secretary of State for the Home Department whether he will make a statement on the new rule introduced by the Prison Commission which prevents prisoners in British jails writing to their Members of Parliament, without first going to their prison governors.

    I would refer the hon. Member to the reply which I gave to the hon. Member for Orpington (Sir W. Smithers) on 31st May.

    Prisoners (Marriage)

    39.

    asked the Secretary of State for the Home Department if he will amend the appropriate regulations or instructions so as to authorise prison governors to permit the marriage during imprisonment of prisoners who are the fathers of babies about to be born to unmarried mothers.

    Parliament has recently authorised the Secretary of State to make rules which may provide for the temporary release of prisoners and when these rules are being drafted consideration will be given inter alia to the suggestion made by the hon. Member.

    Why is it that within the last few weeks this permission has been refused, resulting in great hardship to the mother concerned and future inconvenience to the child?

    Television Sets (Safety Precautions)

    37.

    asked the Secretary of State for the Home Department whether he will make regulations to avoid or minimise the danger of electrocution in the use of television sets.

    I have no power to make regulations to guard against this risk, which I am advised, is no greater in television sets than in many other electrical appliances used in the home. The recent distressing accident was due to an unusual combination of circumstances, and it is the only case on record in recent years of death occurring through a person touching the outside of a television or wireless set. I am, however, consulting the trade association to see whether the present safety precautions ought to be revised.

    Is my right hon. Friend aware that it cannot cost more than 6d. properly to insulate television and wireless sets? If the radio manufacturers will not provide an elementary precaution, is it not possible and desirable, as we have safety regulations for a thousand and one other things, to have one more for television and wireless sets and to arrange for the introduction by the appropriate Government Department of the necessary regulation?

    I am advised that that would require legislation. I have been very carefully into this matter and I am assured that this is the first case of its kind which has occurred for a long time.

    Children (Adoption)

    38.

    asked the Secretary of State for the Home Department if his attention has been drawn to the anomaly arising from the Adoption Act, 1950, whereby a child may suffer over long periods unless the adopters of the child notify their intention to adopt to the local authority, which they are under no obligation to do unless they are in receipt of reward for the adoption; and what steps he is taking to rectify the position.

    It would not, in my view, be reasonable or practicable to require notification of every case in which a child is placed away from home otherwise than for reward.

    While I have some sympathy with the views which the right hon. Gentleman has just expressed, may I ask if he will get in touch with the authorities concerned to see whether there is some way of overcoming some of the difficulties which have been noticed arising out of this matter?

    This is a matter to which I am giving my attention, but to give an affirmative general answer to the hon. and gallant Member's Question would be wrong.

    London Taxicab Fares (Increase)

    42.

    asked the Secretary of State for the Home Department what were the considerations which caused him to include in his Order increasing taxicab fares in London, the provision under which an extra charge of 6d. is payable for the second passenger in a taxicab.

    I would refer the hon. Member to the reply which I gave to a Question by the hon. and gallant Member for Wembley, North (Wing Commander Bullus) on 31st May.

    But is the right hon. Gentleman satisfied that this increase, which bears no relation to the operational cost of the cab, has not put the total charge for a moderate length journey at so high a level that there is grave anxiety about whether the market is wholly ruined? Will the right hon. Gentleman reconsider the whole of these figures in the light of his consideration?

    No, Sir. This particular increase was pressed on me by both sides of the trade, by the owners and by the drivers, and in the light of the Report of Sir Alan Rae Smith on the financial position in the trade I think that this is justified.

    Did the right hon. Gentleman take into consideration the possibility of reducing the cost by running smaller taxis suitable for a maximum of two people?

    Fires (Private Houses)

    43.

    asked the Secretary of State for the Home Department if his attention has been drawn to the number of fires which have caused deaths in private dwellings in recent months; and if he will have inquiries made in the main causes of these outbreaks, with a view to considering whether a new type of safety regulation is needed to lessen the dangers of fire in private dwellings.

    I am not aware of any significant increase in the number of such fires recently; the main causes of fires in private dwellings are well established, they are—open grates, electrical apparatus, smoking, in that order. It is my hope that the publicity measures which my right hon. Friend the Secretary of State for Scotland and my right hon. Friend the Home Secretary have been taking will reduce the number of deaths from this cause. I do not think that the subject can readily be dealt with by regulations, but if the hon. and gallant Member has any suggestions to make I shall be very glad to consider them.

    Entertainments Industry (Employment Of Children)

    44.

    asked the Secretary of State for the Home Department to make a statement as to the action which His Majesty's Government intend to take as the result of the report of the Departmental Committee on the employment of children in the entertainments industry.

    Not yet, Sir, except that I have now received and am considering the comments of the organisations principally concerned.

    In view of the fact that on 19th October last the right hon. Gentleman, in reply to a Question, said that he was considering this matter, can he say when he will be able to announce a firm decision?

    No, Sir. I cannot, because, as may be expected, the views of the organisations are in many respects contradictory.

    Empire Day (Recognition)

    45.

    asked the Prime Minister what official recognition is given to Empire Day.

    Empire Day is officially observed in this country by the flying of flags on Government buildings and His Majesty's ships in port are dressed overall. It is also usually marked by celebrations organised by non-official bodies in which members of the Royal Family and of the Government take part.

    In view of the very inadequate celebration of Empire Day in this country a fortnight ago today; in view of the fact that practically everywhere else in the Commonwealth it was a national holiday, and also in view of the fact that this small, vulnerable island may have to depend on the Empire more in the future than ever before, will the Prime Minister give some thought to a better celebration of Empire Day in future by, for instance, ordering a whole holiday for schools; by endeavouring to arrange for Dominion Prime Ministers to give Empire Day broadcasts in turn, and even by moving the Adjournment of this House after Questions on that day?

    The hon. and gallant Gentleman is not correct in his facts. Empire Day is not an official holiday in the United Kingdom. It is a holiday in Canada, under the name of Victoria Day, and it is in South Africa, but not elsewhere in the Commonwealth; although in most Colonies Empire Day is regarded as a public holiday.

    May I suggest to the Prime Minister that it should be an official holiday in the Mother country? It is the one day which should be an official holiday.

    Would the Prime Minister adopt a scheme which was operated when I was a boy and there was a Conservative Government, whereby we were taken into a field behind the school and allowed to scramble for a few sweets on Empire Day?

    British Overseas Airways Corporation

    46.

    asked the Prime Minister whether he will appoint a Royal Commission to inquire into British Overseas Airways Corporation.

    No, Sir. I am not prepared to recommend to His Majesty the appointment of a Royal Commission.

    Is the Prime Minister aware that on 25th October last the Foreign Secretary announced to the House that agreement had been reached between the Government and the chairman of all these public corporations for a periodical review every seven years? In view of that agreement and the fact that this Corporation has been under public control for nearly 12 years without any inquiry, and has lost a large amount of public money, will not he reconsider his refusal and hold an inquiry?

    A thorough overhaul of the organisation and methods of the Corporation, in which outside consultants have participated, has only recently been concluded, and it is thought that a further inquiry at present would have an unsettling effect throughout the organisation. As the hon. Member knows the deficits are steadily being reduced.

    Agriculture

    Farmers (Gypsies' Assistance)

    49.

    asked the Minister of Agriculture if he is aware that this year farmers will be deprived of the customary help of many gypsies who for the first time will remain on their winter camping sites because of the developing practice of preventing those who leave from returning to them when harvesting is over; and what action he proposes to take to ensure that the necessary labour will be available.

    I am not aware that gypsies who are accustomed to engage in agricultural work over the harvesting season are being prevented from doing so this year. Reports from C.A.E.C. generally are that many gypsies have already come forward for agricultural work this year.

    Will my right hon. Friend consult with the Minister of Local Government and Planning, whose officials during recent weeks heard quite a lot about this problem, and endeavour to find a satisfactory solution to one of the unsatisfactory aspects of the British way of life?

    If my hon. Friend can be at all helpful in securing that gypsies and seasonal workers can be made available we shall be glad to consider the matter.

    Subsidence Damage

    52.

    asked the Minister of Agriculture whether he is yet in a position to make a statement in regard to the steps he proposes to take to enable farmers to bring back into production land, especially in County Durham, which has gone out of use due to coalmining subsidence damage.

    I would refer my hon. Friend to my reply to him on 22nd February and that of my right hon. Friend the Minister of Fuel and Power on 4th June.

    The answer given on 22nd February was not to that effect. If my right hon. Friend will look it up he will find that the reply was that he was giving consideration to the matter but was not yet able to make a statement.

    Yes, that is certainly true but any Questions relating to the Turner Report recommendations will have to be addressed to the Minister of Fuel and Power.

    Home-Grown Wool (Price)

    53.

    asked the Minister of Agriculture how the price of 6s. per lb. for home-grown wool has been arrived at.

    I would refer my hon. Friend to the recently published White Paper (Cmd 8239) for an exposition of the factors which governed the fixing at the recent Price Review of the prices for wool and other commodities covered by Part 1 of the Agriculture Act, 1947.

    Is it a fact that the farmers had accepted a price of 2s. 6d. per lb. for home-grown wool and that when, at the public auction sales, wool began to fetch 9s. and 10s. per lb. on the world markets the farmers at home were given 6s. to keep them quiet?

    No, Sir, I disagree with the last point of my hon. Friend. The guaranteed price was arranged at the February Review and it was agreed that any surplus secured from the auctions of the wool would be put on one side in a suspense account, but would belong to the actual producers of that wool, even though they could not have it distributed for four or five years.

    Gin Traps

    57.

    asked the Minister of Agriculture what information he has received from the county agricultural committees or other sources regarding the number of animals or birds found injured though alive as a result of the use of gin traps.

    But is not the right hon. Gentleman conscious that there is general abhorrence at the use of these gin traps? Is he not willing to find an alternative method?

    Ordnance Survey Maps (Reproduction)

    55.

    asked the Minister of Agriculture what is the present basis of charging reproduction fees for ordnance survey maps; and whether any reductions are made for technical and specialised journals where the accuracy of any map is of particular importance.

    The normal basis for determining the copyright fees for reproductions made from ordnance survey maps is set out in leaflet O.S.23 entitled "Regulations Governing the Reproduction of Ordnance Survey Maps." I am sending a copy to the hon. Member. Applications for permission to reproduce ordnance survey maps in technical and specialised publications are considered on their merits, and reduced fees are charged whenever this appears to be in the public interest.

    Coracle Fishing, River Teifi

    56.

    asked the Minister of Agriculture whether he has yet received from the West Wales River Board any recommendations on the question of coracle fishing licences on the River Teifi.

    I have received no recommendations from the South-West Wales River Board on the question of coracle fishing on the River Teifi, but I am informed that they have arranged for a comprehensive review of the position.

    Manchester Dock Strike (Resumption Of Work)

    (by Private Notice) asked the Minister of Labour if he has any statement to make about the strike at Manchester Docks.

    I am glad to say that the men resumed work this morning and that the Port of Manchester will thus be able to function again. This strike has achieved no useful purpose, but the men and their families have suffered serious loss and hardship. The community has also, of course, suffered heavily.

    In the circumstances, I have given instructions for all the facts to be assembled and a close study made of them. It seems to me important to establish how it came about that the men were induced, against the advice of their union, to take strike action in breach of agreement for declared objects which were not only impossible of achievement but were detrimental to their interests and to the interests of dock workers as a whole.

    When this inquiry has taken place, will my right hon. Friend publish the result in the form of a report?

    Is not the cause of this dispute perfectly clear to the right hon. Gentleman? Why does he not take the action against the unofficial leaders which was recommended by the Leggett Committee?

    It seems to me that the action I have already decided to take is the appropriate one in the circumstances.

    London Docks (Ships' Clerks' Strike)

    (by Private Notice) asked the Minister of Labour if he has any statement to make on the strike of tally clerks in the London Docks.

    The unofficial strike of ships' clerks which began on 4th June has spread this morning to include 1,400 men, 48 still being at work. The strike-is not supported by the dockers and stevedores, but it has rendered idle some 8,000 who were available for work this morning. The stoppage is in protest against the recruitment by the London Dock Labour Board of 80 additional clerks as part of the general addition of 1,500 men to the London Dock Workers' Register.

    Efforts are being made by the two unions concerned in an endeavour to obtain an immediate resumption of work and allow any questions arising to be further considered through the appropriate machinery.

    Can the right hon. Gentleman say how far essential goods, such as food supplies, are jeopardised by this strike? Secondly, can he say what action is being taken, preferably through the trade union movement, to bring home to those who are concerned with work in the docks the immense damage which is done to the national effort, not merely by delay in delivering certain cargoes, but by the immobilisation of large quantities of shipping and their withdrawal from the sea lanes?

    The position with regard to food in the port is not one for serious concern at the moment, but, of course, it could soon be so. I am keeping that matter under constant review. With regard to the knowledge of the men of the effect on the national economy of these disputes, I believe that is very well known. I am most anxious that we should always deal with these disputes through the machinery which has been set up and which is perfectly adequate. Those people who are not prepared to use the existing machinery are doing themselves and the nation a great disservice.

    Has the right hon. Gentleman any information about the number of ships affected today?

    Yes, Sir. There are 79 ships idle, 11 are undermanned and 61 are fully manned.

    Do not these constantly recurring strikes and troubles in the docks show that there is something basically wrong in the dockers' existing system of agreements?

    No, Sir. I should not say that there was anything basically wrong with the present agreements. What is wrong is in the carrying out of those agreements.

    Field Marshal Smuts (Memorial)

    With your permission, Mr. Deputy-Speaker, I desire to make a statement.

    I am satisfied, by representations which have been made to me by the right hon. Gentleman the Leader of the Opposition and the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies), and by other views which have been expressed, that there is a general desire that a suitable memorial to Field Marshal Smuts should be erected in this country.

    His Majesty's Government are in agreement with this view. Field Marshal Smuts held a unique position in the Commonwealth for some 30 years and his services, as statesman, soldier and thinker, to the whole Commonwealth, were altogether outstanding.

    The Government would therefore propose that a statue should be erected at public expense on a suitable site in Westminster. A resolution will be brought before Parliament in due course.

    I would propose to invite representatives of Opposition parties to join in consultation regarding the choice of a sculptor and other details which have yet to be decided.

    I trust that the House, and indeed the whole country, will agree that it is right that we should mark our admiration for this great leader of the Commonwealth in this manner.

    I may also perhaps be allowed to add that an appeal is to be issued tomorrow for private contributions to a fund intended to commemorate Field Marshal Smuts's part in the development of the conception of the Commonwealth and his devotion to the university of which he was Chancellor, by the endowment of Commonwealth studies at Cambridge.

    I am very glad indeed to have the opportunity of offering the Prime Minister our cordial support for the proposal which he has just made. It was a matter which required careful consideration. One has to have a just sense of proportion in all these matters and, of course, one cannot judge the proportion of the individual except in relation to the background of world affairs, all of which has to be considered in its entirety. The first 50 years of the 20th century have been among the most terrible that the human race has ever lived through, with two frightful world wars and immense disturbance and destruction of human life. On the other hand, they have contained the greatest promise for the future in the advance of science, knowledge and the broadening assembly of peoples in every way.

    All that hangs in the balance now. No one can judge. Posterity alone can judge whether this has been a great age or one which preceded some vast disaster. But no one can, I think, doubt that on our present knowledge and view of the proportions of these matters, Jan Smuts played a great part and was a noble and outstanding figure in his faithful and courageous support of his own countrymen when they seemed to be opposed by overwhelming forces, and in his response to magnanimity which carried us forward along the road, and in all the work which he did and the play of his thoughts upon the movements of nations and peoples. In every way he seemed to be one of the most enlightened, courageous and noble minded men that we have known in these the first 50 years of the 20th century in which he played so prominent a part.

    I am grateful that the Prime Minister should have taken this action. I am sure he will gather the full support of the House of Commons for what is done, and that this national tribute will be well supported and sustained by the arrangements which are being made to have a private subscription opened for a system of Commonwealth scholarships at Cambridge University, of which Jan Smuts was an undergraduate and a graduate, and of which, when he died, he was Chancellor.

    May I be allowed, first of all, on behalf of my colleagues, to express our full concurrence with the proposal put forward by the Prime Minister? May I also express my high appreciation of the parts which have been played in this matter by the Prime Minister and the Leader of the Opposition?

    It may be that there is no precedent for this proposal, but that should not weigh with us at all, for there was no precedent either for Jan Smuts. His life, his work, his recorded words and his deeds are now part of history. It is right that future generations, here in London, should see in the form of a statue the man whom we were privileged to know, and to see again the strong features, the perfectly shaped head and the virile bearing of this man, who was an inspiration to his fellow men throughout the whole of his long and varied career.

    It is right that this statue should be provided by Parliament, not merely on behalf of Parliament and on behalf of the British people, but also on behalf of the peoples of the British Commonwealth. As General Smuts was a member of the War Cabinet in both the Great Wars, the proper place for it is in Parliament Square. Very rightly, it is also proposed to honour him at Cambridge. Her brilliant scholar of the early 90's, became, about 50 years later, her Chancellor. I hope that the response to the appeal that will be made from and on behalf of Cambridge will meet with the ready and generous response of the whole nation.

    Festival Gardens, Ltd (Report)

    With your permission, Mr. Speaker, and that of the House, I would like to take this first opportunity of removing any misunderstanding which may have arisen: from my answers yesterday to supplementary questions regarding the publication of reports on Festival Gardens. Ltd.

    I would confirm that, as I then stated, the promised White Paper will contain the actual reports put in to Festival Gardens, Ltd., by Messrs. Moores, Carson and Watson and Messrs. Peat, Marwick and Mitchell, the two firms of chartered accountants concerned. I must, however, make it clear that, in both these cases, earlier interim versions were submitted in great haste more than a month ago, and these earlier versions, which have in both cases been superseded by the later versions, will not appear in the White Paper.

    The revised report of Messrs. Moores, Carson and Watson summarises their findings and conclusions, but omits certain facts and figures, publication of which at this stage would, I am advised, prejudice a satisfactory business settlement of outstanding claims against Festival Gardens, Ltd. Neither the Company nor I have edited, or will in any way edit or expurgate, the reports as they have finally been submitted by the independent chartered accountants themselves.

    I think perhaps I ought to say that we had no warning at all of what the right hon. Gentleman has just told us, and that it was not very easy to follow, offhand. I think we shall have to consider the position and examine the statement.

    Can the right hon. Gentleman assure us that the omissions in the two reports which he is to submit to the House result from a quite independent decision of the accountants, and were not inspired or suggested by the Government?

    I am very glad to have the opportunity of reaffirming what I said yesterday, and what I have said all along. I have nothing whatever to conceal, and I should be very glad indeed if the preliminary reports could be published as well. They were made in haste, because I wanted to get on and make changes. Subsequently, they were found to contain inaccuracies and certain facts and figures, which, if published, I am advised, would prejudice the negotiations between the company and the contractors. I can assure the right hon. Gentleman that we have nothing whatever to hide. I did ask that the papers should be sent to the right hon. Gentleman this morning, but they may have gone to the right hon. Gentleman who asked the supplementary questions yesterday.

    Will all the facts and figures omitted in these publications be subsequently published?

    That just depends whether the House wishes it. I should not stand in the way.

    Business Of The House

    Yes, Sir. The business for next week will be as follows:

    MONDAY, 11TH JUNE—Committee and remaining stages of the Telegraph Bill; and Committee stage of the Finance Bill.

    TUESDAY, 12TH JUNE—Third Reading of the Coal Industry Bill; and Committee stage of the Finance Bill.

    WEDNESDAY, 13TH JUNE—Completion of the Committee stage of the Finance Bill.

    THURSDAY, 14TH JUNE—Second Reading of the Forestry Bill (Lords); Committee stage of Sir William Turner's Hospital at Kirkleatham Bill; and Motion to approve the Draft National Health Service (Superannuation) (Amendment) Regulations, and similar Regulations for Scotland.

    FRIDAY, 15TH JUNE—Consideration of Private Members' Motions.

    May I ask the right hon. Gentleman about the business which precedes the Committee stage of the Finance Bill on Monday and Tuesday? I take it that it is anticipated that it will not take a very long time; indeed, if it were otherwise, it would obviously interfere with the arrangements. As regards the general time-table on the Finance Bill, I am quite sure that the right hon. Gentleman will understand that he has read out the Government's intentions but that it could not be considered to be an agreed time-table, so far as we are concerned on this side of the House.

    Regarding the first point raised by the right hon. Gentleman, I understand that conversations have taken place through the usual channels, and it is felt that the business which is placed first for Monday and Tuesday will not take very long. I would point out, with regard to the second point made by the right hon. Gentleman, that actually this year we are allocating to the Committee stage of the Finance Bill one day more than last year. Last year, there were five days; this year, we have allocated six.

    May I ask the Leader of the House if he will be good enough to bear in mind, in arranging business, that we shall certainly require, after the Finance Bill is disposed of, an opportunity to discuss the question of the new rifle, which hitherto has been dealt with only by Question and Answer and which raises very far-reaching issues as to our becoming committed to a weapon in which we shall be separated from some of our Dominions, as well as from the United States, and probably some European countries. Will he bear in mind that that is a matter on which full opportunity should be given for a careful and serious debate by the House of Commons?

    Yes, Sir, but I should have thought that a matter which would probably come within the ambit of a Supply Day.

    May I ask the Leader of the House whether his attention has been drawn to a Motion standing in the names of some of my hon. Friends and myself relating to the banishment of Tshekedi Khama, and asking that the Order should be rescinded, or, at any rate, that there should be an impartial inquiry? May I ask, as this is a very important matter of principle and as it is a matter which interests hon. Members in every part of the House, whether in the near future time can be afforded for this matter to be debated by the House?

    May I ask the Leader of the House whether time will be afforded for a debate on a Motion which stands in my name relating to the proposed increases in prices of admission by the Football League, and the banning of broadcasts of matches, to the detriment of old age pensioners, the blind, the sick and the community generally?

    No, Sir. I can hold out no hope that I can find time for that. In fact, I cannot find any single one of my colleagues who is willing to accept responsibility.

    May I ask the Leader of the House whether he will find time to have some discussion on the two Motions relating to the postponement of the projected summer train services, which is a matter of considerable concern and worry to all seaside resorts at the present moment, and will be of vital importance during the next few weeks?

    [ That this House notes with concern the failure of British Railways to implement their promise to begin a summer train service on 18th June; deplores the consequent inconvenience caused to holiday resorts and the public and the waste of money in advertising services which are not forthcoming, and calls upon His Majesty's Government to institute an immediate inquiry into the causes of this failure and the administration of British Railways.]

    [ That this House views with concern the postponement of the projected summer train service, and requests His Majesty's Government, in view of the importance of holidays to all sections of the community, to do everything possible to ensure an adequate service to holiday resorts at the earliest moment.]

    Arising out of the reply of my right hon. Friend the Leader of the House, is he not aware of the widespread concern throughout the country relating to this matter? Is he not further aware that the Minister of Local Government and Planning, who is responsible for the welfare of the aged in homes and of the blind, could adequately reply on a matter of such widespread importance?

    No, Sir. I am bound to say that I do not think it could be held that he was responsible for the Football League.

    Can the right hon. Gentleman say when the Government expect to publish a White Paper on the Beveridge Report, and whether he anticipates finding time before the Summer Recess for a debate on that matter?

    The question of a White Paper is under active consideration, and when it is tabled I think there will be time to consider the second part of the hon. Gentleman's question.

    Can my right hon. Friend say whether, in view of the all-night Sitting, it is possible to arrange for such an all-night Sitting to be held on a Wednesday night instead of on a Thursday night?

    Wednesday of this week having passed, it is not a matter of immediate concern, but in this respect I am exceedingly anxious to consult the general convenience of the House. I should be perfectly willing to enter into discussions as to which was the appropriate night if and when an all-night Sitting appeared to be inevitable.

    In view of the raw material shortage, can the right hon. Gentleman say whether the House is to be given any information of the result of the visit of the Lord Privy Seal to Washington?

    Yes, Sir. When we have disposed of the Finance Bill, a Bill to put my right hon. Friend the Lord Privy Seal in the position of accepting the new responsibilities that have been placed on him will be introduced, and I understand that on that occasion my right hon. Friend hopes to make a statement of the kind indicated by the right hon. Gentleman.

    On the previous question of the all-night Sitting, would the right hon. Gentleman bear in mind that last night he moved to report Progress at a time when it was quite possible for the House to have done another couple of hours of business, and that a combination of Motions to report Progress at an early hour coupled with all-night Sittings and accentuated by unfair use of the Closure, as proposed by the Minister, is likely to prejudice the full discussion which the Finance Bill requires, and which it could well receive in a Session in which the Government are unable to propose any constructive legislation?

    As I have just said, I am anxious to consult the general convenience of the House. I know that it is extremely inconvenient to very large numbers of Members when the House rises anywhere between 12.30 a.m. and about 6.30 a.m. With regard to what the right hon. Gentleman said about the use of the Closure, I would remind him that the House is protected in its use by the fact that it has to be accepted by either Mr. Speaker or by the Chairman of Ways and Means.

    Naturally, I should defer to the decision of the Chairman or of Mr. Speaker on such a matter. Except by the regular procedure allowed by the House of putting a Motion on the Paper, the Closure is moved by the Government, and we are entitled to criticise their unfair use of it.

    For the guidance of the House, may I ask, Mr. Deputy-Speaker, in what circumstances under our rules it is ever possible to have an unfair use of the Closure?

    I want, if I may, to put two questions on business to my right hon. Friend. The first is with regard to the Report of the Royal Commission on Betting and Gambling which, as my right hon. Friend will be aware, has now been in the hands of the Government for some considerable time. Can my right hon. Friend give us some indication of when we are to discuss that Report, if only for the purpose of congratulating the bookmakers on the kill they made on Derby Day? My second question on business, which is a much more serious one, is this. My right hon. Friend will be aware that last night an announcement was made by the Board of Trade on the subject of utility clothing which will effectively debar a large number of working-class families from acquiring such clothing and will price them out of the market. Will my right hon. Friend note that a number of my hon. Friends and I will be seeking at an early date to have a full discussion on the price of utility clothing, particularly as far as working-class families are concerned?

    On the first of those two questions, my right hon. Friends and I are giving earnest consideration to the Report of the Royal Commission on Betting and Gambling, and we hope to be able to make a statement regarding our views on it. We accept the recommendation of the Royal Commission that this matter should be legislated for as a whole and not piecemeal. I have noted my hon. Friend's remarks with regard to his second question.

    Division No 86 (Incident)

    I have now, as I undertook to do, inquired into what happened in the Ayes Lobby in the last Division last night. I find that the hon. Member for Aberdeenshire, East (Mr. Boothby) was writing a letter in the Ayes Lobby when that Division was called. When he tried, first of all, to make his way out by the Tellers' end, he found the Division Clerks in their places and the doors locked. When he began to make his way out to the other end, some Members began jokingly to bar his way, The great pressure of Members pressing down the Lobby towards the Tellers soon barred his way entirely, and so it became impossible either for him to make his way out or for the Members who attempted to help him to do so.

    Fortunately, good humour prevailed, especially in the conduct of the hon. Member himself, and no worse incident occurred; but the obstruction caused to the hon. Member was unparliamentary, and he was improperly prevented from reaching the Lobby in which he wished to vote. I have therefore directed that the numbers be corrected in the Journal and that the vote of the hon. Member for Aberdeenshire, East, be added to the Noes, making the result of the Division, Ayes, 293; Noes, 281.

    I also have made some inquiries into the matter, and I ask the House to accept the report that you have made to us, Mr. Deputy-Speaker. I should like to say, on behalf of my hon. Friends who were nearest to the hon. Member for Aberdeenshire, East (Mr. Boothby), and even those who were nearer than I was, that they recognised that what started in perfect good humour as a joke went, as jokes are apt to do, rather too far, and they desire me to express to the hon. Member their regret at the fact that that happened and to apologise to the House for something that was not in accordance with the seemly conduct of our affairs. I hope that the hon. Member for Aberdeenshire, East, will accept that statement in the sincere spirit in which it is tendered.

    We naturally accept and support the report which you, Mr. Deputy-Speaker, have made upon this matter and I was very glad to hear the remarks which were made in such a becoming strain by the Leader of the House. From the information which has reached me, it appears that several Ministers of high standing and importance in the Government took an active part in those proceedings. I am not mentioning their names because of the terms of the remarks by the Leader of the House, but it does appear they did take a part and I trust we may assume they are included among those who have apologised to my hon. Friend the Member for Aberdeenshire, East for their unparliamentary and improper behaviour.

    I only want to refer in one sentence to what the Leader of the House has said and to say that the struggle in the Aye Lobby in the House last night, although conducted with vigour, was also conducted with good humour by both sides—although the sides were not very evenly balanced. I am quite sure that, on reflection, hon. Members on both sides of the House will realise this was in itself a very undesirable incident, which might have created a very dangerous precedent indeed, and that in the circumstances I could not possibly pass over the matter in silence.

    Bill Presented

    Telephone Bill

    "to make further provision for enabling the Postmaster-General to regulate the use of means of telephonic communication provided by him and the general conduct of telephonic business carried on under his control and to repeal sections seventeen and eighteen of the Telegraph Act, 1868," presented by Mr. Ness Edwards; supported by Mr. Jay and Mr. Hobson; read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 117.]

    Orders Of The Day

    Finance Bill

    Considered in Committee. [ Progress, 6th June.]

    [Colonel Sir CHARLES MACANDREW in the Chair]

    Clause 14—(Higher Rates Of Income Tax For 1950–51)

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

    4.5 p.m.

    Clause 14 establishes the rates of Surtax for the year 1950–51, and in view of some of the remarks that came from the other side of the Committee last night about Surtax, I think we ought to consider the question a little further. Of course, the fact that under this Clause a certain number of taxpayers will have to pay 19s. 6d. in the £ may not seem at all unwelcome to hon. Members opposite. They may say, "What does it matter one way or the other to a man with £15,000 a year whether he is allowed to keep an extra £100?"

    It is to the principle of the very high rates of Surtax that I object because, together with Clause 13, which we passed last night, we are taking one more step in the direction of the complete destruction of the financial incentives to those who can earn the highest income. I know that the bulk of the incomes in the highest Surtax class are not earned incomes; in fact they are investment incomes; but for the moment I am not concerned with those investment incomes, although I might mention that anybody who goes round the Festival of Britain will observe how many of the events and acts in our history to which attention is there drawn owe their origin to men who either inherited or accumulated substantial property. That struck me very much when I was going round the Festival.

    Be that as it may, what is really urgent is to think out afresh how we can reward, and so keep at full stretch, the best brains we have in this country, and even how we can dissuade some of their possessors from going overseas where taxation is lighter. The argument from the other side of the Committee last night can be summed up by this quotation from the speech of the hon. Member for Stoke-on-Trent, North (Mr. A. Edward Davies). He said:
    "I say that they"—
    he meant these higher rates of taxation—
    "do not discourage incentive amongst properly socially-minded people who wish to see this country emerge from its present difficulties …"—[OFFICIAL REPORT, 6th June, 1951; Vol. 488, c. 1123–4.]
    Of course, the words "properly socially-minded people" beg the question. According to the hon. Member for Stoke-on-Trent, North, a properly socially-minded person is precisely someone who does not want a financial incentive, so we do not get any further with that. It is humbug to pretend that there are, or that there ever will be, a very large section of people who will not pay attention to financial incentives. I want to be fan-to hon. Members opposite, but I do not think they are any more anxious than we are on this side of the Committee, when we have done a broadcast or written an article for a newspaper, to return the cheque to the B.B.C. or to Fleet Street. When we have done a bit of work, we all like to get paid for it. That is the situation in which one has to consider these highest rates of Surtax.

    The case with regard to them is often argued on much too narrow a basis. There is very much more in it than a difference of opinion between the two sides of this Committee as to what net income society ought to allow any man to keep for himself. Hilaire Belloc once wrote, and it struck me as very true, that what men really want is not money but their own way. A tax like this which takes 97½ per cent. of any man's earnings does much more than deprive him of £ s. d. It effectively prevents him from getting his own way in respect of part of his efforts. However much he puts into it, the natural consequences and rewards of his efforts are blotted out. To that man the tax is what we now laboriously call a disincentive, but I prefer Mr. Belloc's phrase—it prevents him from getting his own way.

    There are not many taxpayers who have the brains to earn more than £15,000 a year. They are very rare birds, and nowadays they are precisely the people who are in demand all the world over.

    Is the hon. Gentleman suggesting that technicians pay 19s. 6d. in the £?

    I am referring to those earning over £15,000 a year and who pay 19s. 6d. in the £ surtax. That is all I am discussing. In the Middle Ages the international figures were theologians, scholars and humanists, but today it is the scientists and the engineers for whose services kings and capital cities compete.

    The hon. Gentleman does not know how much is paid to the first-class technicians. They are paid more than £15,000 in some cases. The more complicated science becomes and the more desirable it is to lay out great projects—let us say under the Colombo Plan—the fewer are the people with the highest technical skill capable of carrying them out. One of my hon. Friends is in a very good position to tell hon. Members opposite what constructional engineers get in these days.

    The point which hon. Members opposite do not appreciate is that it is just this type of international technician who most powerfully raises the standard of life. What he and his like do has more effect in increasing production than can be achieved by any other handful of people. If he is frustrated because hon. Gentlemen opposite hate to see him keep more than 6d. in the £ of his earnings, in what conceivable way can the British people benefit? Is it really better to satisfy jealousy or to defeat poverty? That is the issue behind the highest rates of Surtax. We say it is better to prefer plenty than to prefer equality.

    This is an issue that we ought not to be frightened about merely because it seems very unpopular to protect the interests of a handful of men earning very high incomes. I say this quite sincerely because I am sure these people add to the prosperity and standard of life of this country. They being human themselves and there being international competition for their services, we are very foolish if, in pursuit of some theory of levelling down, we deliberately make it less attractive for them to exercise their abilities in the United Kingdom than in many other places in the industrial world.

    Although we are not going to vote against this Clause now, I must say that I look forward to the day when substantial alterations in the Surtax rates will be carried through, and that in the true interests of every section of the British people.

    The hon. Member for Chippenham (Mr. Eccles) is to be congratulated upon having made a very frank, candid and honest speech. I agree with him absolutely that if the view which he expressed commends itself to a politician or to a party, to use his own phrase, he ought not to be afraid of it. Indeed, so far from being afraid of it, people who hold that view ought to advertise it, because there are so few people among the ordinary folk in offices, streets, public houses, mines, workshops and factories who share that view. If the hon. Member is ever to get his way, he will have to advertise his view on a big scale, and I hope he will not take it amiss if I offer him a little advice on how to do it.

    In view of what the hon. Gentleman said, I am sure he will use all his influence with his friends to see to it that when the Conservative Party make up their election programme for the election which they would like to have as soon as possible, they will give pride of place to this suggestion which he has made: let us begin to fight for social justice by doing something for the poor, unfortunate, frustrated people who earn more than £15,000 a year. It would be an excellent way for the Conservative Party to present a programme at the election when it comes, and I am sure it will do us on this side of the Committee a great deal of good by showing exactly where are the interests of those who would like to see this Government replaced by another.

    4.15 p.m.

    I do not know whether the hon. Gentleman is right or wrong in his view that people who are at the top of the tree in those professions to which he referred, whose capacities are of the first order and are fully employed and are, indeed, the subject of international competition, will really sulk in their tents like Achilles unless they get this further £100 that the hon. Member is so anxious about. I suspect he is mistaken in that view and that the people whom he has in mind, such as the scientists and the technicians, do not feel so frustrated or disappointed as he thinks they do.

    Nor, if I may repeat the interruption, is it in the main the scientists, engineers and technicians who get these salaries. However, I do not want to quarrel with the hon. Member about that. He made his plea on their behalf and not on behalf of the crooks and entrepreneurs who form the bulk of the people whose earnings are in the class that he was talking about. He was not speaking for them. He was speaking of the technicians and the scientists, and I am saying that he is wholly mistaken in thinking that of those scientists and technicians there are very many who would sulk unless they got these extra few pounds. I agree that their emoluments are pretty high. Their capacities are fully occupied and they are happy in what they are doing. They feel they are rendering some service to the community, and I do not think that they will thank the hon. Member for the kind of things he said in their name this afternoon.

    If the hon. Member had his way, the revenue would be reduced accordingly. I should like to know whether he is suggesting that it should be reduced by that amount or that the amount we should lose by making these concessions to those earning £15,000 and above annually should be made up by greater taxation on those who earn less.

    My argument was that production and wealth would increase if the incentives to those in the highest earning classes were increased. Therefore, if the revenue loses a certain amount directly by reducing this tax on them, the revenue would more than gain it by the increased tax obtained from the wealth produced.

    I think the hon. Gentleman, in his enthusiasm for his case, does what many of us are inclined to do—I am sure I do it myself from time to time—and that is to prove far more than he intends to prove. What he is saying is that if a man earning £15,000 a year or more could only be saved from all this tax, he would work so much harder that production would be increased and everybody would benefit. Is it an argument which is limited to a man who is earning £15,000 or more? [HON. MEMBERS: "NO."] No, not at all; I thought the hon. Member would say so. If a man is earning only £10,000, would he not equally be stimulated to greater productivity by Income Tax concessions? Or if he were earning only £5,000 or £3,000 or £2,000 or £500—at what annual salary does the incentive cease to work?

    The incentive ceases to work when the tax takes away such a high proportion of every pound earned that it is literally not worth doing the work. The hon. Gentleman must know that if, for one reason or another, a man has an income of over £10,000 a year there is no attraction for him to go on to the board of a company where the fees, quite rightly, are not more than £400 a year—and yet his advice might be extremely useful to that company. Does that effect of the level of taxation commend itself to the hon. Member?

    The hon. Gentleman says that everybody would be greatly relieved if their taxation were less. He need not be at such great pains about it; we all agree with him; but what the Committee are considering this afternoon, and what concerns the Chancellor, is how to raise a certain amount of money. The hon. Gentleman has put forward the answer that if only the Chancellor would relieve the man who pays the highest rate of Income Tax and Surtax from part of the taxation, there would somehow or other, as a result, be greater revenue.

    I do not think that is so, nor do I think the hon. Gentleman really means that. There would obviously be a loss of revenue; the Chancellor would have to do without part of the revenue or make it up at the expense of people whose earnings are less than £15,000. I think the hon. Gentleman might do himself greater justice in the contributions he makes to these discussions, which I always find interesting and valuable, if he refrained from pursuing these hares and will-o'-the-wisps which I am sure, in his own serious mind, he does not believe for a moment.

    May I give the hon. Gentleman an illustration from my own constituency which completely contradicts the view he has been trying to express? I have a constituent who owns a very flourishing business and he has told me that if he spent a further £100,000 on certain improvements to his business he could very much reduce the price at which his products are sold. But if he spent that £100,000, which obviously would entail a good deal of risk—the risk of something going wrong—and a great deal of hard work, the advantage to him would be a net amount of £100. Is it, therefore—

    I did not call the hon. Gentleman. I thought he was about to ask a question, not to make a speech.

    I was asking the hon. Member for Nelson and Colne (Mr. S. Silverman) whether I might give him an illustration which I think shows that he is entirely wrong.

    But it was a much longer illustration than I anticipated. Mr. Joynson-Hicks.

    I am sorry to interrupt the illustration of my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman) and I hope the Closure will not be moved before he has had an opportunity of completing that illustration and developing his further remarks. I want to some extent to follow the hon. Member for Nelson and Colne (Mr. S. Silverman). I listened with great attention to the speech made by my hon. Friend the Member for Chippenham (Mr. Eccles), and I agree with every word of it; and I then listened to a representation of that speech by the hon. Member for Nelson and Colne, and I did not recognise a single word of it. Never have I heard so much talk around so little accuracy of quotation. Never before have I heard such a speech which purported to be a criticism of what had been said but which was in fact a dissertation of the hon. Gentleman's own views.

    I think the hon. Gentleman is a little unfair. His hon. Friend the Member for Chippenham (Mr. Eccles) interrupted twice in the course of my speech. I was glad to give way to him and to reply to his interruptions to the best of my ability, and to what extent to his satisfaction it is not for me to judge. Throughout the whole of my speech the hon. Member for Chippenham did not for a moment complain of any misrepresentation.

    It is quite possible that my hon. Friend did not fully appreciate that the hon. Member for Nelson and Colne was seeking to quote from his speech, but in any case it was gratifying to note that the hon. Member for Nelson and Colne was twice called back to the subject by my hon. Friend. What interested me particularly about the hon. Member's speech, and what caused me to pay even closer attention to what he said, was that he offered to give advice to my hon. Friend. The hon. Member for Nelson and Colne is, I know, a member of my own profession—and an exceedingly skilful and successful one at that; and I wondered whether he was going to give the old professional adage which we have. He did not. We have an admirable adage in our profession which says that advice which is gratuitously offered is quite useless.

    With respect, I think the hon. Member has the adage wrong. It is not that advice one gets for nothing is useless. I remember the adage differently—never give advice for nothing because the recipient is apt, though mistakenly, to think it is worth what he paid for it.

    In any case, the assessment by my hon. Friend the Member for Chippenham of the value of the advice would be what it was worth. I should not have wished to detain the Committee on this Clause had not the Government, by their action last night, precluded many of us who still wanted to continue the discussion on the Income Tax Clause from having an opportunity to do so. This Clause deals with Surtax, which is a part of the system of taxation in this country. Although certain aspects of it can be considered by themselves, many aspects react upon other parts of the system.

    If we have a speech later from the Treasury Bench upon this subject, I have little doubt, from the precedents of last night, that we who are speaking on the Surtax Clause from this side of the Committee will again be misrepresented. It will be suggested that we claim that the whole of the economic affairs of the country could be put right by lowering the Surtax, to the consequent profit of a small minority of the population. We are quite prepared to accept that misrepresentation for we are accustomed to being told things which are not correct. We do not claim that at all. What we claim is that those who are directly affected by Surtax have just as much a right to have their affairs considered in this Chamber as those who are affected by any other class of taxes.

    In the case of Surtax the matter really goes further than that, because although we must appreciate that the tax falls directly upon only a small minority of people in this country indirectly Surtax affects the whole community. In considering the question of Surtax it is, therefore, relevant to bear in mind the effect which that tax and the entire high rate of taxation throughout the country have upon our affairs.

    First, I think we should take into account that in the vast majority of cases in the high ranges of Surtax the tax itself has now become definitely inflationary. I speak objectively here, because I am certainly not a high Surtax payer and very often do not pay Surtax at all, so that I am not directly affected. But people do not reach a position in which they have a liability to a right rate of Surtax without having built up a substantial public life, which carries with it its own responsibilities.

    The hon. Member for Nelson and Colne separated the technicians, and those about whom my hon. Friend the Member for Chippenham had been speaking, from other classes and went on to refer to other categories of high Surtax payers. I gather he implied that they represented the majority, and he referred to them as being crooks and entrepreneurs. But these are not high Surtax payers, because if they are crooks they are a jolly sight too careful to arrange their affairs to see that they do not get caught by Surtax. I see on the Treasury Bench the Attorney-General, who in his previous office had great experience of the Inland Revenue authorities, and I feel quite sure that he will bear me out, and that he does not recognise that there have been any crooks or entrepreneurs amongst the high Surtax payers of this country.

    4.30 p.m.

    The people in the higher grades are those who, because of the life which they have led, in the glare of full publicity, and because of the ramifications that they have built up in their lives, with a high degree of public as well as private responsibilities, are probably responsible for the payment of a considerable amount of wages out of their incomes, and when we get to the point of taxation at its present rate—and here I come back to the point I was making, that this is an inflationary tax—they can maintain those responsibilities, they can pay those wages, only out of the realisation of capital; and therefore, far from people of this particular class being able any longer to set a lead in saving for the benefit of the nation as a whole, they have no alternative whatsoever except to liquidate such capital as they have in order to maintain responsibilities which they built up, generally and very largely in the public interest of this country.

    On that particular point there is one further aspect that I have never been able to understand. It is just as good for the country as a whole that people in these higher Surtax ranges should have children as it is that the people in any other tax range should. Those who are liable only for the payment of Income Tax gain tax relief according to the number of children whom they have to support. Why should not the same advantage be given to those who also have to pay Surtax? It always seems to me that one of the most sensible things that could be done would be to allow a certain measure of Surtax relief according to the number of children, upon similar lines as there are Income Tax reliefs. I know full well the challenge which this suggestion can bring forward, and I would not suggest that the present is the appropriate time for it to be done, but, as a matter of tax principle, I can see no reason at all why it should not form one of the principles of our scheme of taxation in this country.

    I entirely agree with what my hon. Friend the Member for Chippenham said about the general, as well as the financial, effects of this high rate of taxation from which we are suffering in this country. I should think that all of us in the professions know of cases of people who are capable of earning an income which would bring them into the high ranges of taxation and who, because of the ability, and the sound public—or social, if hon. Members prefer that word—sense with which they have lived, have saved and are already able to enjoy an investment income from their savings—so much so that at the present time it is beneficial to them to retire from active working, and live on their savings and incomes from savings, rather than go through the ardours and strain and stress of earning that additional money.

    Who of us is there who, having reached middle age, and can see two alternatives before him, is really going to be activated on ordinary grounds—there may be special circumstances, such as wanting to maintain a business for one's children; something of that sort—to feel that it is worth while carrying on working as hard as he can for the sake of securing a benefit which is of no greater advantage to him than is retiring from work altogether?

    In addition to that there is, as we all know, the wide range of cases of people who are quite definitely leaving the country—people who are capable still of being of great value to the country by their work, by their abilities, by their brains and by their experience, but for whom it is not worth while staying in this country. I, personally, cannot see how those people can be blamed when, having an opportunity, they take up a new life in another country in which they are able to retain and enjoy the advantages which they are able to gain for themselves. It is that effect which this high range of taxation is having upon a wide range of the most valuable people in our community that has caused be to speak on this Clause of the Bill.

    I was very much struck by almost the opening sentence of the speech of the hon. Member for Chichester (Mr. Joynson-Hicks). He was presenting to us a picture of an honourable man in business who had built up a substantial way of life with substantial responsibilities, public as well as private, and he was pointing out that a rate of taxation at high levels meant that that man did not have those margins in his income that would enable him to carry out what were often traditional public responsibilities.

    The reason why I was so struck with that sentence is this. Hon. Members opposite seem to me to have at least a dual psychology. It is probably much more complicated than dual, but they certainly have a dual psychology. I have been shocked again and again at the mean, tawdry criticisms that have come from the benches opposite about the expenses of Members of Parliament. I do not know of any business man—I do not know of anyone in any way of life—who carries heavier or more substantial public responsibilities than we do. On another occasion when hon. Members opposite are niggling at the cost of the Dining Room or niggling about some other trivial matter, I may remind them of how they speak and of how their minds work when they are discussing other people in relation to public responsibilities.

    We here, if we are serious Members of Parliament—and we all are, I hope—have interests that go far beyond our constituencies. We have also got national and international interests. That means we require a certain mobility in the way we live. It is very good that we should move about, sometimes even beyond the confines of our own country. It means we have got to meet people. But that all costs money. Hon. Members opposite, far from thinking of these things, again and again make public speeches and broadcasts trying to insinuate into the public mind that Members of Parliament are overpaid.

    We cannot discuss the payment of Members of Parliament on this Clause.

    Is the hon. Lady suggesting that hon. Members on her side of the Committee travel about the world at their own expense—at the cost to them of heavy sums of money?

    That is just the sort of thing that we cannot discuss on this Clause.

    What I was saying was that I do not think it is good that the only people who travel around on delegations and the like should be strictly official Government personnel. The back benchers on both sides of the House of Commons are very important people. I am simply pointing out that I cannot understand how, on a Clause like this hon. Members opposite can say that it is impossible for the private business man to carry out his public responsibilities while they expect those of us who give our whole time to public work to carry out our responsibilities.

    I agree that there is a very highly developed technique now among people to whom we usually refer as spivs or crooks. Somehow or other they manage to go into business and they seem to be doing and living very well. They are not the people who often appear as earning the highest incomes. I hope that the Chancellor will think again about this because while I think that the taxation does not fall too heavily on those who have the largest incomes at present I can sympathise with the annoyance of an honourable man who sees someone else employing all kinds of shady tricks which he himself would not employ. I hope that in the rest of the discussion on the Clause hon. Members opposite will remember that Members of the House of Commons have substantial public responsibility and that none of them has suggested that we are under-paid.

    As I understood it, the argument of the hon. Lady the Member for Can nock (Miss. Lee) was a very considerable criticism of the Clause. It was that people in responsible positions required appreciable net incomes if they were properly to discharge their responsibilities. I do not quarrel with that argument, but I would beg the hon. Lady to apply that argument to not only the sphere of hon. Members but also, as is the duty of hon. Members, to those people outside for whom we are responsible. I hope she will allow me to observe, in parenthesis, that highly remunerated and high responsibilities, whether by hon. Members or anybody else, sometimes have to be discharged after half-past twelve in the morning.

    The hon. Member for Nelson and Colne (Mr. S. Silverman) tried, with that dialectical adroitness which we all admire, to suggest that criticism of a level of taxation of this kind was based solely on sympathy for these frustrated persons with about £1,500 a year. The hon. Member is far too intelligent, whatever some of his hon. Friends may be, to be taken in by that argument. He knows that the only point of public importance with which the Committee is, or ought to be, concerned is whether or not it is in the public interest to remove a very high proportion of the larger earned incomes. That is the public issue—whether or not it is in the interests of a healthy economic society to do that.

    Hon. Members opposite have a long and complicated record of intellectual dishonesty on this very issue. They used to say—the late Mr. John Burns said it—that no man should have more than £1,000 a year. It is fair to say that when that late lamented right hon. Gentleman achieved a Cabinet salary of £5,000 a year he amended the statement by saying that that did not, of course, include supermen; and no doubt right hon. Gentlemen who are his successors on the Government Front Bench will regard themselves as being within that exception.

    4.45 p.m.

    The attitude that high salaries and high net earnings are not in the public interest comes singularly ill from an administration which has itself, by direct legislative action, created more highly paid posts than any other Government in this country. Right hon. and hon. Gentlemen opposite have created on the boards of the nationalised industries scores of appointments at £5,000 a year. They have created a more limited number of appointments at the rate of £8,500 a year plus expenses, plus travel and, in the case of several boards, plus a fund of some thousands of pounds a year available for entertainment at the chairman's discretion.

    I would remind the hon. Gentleman that the matter before the Committee is not how much is being paid to people but how much is being taken from them by Surtax.

    I hope it will not be beyond the hon. Gentleman's considerable intellectual gifts to appreciate that it would be a very curious suggestion that his right hon. Friends should have created large salaries not for any public purpose but solely to take most of them away again. I must say that I take a higher view of right hon. Gentlemen opposite than does the hon. Member, although I am bound to concede that he is able to study their intellectual processes more closely than I can and so he may well be right.

    Let us start on the basis that when the Government create a large number of posts at a high rate of salary they do so because they believe that for those posts at any rate a high rate of salary is in the public interest.

    I am sorry; I cannot give way. I am dealing with another aspect of the matter. I am assuming that when scores of appointments at the rate of £5,000 a year are created that is done because it is recognised that highly responsible posts require a high rate of remuneration. Having accepted that principle in practice and having created this very large number of appointments, surely the Government cannot possibly take the attitude that high net earnings are not in the public interest. Surely it is still more debarred from taking that attitude when it has arranged the remuneration of those appointments in a way designed to protect them as much as possible from the incidence of taxation by giving remuneration in kind by way of motor cars, accommodation, and so on. I am not quarrelling with their doing that. I think they are right to do it. I think that no money is too much to pay a man if he is really to try to run the Coal Board with its present set-up. But I find it a little revolting that right hon. Gentlemen who have done that should then say what a dreadful thing it is for anybody else to earn high net salaries. That is wholly inconsistent and wholly wrong.

    All right. The hon. Member has been so persistent that I must yield to his blandishments.

    I thank the hon. Member. When he is talking about the highly-paid posts which have been created, is he taking into his reckoning the larger number, in the aggregate, which have been abolished and that less money is being paid out in these spheres of industry than was formerly the case?

    I believe I can follow the hon. Gentleman's intellectual processes. His reasoning is that it is all right for the Government to create highly-paid posts to which they themselves appoint as long as they abolish other highly-paid posts to which they do not appoint. But surely hon. Members cannot come forward and say, "We are sea-green incorruptibles and think that no man should be paid more than £1,000 a year" when, at the same time, they create large numbers of posts at five and eight times that amount and try to excuse that by saying that they have abolished some others which were not even paid out of publicly-owned funds. That will not do. The Government must squarely face the issue of whether or not it is in the public interest that high responsibilities should be highly rewarded.

    By their actions in the sphere which I have indicated they have accepted that, just as people throughout the world, including Soviet Russia, have been forced by the facts to accept it. If the answer to that question is "Yes," I feel that some of the arguments of the Treasury Bench and of hon. Members below the Gangway are so inconsistent with the actual actions of the party opposite as to savour of hypocrisy.

    Taxation at this level makes it physically impossible for the young man, however gifted and energetic, setting out on life, to set before himself as a practical ambition the acquiring of a fortune or, at any rate, the acquiring of a fortune by hard and honest work in his trade or profession. As the hon. Member for Cannock (Miss. Lee) said, it is, of course, possible to acquire a fortune by the methods of the spiv, by being fortunate in a football pool or on the race track or, perhaps, on the Stock Exchange—or, as an hon. Friend of mine points out, by a selective process in the course of matrimony. But the one thing that is absolutely barred to a young man of ambition and of character is the possibility of acquiring a fortune by hard and industrious work at the trade or profession of his choice.

    I think that hon. Members opposite must ask themselves whether they think that is a good thing for an economic society such as ours; whether it is wise to say to the younger generation, "For you the possibility of acquiring a fortune is absolutely barred." I myself believe that to put that idea into the minds of the younger generation in a society such as ours spells slow but inevitable economic death.

    I was stimulated into making a short contribution to this debate by the speech of the hon. Member for Chippenham (Mr. Eccles). It would, however, be asking too much to expect anyone to follow the line of argument of the hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and to be expected to refrain from making one or two references to what he said. He has managed to combine in a very short speech three accusations against the Government. One, that they are jealous of highly-paid persons, two, that they are hyprocritical, and three, that they are suffering from intellectual dishonesty because we suggest that at present it is necessary to maintain a high level of Surtax.

    The hon. Member for Kingston-upon-Thames painted a very interesting picture in the latter part of his speech. He pointed to the lack of opportunities available to young people to reach those pinnacles of wealth and happiness which lie at the top of a high ladder which every young man should have the opportunity to climb. If anyone is responsible for intellectual dishonesty it is the hon. Gentleman himself, who knows full well that for every man who climbs to the top of that ladder a thousand people have to remain at the bottom.

    Does the hon. Gentleman not agree that that argument, for the same reason and in the same proportion, applies to the members of the Socialist Party who are struggling at the bottom and want to reach Downing Street?

    The hon. Gentleman's intervention is as useful a contribution as are his previous interventions in the House. I am not one of those doctrinaire people who believe that it is a good thing to have a high rate of Income Tax and Surtax. I believe that there may be an argument that incentives play a very important part in the contribution to the national economy and the efforts that people are called upon to make from time to time in the various spheres of their operations.

    Whereas I should like to see Income Tax at 3s. 6d. in the £ and Surtax reduced consistent with the maintenance of the highest level of social welfare, I think that I am representative of reasonable opinion in the Committee which recognises that at present, in view of the international situation, it is quite impossible for money to be raised to pay for our defence without having this high level of taxation to provide a high proportion of it. It is useless for hon. Members opposite to seek to advance such arguments, knowing full well that they must be dishonest arguments, because if taxation were reduced in any sphere they would immediately say that we were not making the necessary contribution to our defence should the level of expenditure be affected.

    The hon. Member for Kingston-upon-Thames dealt throughout a considerable part of his speech with the question of high salaries. I believe—and you are to judge, Mr. Touche—that that had nothing to do with the debate now before the Committee. The hon. Member for Chippenham was talking of people in the range of £15,000 to £20,000 a year. He spoke about the effects of the incidence of Surtax on their net earnings. The hon. Member for Kingston-upon-Thames, however, talked about people who earn £5,000 a year. I think his party will recognise that the man who earns £15,000 a year still has greater net earnings than the man who earns £5,000 a year; in fact, incentives to greater effort, although I admit that they are small, still exist.

    The fact remains that these appointments at high salaries in the nationalised industries or on other Government boards are to a large extent prestige appointments as much as anything else, and the prestige of the job is usually reflected in the salary that is paid. The man who earns £5,000 a year on a nationalised board has to pay Surtax in the same way, so I do not see how that argument applies.

    The hon. Member for Kingston-upon-Thames referred to the expenses of people in nationalised industries—payment in kind by means of transport, and so on. I wish he would consult with some hon. Gentlemen sitting on his own benches who are industrialists, and who know full well that if there is any sphere where there is payment in kind it is in the field of industry where directors of companies, as a rule, have their expenses paid and that their transport expenses are paid by the company with whom they are associated. I think that it would be utter hypocrisy to deny that these circumstances exist quite legitimately in the majority of industries.

    I would like to challenge the hon. Gentleman's statement because I made no such admission. If I were to do so, it would not be material to my argument. My argument was that a Government who have done this in respect of appointments which they themselves make when running their own industries cannot possibly say that it is wrong for that to be done elsewhere.

    Would the hon. Member for Bolton, West (Mr. J. Lewis), not agree that in the last few years the tendency has been to reduce expense allowances of any kind made by public companies, whereas the tendency in the case of public appointments has been to increase expense allowances?

    I am quite willing to concede the first point. The tendency has been to tighten up, and justifiably so. I have no evidence whatever that the second part of his premise bears any relationship to the facts. What evidence is there that the expenses of people engaged in the nationalised industries have been increased? I think that it is dangerous, in a debate of this kind, to throw out such suggestions when there is no ground for assuming that they are true. I think that it remains on a general level in all forms of industry, both national and private, that legitimate expenses are paid by the employer whether it is a nationalised industry or whether it is private enterprise. There are expenses which any director has to incur and which he could not afford to do if they had to come out of his own pocket.

    My last point relates to a matter raised by the hon. Member for Chippenham, who, I am glad to see, has returned to his place. He referred to the scientists and the technicians. The hon. Gentleman is asking too much when he advances the argument that the majority of scientists and technicians are in the £15,000 to £20,000 a year class.

    5.0 p.m.

    I am sorry if I misrepresented the hon. Member on that point. He says that he did not say the majority. But only a small proportion of them, perhaps 2 per cent., are in that class. The hon. Gentleman must know full well that in the majority of cases where scientists and technicians are employed in the industry or where they are, in fact, employed by trade institutes or learned societies they have very moderate salaries but they perform, nevertheless, very useful functions. They are very happy people generally in the sense that they have a great personal interest in the work they are doing and the contribution they are making to society; but what is essentially true in this instance is that in very few cases is their work related to productivity so that if their work is not related to output in that sense there is no means of increasing their salaries by their direct efforts and results of actual scientific investigations and technical work which they carry out.

    The work invariably redounds to the benefit of the company by whom they are employed, and it is an utterly fallacious argument to say that there is disincentive because they are subject to a high rate of Surtax. The argument of the hon. Member for Chippenham is wrong in two respects, firstly because the scientists, and technicians, except in very few cases, do not come into the £15,000 or £20,000 class; and, secondly, because even if they did, their work is not affected by greater incentives which would have to relate to increased output out of which they would get some personal benefit.

    Everybody will agree that our tax is very high. We are admittedly the highest taxed country in the world. But we are also a country which has something of which we can be justly proud—the finest system of social services in the world. No doubt, hon. Members opposite will agree with that, because from time to time, particularly at election times, they claim that they are responsible for having made some contribution to that system.

    Nevertheless, I think it will be conceded that tax as it is today is something which bears very heavily upon the majority of the people of this country, and we should like to see it reduced, though, as I said before, consistent with the maintenance of the highest level of social welfare. If we have to spend thousands of millions of pounds on defence we cannot afford to reduce taxes. When it is suggested that our national life is directly affected in terms of productivity through lack of incentive because people have to make an important contribution through the medium of a high level of Surtax, I say that it is an utterly fallacious argument. Surtax bears heavily on certain people who have important commitments, but Income Tax at its present level bears heavily on the middle classes as well. It is a general problem associated with national conditions, over which we in this country have no control.

    If hon. Members opposite concede the point that defence is necessary, then it has to be paid for, and if it has to be paid for, in the main, it has to be paid out of taxation. Hon. Gentlemen opposite cannot have it both ways. Is any hon. Member opposite prepared to stand up and say that he would like to see Surtax reduced and Income Tax maintained at its present level? Of course not. I would not imagine that for a single moment.

    This debate is purely academic, because it is so reduced by virtue of the lack of logic in the arguments of hon. Members opposite. It is merely academic, too, in the sense that it expresses a point of view which everybody would like to see realised, but it does not involve consideration of the effects of the reduction of tax and other factors associated with it, so that the whole argument which has been advanced by hon. Members opposite is without foundation. I myself would be delighted to see lower Income Tax and lower Surtax, but hon. Gentlemen opposite must know that in today's circumstances it is not possible. I maintain that the speeches which have been made from the Opposition benches this afternoon show no sense of realism whatsoever.

    I wish to intervene for only a short time and, first, to refer to the speech of the hon. Member for Nelson and Colne (Mr. S. Silverman), who, I am sorry to say, is no longer in his place. He discussed this subject from the purely party political point of view; he argued that nobody should speak for the Surtax payer who was earning in the realm of £15,000 a year, and he said he supported the mass of people who had the smaller incomes. We need to lift this subject completely out of the political arena.

    I deal very frequently with Surtax assessments. I can assure hon. Members that there are many people with substantial incomes, though not of the level of £15,000 a year, who would be prepared to take on more responsibility but for the burden of Surtax. They say it does not make it worth their while. Men who are asked to join boards, and who have other interests, do not think it worth while to shoulder extra responsibilities because of the small amount of net income which comes to them after the Surtax has been taken from their salaries.

    As a Surtax payer I have no hesitation in saying that this is the worst tax that I pay, and that I hate the very sight of it. It is a most vicious tax and it has reached saturation point. It is most unfair in the method in which it is applied and, apart from that, it hinders the national effort, in that but for it there would be many people who would be willing to do more work. In the national interest there should be some relief in the higher rates of Surtax, so that men who would be prepared to do these extra tasks would get something out of it.

    I know instances of men who propose to retire earlier than would normally be the case because of the great burden which Surtax puts upon them. I meet such people very frequently, and they say to me, "After I have got my income with the Surtax taken off I cannot do what I should like to do, and I have got to realise some of my capital to do such things as keep my family at school and maintain the other responsibilities which I have." There is no question but that this tax is having a detrimental effect on the industrial effort of this country.

    The hon. Gentleman is trying to be fair, and I hope that he will take this point fairly. Is not the question of the ability of any Surtax payer to meet his outgoings dependent to a large extent on the standard of living he has created for himself? Very rarely do we find a Surtax payer who cannot send his children to what he would consider the best schools and pay for them there. It all depends on the standard of living to which he is accustomed.

    The hon. Member must have forgotten entirely that there are many people in this country who have had responsibilities thrust on them, and these are the people who are feeling very hurt. They cannot get out of these responsibilities without causing extreme hardship on other people. They have to face that position and carry on as best they can. Surtax demands are forcing them to make inroads in their capital to meet their responsibilities. Such an unfortunate state of affairs exists in this country in a very large number of cases, and I am not speaking now of the people with £15,000 a year, but rather of those with lesser incomes. It is damaging the system of incentives and encouragement to our people.

    I was about to instance the case of a man, an excellent man at his job, who would be quite capable of carrying on and of giving a great deal more effort to the country. The burden of Surtax on his income has made him feel that it will be far better for him to retire and leave things alone. There are many people in that position. On the other side, there are workpeople who feel that the burden of taxation is so great that it is not worth their while working overtime. I do not think that hon. Gentlemen opposite can dispute that there are many cases in this country of that kind.

    When taxation becomes a burden to a person, no matter what his station in life, it acts as a disincentive to carrying on and working harder. For that reason I believe that I am speaking for a fair number of people. It is a matter of the national interest, which we ought to consider free from party politics. [Laughter.] Certainly. If I were in the party arena on this point I should take a view like that of the hon. Member for Nelson and Colne (Mr. S. Silverman). He made a party political speech when he said that we were standing up for the £15,000 a year man and that he stood for the others, the clerks, the cooks, etc. That is vote catching. We do not want that sort of thing.

    I do not think that I did say that. I was commenting on the speech made by the hon. Member for Chippenham (Mr. Eccles), who confined himself to the £15,000 a year class. As for vote catching, I do not quite understand the hon. Member.

    My hon. Friend the Member for Chippenham (Mr. Eccles) instanced a case of a £15,000 a year man, but his general argument did not refer to the £15,000 a year class. Instead of trying to twist the argument round in his own favour, the hon. Member for Nelson and Colne should face the issue which my hon. Friend the Member for Chippenham put to the Committee. Instead of looking at this matter from a vote catching and party political point of view he should realise that it needs far more courage to stand up here for the rights of a few people than it does to stand up on the benches opposite to oppose these few and claim to be standing up for the masses. This is a matter of justice. However few there are of such people in this country it is the duty of every hon. Member in this Committee to see that justice is done to them. Hon. Members who do not contribute to that view are not facing up to the issue.

    Before the hon. Gentleman leaves that point, will he tell the Committee the yearly income of the man to whom he referred, before tax is applied to it?

    The income is £2,000 a year, but I do not think that that matters.

    An hon. Gentleman referred to the men at the top. We cannot have everybody on the £15,000 or £10,000 a year mark. This world is such that we must have people in different stations of life. To believe otherwise is one of the fallacies of Socialism. We have to have people earning managerial salaries, as managing directors or in other controlling positions. The hon. Member for Bolton, West (Mr. J. Lewis), interrupted me when I spoke of people sending their boys to public schools, and said that people had to be content with sending their boys to something less than the best public schools. I would like to tell him that the cost of keeping a boy in an approved school is now £400 a year, which is more than Eton.

    5.15 p.m.

    I am obliged to the hon. Gentleman for giving way. On the last point which he has made, I would reply that I was not trying to tell people where they should send their boys. I said it was a matter of the standard of living, and that people in the Surtax class who desired to send their boys to good schools need not necessarily send them to the best schools. In other words, they can still get education for their children. On his first point, I think the hon. Member is confused because we are not talking only about people in the highest ranges of income. The point which the hon. Member for Chippenham (Mr. Eccles) made was in respect of highly-paid men, such as the £15,000 a year man. A man in the managerial class is not worried about incidence of Surtax at all.

    You do not do so badly yourself.

    On a point of order. Did you, Mr. Touche, hear the hon. Member for Bolton, West (Mr. J. Lewis), say to my right hon. Friend the Member for Bournemouth, East, and Christchurch (Mr. Bracken): "You are a pig"?

    I did not hear it. I was listening to the hon. Member who was addressing the Committee.

    It was very audible to hon. Members on this side of the Committee. The hon. Member called my right hon. Friend a pig, and I suggest that he should be asked to withdraw the expression.

    I did hear a dim sort of echo from the hon. Gentleman. I never associated a pig with him, so I do not care what insults he offers to us.

    If the hon. Member for Bolton, West (Mr. J. Lewis) called the right hon. Gentleman a "pig," it is an unparliamentary expression, and he must withdraw it.

    I am certainly prepared to withdraw the expression, under your direction, Mr. Touche. The fact remains that the right hon. Gentleman himself made an objectionable remark—

    I was about to say that the right hon. Gentleman himself, before I was provoked into making the statement, which I readily withdraw, made a provocative and nasty remark about me. If the right hon. Gentleman, because of his pugnacious attitude, provokes people into making remarks, you should call upon him to withdraw his provoking observations.

    I did not hear any such remark from the right hon. Gentleman, and I cannot ask him to withdraw any remark which is not unparliamentary.

    In any case, I would not associate pig with the hon. Member for Bolton, West.

    I think the remark was put in this way, that the hon. Member opposite had not fared very badly in his life himself. People in glass houses should not throw stones. If the hon. Gentleman opposite does not know that there are many managing directors and general managers getting several thousands of pounds a year he does not know much about the country's trade and industry.

    I appeal to the Committee to look upon these matters impartially. In the higher incomes we have reached saturation point in regard to Surtax, and I ask the Chancellor of the Exchequer to realise that human nature is human nature, whether a man is Socialist, Liberal or Conservative. In my opinion, no man will work longer hours and a longer week for 6d. in the £. This ought to be examined from a commonsense point of view. I deal, and have done for years, with assessments of Surtax, and I know that it creates a disincentive to many people. I ask the Chancellor to examine this so that we can get a fair balance and a fair approach to the subject.

    I regret that this debate has gone on so long, but there are one or two things that should be said from this side of the Committee. The impression given by hon. Members opposite, which has so far not been contradicted from this side of the Committee, is that the productive wealth of the country depends very largely upon those paying Surtax, those in the range of this Clause to which exception is taken. If it were possible, I should like to know how many people receive £15,000 a year or more? Unless they have £15,000 a year or more, they do not pay 19s. 6d. in the £, as I understand it. How many people are paid more than that for the position they hold or the function they are supposed to fulfil?

    He does not receive that. I do not know how much the right hon. Member for Bournemouth, East, and Christchurch (Mr. Bracken) receives, but I think it a pity that some of his friends in the theatrical profession have not recommended him to compete with people like Danny Kaye, because sometimes he amuses me just as much. He is in the wrong occupation as a Member of Parliament.

    Last night, when we were dealing with Income Tax, a certain assertion was made by the Opposition, which was repeated this afternoon by the hon. Member for Chippenham (Mr. Eccles), that those affected by this Clause, those who receive over £15,000 a year—very few of whom earn it professionally, or in any other way; it is generally derived from the ownership of shares or property—

    Oh, yes, it is. At present values there are very few people worth £15,000 a year or more. The difficulty is, not in getting people to receive £7,000, £8,000, £9,000 and £10,000. The difficulty is to get more miners, and to get people for the undermanned industries. The hon. Member for Chippenham and others have spoken of the difficulty in getting these supermen or superwomen who produce all the wealth. This idea of the brain worker producing the wealth of this country is out-dated. I ask hon. Members to remember where this idea came from. In 1894 Mallock published a book on the Mallock theory. He said that it was not the worker in industry who produced the wealth but the man at the top: "Direction ability" I believe he described it. Never was such nonsense uttered in economics as that. Those in industry, not because of specialist knowledge and ability but because of their brain, have their place, and today are remunerated accordingly. There is a scale of payment for services rendered.

    Too much emphasis has been laid upon the value of these people. We are not worried about the specialists, or the professional men. We are not short of them today. The trouble is that everybody is pressing to get into the professions. Everybody wants a super-education to escape having to work for his living. Hon. Members, like everybody else who has any affection for those responsible for the inventions of the world, want to do the best for those concerned. I am not unmindful of that, and I am not anxious to prevent them from carrying on. But if that is done at the expense of other members of the community, then the others are justified in kicking up a fuss about it.

    If the Clause had referred to miners, I assure the hon. Gentleman that I would have said something about miners, and other workers. The Clause happens to refer to Surtax payers, and I therefore confined my remarks to them. I should like him to realise that I think that both miners and Surtax payers are necessary to productive processes.

    I am prepared to accept that, but the evaluation the hon. Gentleman places upon miners, judging by his criticisms of the Coal Board from time to time—

    The Coal Board are, for good or ill, the employers of the miners.

    There is no justification for the opposition to this Clause. I am sorry that it is not possible so to arrange taxation that we could get more than we are getting from those who are getting something for nothing.

    I intended to refer to the right hon. Member for Bournemouth, East and Christchurch, and not to you, Mr. Touche.

    I do not think the hon. Gentleman ought to refer to the Chair and to make financial inquiries into the affairs of its occupant. I can assure the hon. Gentleman that "very little," as he says, will describe my position.

    I have made the point I was particularly anxious to make, which was to contest the assertion made last night and today, that the emphasis should be on the super-person with a large income. In that argument there was no recognition of those at the bottom. I say that additional taxation should be imposed upon those in the Surtax class rather than upon those who, by hand and brain, work for their living. The fact is that they could not carry any more. As I was saying before the right hon. Member for Bournemouth, East and Christchurch, interrupted, all I regret is that taxation could not be so designed that we would get at the Surtax payer more than we do. I know perfectly well that if we had not reduced Surtax at the expense of Income Tax, it would have been 20s. in the pound. While I know that is not the right way to do it, I am not certain it would not have been a justifiable way.

    5.30 p.m.

    I am glad that the hon. Member for Kirkdale (Mr. Keenan) admits that it is one of the basic urges of our life and civilisation to rise above a mundane and common level of employment and to educate oneself for something better. That should occur throughout the entire community, and I should have thought that full equality of opportunity is what is most desired by all men in public life. Our arguments on this side of the Committee this afternoon are entirely designed to assist that process.

    The hon. Member for Bolton, West (Mr. J. Lewis), and the hon. Member for Nelson and Colne (Mr. S. Silverman) both fell into the common error of not distinguishing between the character of the speech of my hon. Friend the Member for Chippenham (Mr. Eccles) and others on this side of the Committee, on the one hand, and the fact that, on the other hand, we shall not vote on this Clause. We do not desire to deprive the State at this moment of over £100 million, and certainly not by this means. We need the sum for re-armament. But that is not to say that we should not have a debate on the principles of Surtax, even if that debate is largely academic this year. What is Parliament for unless it is to formulate principles of public action in advance of the ability of any Government Department to carry them out? That is what Parliament is meant to do, and we are entirely justified in having a debate about Surtax in the hope that something will occur in future years.

    My hon. Friend the Member for Chippenham hoped that the party on these benches would be able in a short time to put into effect some reductions of Surtax. He was not referring to one level or to the elimination of the entire Surtax range, or to any specific scheme for reducing it. I hope, with him, that the party on these benches will put into their election programme something of this kind. I saw the Financial Secretary and one or two other hon. Members opposite smile a little when this subject was introduced. It was patent from the speech of the hon. Member for Nelson and Colne. The hon. Gentleman tried to waive down his supporters behind him, the idea being to let the Tories blow the gaff on this subject because then the Socialist researchers would marshal the arguments, sift them through the Transport House organisation and reproduce them in the constituencies against their opponents when speaking on the platform.

    In my view, the time has now passed when it will be possible for hon. Members opposite to do this kind of thing with advantage to themselves or to the country. Maybe 25 years ago, maybe in 1945, there were some advantages to be derived from that process, but the situation we are in today discounts any possibility of right hon. and hon. Gentlemen opposite being able to get away with a superior electoral attitude on this issue. I look back to days when there were too many, shall I say, irresponsibly rich men in this country. I have never been one of those who wished to see Surtax wiped altogether off the slate, and in my remarks this afternoon I have no wish to see the entire Surtax abolished. I think there is a case only for beginning to reduce it.

    Indeed, there are some rich men today who are at an advantage over their fellows or over those of equal intellectual power. There are those who can draw upon their capital and live today in the same way of life as they have lived in the past. Whereas there are other people of equal, or even superior, intellectual attainment starting life today who simply cannot make a decent living for themselves and their families, and who cannot hope to save anything for the future, So, in considering this subject, we ought to differentiate between those two classes.

    We have now arrived at a situation where it is impossible any longer to raise the wealth of this country by penalising one section of the community and giving the proceeds to the rest. This process has been going on now for a number of years. It is not entirely the party opposite who have done it. We, on this side of the Committee, have been doing it deliberately for the last 25 years. There is a good deal to be said for helping those in more slender circumstances by reducing the undue exercise of privilege and money power of those who are extremely rich. But that we have now arrived at a situation when the total wealth of this country cannot be raised any longer by that process, I am absolutely convinced.

    It is because I believe the public know that in their heart of hearts that I am sure no political gloss which right hon. and hon. Gentlemen may try to put over in the country on what has been said this afternoon will be of any avail. People know, after five years of Socialism and super-planning and super-bureaucracy and undue equalitarianism, that the wealth of this country is not rising at the speed it should. They are beginning to see examples of other countries, which do not have this huge taxation, gaining advantage over us in productivity and rising faster than we can out of this economic dislocation produced by the war.

    Western Germany is one, and the United States of America is another. Switzerland and South Africa may be others. In all those countries, certainly in the two I named first, the common experience of those living and travelling there is that they are rising in prosperity at a greater pace than we are. The fact that we are not rising so fast is largely due to the lack of incentive, to the lack of opportunity, and to the fact that so many people are curbed and curtailed in the enterprises they want to create and in the expanding standard of living which they wish to acquire for themselves and their families.

    If the hon. Member for Kirkdale was right in saying that the desire of each man is to create a better opportunity for himself to rise above the mundane level of existence, and if my hon. Friend the Member for Hallam (Mr. Jennings) is right in saying that men of enterprise today are contemplating going abroad because they cannot save or establish their families, is that not part of the general argument that the whole State is in this position and cannot get back to the prosperity it was in before? In their hearts people realise that, and it will not be the slightest use for the Financial Secretary or anybody else to carry to the hustings the arguments put by this side of the Committee today.

    Whatever may be said in favour of collectivism for spending wealth effectively once it has been created, there is nothing to be said for its power to raise or even maintain wealth. Our people are now fully aware that Socialism as an instrument of planning the creation of wealth has failed, and miserably failed. My hon. Friend the Member for Chippenham has done a great service from the point of view of the future prosperity of our beloved country in raising this matter so cogently and effectively this afternoon.

    We have had a fairly full and not uninteresting debate on the Clause, which, after all, refers simply to Surtax in the year 1950–51. We have already decided last night what the Surtax should be in 1951–52; therefore, we are not being very forward looking at the moment and so, perhaps, we could now come to a decision.

    Nobody, of course—certainly, no one in the Government—would wish to maintain such high rates of taxation as we have at present were it not for the defence programme, which, I think, the whole Committee agrees has to be paid for as we go. The hon. Member for Chippenham (Mr. Eccles), however, and the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and others argued that these rates of taxation are injuring the production of wealth. The hon. Member for Kingston-upon-Thames said that they would lead to slow economic death, and the hon. Member for Chippenham implied that with lower rates of Surtax there would be some rapid and considerable increase in production. We could argue this in theory at great length, but I certainly do not intend to do that because to my mind the facts are against hon. Members opposite when they argue in that way; and the facts are much more convincing than any theoretical argument.

    Were these arguments true, we should have had lower production since the war than we had before, when taxation was much lower, and we would have had a slower increase in production and in productivity. The hard fact is that since the war, with higher rates of direct taxation, we have had much higher production, a much more rapid rise in production and in productivity, and also, of course, record exports and a record rate of physical investment. We have also shown a higher rate of productivity than a great many countries with lower rates of taxation.

    Those are facts. This taxation has led not to economic death, but to exactly the opposite. I confess that I should have had much more sympathy with the argument of the hon. Member for Chippenham before the war, when we had not had this experience. But we have had this experience. We live and learn—or, at least, all of us live and some of us learn. I hope that the Committee will now approve the Clause.

    I am not satisfied with the observations of the Financial Secretary, all the more so because his supporters this afternoon, having fired their shot, have left. We heard the hon. Member for Nelson and Colne (Mr. S. Silverman) who referred to Surtax payers in the main apparently as crooks and entrepreneurs. The hon. Lady the Member for Cannock (Miss. Lee) spoke of them as spivs. The hon. Member for Bolton, West (Mr. J. Lewis), used a porcine expression which he was required by the Chair to withdraw. That is the kind of level of debate we have had this afternoon.

    The brief and compact speech of the Financial Secretary does not seem to me to have dealt with the weakness of the arguments from the Government side. His supporters—and, Heaven knows, support was very necessary for him—have gone after singularly ineffective and tendentious speeches, and he has misjudged the temper of the Committee. Consequently, I presume to make a few remarks upon this subject.

    I congratulate my hon. Friend the Member for Chippenham (Mr. Eccles) on his courage. It is not an easy or popular thing that he did. To come into the Chamber and to defend the rich is a singularly difficult thing to do in view of the long-standing prejudice in the minds of hon. and right hon. Members opposite. Defending a few rich men brings no reward—or votes—and consequently this attitude cannot be appreciated or even understood by the Government and their supporters.

    The Financial Secretary and his hon. Friends have treated this matter lightly, because the truth is that, instead of despising rich men and casting them aside in a two or three minutes' speech, the business of a Chancellor of the Exchequer who understands his trade is to nourish the rich men. The more of them he has, the less he has to take away from the poor. The more rich men he has to tax, the less taxation he will need to take from those who are now resenting the payment of the existing rates of taxation.

    5.45 p.m.

    The Government's attitude towards rich men, which is the attitude of envy and of jealous people throughout the history of the world, is not generous and is not, indeed, just. To take away 97½ per cent. of what one believes to be one's honest earnings is an improper, undesirable and unfair thing for any Government to do. It is just as much an injustice to deal an injustice to a rich man as to a poor man. Life, liberty and the pursuit of happiness are, I think it would be agreed, the rights of all men.

    Hitherto, it may be said, these things have been denied to the poor, but are the Government now to deny them to the rich? Is a rich man, merely because he is a rich man, not to have life and liberty and the pursuit of happiness? I know the gloss which will be placed upon these observations of myself and my hon. Friends by Transport House, but Transport House has never been very much concerned about justice. There are rights for rich men, as there are rights for poor men, but the Government's view is that there are no rights for the rich men. The only rights the Government recognise are of those who are numerically considerable and who are likely to be their continuing supporters.

    After all, who are these rich men? They are about one in a million—that is about the number of rich men we have in the country. At the present time, these are the people who are infinitely precious to the Chancellor. How he rubs his hands when he learns of a £2 million estate of which £1¾ million is going to fall into his Treasury. Does it make the Chancellor happy, or his withers unwrung, when he draws Death Duties on that scale? Does he come weeping to the House of Commons? On the contrary, there is much rejoicing in the Treasury when these events occur. If when these men are dead the Chancellor draws these substantial Death Duties from them with such pleasure, why should he not rejoice in their continued life? Why should he not join with me in seeking their more and more abundant prosperity?

    I want seriously to ask the Committee—I am glad to see present the hon. Members for Stechford (Mr. Jenkins) and Gloucestershire South (Mr. Crosland), two, I am told, of the most brilliant young economists of the Government—what has happened to Pareto's Law, which said that the more rich men there are in a society, the better is its general standard of living. A society which has the greatest number of rich men is generally the society which is best for all, and this is very easily demonstrated. In a society where the richest man has £5,000 a year, the poorest man in it will have £100 a year; but in a society where the richest man has £100,000 a year, he would like a couple of fellows to be his deputies at £5,000 a year. But that is not how it works. As my right hon. Friend the Member for Aldershot (Mr. Lyttelton) would say, the man who gets £100,000 a year may want two deputies at £5,000 each, but they would require £50,000 or £60,000 each, while the man in the other society who has £5,000 a year gets his deputies at £2,500.

    I ask the Government, and particularly the young economists who are going to guide, I hope, their own lives, and ours, successfully, is Pareto's Law no longer accepted? Is it no longer true? Is it not the case that the country where there are the greatest number of rich men—the United States, for instance—has the highest standard of living? Is this no longer true?

    May I interrupt the hon. Member, whose speech everyone is enjoying? He spoke about honest earnings and the rich men who earn £100,000 a year from being captains of industry, or whatever they are. Will he deal with the point, which is the one which exercises the minds of hon. Members on this side of the Committee, that as soon as people get into the higher Surtax brackets—this has not been mentioned in the speeches of hon. Members opposite—the bulk of the income is unearned and not earned income? That is what we are concerned about on this side of the Committee.

    Being a fellow countryman of yours, Sir Charles, I was simple enough, in my search for information to give way to the hon. Member. It was in order to know whether Pareto's Law which says, far from the rich becoming poor and the poor poorer, the more rich the rich become the less poor the poor become, was correct. But the hon. Member, like Socrates, is merely asking questions and not informing the Committee. I say it is the duty of a Socialist Chancellor of the Exchequer to encourage the accumulation of personal wealth and that the more rich men he has in this country the fewer poor men there will be.

    The more rich men there are the less will be the burden we have to place on the poor.

    The hon. Member for Loughborough (Mr. Follick) wants to know about India. He is a much-travelled man already and a man of leisure; if he cares to go to India and find out, I shall not detain him.

    I am much obliged to the hon. Member for giving way, but I wonder whether he recollects some of the industrial history of the 19th Century in this country when some men did get rich, and very rich, but never were the poor poorer than at that time?

    I hope the hon. Member will not deal with the 19th Century, as this Clause deals with the 20th Century.

    Strange as it may seem, Sir Charles, two good minds think alike and I was about to point out that in those days there was no Surtax and that they had nothing to do with Surtax.

    The Financial Secretary made a great deal of play with figures on the improvement of productivity in the last few years and rightly claimed that it is something for which he should have credit. I submit that if there is credit in the productivity of the machine, the mechanical device, there is a like credit to be given to the productivity of the person. If he accepts (hat analogy, I am very happy, because he will then recognise that he cannot justify productivity by the installation of productive machinery if he will not also recognise the productivity of persons. This Clause deals with the enhancement of the productivity of persons.

    I want a really expanding productive society, and I believe that no man can grow rich at the expense of society, except with the consent of the people. I will not go back to the Middle Ages, or the Industrial Revolution, but to more recent times. I should like to know of a man who has grown rich when the public did not will it. I once told Lord Beaverbrook, the former Mr. Max Aitken, that he was an exceptionally modest man. He was shocked when I made that assertion, but I said to him, "Sir, you are a rich man because every day two million people say, 'Here is a penny for you.'"

    It is the public who make a man rich and we must not run down a man who makes £15,000 a year, because it is the public who make it possible. If I am a grocer and become a very rich grocer, it is because thousands of persons voluntarily give me orders for groceries. The same applies if I am a newspaper proprietor and four million people buy my paper. They are all independent, with independent minds like yours, Sir Charles, and say, "Here is 1½d. for your paper." If that is not democracy, I do not know what is! Democracy may do many good things. It certainly freely makes men rich.

    I put it to the Minister that this is a fruitful and useful debate and he should not be discouraged, but encouraged, by the fact that his quondam supporters who talk of crooks and spivs and entrepreneurs have fled. He is on sound ground even if he stands alone. What has been said by my hon. Friend the Member for Chippenham and others, let him read, and when he has another Budget to produce—which will be many years ahead—let him think well of his fatted calf the Surtax payer, for without him he would be a poor thing and the country would be a poorer thing.

    I think we might come to a decision on this Clause. It is a very narrow point and we have had two hours on it.

    May I submit this to you, Sir Charles? I want briefly—and I promise to be brief—to put a point on the effect of this Clause on production, which has not been put, and I think I am entitled so to do. If I am ruled out of order, I will sit down.

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

    Clause 15—(Alterations In Personal Reliefs, Etc)

    The first and second Amendments to this Clause are not selected. I refer to the Amendment in the name of the hon. Member for Bucks, South (Mr. Bell), in page 9, line 28, at the end, to insert:

    "and the said section shall be further amended by the addition at the end thereof of the following words "and if he further proves that he is over sixty-five years of age and is not gainfully occupied, to a further deduction of sixty pounds, if he is otherwise entitled to a deduction under this section of one hundred and ninety pounds or of forty pounds if he is otherwise so entitled to a deduction of one hundred and ten pounds,"
    and to the Amendment in the name of the hon. and gallant Member for Merton and Morden (Captain Ryder), in line 34, at the end, to insert:
    "and at the end of the said subsection (1) there shall be inserted the following words 'provided that where the claimant is a widow, the allowance shall be ninety pounds.'"

    On a point of order. Might I ask whether it would be possible for the Committee to divide on the first Amendment? It has been ruled that that Amendment dealing with the lower ranges of Income Tax cannot be discussed, but it occurs to me that after the discussion on the previous Clause it would be beneficial if there were a separate Division on the Amendment; otherwise, it will be impossible to discuss reliefs for the lower range of incomes, which to me and my hon. Friends is of vast importance, having regard to the speech made by the Chancellor of the Exchequer last night. We are interested in the relief for the lower range of taxpayers, and it seems rather unfair that we should be deprived of putting their case to the Chancellor.

    We cannot have a Division unless an Amendment is called, and I do not intend to call that Amendment.

    Will you reconsider your selection, Sir Charles? [HON. MEMBERS: "Oh."] Hon. Members do not want it, but will you reconsider your decision not to call that Amendment to give us a chance to divide on it?

    I beg to move, in page 9, line 46, at the end, to insert:

    "and the words 'sixty pounds' shall be substituted for the words 'fifty pounds.'"
    There is no class up to the present which in recent years has been hit so hard by two things, first, the increase in indirect taxes, Purchase Tax, Excise Duties and so on, and, secondly, by the fall in the purchasing power of the £, as the fixed income groups, more particularly the small fixed income groups, the pensioners, the small annuitants, the people whose sole income is a small dividend or interest bearing security and also, of course, those with no income at all. In those circumstances, they frequently have to rely upon other persons for their support. In years gone by that was not the case because, small though their pension or annuities may have been, they were sufficient to support the simple standards of the aged, or infirm, or the widowed, who at present are the recipients, the indirect recipients, of what is known as the dependent or relative allowance.

    6.0 p.m.

    In subsection (2), the Chancellor of the Exchequer has looked after a different class of persons. He has looked after the young and fit married persons by increasing the marriage allowance from £180 to £190, so that a married couple with a joint income of £190 a year pay no Income Tax at all. The aged and infirm with small incomes do not benefit from this Clause directly in any way, though there is some indirect benefit in subsection (4) through their higher income limit.

    I have used the words "aged and infirm" because they are used in the Finance Act, 1920, which first made provisions for the dependent relative allowance. The words used in Section 22 were:
    "If the claimant proves that he maintains at his own expense any person, being a relative of his or of his wife who is incapacitated by old age or infirmity from maintaining himself, or his or his wife's widowed mother, whether incapacitated or not …"
    I make a special plea for the person upon whose financial support they rely, and upon whose financial support they are more than ever relying, due, as I said, to the increase in indirect taxation and the fall in the purchasing power of the £. Probably very few members of the Committee realise that the figure of £50, which is the present allowance, was fixed eight years ago, in Section 16 of the Finance Act, 1943. The cost of maintaining these aged or infirm persons has increased by at least a third since 1943, and my Amendment seeks to give at least partial recognition to the increased cost of maintaining these aged or infirm people.

    I may be told that the principle of the concession is accepted but that the cost is prohibitive. I have no accurate knowledge on that point. I can only make a guess. Having no access to the only records which would help me to make an intelligent guess, mine is entirely a shot in the dark, and the Chancellor or the Financial Secretary can if necessary correct me. I do not expect that the cost of such a concession as this would exceed £4 million in a full financial year. The number of cases concerned is not large, but each case is usually a very tragic one.

    The cost to the Exchequer would be very small in relation to the Budget, so I ask the Chancellor to recognise, in the case of the aged and infirm, not some new principle, not something which is out of harmony with the Socialist Budget he introduced a month ago, but precisely what he has recognised in the case of the young, that is by increasing the dependent relative allowance from £50 to £60 a year.

    The principle underlying this Amendment is the same as that which underlies several new Clauses standing in the names of certain hon. Members on this side of the Committee. It is a principle recognised by the Government in the Finance Act, 1920, namely that in considering the taxation of the breadwinner of the household, his household responsibilities as a whole must be considered. Those household or family responsibilities spread beyond taking care of his wife and children. They extend to the care of aged and infirm relatives, and, indeed, to a widowed mother.

    As my hon. Friend has said, this dependent relative allowance was instituted in the Finance Act, 1920, along with the children's allowance. It is interesting to see how the two have varied since then, because there is a good deal to be said for the argument that the two move together. If the cost of maintaining a child increases, the cost of maintaining a dependent relative also increases at the same time. The children's allowance was originally £36 for the first child, and between 1920 and 1939 it varied between £50 and £60. It was £50 during the war. It was increased in 1947 from £50 to £60. and in this Bill it is being increased from £60 to £70.

    The dependent relative allowance started at £25 and was increased in the Finance Act, 1943, to £50. It has not been increased since then. In 1947 the limits which apply to the income of the dependent if the dependent relative allowance is to be granted was raised by the Government, but the amount of the allowance has not been increased since 1943, although the cost of maintaining these people has obviously increased substantially.

    In 1949, my hon. Friend the Member for Dorset, South (Viscount Hinchingbrooke), introduced an Amendment to the Finance Act which was designed both to raise the exemption limit and to increase the amount. The Financial Secretary replied on that occasion, and he rejected the proposal on three grounds. First, he said that the cost would be too high; it would be £7 million. On this occasion the cost must be substantially lower, because the Government have already done one of the things for which my hon. Friend the Member for Dorset, South, asked—they have raised the exemption limit. So the cost cannot now be £7 million. I imagine that £4 million or £5 million would be about the correct figure.

    The second argument of the Financial Secretary was that it was too soon to raise this allowance again because it had twice been raised in recent years. Two further years have now passed. It is now eight years since there was any increase in the amount of the allowance. There was an increase in the income limit in 1947 but no increase in the allowance itself. That argument, which the Financial Secretary used in 1949, is considerably less strong than it was.

    His third argument was that it would be difficult to raise the dependent relative allowance if at the same time nothing was done for the old age pensioners. That argument does not hold good any longer because on this occasion something has been done for the old age pensioners. On all these grounds it seems that the opposition offered by the Financial Secretary in 1949 to this proposal cannot any longer be continued.

    There is no question that, just as the cost of maintaining children has increased, so the cost of maintaining aged and infirm relatives has increased. The Government have been wise and have acted properly in recognising the family responsibilities of the taxpayer, and in assisting him by raising the children's allowance. It would be consistent to follow through that principle and to recognise that the family is a unit which extends beyond children and wife to include infirm relatives in respect of whom a moral responsibility rests on the taxpayer; and so to accept this Amendment and increase the dependent relative allowance.

    I hope that the Government can favourably consider this Amendment. I am sure that if it could be accepted its action would be popular on both sides of the Committee. We are dealing with a matter which vitally concerns a large number of families in which there is a person who cannot help himself or herself, and who, therefore, needs assistance from the breadwinner of the family, who thereby has to take on that additional responsibility. We all know how heavy any additional responsibility is in these days of severe taxation.

    On previous occasions in Committee on Finance Acts, I have called attention to the anomalous arrangements which have been allowed to grow into existence in relation to a number of these Income Tax allowances. Here we are suggesting that an anomaly should be mitigated. There can be no reason whatever why, if it is right to modify the children's allowance from time to time, it should not be right to modify this similar allowance for another dependent person in the household. The figure of £50 arrived at in 1943 was, in a sense, an arbitary one then. It happened to fit in with the other allowances. Those other allowances have been changed, but this has not been altered, and on that ground it is quite obvious that the Committee and the Government should be prepared again to re-examine the matter.

    I hope that the Government will not make any play with the argument that they are already doing something for these cases in the subsection and that therefore they are not called upon to do any more by accepting this Amendment. Let me point out that what they are proposing to do for such cases confers no benefit whatever on those families who are the hardest hit. The acute case is where the dependent relative has no income at all. What they are doing in the Bill is to assist the case where the dependent relative has some income and the need is not so great. What I have in mind is the instance where the need is acute and pressing because the dependent relative has nothing of his or her own, and costs are rising all the time. Surely this Committee should be prepared to make an effort to try to recognise the hardship which otherwise ensues.

    The hon. Member for Portsmouth, Langstone (Mr. G. P. Stevens), put his case persuasively, and the hon. Member for Barnet (Mr. Maudling) very ingeniously, for this Amendment. The question of the dependent relatives' allowance is one which, for the reasons given by the hon. Member for Hampstead (Mr. H. Brooke), we should all approach with sympathy. The proposal here is to raise the allowance from £50 to £60. As the hon. Member for Barnet said, it was placed at £50 in 1943; and limits were then set of £30 income for the dependent relative for the full allowance rising to £80, at which the allowance tapered off. In 1947, when the old age pension was raised, those limits of £30 and £80 were raised to £70 and £120 so as to ensure that anybody getting the 26s. old age pension got the full benefit of the allowance.

    As was implied by the hon. Member for Hampstead—I think I am entitled to refer to it, even though he attempted to deter me from doing so—in Clause 15 (4) we are this year, in association with the further rise in the old age pension, raising the limit further to £80 and £120. That does give further benefit to a number of these persons, and I think it goes some way to meet the point of the hon. Member for Barnet, that in a year when we are doing something for the children we ought to do something for the dependent relative also.

    6.15 p.m.

    The hon. Member for Hampstead said that that was insufficient. We have to remember that all this entirely affects people within the Income Tax range. There are many, no doubt millions of persons, whose income does not rise to that level at all and they are naturally those in the most acute need. We have to see this matter in perspective. There is the £20 million to assist to increase the retirement pension and assistance rates to those very persons who almost entirely fall below the Income Tax range.

    I agree that the proposal in this Amendment would be a high priority in an easier financial year, when we were not confronted with such budgetary difficulties; but it would cost £5¼ million—the figure of the hon. Gentleman was very nearly right—and I think we have to recall the general setting of the Budget, and the fact that we felt bound this year to impose charges on the Health Service. We must ask whether it would be justifiable, in all those circumstances, to concede, in addition to this other measure, a further £5¼ million for that purpose. On the whole, we cannot feel that a case has fully been made out. In our view the first priority this year must be concessions to the old age pensioner by way of increases in the National Assistance rates. Therefore, with regret I must announce that we cannot accept this Amendment.

    I hope it is not too late for the Financial Secretary to reconsider his decision. After the Chancellor announces his Budget and the Finance Bill is published and subsequently discussed, all of us receive many letters from constituents asking for relief from either direct or indirect taxation to mitigate their hardship due at the moment principally to the rising cost of living. In my view there is no category of persons more in need of sympathy and sympathetic treatment in relief of taxation than the people referred to in the Amendment, the dependent relatives and particularly the person dependent on a fixed income for his or her means of livelihood.

    In my constituency I probably have more than the average number of people dependent on fixed incomes, and I have a good opportunity to see how hard is their plight. In all our budgetary arrangements when we are discussing the case of, let us say, the lowest paid worker in the country, we should remember that he has, after all, some bargaining power behind him. He has behind him a union through which he can negotiate his wage claims. The category of persons we are now discussing not only have no union to represent their views, but no spokesman as such, and very little real bargaining power to support them. Therefore, it is incumbent upon the Government to give them more consideration than any other category.

    The Financial Secretary has said this Amendment would cost £5¼ million. I realise that it is the responsibility of us all today, on both sides of the Committee, to see where we can find money and where we can cut down costs. I merely ask the Financial Secretary whether he really believes that £5¼ million is a high price to pay to mitigate the hardship of this kind of person, existing in circumstances for which no adequate allowance has been made during the last seven years.

    I am very sorry that the Financial Secretary spoke so soon after this Amendment had been moved. Quite apart from his refusal to grant any concession, I should have thought that the hon. Gentleman would have cared to hear some of the arguments which could be put forward in support of this Amendment. I fully realise now that the hon. Gentleman does not want to hear the arguments. It would have been fairer to a wide section of the community if he had been prepared to listen and then to have given a considered reply to the arguments put forward.

    I thought that the arguments had been so well put by the first three speakers that they could hardly have been improved upon.

    That may be so, but I have been long enough in politics to understand the Front Bench technique, even in my own party. Therefore, I am not prepared to accept that as a reason. As the hon. Gentleman saw that other hon. Members on this side of the Committee wished to take part in the debate, I am not prepared to accept what he said as a good reason for his intervention.

    I want to put on record how much I regret that the Chancellor's speech last night is not available today in HANSARD so that I can quote from it. I will not pursue the subject, because I know that I should be out of order, but I want to comment on what the right hon. Gentleman said as a background to what I want to say. Last night the right hon. Gentleman delivered a tirade against this side of the Committee on the ground that presumably we were only interested in people who were paying Income Tax.

    Today, when my hon. Friends and myself move an Amendment dealing with lower income groups, the Financial Secretary gets up and repudiates it in somewhat dulcet tones and with none of the vindictiveness which was displayed last night on the Treasury Bench. I hope that the country will take note of the fact that it is a Socialist Government which has refused to take note of what I call the second category of people who are seriously impeded by the ever-rising cost of living.

    In the Budget account was taken of the position of old age pensioners and of those on the various scales of National Assistance, though I am afraid that it was not met with very great pleasure by the old age pensioners. We come next to dependent relatives who have no income but who are being provided for by those who, in many instances, have to work to maintain them. Those people are seriously in need of assistance from the Government. Therefore, I am extremely disappointed that the hon. Gentleman should refuse to find sufficient money to meet the Amendment.

    I will give one example of where he can find the money, and I should be obliged if the occupants of the Treasury Bench would listen. I observe with interest that the Select Committee on Estimates has produced a Report about £8 million lost on hostels. People were living at hostels—

    No, it cannot, but the hon. Gentleman did say that the money had to be found and he did not say where it was to be found. As hon. Gentlemen opposite are always taunting us with not making practical proposals, I thought that I should mention that. The Financial Secretary will know of the report and I need not proceed further with that subject. It is now on record. The money could be found from various sources. If the hon. Gentleman likes to invite me to come and tell him about that, I should be delighted to accept an invitation.

    Another point I want to make is that I think that the hon. Gentleman has failed to take into consideration that both bachelors and spinsters—and I mix them together—[Interruption.] I find that I get much more support from my own colleagues if I talk about bachelors and spinsters together. The bachelors are rather self-conscious about the spinsters. I think that the hon. Gentleman ought to take into consideration that the spinsters are not getting equal pay, and yet they have to carry the burden—

    No, I will not. All this arises from the fact that the hon. Gentleman intervened too early in the debate. He did not give full consideration to the whole of this problem. There are people—and I will not talk about equal pay—who are maintaining dependent relatives and who do not get very high wages. They have to pay, by way of direct and indirect taxation, a contribution to the concessions which have already been given to married men with families. Therefore, the hon. Gentleman is doing no justice at all to this second category.

    It is difficult to find a way of assisting people who are on a static income. Just as in the constituency of my hon. Friend the Member for Surrey, East (Mr. Astor), there are in my constituency a large number of people who maintain dependent relatives. It is most regrettable that apparently the Government do not understand their plight and are not prepared to do anything to assist them. I can only hope that, between now and the Report stage, this country will ring with the fact that the Socialist Government are not concerned with the position of those in the lower income groups. If this Amendment were accepted, we should be doing something for a most deserving group of people.

    Before the hon. Lady the Member for Tynemouth (Miss. Irene Ward) gets carried away with indignation, she should bear in mind that a large number of dependent relatives—probably the majority for whom an Income Tax claim is made—are already old age or retirement pensioners for whom a great deal has been done since the present dependent relative allowance was raised to £50 in 1943.

    In 1943, the income limit of the dependent relative for whom an allowance was given was as low as £30. That was because the old age pension then was only £26 a year. Since then, the old age pension has been raised. First it was increased to 26s. a week, and it is now to be raised to 30s. a week. Notwithstanding that great improvement in the position of the old age pensioner, dependent relative claims will still be admitted where assistance is given to the relatives concerned, even though their income is so much higher. That seems to be an important point. The improvement in the provision for old age under the social services of the present Government must be looked at in relation to the dependent relative allowance. Surely, that is a point to be borne in mind?

    6.30 p.m.

    The second remark I would make about this, and I do it with great diffidence, is that I believe there is a very great deal of abuse of this Income Tax allowance. I hope that the Royal Commission, which will later consider this and many other Income Tax allowances, will review the possibility that, especially amongst overseas workers in this country, there is quite a considerable abuse of the dependent relative allowance for Income Tax purposes. It is really a question of priorities, and a question whether, having regard to the improvement in the position of the majority of old people which has taken place under the social services schemes, this dependent relative allowance has a prior claim at a time when we are having to increase taxation.

    It is, no doubt, true, as the hon. Member for Sowerby (Mr. Houghton) has just reminded the Committee, that we must consider this question in relation to the general effect of the social services and so on upon the old people concerned; but so also must we consider it, surely, in relation to two other things. One is the falling value of money, and, presumably, the social services to which he referred were designed for a higher value of money than people are going to get in the year for which we are legislating. It is perfectly proper that that should have been taken into consideration.

    The second general matter which seems to me proper, and which I do not think has yet been mentioned—if I may so far assume that the gentleman from Whitehall is not so omniscient as to believe there is no more to be said on the matter than he could imagine—there is one other consideration that ought to be taken into account, and that is what it is we are taxing. What it is that is being taxed here is benevolence and affection. What is being taxed is what need not be done but is done as a matter of affection, and I should like to ask him—because I hope he has not exhausted his faculties, as he has not exhausted his opportunities of speech—one question.

    He told us that this would cost £5,250,000. Has any estimate been made in his office how much more or less than £5,250,000 would be thrown upon the public if all of this burden were disclaimed, were refused or rejected by the persons falling to be taxed—if they said "I am not bound to keep my aged aunt, or my imbecile and disgusting uncle, though he is my uncle, and I am not going to do it any longer"? How much more or how much less than £5,250,000 would be affected? Unless there was a fairly close estimate of that, I do not really think that he is in a position to use the argument which the Financial Secretary used a quarter of an hour ago.

    I hope, before we finish with this Amendment, that the Financial Secretary will be able to give us a little more encouragement than he did when he intervened a short time ago. He cannot resist either the logic or the justice of the Amendment moved by my hon. Friend.

    So far as the justice of it is concerned, the hon. Member for Sowerby (Mr. Houghton) drew attention to the fact that many dependent relatives were in the old age pension class, and he took credit for the fact that they were now going to get the increase of 4s. in their weekly pensions, but he did not remind the Committee that that 4s. increase has been more than eaten up by the rise in the cost of living since the original pensions rates were fixed in 1946.

    So far the logic of the claim is concerned, the Chancellor, in this Bill, is increasing the allowance in respect of the wife and in respect of the child, but he is not increasing the allowance in the case of the dependent relative. Hitherto, in years gone by, these three allowances, generally speaking, have all moved up together. So far as the wife and the child are concerned, they are liabilities which a man voluntarily takes upon himself. So far as a dependent relative is concerned, this is a liability which is nearly always thrust quite accidently upon certain individuals.

    I am tremendously struck as I go about by the number of people I meet maintaining dependent relatives, who have undertaken the burden courageously, cheerfully and voluntarily. In a vast number of cases, the person maintained is not in the retirement age class at all. Innumerable examples come to one's notice, and I hope, in view of the fact that the logic and the justice of this Amendment cannot really be resisted, that the right hon. Gentleman will not try to get away with it simply on the ground that it would cost, as he says, £5,250,000. That is a point which ought to have been taken into consideration when the Budget was framed as a whole. When he decided to increase the allowance for the wife and

    Division No. 87.]

    AYES

    [6.38 p.m.

    Aitken, W. T.Darling, Sir William (Edinburgh, S.)Hudson, Rt. Hon. Robert (Southport)
    Alport, C. J. M.Davidson, ViscountessHudson, W. R. A. (Hull, N.)
    Amery, Julian (Preston, N.)Davies, Nigel (Epping)Hutchinson, Geoffrey (Ilford, N.)
    Amory, Heathcoat (Tiverton)de Chair, SomersetHutchison, Lt.-Com. Clark (E'b'rgh W.)
    Arbuthnot, JohnDe la Bère, R.Hutchison, Col. James (Glasgow)
    Ashton, H. (Chelmsford)Deedes, W. F.Hyde, Ll.-Col. H. M.
    Assheton, Rt. Hon. R. (Blackburn, W.)Digby, S. WingfieldHylton-Foster, H. B.
    Astor, Hon. M. L.Dodds-Parker, A. D.Jeffreys, General Sir George
    Baker, P. A. D.Donner, P. W.Jennings, R.
    Baldock, Lt.-Cmdr. J. M.Douglas-Hamilton, Lord MalcolmJohnson, Howard (Kemptown)
    Baldwin, A. E.Drayson, G. B.Jones, A. (Hall Green)
    Banks, Col. C.Dugdale, Maj. Sir Thomas (Richmond)Joynson-Hicks, Hon. L. W.
    Baxter, A. B.Duncan, Capt. J. A. L.Kaberry, D.
    Beamish, Maj. TuftonDunglass, LordKerr, H. W. (Cambridge)
    Bell, R. M.Duthie, W. S.Lambert, Hon. G.
    Bennett, Sir Peter (Edgbaston)Eccles, D. M.Lancaster, Col. C. G.
    Bennett, Dr. Reginald (Gosport)Eden, Rt. Hon. A.Langford-Holt, J.
    Bennett, William (Woodside)Elliot, Rt. Hon. W. E.Leather, E. H. C.
    Bevins, J. R. (Liverpool, Toxteth)Erroll, F. J.Legge-Bourke, Maj. E. A. H.
    Birch, NigelFisher, NigelLennox-Boyd, A. T.
    Bishop, F. P.Fort, R.Lindsay, Martin
    Black, C. W.Foster, JohnLinstead, H. N.
    Boles, Lt.-Col. D. C. (Wells)Fraser, Hon. Hugh (Stone)Llewellyn, D.
    Boothby, R.Fraser, Sir Ian (Morecambe & Lonsdale)Lloyd, Rt. Hn. Geoffrey (King's N'rt'n)
    Bossom, A. C.Fyfe, Rt. Hon. Sir David MaxwellLloyd, Maj. Guy (Renfrew, E.)
    Bowen, E. R. (Cardigan)Gage, C. H.Lloyd, Selwyn (Wirral)
    Boyd-Carpenter, J. A.Galbraith, Cmdr. T. D. (Pollok)Lockwood, Lt.-Col. J. C.
    Boyle, Sir EdwardGarner-Evans, E. H. (Denbigh)Longden, Gilbert (Herts, S. W.)
    Bracken, Rt. Hon. B.Gates, Maj. E. E.Low, A. R. W.
    Braine, B. R.Glyn, Sir RalphLucas, Sir Jocelyn (Portsmouth, S.)
    Braithwaite, Sir Albert (Harrow, W.)Gomme-Duncan, Col. A.Lucas, P. B. (Brentford)
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Gridley, Sir ArnoldLucas-Tooth, Sir Hugh
    Bromley-Davenport, Lt.-Col. W.Grimond, J.Lyttelton, Rt. Hon. O.
    Brooke, Henry (Hampstead)Grimston, Hon. John (St. Albans)McAdden, S. J.
    Browne, Jack (Govan)Grimston, Robert (Westbury)McCallum, Major D.
    Buchan-Hepburn, P. G. T.Harden, J. R. E.McCorquodale, Rt. Hon. M. S.
    Bullock, Capt. M.Hare, Hon. J. H. (Woodbridge)Macdonald, Sir Peter (I. of Wight)
    Bullus, Wing Commander E. E.Harris, Frederic (Croydon, N.)Mackeson, Brig. H. R.
    Burden, F. A.Harris, Reader (Heston)McKibbin, A.
    Butcher, H. W.Harvey, Air Cdre. A. V. (Macclesfield)McKie, J. H. (Galloway)
    Butler, Rt. Hn. R. A. (Saffron Walden)Harvey, Ian (Harrow, E.)Maclay, Hon. John
    Carr, Robert (Mitcham)Harvie-Watt, Sir GeorgeMaclean, Fitzroy
    Carson, Hon. E.Hay, JohnMacLeod, Iain (Enfield, W.)
    Channon, H.Head, Brig. A. H.MacLeod, John (Ross and Cromarty)
    Churchill, Rt. Hon. W. S.Headlam, Lt.-Col. Rt. Hon. Sir CuthbertMacmillan, Rt. Hon. Harold (Bromley)
    Clarke, Col. Ralph (East Grinstead)Heald, LionelMacpherson, Major Niall (Dumfries)
    Clarke, Brig. Terence (Portsmouth, W.)Heath, EdwardMaitland, Cmdr. J. W.
    Clyde, J. L.Henderson, John (Cathcart)Manningham-Buller, R. E.
    Colegate, A.Hicks-Beach, Maj. W. W.Marlowe, A. A. H.
    Conant, Maj. R. J. E.Higgs, J. M. C.Marples, A. E.
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Hill, Dr. Charles (Luton)Marshall, Douglas (Bodmin)
    Cooper-Key, E. M.Hill, Mrs. E. (Wythenshawe)Marshall, Sidney (Sutton)
    Corbett, Lt.-Col. Uvedale (Ludlow)Hinchingbrooke, ViscountMaude, Angus (Ealing S.)
    Craddock, Beresford (Spelthorne)Hirst, GeoffreyMaude, John (Exeter)
    Cranborne, ViscountHolmes, Sir Stanley (Harwich)Maudling, R.
    Crookshank, Capt. Rt. Hon. H. F. C.Hope, Lord JohnMedlicott, Brig. F.
    Crosthwaite-Eyre, Col. O. E.Hopkinson, HenryMellor, Sir John
    Crouch, R. F.Hornsby-Smith, Miss. P.Molson, A. H. E.
    Crowder, Capt. John (Finchley)Horsbrugh, Rt. Hon. FlorenceMonckton, Sir Walter
    Crowder, Petre (Ruislip—Northwood)Howard, Gerald (Cambridgeshire)Moore, Lt.-Col. Sir Thomas
    Cundiff, F. W.Howard, Greville (St. Ives)Morris, Hopkin (Carmarthen)
    Cuthbert, W. N.Hudson, Sir Austin (Lewisham, N.)Morrison, John (Salisbury)

    child, he ought to have considered also the cost of making this concession to the dependent relative, and, if the right hon. Gentleman cannot tell us, as I hope he still may, that he will consider this question again between now and Report stage, I would advise my hon. Friends that we should go into the Division Lobby in support of the Amendment.

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

    The Committee divided: Ayes, 282; Noes, 294

    Morrison, Rt. Hon. W. S. (Cirencester)Robinson, Roland (Blackpool, S.)Thomas, J. P. L. (Hereford)
    Mott-Radclyffe, C. E.Robson-Brown, W.Thompson, Kenneth Pugh (Walton)
    Nabarro, G.Rodgers, John (Sevenoaks)Thompson, Lt.-Cmdr. R. (Croydon, W.)
    Nicholls, HarmarRoper, Sir HaroldThorneycroft, Peter (Monmouth)
    Nicholson, G.Ropner, Col. L.Thornton-Kemsley, Col. C. N.
    Nield, Basil (Chester)Russell, R. S.Thorp, Brig. R. A. F.
    Noble, Cmdr. A. H. P.Ryder, Capt. R. E. D.Tilney, John
    Nugent, G. R. H.Salter, Rt. Hon. Sir ArthurTurner, H. F. L.
    Nutting, AnthonySavory, Prof. D. L.Turton, R. H.
    Oakshott, H. D.Scott, DonaldTweedsmuir, Lady
    Odey, G. W.Shepherd, WilliamVane, W. M. F.
    O'Neill, Rt. Hon. Sir HughSmiles, Lt.-Col. Sir WalterVaughan-Morgan, J. K.
    Ormsby-Gore, Hon. W. D.Smithers, Peter (Winchester)Vosper, D. F.
    Orr, Capt. L. P. S.Smyth, Brig. J. G. (Norwood)Wakefield, Edward (Derbyshire, W.)
    Orr-Ewing, Charles Ian (Hendon, N.)Snadden, W. McN.Walker-Smith, D. C.
    Orr-Ewing, Ian L. (Weston-super-Mare)Soames, Capt. C.Ward, Hon. George (Worcester)
    Osborne, C.Spearman, A. C. M.Ward, Miss. I. (Tynemouth)
    Peaks, Rt. Hon. O.Spence, H. R. (Aberdeenshire, W.)Waterhouse, Capt. Rt. Hon. C.
    Perkins, W. R. D.Spens, Sir Patrick (Kensington, S.)Watkinson, H.
    Peto, Brig. C. H. M.Stanley, Capt. Hon. Richard (N. Fylde)Webbe, Sir H. (London & Westminster)
    Pickthorn, K.Stevens, G. P.Wheatley, Maj. M. J. (Poole)
    Pitman, I. J.Steward, W. A. (Woolwich, W.)White, Baker (Canterbury)
    Powell, J. EnochStewart, Henderson (Fife, E.)Williams, Charles (Torquay)
    Price, Henry (Lewisham, W.)Stoddart-Scott, Col. M.Williams, Gerald (Tonbridge)
    Prior-Palmer, Brig. O.Storey, S.Williams, Sir Herbert (Croydon, E.)
    Profumo, J. D.Strauss, Henry (Norwich, S.)Wills, G.
    Raikes, H. V.Stuart, Rt. Hon. James (Moray)Wilson, Geoffrey (Truro)
    Rayner, Brig. R.Summers, G. S.Winterton, Rt. Hon. Earl
    Redmayne, M.Sutcliffe, H.Wood, Hon. R.
    Remnant, Hon. P.Taylor, Charles (Eastbourne)York, C.
    Renton, D. L. M.Taylor, William (Bradford, N.)
    Roberts, Maj. Peter (Heeley)Teeling, W.

    TELLERS FOR THE AYES:

    Robertson, Sir David (Caithness)Teevan, T. L.Mr. Studholme and Mr. Galbraith

    NOES

    Acland, Sir RichardCooper, John (Deptford)Greenwood, Rt. Hn. Arthur (Wakefield)
    Adams, RichardCorbet, Mrs. Freda (Peckham)Grenfell, D. R.
    Albu, A. H.Cove, W. G.Grey, C. F.
    Allen, Arthur (Bosworth)Craddock, George (Bradford, S.)Griffiths, David (Rother Valley)
    Allen, Schofield (Crewe)Crawley, A.Griffiths, Rt. Hon. James (Llanelly)
    Anderson, Alexander (Motherwell)Crosland, C. A. R.Griffiths, William (Exchange)
    Anderson, Frank (Whitehaven)Cullen, Mrs. A.Gunter, R. J.
    Attlee, Rt. Hon. C. R.Daines, P.Hale, Joseph (Rochdale)
    Awbery, S. S.Dalton, Rt. Hon. H.Hale, Leslie (Oldham, W.)
    Ayles, W. H.Darling, George (Hillsborough)Hail, John (Gateshead, W.)
    Bacon, Miss. AliceDavies, A. Edward (Stoke, N.)Hall, Rt. Hon. Glenvil (Colne Valley)
    Baird, J.Davies, Harold (Leek)Hamilton, W. W.
    Balfour, A.Davies, Stephen (Merthyr)Hardman, D. R.
    Barnes, Rt. Hon. A. J.de Freitas, GeoffreyHardy, E. A.
    Bartley, P.Deer, G.Hargreaves, A.
    Bellenger, Rt. Hon. F. J.Delargy, H. J.Hastings, S.
    Benn, WedgwoodDodds, N. N.Hayman, F. H.
    Benson, G.Donnelly, D.Henderson, Rt. Hon. Arthur (Tipton)
    Beswick, F.Driberg, T. E. N.Herbison, Miss. M.
    Bevan, Rt. Hon. A. (Ebbw Vale)Dugdale, Rt. Hon. John (W Bromwich)Hewitson, Capt. M.
    Bing, G. H. C.Dye, S.Hobson, C. R.
    Blenkinsop, A.Ede, Rt. Hon. J. C.Holman, P.
    Blyton, W. R.Edelman, M.Holmes, Horace (Hemsworth)
    Boardman, H.Edwards, John (Brighouse)Houghton, D.
    Booth, A.Edwards, Rt. Hon. Ness (Caerphilly)Hubbard, T.
    Bottomley, A. G.Edwards, W. J. (Stepney)Hudson, James (Ealing, N.)
    Bowden, H. W.Evans, Albert (Islington, S. W.)Hughes, Emrys (S. Ayrshire)
    Bowles, F. G. (Nuneaton)Evans, Edward (Lowestoft)Hughes, Hector (Aberdeen, N.)
    Braddock, Mrs. ElizabethEvans, Stanley (Wednesbury)Hynd, H. (Accrington)
    Brook, Dryden (Halifax)Ewart, R.Hynd. J. B. (Attercliffe)
    Brooks, T. J. (Normanton)Fernyhough, E.Irvine, A. J. (Edge Hill)
    Broughton, Dr. A. D. D.Field, Capt. W. J.Irving, W. J. (Wood Green)
    Brown, Rt. Hon. George (Belper)Finch, H. J.Isaacs. Rt. Hon. G. A.
    Brown, Thomas (Ince)Fletcher, Eric (Islington E.)Janner, B.
    Burke, W. A.Follick, M.Jay, D. P. T.
    Burton, Miss. E.Foot, M. M.Jeger, George (Goole)
    Butler, Herbert (Hackney, S.)Forman, J. C.Jeger, Dr. Santo (St. Pancras, S.)
    Callaghan, L. J.Fraser, Thomas (Hamilton)Jenkins, R. H.
    Carmichael, J.Freeman, John (Watford)Johnson, James (Rugby)
    Castle, Mrs. B. A.Gaitskell, Rt. Hon. H. T. N.Johnston, Douglas (Paisley)
    Champion, A. J.Ganley, Mrs. C. S.Jones, David (Hartlepool)
    Chetwynd, G. R.George, Lady Megar LloydJones, Frederick Elwyn (W. Ham, S.)
    Clunie, J.Gibson, C. W.Jones, Jack (Rotherham)
    Cocks, F. S.Gilzean, A.Jones, William Elwyn (Conway)
    Coldrick, W.Glanville, James (Consett)Keenan, W.
    Collindridge, F.Gooch, E. G.Kenyon, C.
    Cook, T. F.Gordon-Walker, Rt. Hon. P. C.Key, Rt. Hon. C. W.
    Cooper, Geoffrey (Middlesbrough, W.)Greenwood, Anthony (Rossendale)King, Dr. H. M.

    Kinghorn, Sqn. Ldr. E.O'Brien, T.Strachey, Rt. Hon. J.
    Kinley, J.Oldfield, W. H.Strauss, Rt. Hon. George (Vauxhall)
    Kirkwood, Rt. Hon. D.Oliver, G. H.Stross, Dr. Barnett
    Lang, GordonOrbach, M.Summerskill, Rt. Hon. Edith
    Lee, Frederick (Newton)Padley, W. E.Sylvester, G. O.
    Lee, Miss. Jennie (Cannock)Paget, R. T.Taylor, Bernard (Mansfield)
    Lever, Leslie (Ardwick)Paling, Rt. Hon. W. (Dearne Valley)Taylor, Robert (Morpeth)
    Lewis, Arthur (West Ham, N.)Paling, Will T. (Dewsbury)Thomas, David (Aberdare)
    Lewis, John (Bolton, W.)Pannell, T. C.Thomas, George (Cardiff)
    Lindgren, G. S.Pargiter, G. A.Thomas, Iorwerth (Rhondda, W.)
    Lipton, Lt.-Col. M.Paton, J.Thomas, Ivor Owen (Wrekin)
    Logan, D. G.Pearson, A.Thorneycroft, Harry (Clayton)
    Longden, Fred (Small HeathPeart, T. F.Thurtle, Ernest
    McAllister, G.Poole, C.Timmons, J.
    MacColl, J. E.Popplewell, E.Tomney, F.
    McGhee, H. G.Porter, G.Turner-Samuels, M.
    McGovern, J.Price, Philips (Gloucestershire. W.)Ungoed-Thomas, Sir Lynn
    McInnes, J.Proctor, W. T.Usborne, H.
    Mack, J. D.Pryde, D. J.Vernon, W. F.
    McKay, John (Wallsend)Pursey, Cmdr. H.Viant, S. P.
    Mackay, R. W. G. (Reading, N.)Rankin, J.Wallace, H. W.
    McLeavy, F.Rees, Mrs. D.Watkins, T. E.
    MacMillan, Malcolm (Western Isles)Reeves, J.Webb, Rt. Hon. M. (Bradford, C.)
    McNeil, Rt. Hon. H.Reid, Thomas (Swindon)Weitzman, D.
    MacPherson, Malcolm (Stirling)Reid, William (Camlachie)Wells, Percy (Faversham)
    Mainwaring, W. H.Rhodes, H.Wells, William (Walsall)
    Mallalieu, E. L. (Brigg)Richards, R.West, D. G.
    Mallalieu, J. P. W. (Huddersfield, E.)Robens, Rt. Hon. A.Wheatley, Rt. Hon. John (Edinb'gh E.)
    Mann, Mrs. JeanRoberts, Emrys (Merioneth)White, Mrs. Eirene (E. Flint)
    Manuel, A. C.Roberts, Goronwy (Caernarvonshire)White, Henry (Derbyshire, N. E.)
    Marquand, Rt. Hon. H. A.Robertson, J. J. (Berwick)Whiteley, Rt. Hon. W.
    Mathers, Rt. Hon. G.Robinson, Kenneth (St. Pancras, N.)Wilcock, Group Capt. C. A. B.
    Mellish, R. J.Rogers, George (Kensington, N.)Wilkes, L.
    Messer, F.Ross, WilliamWilley, Frederick (Sunderland)
    Middleton, Mrs. L.Royle, C.
    Mikardo, Ian.Shawcross, Rt. Hon. Sir HartleyWilley, Octavius (Cleveland)
    Mitchison, G. R.Shinwell, Rt. Hon. E.Williams, David (Neath)
    Moeran, E. W.Shurmer, P. L. E.Williams, Rev. Llywelyn (Abertillery)
    Monslow, W.Silverman, Julius (Erdington)Williams, Ronald (Wigan)
    Moody, A. S.Silverman, Sydney (Nelson)Williams, Rt. Hon. Thomas (Don V'lly)
    Morgan, Dr. H. B.Simmons, C. J.Williams, W. T. (Hammersmith, S.)
    Morley, R.Slater, J.Wilson, Rt. Hon. Harold (Huyton)
    Morris, Percy (Swansea, W.)Smith, Ellis (Stoke, S.)Winterbottom, Ian (Nottingham, C.)
    Morrison, Rt. Hon. H. (Lewisham, S.)Smith, Norman (Nottingham S.)Winterbottom, Richard (Brightside)
    Mort, D. L.Snow, J. W.Wise, F. J.
    Moyle, A.Sorensen, R. W.Woodburn, Rt. Hon. A.
    Mulley, F. W.Soskice, Rt. Hon. Sir FrankWoods, Rev. G. S.
    Murray, J. D.Sparks, J. A.Wyatt, W. L.
    Nally, W.Steele, T.Yates, V. F.
    Neal, Harold (Bolsover)Stewart, Michael (Fulham, E.)
    Noel-Baker, Rt. Hon. P. J.Stokes, Rt. Hon. R. R.

    TELLERS FOR THE NOES:

    Mr. Hannan and Mr. Wilkins.

    I beg to move, in page 10, line 15, at the end, to add:

    (7) Subsection (1) of section fifteen of the Finance Act, 1925 (which, as amended by subsequent enactments, provides for a deduction of tax on an amount equal to one-fifth of the amount of the earned income but not exceeding four hundred pounds), shall have effect as if the words "five hundred pounds" were substituted for the word "four hundred pounds."
    While I naturally regret the way in which the last Amendment was received, I hope the Chancellor will regard this one in a different light, because it is of quite a different character. I am putting forward what I believe to be a business proposition which will produce results. This Amendment deals with the earned income relief, and, as the Committee knows, at the present time that relief extends only to incomes up to £2,000, and is itself limited to the sum of £400.

    The Amendment makes a modest increase from £2,000 to £2,500 which would enable the recipients to have an increased allowance from £400 to £500. I move this Amendment because for a long time there has been a feeling that the earned income allowance was not high enough in the present changed conditions. The reduced value of money has reduced the value of the concession which was made. We are not concerned here with the high-salaried man, nor, on the other hand, is it a case of giving away something for nothing. This is a matter of increasing the incentive to people who have to do the work.

    I can assure the Committee that the class of people affected by this earned income allowance includes some of the most important people in the country. They are ordinary managerial types employed to a large extent in industry, the ordinary professional man, the civil servant, the smaller business man—the type of person who is doing such a great deal at present to increase so enormously the productivity of the country and who has been responsible for a great many of the results to which hon. Members opposite are constantly paying tribute.

    If a job is done well, one can depend upon it that there has been some very good staff work. I am always prepared to pay the highest tribute to our workers, but I know those workers are the very first to admit that their effectiveness depends to an enormous extent upon the leadership of the class for whom I am now pleading. That class, like every other section of the community, is very much affected by the rise in costs and the reduction in the value of money, and we are asking those people to carry additional burdens. I can assure the Committee that the burdens are enormous at the moment. It is hard work organising factories even with a supply of raw materials. It is a very difficult job to ask these people to increase production and then add to their task that of scouring the country for materials and buying scrap so that they can barter it. That is what is going on.

    I feel that we are not asking too much in asking that these people should be recognised. It has been suggested that this earned income allowance might be very considerably increased. We have resisted that. We feel that in these days we want something more in the nature of a gesture, something to show that these people are being appreciated. We did not set the figure too high because we knew that in conditions as they are today, the Chancellor would be bound to turn down such a proposal and say he could not afford it. I maintain that we are not asking for something for nothing, and from my knowledge of what is happening I know that any concession would be amply repaid many times over. Hon. Members will know the old saying about not muzzling the ox that grinds the corn. I am asking that we should give a little more corn to the ox in order to get a great deal more food from him as he works.

    The hon. Member for Birmingham, Edgbaston (Sir P. Bennett), has certainly moved this Amendment with great frankness and moderation. It is important that we should understand exactly what is involved in it. It is that there should be a concession to drawers of earned incomes between £2,000 and £2,500. It would not be an enormous concession. I think that in the case of people earning exactly £2,500 it would be £47 10s. a year.

    There are worse categories of people to whom to give concessions than those involved in this Amendment, but there are also better categories. There are certainly worse. Some of them are those we heard about from the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) last night when he hinted very strongly how he would like to abolish the Surtax altogether at the rate at which it falls on people at more than 15s. in the £; and there are also those people the hon. Member for Chippenham (Mr. Eccles) talked about this afternoon. In certain circumstances there may be a case for giving concessions to drawers of earned incomes in the category dealt with in this Amendment, but I cannot think that this year, when we have to impose many new burdens on other sections of the community, is really a year in which to make concessions to anybody earning more than £2,000 annually.

    If we were to do it, even in future years, it should be done at the expense of drawers of big unearned incomes. One of the ways in which I should prefer to see this done, if it were to be done, would not be by an increase in the earned income allowance but by a separation between the standard rate for unearned income and the standard rate for earned income. I think we give a wrong impression by the way in which we express these things at the present time. People with earned incomes think they have been paying in the past at a standard rate of 9s. in the £ and that they will pay in the future at a standard rate of 9s. 6d. in the £; but in fact nobody with an earned income up to £2,000 possibly pays anything like that on the standard rate. The standard rate in the past for earned income has been about 7s. 2d. and not 9s. and as now increased will be about 7s. 7d. in the £ and not 9s. 6d. It would be better if we expressed it that way so that people do not feel they are paying a higher rate than they really are.

    I suggest to the Chancellor that the standard rate on unearned income should be separated entirely from the standard rate on earned income so that we can see the earned rate at the lower level and so that, as we might want to do one day, we can put up the unearned standard rate without putting up the earned standard rate. It might then be possible in an easier year to give concessions to drawers of earned incomes at the expense of drawers of big unearned incomes. It might be well worth considering doing that when we face easier circumstances than we are facing this year.

    I had no intention of taking part in the debate on this Amendment until I heard the hon. Member for Stechford (Mr. Jenkins). I think it would be most unfortunate if any silence with regard to his suggestions were to lead people to imagine one might support them. He appears to be under the impression that one can divide into two watertight compartments income deemed earned and income deemed unearned, whereas anybody who knows anything about the case must acknowledge that there are large numbers of people in this country who have contrived to save money in one form or another and have subsequently invested it. Those investments are labelled unearned income from the point of view of the hon. Member for Stechford and therefore should bear higher taxation.

    If the hon. Member is arguing that one cannot effectively distinguish between earned and unearned income, how can he possibly support this Amendment, because precisely what the Amendment tries to do is to take the distinction already there and extend its importance.

    The point is that it is quite obvious that the hon. Member for Stechford wanted to give a concession along the lines mentioned by my hon. Friend the Member for Edgbaston (Sir P. Bennett) at the expense of those whom he calls the recipients of unearned income. My point is that whether it be in the form of savings subsequently invested or in the form of a pension from a commercial company which a man might have served faithfully for many years, quite clearly from the definition now used by the Inland Revenue they will fall into the category of those whom the hon. Member for Stechford now suggests, should provide means to give taxation relief to those still working possibly in the same factory.

    7.0 p.m.

    The only point I want to add in support of my hon. Friend is that the Committee should appreciate the additional responsibilities and worries which are borne by those who hold senior administrative posts in the category to which this Amendment refers. I well remember a great friend of mine, who was a manager at the time, deciding that it would be in the interests of his job and of the firm for which he was working if he took six months off from his managerial responsibilities and spent a few weeks doing every job in the factory for which he was responsible. Whether it meant stripping to the waist and sweating, or doing some other form of job, for six months he did it, and whether he was on the six to two shift or the two to ten shift or the ten to six shift, it made no difference. He said that he had not had such a holiday in his life, because when he came out of the factory he ceased to have any worries about his job.

    Scores of people affected by this Amendment know quite well that when they leave the factory, if they are not at all sure about a decision which they have to make the following day or a decision which they have already made, they have an additional worry outside working hours, which is not the case with those who earn substantial sums—and good luck to them—by piece work or other methods. In addition, very often people with managerial responsibilities have a seven-day week, for they have to go and supervise the plant on Sunday mornings. I am pleading for these technicians who, as my hon. Friend quite rightly said, are making a valuable contribution to the increase in productivity which we welcome, and I hope the Chancellor will recognise that contribution by accepting this Amendment.

    I listened attentively to the speech of the hon. Member for Edgbaston (Sir P. Bennett). He referred to the question of incentive, and it would appear that that question cannot be avoided in our discussions, no matter what are the terms of the Amendment we happen to be considering.

    The hon. Gentleman also said that the purpose of this Amendment was to help the small business man. It has already been explained that this Amendment will affect only those who are earning more than £2,000 a year, so I would say that he is not such a small business man after all. It seems to me when people speak of small business men that what is meant by "small" depends entirely upon one's outlook on life. To me, £2,000 a year is rather a large income, and I look askance at any Amendment which seeks to relieve in an exceptional way one class of the community, while ignoring the poor man who is scarcely able to live. I do not favour this Amendment in any shape or form.

    The hon. Member for Edgbaston said we should remember that the workers depend upon the managerial type of man. That kind of talk in these days is out of place, out of fashion and, indeed, I might almost say rather unintelligent—

    In a comparative sense, I mean. How can we possibly separate these people? Just as the worker depends upon the managerial type, so does the so-called technical leader depend upon the workers.

    They all have to work together; we cannot separate one section from another. When we are dealing with the Budget, which is supposed to be an instrument for meeting the social needs of the people, I always consider it from the point of view of how it helps the poor man.

    Some people will say—indeed, it has been argued in this Committee today—that in so far as we have lots of men with high incomes, to that extent we can say that our society is on a good foundation. I regard the matter from the opposite point of view. I say that to the extent that the mass of our fellow countrymen are on a higher standard of life than they used to be, then to that extent the country is progressing—and much more so than when there is a small section of the community advancing from a lower stage to a higher one. I think that is a logical argument which is difficult to refute.

    What exactly does this Amendment amount to? It is to relieve the men who are earning more than £2,000 a year. Three or four years ago I was trying to find out how many men in the country were earning less than £5 a week. I wrote to several trade union leaders, but they could not tell me. They could only tell to some extent, and then just approximately, what was happening in their own industry. They had no knowledge of how many people were working for less than £5 a week. But, accidentally, I came across the information, or sufficient information upon the subject to give me rather an eye opener. The information related to the position which existed according to the Inland Revenue Returns in 1949.

    These Returns are obtainable from the Vote Office, and they show that in April, 1949, we had 2,800,000 married couples living on less than £5 a week. To me, that was amazing. I never dreamt that the number was so high. The information also indicates that these people have nearly 4 million dependants—children and so forth. Therefore, there are 8 million people living on less than £5 a week.

    Did the hon. Member say that there are 8 million workers in this country living on less than £5 a week?

    I said it included 2,800,000 married couples plus their dependants, children and so forth. If the hon. Member will look in the Returns he will find the information.

    I apologise for interrupting the hon. Member, but we on this side of the Committee are anxious to follow his argument. Does that figure of 2,800,000 consist only of those who are in employment, or does it include old age pensioners?

    May I put one point to the hon. Gentleman? Do I understand that the figures he has given relate solely to the actual cash receipts of the married couples in question? For instance, in the agricultural industry the minimum wage at the time of which he is speaking was below £5, but that would not include any emoluments received.

    They relate to the income given in the Income Tax returns. Let us take the case of the man earning £2,000 a year. He receives £400 by way of relief on earned income—one-fifth of £2,000; and he receives an allowance of £190 if he is married and an allowance of £140 if he has two children, making a total of £730 free of Income Tax altogether. Thus, members of this section of the community, which the Amendment seeks to relieve apart from all others, have at least £730 free of Income Tax altogether.

    Let us next take the case of the worker—the higher paid worker, with £10 a week. He receives a relief of £104 for earned income, £190 as a marriage allowance and £140 for two children, making a total of £434. Thus, although he receives only £10 a week he has to pay Income Tax. Yet the Amendment seeks to relieve a higher paid section, as though they were specially in need of relief, more than the ordinary working man. In my mind that it is not the right way to look at the situation today. The country is having a difficult time. The cost of living is going up. Is this the time to begin to step up reliefs from taxation for this class? We must bear in mind that millions of working people in various grades are not paying Income Tax at all because their incomes are so low that they have only sufficient on which to live. To my mind the object of the Amendment is entirely wrong and should not receive any enthusiastic support.

    The amount of incentive the Amendment would give is not very great. When I hear hon. Members opposite day in and day out emphasising this question of incentive, I begin to wonder what kind of people they represent. Are they representing the people who put them into power? They think they are.

    Shame! They should be locked up—the lot of them. [Laughter.]

    The people who sent you to Parliament are much better than you think they are.

    I am sure the people who sent me to Parliament would like the hon. Gentleman to keep more to the Amendment.

    Like most hon. Members I try to stick to the subject before the Committee. I always do. [Laughter.] Sometimes, of course, we go astray; that is a common weakness of Members of Parliament when they are speaking. This Amendment was placed on the Order Paper on the ground that it would give a greater incentive to this section of the community. If that be so—and the hon. Member for Edgbaston (Sir P. Bennett) has admitted it—I should have thought that I was in order in dealing with the question of incentive. I may be wrong.

    I believe that the ordinary man has more moral quality than hon. Members opposite seem to think. I believe that the man who is making £2,000 a week—[HON. MEMBERS: "He would be a millionaire."]—we all make mistakes; the man who is earning £2,000 a year, the ordinary reasonable Englishman—[HON. MEMBERS: "What about the Scotsman?"]—has some idea about his own fellow-man and wants to help his own fellow-man. Hon. Members may talk about the incentive which this Amendment would give, but I have sufficient faith in humanity and in Englishmen to know that a very large section of these people will do their best in their job in the interests of themselves and of this country.

    7.15 p.m.

    If a Scotsman may be allowed to reply to comments which have been directed primarily to the criticism of Englishmen, I should like to show the unity between the two countries by taking up the cudgels. The hon. Member for Wallsend (Mr. McKay) based his argument, at the end of his speech, upon an inherent fallacy about which we have heard a good deal today—that people are not actuated by a profit motive. It may be that in the millennium we shall find individuals who are prepared to ignore the purchasing power of money, but at present it is nonsense to pretend that that state of affairs exists.

    Exceptional cases can, of course, be found, but the great majority of ordinary individuals regard the amount they earn and the amount they have to spend as something very important in their lives. That feeling sometimes takes the form of demands for higher wages or it may take the much less desirable form of seeking out perquisites and privileges; but it is there in one form or another with the great majority of the citizens of this country. Let us put aside the falacious idea that we can legislate for a situation which does not exist and let us quite firmly and frankly face the fact that money does count.

    The hon. Member for Wallsend seemed not to realise that, if it is to be successful, industry must consist of a balanced team. He used the words, "Let us now get down to the workers"; and he spoke of the man who earns about £5 a week. Is that the hon. Gentleman's conception of the only people who work, the only people who play a part in turning the great industrial machine? Is the whole of legislation to be considered only in relation to them and in relation to that scale of earnings?

    The hon. Gentleman further asked whether this is the time—when the cost of living is going up—to do what is suggested in this Amendment? But it is precisely because the cost of living is going up that this Amendment has been moved. Other sections of the community have benefited much more rapidly than has the white-collared class—if hon. Members like to call them that—the earners of something like £2,000 a year. Statistically the wage rates have gone up faster, and that particular part of the team has been lagging behind.

    The hon. Member for Stechford (Mr. Jenkins) talked about this "concession." Concessions can take two forms. They will be found in both forms throughout the whole of our discussions on this Bill. There are concessions made for equity and justice and concessions that pay dividends. My hon. Friend the Member for Edgbaston (Sir P. Bennett) showed, I think, successfully—he certainly showed it successfully to my mind—that this is a dividend-paying concession, and that it is only fair, if we are to ask part of that balanced team to work harder to produce more, that we should give them an incentive to do it. It is not fair that the costs of everything should be going up and that one particular section of this team should be left out. Therefore, I urge the Chancellor to consider whether this Amendment should not be regarded in the light in which my hon. Friend the Member for Edgbaston put it forward, as a dividend-paying Amendment, and that he should accept it.

    Before the hon. and gallant Gentleman sits down, would he mind answering a question? I have not taken part in the debate, although I have listened very carefully to it, and I am particularly interested in the question of incentives to production, as the Committee knows. Would the hon. and gallant Gentleman be good enough to tell the Committee what, in his opinion, would be the effect on the millions of lower-paid workers if they knew that one particular group—and I agree they are workers, too—were getting a concession, while the lower-paid workers were getting nothing likewise—the millions of workers for whom, at the moment, the Opposition are not asking anything?

    I think the workers have had their concessions. Not only that; they are fair minded enough to agree that if there is somebody who is part of the team and who is being left behind amid gradually amounting costs, he should be brought up. They will accept the situation, and recognise the part which he plays as being a valuable one, as the hon. Member, in fact, said it is.

    As the Committee appreciates, this Amendment would affect only those with earned incomes of over £2,000 a year. It would give partial benefit to those with between £2,000 and £2,500, and, of course, the full amount to those with more than £2,500 earned income. I am not in principle at all opposed to the idea of increasing the differentiation between earned and unearned income, nor am I opposed to the idea—again in principle, and in suitable circumstances—of extending rather further up the income scale differentiation as compared with the present position. However, I am bound to say that in present circumstances it is really not possible for us to make the change proposed in this Amendment. It would cost £5,500,000 in a full year.

    Is it a bagatelle? I am sorry that hon. Members opposite, who continually criticise me for not cutting down expenditure, should believe that £5,500,000 is a bagatelle.

    Surely, compared with the total size of the revenue of £4,500 million, £5,500,000 is a bagatelle?

    I think myself that it is a very dangerous phrase to use, and I certainly would not wish to be associated with it.

    There is also another and, as I think, serious objection to the Amendment, and it is that it does, of course, affect only those with over £2,000 a year. If it were introduced we should have this curious and, as I think, quite unsatisfactory situation that, for example, a man with a wife and two children, and earning anywhere between £2,260 and £3,170 a year, would pay less tax this year, whereas the man with £2,000 a year, who, of course, is not affected by this, would continue to pay, as he will do under the proposals of the Bill, £18 more than last year. I think it would be very difficult to justify a situation in which we reduced the taxation for people in exactly similar circumstances if they just happened to be over the £2,000 a year limit, while those with £2,000 a year, and, of course, the many others under that limit, would pay the full tax.

    As to the position of the salaried classes, for whom the hon. and gallant gentleman the Member for Scotstoun (Colonel Hutchison)—

    Would the right hon. Gentleman repeat those figures? I am trying to pick them up.

    A man with a wife and two children and with between £2,260 and £3,170 would pay less tax, whereas the man with £2,000 a year would pay £18 more, as he does.

    The hon. and gallant Member for Scotstoun (Colonel Hutchison) suggested that, whereas wages had gone up, salaries had not been affected in the same way. I do not know whether one can say that generally. Some salaries of professional workers, I agree, tend to be rather fixed for long periods. They do not move so frequently. Everybody will recognise that. However, so far as industry is concerned—and the hon. Member for Edgbaston (Sir P. Bennett), who moved the Amendment, spoke in terms of industry—there is a remedy.

    If, in fact, the managements and the directors of the firms feel that their chief technicians, engineers—the people of the class of which the hon. and gallant Member for Scotstoun was speaking—really are under-paid, there is nothing to prevent them from increasing their salaries and putting the matter right that way. [An HON. MEMBER: "What about the Civil Service?"] We are not talking of just one class. The Civil Service, as a matter of fact, in any case had a rather substantial increase not long ago. However, we are concerned here with the whole body of taxpayers falling within that class.

    I am concerned with one point—and it is a perfectly valid one—that we cannot throw upon the State the burden of helping those people, if they need helping. We must expect the employers to see to their interests as well, and I have no doubt that they will do so. While I am not unsympathetic to the general idea of the hon. Member's proposal, I am afraid that this year we cannot afford it, and in the circumstances, I must ask the Committee to reject the Amendment.

    The right hon. Gentleman mentioned the professional aspect of this matter. It is not really a question of additional wages or salaries being paid. Would he consider the professional aspect of it?

    I am not clear what the hon. Gentleman is thinking of. We are concerned here with the tax position of persons with over £2,000 a year—one section. I do not know what the hon. Gentleman means by the "professional aspects" of it.

    The professional worker. Where it is not just a question of some employer or some firm paying a higher rate of salary in order to meet the case, but a case of a professional worker being unable to obtain more for the services he performs, would the right hon. Gentleman refuse this concession to give additional assistance to him to meet the increasing cost of living and the additional commitments which he has?

    The Amendment would go far outside the professional class so far as those with over £2,000 a year are concerned, and would not touch others with under £2,000 a year, and so it is singularly ill adapted to helping the professional classes.

    I rather gathered from what the Chancellor said that he is not altogether unsympathetic to the idea behind the Amendment but realises that it may go possibly rather farther than hon. Members realise at the moment. I ask the Chancellor to consider this point. Recently some of us have had to go with some care into the question of the salaries being paid to executives, and there is no doubt that they are suffering tremendously because of the pressing demands of the steep rise in the cost of living. Many of them do not know how they can continue to educate their children.

    I wonder whether the Chancellor would be agreeable, if a ceiling were put into the Amendment, to considering it on Report, because there is one aspect of the re-armament programme to which I do want to draw his attention. It is absolutely vital, if we are to get the re-armament programme carried through successfully, that the managerial side should be properly manned with people suitable to be employed in conjunction with those on specialist work.

    7.30 p.m.

    There is a great shortage of technical people, of engineers, just now, and something must be done to make those positions more attractive, because it will not be of assistance to the workpeople to have indifferent people in the management. It is vital to have the best people, people who are trusted by the workmen, and who have real knowledge of how to deal with the problems which arise. I beg the Chancellor to realise that some of the poorest people are those well fitted for the task of management; we want to encourage them to step up the ladder of progress, to work up to the higher positions, and it will not be attractive to do so unless there is some tax concession.

    I should first like to address myself to the question raised by the Chancellor, of the recent increases given to higher paid civil servants.

    I was replying to an interjection. Somebody said "What about the Civil Service?" and I replied. I did not introduce it into my speech, but I think I was entitled to reply to the interjection.

    His was a perfectly fair remark; I am not saying it was not. The higher paid civil servants have had a recent increase in salary, but anybody who has studied the history of the Chorley Report, the delay with which it was implemented, and the very considerable reservations made by the Chorley Committee in regard to the inadequacy of the increase even then, would agree that it is not right that this Committee should approach this Amendment in the frame of mind that civil servants have had such a big increase in salary that it is quite proper for them to bear the increased tax which this present Budget requires, and that they should not have the increased allowances for which this Amendment asks.

    One of the main reasons there was such an acrimonious discussion on the last Clause in regard to the high rates of expenses and servant's wages paid for high officials in the Coal Board, and other places, was because we are so cutting down the remuneration, after tax, of those in these jobs that they are unable to pay their servants and to live at the level of expenditure expected of them. In the old days His Majesty's Judges, and Cabinet Ministers, were paid £5,000 a year, and were expected to run, and did run, their own cars or carriages. One of the undoubted effects of this very high rate of taxation on earned income is that there is a vicious circle, which has to be cut somewhere, and it is being cut on this—I think we might almost say—racket of expenses. At the expense of their firms, or of the Government, people are incurring items of expenditure which, while completely justifiable in themselves, were formerly and, I would say, more properly borne by themselves out of their own income, but they cannot now be so borne.

    In the old days the Prime Minister had his own carriage and paid for it out of his own salary, and he probably retired having saved something. Let us face the fact that he cannot do that under our present taxation arrangements. I think that the Committee ought to do everything it can to make earned income lose less in the process than it does under this particular provision, and this Amendment is designed solely for that purpose.

    The Chancellor said it would mean that a man earning £3,170 a year, with a wife and two children, would pay less. I am not suggesting the right hon. Gentleman is trying to mislead us, but the situation is that the increased taxation which that man would be paying would be no more than offset by the remission given under this Amendment. This Amendment by no means increases taxation for the £2,000 a year man. It gives a needed relief to the man with £3,170, and it is purely irrelevant—and I expect the figures were chosen because it is at that point that it happens—that what the man pays in increased taxation under the other provisions are about balanced by the saving, and the rightful saving, he would make if this Amendment were accepted.

    I did not intend to take part in this debate, but I am provoked to do so after listening to the discussion during the last hour or so. As the Committee knows, I am particularly associated with incentives and payment by results, and I listen with some care to what the hon. Member for Edgbaston (Sir P. Bennett) has to say, because we recognise in him a person who knows the situation at shop and factory level.

    I am rather surprised that he should put forward the argument that in "X" works "Y" personnel, given an incentive in this form, will increase production, and that the concession will be returned a hundredfold. It will do nothing of the sort. Today, the workers are watching the incidence of taxation with great care. They are a much better informed democracy than ever before in our history, and they watch with meticulous care the incidence of P.A.Y.E., what the boss is getting, and why.

    If in any particular works it became known that the manager, through this concession, if granted—although I have every reason to believe it will not be—were to receive £50 or £100 a year more, and were thus encouraged to drive still further the men who were remaining static, then the reverse of what this Amendment is supposed to achieve would happen. Today men will not be driven by people who receive more because of an Amendment to an Act of Parliament, while they themselves are expected to remain where they were before the concession was made.

    The hon. Member for Edgbaston knows full well that today executives have it within their own power, within their own board rooms, to make whatever concessions they think fit to offset what they consider to be a hardship to any of their employees. I know that they have not the same facilities as members of trades union, but with the understanding of management that we now have we know that the executive, the hierarchy, can easily arrange, through expense sheets—it is done, and we all know it is done—and through increases in salary, to offset any hardship. I submit that to give such a concession, in this year of rearmament, to men earning £3,170 a year while leaving those they are expected to drive where they were, would be a wrong step.

    The Chancellor suggested that if the people we are considering were really in such difficulty it would be perfectly possible for the businesses concerned to raise their salaries. I do not know what experience the right hon. Gentleman has had of running a business. I do not profess to have a very lengthy experience myself, but for the last year or so I have been trying to run a business, and I have found that one of the things we are up against, day after day is overheads versus turnover. Are we running efficiently? Are we able to bring our costs down as much as we ought in order to meet the demands which the Chancellor is frequently making—to bring down costs, and to make goods more readily accessible to those who want to buy them, particularly overseas?

    What he is suggesting this evening is that overheads should be put up rather than that the Chancellor himself should try to bring down the expenditure of the Government in order to make room for this £5 million. It is not a fair argument when the right hon. Gentleman says that he is surprised that we on this side of the Committee should suggest an increased expenditure of £5 million at a time like this. He is the man who is spending the money, and he should save that £5 million. If he did save it, I think that he could go some way to meet this Amendment.

    I see considerable force in what he said and in the comparative figures which he gave, and I think that the suggestion made by the hon. Member for Abingdon (Sir R. Glyn) is one which he might very well pursue a little further to see whether he cannot fix a ceiling, in order to make certain there is no inequity. The hon. Member for Rotherham (Mr. Jack Jones) is a Member of the House to whom I listened with very great interest because I feel that he says what he thinks, and that is what we are sent here to do. I sometimes wonder whether he is right in interpreting the general minds of the workers of this country as being such that when anyone is given any concession by the Government they automatically say, "I want that concession, too." I do not believe that is the general run of it. I do not believe that this country was built up on envy, hatred, malice and uncharitability.

    I know the hon. and gallant Gentleman does not wish to misrepresent me. I did not say that the worker asked to be given the same. I said that the worker would feel upset if "X" manager received a concession while "C" remained where he was.

    That is what I thought the hon. Gentleman said, and I believe him to be wrong. I do not believe that today in any works where the workers are as educated as the hon. Member was trying to make out—and I agree that they are taking a more intelligent interest than in years gone by in the general running of this country—they have not appreciated the fact that the people whom this Amendment is designed to help are the people who not merely are vital to industry but are needed in industry today to meet the demands which the Government are putting upon them.

    One might say that the vast majority of these people—obviously there would be some exceptions—are people who have homework almost every night—who work overtime very often and get far too little sleep. These are the people who deserve more consideration from the Chancellor than he is apparently prepared to give them. I hope that by my remarks I have persuaded him to look at this matter again, even if he cannot go the whole way with my hon. Friend the Member for Edgbaston (Sir P. Bennett).

    7.45 p.m.

    A large proportion of industry today, particularly manufactoring industry, has found costs rising very fast indeed during the last few years, and is finding it extremely difficult to maintain markets because the public has a limited amount of money, which is becoming of less value all the time. Instead of being able to buy five items people are now able to buy only four, because prices are being forced up. Therefore, much of manufacturing industry today is having to cut its costs very considerably. They certainly cannot take advantage of the Chancellor's suggestion of rising managerial salaries in order to meet the additional burdens with which their managers may be confronted.

    Many people in industry today are finding that their workers are coming to them for increased salaries because they are finding difficulty in buying cigarettes and beer and in maintaining their previous standard of living. The companies concerned are endeavouring to meet the pressure which is being put upon them, and to meet their increased costs. I would point out to the Chancellor that many companies are, unfortunately, not in a position to help their people. In many instances they are tempted to cut their managerial staff to the danger limit and even to the detriment of the companies concerned.

    The result is that those with incomes such as we have been discussing in this Amendment are in a position that they cannot obtain any relief whatsoever. They are not in the position of the lower-paid workers who can bring pressure on industry to try to get some alleviation of the difficulties with which they are faced by taxation and the high cost of living. From what the Chancellor has said, I feel that he has some sympathy with this problem. I know that many of the higher-paid officials in the Civil Service and in local government employment are today succeeding in getting increased salaries. The money for that has to be found in one form or another from the taxes. I put it to the Chancellor that in much of our industry today it is not possible to do that for the reasons which I have given to him.

    There are a large number of persons in a managerial capacity in industry today who are finding it very difficult to make ends meet under present monetary difficulties and unfortunately they are liable to have cuts in their salaries. It is those people whose earned income would be relieved if this Amendment were accepted. I hope that I am right in believing that the Chancellor recognises that this problem is mounting. I can assure him from my own knowledge that it is a problem which is affecting many important people in industry who are not only responsible for the progress of industry in this country but in our markets overseas.

    I suggest to the Chancellor that, if he cannot see his way to find an answer to this problem now, it is one which he will have to face in the near future. It is a very serious matter indeed, because unless something is done for these people they will be forced to look elsewhere for higher remuneration in order to keep up even a limited standard of existence. They can in many instances find posts abroad, and industry today is finding that it is losing excellent managerial executives who are obtaining posts abroad, or posts in public services, to the detriment of industry as a whole. That is not a good thing for the future of our industry in developing trade here and in looking for markets abroad. I hope that the Chancellor will recognise that this is an issue for his further consideration, and one to which, I hope, he will give serious consideration at an early date.

    It surprises me that hon. Gentlemen do not realise that this Amendment is badly timed. There are many of us on both sides of the Committee who are not only in favour of the existing differentials for taxation purposes between earned income and unearned income, but who would like to see the differential carried much higher than it is. For myself, I should like to see it carried right the way through so that the differential ascends the scale. But hon. Gentlemen have not appreciated the difficulty of doing anything in this direction this year. How can hon. Gentlemen opposite defend an Amendment which would produce this result—that a married man with two children earning £2,000 a year would be asked this year to pay more tax, whereas a married man with two children getting £3,000 a year would be asked to pay less tax?

    If hon. Gentlemen opposite could see in their minds how the graph of taxation changes this year works, they would see that, if this Amendment were carried, the relief given to the family man in the lower income would start the graph fairly low. It would then rise at the middle range of income and as it got higher and still higher, it would fall. The result would be that the family man in the lower income range would pay less, the family man on the middle range of income would pay more and the family man in the higher range of incomes would pay less. That would be extremely difficult to defend in a year of increased taxation.

    We all know that the hon. Member for Sowerby (Mr. Houghton) is well informed on this subject and we all very much respect his views. However, instead of thinking of a graph of allowances, I suggest that he thinks of a graph of the taxation borne or better still the net income left in the hands of the recipient. The fact is that what we are proposing in this Amendment is not the sort of graph which he is describing but a much more reasonable one. If it is looked at in that light, it will be seen that a fairly steep increase in taxation takes place as income goes up to the point of £2,000 a year and then there will be a change at the critical point of £2,000 where a super-steep curve will be seen.

    I am sure that most hon. Members look at this in relation to how much less has to be paid, and that is the material point from a political aspect. I conclude by saying that the effect of this Amendment would be to reduce Surtax on earned incomes, and I am sure that hon. Gentlemen opposite would agree that that is politically inexpedient this year.

    I would not have intervened in this debate but for a remark which was made by the hon. Member for Rotherham (Mr. Jack Jones). I always listen to him with interest, because he is very objective in his views, but I should like to ask him whether he will not reconsider the remark which he made that executives found it necessary to drive their employees to greater efforts.

    I am sure the hon. Member would not wish to misrepresent what I said. It has been argued that, in order to give the executives an incentive to produce more, some remission of taxation would be necessary. It has been said that the present level of taxation is not getting the best from the management, but if concessions are granted as an incentive to managements to produce more, they can only do it by driving the workers harder to get it.

    At least it is entirely rejected on this side of the Committee. I speak as one who has spent most of his life in industry, and I entirely refute the idea that there is any question of anyone being driven in any way. As one hon. Member opposite said today, it is a question of team work. That brings me to the one point upon which I should like to make a few remarks. I do not disagree with the remarks of the hon. Member for Sowerby (Mr. Houghton), and what we are fighting for on this Amendment is a question of principle. Perhaps if we cannot get it this year, we may get it at some future date. This question also refers to the remarks of the hon. Member for Rotherham.

    If we work as a team in industry, we each have our part to play. If the workers are successful in increasing output in any enlightened industry today, except the nationalised industries, the workers will share in that increased output, and therefore in the increased earnings. The departmental manager or executive, who is on a fixed salary, will not share. Therefore, I think the Amendment moved by my hon. Friend the Member for Edgbaston (Sir P. Bennett) raises a very important point. Some regard should be paid to the fixed-salary people, who carry a very heavy weight, as everybody in the Committee agrees, and work long hours. Such people should have a chance to share in increased productivity. Normally that is difficult to arrange, and reasonable arguments have already been put forward why it is not possible or fair to increase their salaries in an ad hoc manner to ease any taxation burden they may have to bear. I do not agree with the hon. Member for Rotherham when he says that he did not mind very much if they got it on the side but he objected if they got it in an open and above-board sort of manner.

    All I can say to the Chancellor is that if this principle, or something like it, cannot be accepted this year, at least we hope he will turn his mind towards the problem of the executive and managerial people in industry, who carry an enormous weight of responsibility, who have high technical ability and who do not share sufficiently in the reward for increased productivity, as do the workers today in every industry. The only way that I can see to meet the genuine need of these people is by a remission in the scales of earned income. Therefore, I sincerely support the Amendment. There is a great deal of substance in it, and I hope the Chancellor will agree at least that it should be given very serious consideration, if not this year then in another year.

    Will the hon. Member answer this question? Is it not a fact that where increased productivity occurs, the directors themselves can give the manager concerned a fair share in the results of that increased productivity in the same way as the workers get their fair share?

    Yes, I do not disagree with that at all. It is a perfectly fair point, which has been answered by my hon. Friend the Member for Croydon, North (Mr. F. Harris), who gave cogent reasons why it is not possible to make multilateral increases in the salaries of executives and technical men to meet that particular point. In any case, I am not concerned with that. I am merely concerned with the fairness of the case as a whole, and if we want increased productivity—and I hope the hon. Member for Rotherham, if he does not agree with me in anything else, does not dissent from that—both sides have got to be considered. If the workers increase their productivity, they increase their earnings, and jolly good luck to them. I ask the Chancellor to turn his mind towards the problem of whether he cannot give a little incentive to the executives and the technical men in the way that we have suggested.

    8.0 p.m.

    We have had a considerable amount of discussion of this Amendment in which, unexpectedly, a considerable number of Members behind the Government have taken part—a rather rare phenomenon. We welcome their appreciation of the value of debate in general, and of debate in particular on this Amendment.

    A case has definitely been made for the Amendment. The Chancellor as much as admitted it himself when he said that he was not opposed to differentiations in tax rates between earned and unearned income, and had no objection to the levels at which the differentiation was most effective being raised.

    What I said—I was rather careful about it—was that at a suitable moment I had no objection in principle. I think I said I was broadly sympathetic towards extending the differentiation upward.

    I thought that was what I had said. At any rate, that merely accentuates that the right hon. Gentleman thinks it is a reasonable thing to do. I do, too. It is certainly much more reasonable than the alternatives which have been put up from behind the Chancellor. One hon. Gentleman said that the answer was to increase the salaries or expenses. I thought that the Chancellor himself had for some time been against that particular form of remedy. In fact, in recent Finance Bills we have been dealing with the question of checking allowances. It seems a very odd answer to come from Labour benches that the problem should be dealt with by increasing allowances.

    The right hon. Gentleman himself said that the answer was not to do anything in the way of re-arrangement of this tax structure. It may well be. I cannot carry the graph in my head any more than can the hon. Member for Sowerby (Mr. Houghton). For one reason, I have not seen it. It happens in all sorts of odd places in the Income Tax schedules that there are difficulties, particularly where we move from one branch to another. We all know that special marginal arrangements have to be made. The particular point which was raised by the hon. Member and by the Chancellor is not conclusive against the proposal in the Amendment. Possibly some way out can be found to deal with it, but if it cannot, then it is just one of those things in the difficult and complicated schedules of the Income Tax.

    The Chancellor suggested that the other alternative was to put up salaries. I was rather surprised at that. I thought that we were still in the period when he was not encouraging the increase of salaries.

    I am obliged to the right hon. and gallant Gentleman for giving way. I did not, of course, suggest that there should be a general increase in salary. [An HON. MEMBER: "Yes."] Oh, no. I must make this point clear to hon. Members opposite. There is undoubtedly an inflationary danger if we have continued increases in wages and salaries. The point that was made opposite was that certain technicians in individual businesses were far too low-paid in relation to other people. I was dealing with that particular point and not with the general position of wages and salaries.

    I certainly do not want to misrepresent the right hon. Gentleman—I am sure that he will acquit me of that—but that was the impression I had. Even so, he is still left with the proposition that there are some people whose salaries, in order to get over the difficulty with which this Amendment aims at dealing, might be raised. I thought that even that was against the general trend of the right hon. Gentleman's policy. In the end, something of this kind has to be done.

    The right hon. Gentleman has taken up a completely non possumus attitude. Several suggestions have been made. My hon. Friend the Member for Abingdon (Sir R. Glyn), and the hon. Member for Woking (Mr. Watkinson), made suggestions, but the right hon. Gentleman says: "No, we cannot do it." We just do not believe that, in the difficult situation in which these particular people find themselves at the present time. We think something might well be done. I do not accept, any more than my hon. Friends have accepted, what the hon. Member for Rotherham (Mr. Jack Jones) tried to tell the House, which was that workmen were very jealous and that if somebody got some tax advantage they would enormously resent it. It is not the ordinary experience of people that this envious attitude is common.

    Division No. 88.]

    AYES

    [8.5 p.m.

    Aitken, W. T.Davies, Nigel (Epping)Hutchison, Lt.-Cont. Clark (E'b'rgh W.)
    Alport, C. J. M.de Chair, SomersetHutchison, Col. James (Glasgow)
    Amery, Julian (Preston, N.)De la Bère, R.Hyde, Lt.-Col. H. M.
    Amory, Heathcoat (Tiverton)Deedes, W. F.Hylton-Foster, H. B.
    Arbuthnot, JohnDigby, S. WingfieldJeffreys, General Sir George
    Ashton, H. (Chelmsford)Dodds-Parker, A. D.Jennings, R.
    Assheton, Rt. Hon. R. (Blackburn, W.)Donner, P. W.Johnson, Howard (Kemptown)
    Astor, Hon. M. L.Douglas-Hamilton, Lord MalcolmJones, A. (Hall Green)
    Baker, P. A. D.Drayson, G. B.Joynson-Hicks, Hon. L. W.
    Baldock, Lt.-Cmdr. J. M.Dugdale, Maj. Sir Thomas (Richmond)Kaberry, D.
    Baldwin, A. E.Duncan, Capt. J. A. L.Kerr, H. W. (Cambridge)
    Banks, Col. C.Dunglass, LordKingsmill, Lt.-Col. W. H.
    Baxter, A. B.Duthie, W. S.Lambert, Hon. G.
    Beamish, Maj. TuftonEccles, D. M.Lancaster, Col. C. G.
    Bell, R. M.Eden, Rt. Hon. A.Langford-Holt, J.
    Bennett, Sir Peter (Edgbaston)Elliot, Rt. Hon. W. E.Leather, E. H. C.
    Bennett, Dr. Reginald (Gosport)Erroll, F. J.Legge-Bourke, Maj. E. A. H.
    Bennett, William (Woodside)Fisher, NigelLennox-Boyd, A. T.
    Bevins, J. R. (Liverpool, Toxteth)Fletcher, Walter (Bury)Lindsay, Martin
    Birch, NigelFort, R.Linstead, H. N.
    Bishop, F. P.Foster, JohnLlewellyn, D.
    Black, C. W.Fraser, Hon. Hugh (Stone)Lloyd, Rt. Hn. Geoffrey (King's N'rt'n)
    Boles, Lt.-Col. D. C. (Wells)Fraser, Sir Ian (Morecambe & Lonsdale)Lloyd, Maj. Guy (Renfrew, E.)
    Boothby, R.Fyfe, Rt. Hon. Sir David MaxwellLloyd, Selwyn (Wirral)
    Bossom, A. C.Gage, C. H.Lockwood, Lt.-Col. J. C.
    Boyd-Carpenter, J. A.Galbraith, Cmdr. T. D. (Pollok)Longden, Gilbert (Herts, S. W.)
    Boyle, Sir EdwardGalbraith, T. G. D. (Hillhead)Low, A. R. W.
    Bracken, Rt. Hon. B.Garner-Evans, E. H. (Denbigh)Lucas, Sir Jocelyn (Portsmouth, S.)
    Braine, B. R.Gates, Maj. E. E.Lucas, P. B. (Brentford)
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Glyn, Sir RalphLucas-Tooth, Sir Hugh
    Braithwaite, Sir Albert (Harrow, W.)Gomme-Duncan, Col. A.Lyttelton, Rt. Hon. O.
    Bromley-Davenport, Lt.-Col. W.Gridley, Sir ArnoldMcAdden, S. J.
    Brooke, Henry (Hampstead)Grimston, Hon. John (St. Albans)McCallum, Major D.
    Browne, Jack (Govan)Grimston, Robert (Westbury)McCorquodale, Rt. Hon. M. S.
    Buchan-Hepburn, P. G. T.Harden, J. R. E.Macdonald, Sir Peter (I. of Wight)
    Bullock, Capt. M.Hare, Hon. J. H. (Woodbridge)Mackeson, Brig. H. R.
    Bullus, Wing Commander E. E.Harris, Frederic (Croydon, N.)McKibbin, A.
    Burden, F. A.Harris, Reader (Heston)McKie, J. H. (Galloway)
    Butcher, H. W.Harvey, Air Cdre. A. V. (Macclesfield)Maclay, Hon. John
    Butler, Rt. Hn. R. A. (Saffron Walden)Harvey, Ian (Harrow, E.)Maclean, Fitzroy
    Carr, Robert (Mitcham)Harvie-Watt, Sir GeorgeMacLeod, Iain (Enfield, W.)
    Carson, Hon. E.Hay, JohnMacLeod, John (Ross and Cromarty)
    Channon, H.Head, Brig. A. H.Macmillan, Rt. Hon. Harold (Bromley)
    Churchill, Rt. Hon. W. S.Headlam, Lt.-Col. Rt. Hon. Sir CuthbertMacpherson, Major Niall (Dumfries)
    Clarke, Col. Ralph (East Grinstead)Heald, LionelMaitland, Cmdr. J. W.
    Clarke, Brig. Terence (Portsmouth, W.)Henderson, John (Cathcart)Manningham-Buller, R. E.
    Clyde, J. L.Hicks-Beach, Maj. W. W.Marlowe, A. A. H.
    Colegate, A.Higgs, J. M. C.Marples, A. E.
    Conant, Maj. R. J. E.Hill, Mrs. E. (Wythenshawe)Marshall, Douglas (Bodmin)
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Hill, Dr. Charles (Luton)Marshall, Sidney (Sutton)
    Cooper-Key, E. M.Hinchingbrooke, ViscountMaude, Angus (Ealing S.)
    Corbett, Lt.-Col. Uvedale (Ludlow)Hirst, GeoffreyMaude, John (Exeter)
    Craddock, Beresford (Spelthorne)Holmes, Sir Stanley (Harwich)Maudling, R.
    Cranborne, ViscountHope, Lord JohnMedlicott, Brig. F.
    Crookshank, Capt. Rt. Hon. H. F. C.Hopkinson, HenryMellor, Sir John
    Crosthwaite-Eyre, Col. O. E.Hornsby-Smith, Miss. P.Molson, A. H. E.
    Crouch, R. F.Horsbrugh, Rt. Hon. FlorenceMonckton, Sir Walter
    Crowder, Capt. John (Finchley)Howard, Gerald (Cambridgeshire)Moore, Lt.-Col. Sir Thomas
    Crowder, Petre (Ruislip—Northwood)Howard, Greville (St. Ives)Morrison, John (Salisbury)
    Cundiff, F. W.Hudson, Sir Austin (Lewisham, N.)Morrison, Rt. Hon. W. S. (Cirencester)
    Cuthbert, W. N.Hudson, Rt. Hon. Robert (Southport)Mott-Radclyffe, C. E.
    Darling, Sir William (Edinburgh, S.)Hudson, W. R. A. (Hull, N.)Nabarro, G.
    Davidson, ViscountessHutchinson, Geoffrey (Ilford, N.)Nicholls, Harmar

    It is not what the hon. Member for Rotherham said which matters at the moment, but what is to happen about this Amendment. The right hon. Gentleman has taken up such a non possumus attitude that if my hon. Friend proposes to press his Amendment to a Division, I will support him.

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

    The Committee divided; Ayes, 281; Noes, 302.

    Nicholson, G.Roper, Sir HaroldThompson, Kenneth Pugh (Walton)
    Nield, Basil (Chester)Ropner, Col. L.Thompson, Lt.-Cmdr. R. (Croydon. W.)
    Noble, Cmdr. A. H. P.Russell, R. S.Thorneycroft, Peter (Monmouth)
    Nugent, G. R. H.Ryder, Capt. R. E. D.Thornton-Kemsley, Col. C. N.
    Nutting, AnthonySalter, Rt. Hon. Sir ArthurThorp, Brig. R. A. F.
    Oakshott, H. D.Savory, Prof. D. L.Tilney, John
    Odey, G. W.Scott, DonaldTurner, H. F. L.
    O'Neill, Rt. Hon. Sir HughShepherd, WilliamTurton, R. H.
    Ormsby-Gore, Hon. W. D.Smiles, Lt.-Col. Sir WalterTweedsmuir, Lady
    Orr, Capt. L. P. S.Smithers, Peter (Winchester)Vane, W. M. F.
    Orr-Ewing, Charles Ian (Hendon, N.)Smyth, Brig. J. G. (Norwood)Vaughan-Morgan, J. K.
    Orr-Ewing, Ian L. (Weston-super-Mare)Snadden, W. McN.Vosper, D. F.
    Osborne, C.Soames, Capt. C.Wakefield, Edward (Derbyshire, W.)
    Peake, Rt. Hon. O.Spearman, A. C. M.Wakefield, Sir Wavell (Marylebone)
    Perkins, W. R. D.Spence, H. R. (Aberdeenshire, W.)Walker-Smith, D. C.
    Peto, Brig. C. H. M.Spens, Sir Patrick (Kensington, S.)Ward, Hon. George (Worcester)
    Pickthorn, K.Stanley, Capt. Hon. Richard (N. Fylde)Ward, Miss. I. (Tynemouth)
    Pitman, I. J.Stevens, G. P.Waterhouse, Capt. Rt. Hon. C.
    Powell, J. EnochSteward, W. A. (Woolwich, W.)Watkinson, H.
    Price, Henry (Lewisham, W.)Stewart, Henderson (Fife, E.)Webbe, Sir H. (London & Westminster)
    Prior-Palmer, Brig. O.Stoddart-Scott, Col. M.White, Baker (Canterbury)
    Profumo, J. D.Storey, S.Williams, Charles (Torquay)
    Raikes, H. V.Strauss, Henry (Norwich, S.)Williams, Gerald (Tonbridge)
    Rayner, Brig. R.Stuart, Rt. Hon. James (Moray)Williams, Sir Herbert (Croydon, E.)
    Redmayne, M.Studholme, H. G.Wills, G.
    Remnant, Hon. P.Summers, G. S.Wilson, Geoffrey (Truro)
    Renton, D. L. M.Sutcliffe, H.Winterton, Rt. Hon. Earl
    Roberts, Maj. Peter (Heeley)Taylor, Charles (Eastbourne)Wood, Hon. R.
    Robertson, Sir David (Caithness)Taylor, William (Bradford, N.)York, C.
    Robinson, Roland (Blackpool, S.)Teeling, W.
    Robson-Brown, W.Teevan, T. L.

    TELLERS FOR THE AYES:

    Rodgers, John (Sevenoaks)Thomas, J. P. L. (Hereford)Major Wheatley and Mr. Heath.

    NOES

    Acland, Sir RichardCorbet, Mrs. Freda (Peckham)Grenfell, D. R.
    Adams, RichardCove, W. G.Grey, C. F.
    Albu, A. H.Craddock, George (Bradford, S.)Griffiths, David (Rother Valley)
    Allen, Arthur (Bosworth)Crawley, A.Griffiths, Rt. Hon. James (Llanelly)
    Allen, Scholefield (Crewe)Crosland, C. A. R.Griffiths, William (Exchange)
    Anderson, Alexander (Motherwell)Crossman, R. H. S.Grimond, J.
    Anderson, Frank (Whitehaven)Cullen, Mrs. A.Gunter, R. J.
    Attlee, Rt. Hon. C. R.Daines, P.Hale, Joseph (Rochdale)
    Awbery, S. S.Dalton, Rt. Hon. H.Hale, Leslie (Oldham, W.)
    Ayles, W. H.Darling, George (Hillsborough)Hall, John (Gateshead, W.)
    Bacon, Miss. AliceDavies, A. Edward (Stoke, N.)Hall, Rt. Hon. Glenvil (Colne Valley)
    Baird, J.Davies, Harold (Leek)Hamilton, W. W.
    Balfour, A.Davies, Stephen (Merthyr)Hannan, W.
    Barnes, Rt. Hon. A. J.de Freitas, GeoffreyHardman, D. R.
    Bartley, P.Deer, G.Hardy, E. A.
    Bellenger, Rt. Hon. F. J.Dodds, N. N.Hargreaves, A.
    Benn, WedgwoodDonnelly, D.Hastings. S.
    Benson, G.Driberg, T. E. N.Hayman, F. H.
    Beswick, F.Dugdale, Rt. Hon. John (W Bromwich)Henderson, Rt. Hon. Arthur (Tipton)
    Bevan, Rt. Hon. A. (Ebbw Vale)Dye, S.Herbison, Miss. M.
    Bing, G. H. C.Ede, Rt. Hon. J. C.Hewitson, Capt. M.
    Blenkinsop, A.Edelman, M.Hobson, C. R.
    Blyton, W. R.Edwards, John (Brighouse)Holman, P.
    Boardman, H.Edwards, Rt. Hon. Ness (Caerphilly)Holmes, Horace (Hemsworth)
    Booth, A.Edwards, W. J. (Stepney)Houghton, D.
    Bottomley, A. G.Evans, Albert (Islington, S. W.)Hoy, J.
    Bowen, E. R. (Cardigan)Evans, Edward (Lowestoft)Hubbard, T.
    Bowles, F. G. (Nuneaton)Evans, Stanley (Wednesbury)Hudson, James (Ealing, N.)
    Braddock, Mrs. ElizabethEwart, R.Hughes, Hector (Aberdeen, N.)
    Brook, Dryden (Halifax)Fernyhough, E.Hughes, Moelwyn (Islington. N.)
    Brooks, T. J. (Normanton)Field, Capt. W. J.Hynd, H. (Accrington)
    Broughton, Dr. A. D. D.Finch, H. J.Hynd, J. B. (Attercliffe)
    Brown, Rt. Hon. George (Belper)Fletcher, Eric (Islington, E.)Irvine, A. J. (Edge Hill)
    Brown, Thomas (Ince)Follick, M.Irving, W. J. (Wood Green)
    Burke, W. A.Foot, M. M.Isaacs, Rt. Hon. G. A.
    Burton, Miss. E.Forman, J. C.Janner, B.
    Butler, Herbert (Hackney, S.)Fraser, Thomas (Hamilton)Jay, D. P. T.
    Callaghan, L. J.Freeman, John (Watford)Jeger, George (Goole)
    Carmichael, J.Freeman, Peter (Newport)Jeger, Dr. Santo (St. Pancras, S.)
    Castle, Mrs. B. A.Gaitskell, Rt. Hon. H. T. N.Jenkins, R. H.
    Champion, A. J.Ganley, Mrs. C. S.Johnson, James (Rugby)
    Chetwynd, G. R.George, Lady Megan LloydJohnston, Douglas (Paisley)
    Clunie, J.Gibson, C. W.Jones, David (Hartlepool)
    Cocks, F. S.Gilzean, A.Jones, Frederick Elwyn (W. Ham, S.)
    Coldrick, W.Glanville, James (Consett)Jones, Jack (Rotherham)
    Collindridge, F.Gooch, E. G.Jones, William Elwyn (Conway)
    Cook, T. F.Gordon-Walker, Rt. Hon. P. C.Keenan, W.
    Cooper, Geoffrey (Middlesbrough, W.)Greenwood, Anthony (Rossendale)Kenyon, C.
    Cooper, John (Deptford)Greenwood, Rt. Hn. Arthur (Wakefield)King, Dr. H. M.

    Kinghorn, Sqn. Ldr. E.O'Brien, T.Strauss, Rt. Hon. George (Vauxhall)
    Kinley, J.Oldfield, W. H.Stross, Dr. Barnett
    Kirkwood, Rt. Hon. D.Oliver, G. H.Summerskill, Rt. Hon. Edith
    Lang, GordonOrbach, M.Sylvester, G. O.
    Lee, Frederick (Newton)Padley, W. E.Taylor, Bernard (Mansfield)
    Lee, Miss. Jennie (Cannock)Paget, R. T.Taylor, Robert (Morpeth)
    Lever, Leslie (Ardwick)Paling, Rt. Hon. W. (Dearne Valley)Thomas, David (Aberdare)
    Lewis, Arthur (West Ham, N.)Paling, Will T. (Dewsbury)Thomas, George (Cardiff)
    Lewis, John (Bolton, W.)Pannell, T. C.Thomas, Iorwerth (Rhondda, W.)
    Lindgren, G. S.Pargiter, G. A.Thomas, Ivor Owen (Wrekin)
    Lipton, Lt.-Col. M.Parker, J.Thorneycroft, Harry (Clayton)
    Logan, D. G.Paton, J.Thurtle, Ernest
    Longden, Fred (Small Heath)Pearson, A.Timmons, J.
    McAllister, G.Peart, T. F.Tomnoy, F.
    MacColl, J. E.Poole, C.Turner-Samuels, M.
    Macdonald, A. J. F. (Roxburgh)Popplewell, E.Ungoed-Thomas, Sir Lynn
    McGhee, H. G.Porter, G.Usborne, H.
    McGovern, J.Price, Philips (Gloucestershire, W.)Vernon, W. F.
    McInnes, J.Proctor, W. T.Viant, S. P.
    Mack, J. D.Pryde, D. J.Wade, D. W.
    McKay, John (Wallsend)Pursey, Cmdr. H.Wallace, H. W.
    Mackay, R. W. G. (Reading, N.)Rankin, J.Watkins, T. E.
    McLeavy, F.Rees, Mrs. D.Webb, Rt. Hon. M. (Bradford, C.)
    MacMillan, Malcolm (Western Isles)Reeves, J.Weitzman, D.
    McNeil, Rt. Hon. H.Reid, Thomas (Swindon)Wells, Percy (Faversham)
    MacPherson, Malcolm (Stirling)Reid, William (Camlachie)Wells, William (Walsall)
    Mainwaring, W. H.Rhodes, H.West, D. G.
    Mallalieu, E. L. (Brigg)Richards, R.Wheatley, Rt. Hon. John (Edinb'gh E.)
    Mallalieu, J. P. W. (Huddersfield, E.)Robens, Rt. Hon. A.White, Mrs. Eirene (E. Flint)
    Mann, Mrs. JeanRoberts, Emrys (Merioneth)White, Henry (Derbyshire, N. E.)
    Manuel, A. C.Roberts, Goronwy (Caernarvonshire)Whiteley, Rt. Hon. W.
    Marquand, Rt. Hon. H. A.Robertson, J. J. (Berwick)Wilcock, Group Capt. C. A. B.
    Mathers, Rt. Hon. G.Robinson, Kenneth (St. Pancras, N.)Wilkes, L.
    Mellish, R. J.Rogers, George (Kensington, N.)Wilkins, W. A.
    Messer, F.Ross, William (Kilmarnock)Willey, Frederick (Sunderland)
    Middleton, Mrs. L.Royle, C.
    Mikardo, Ian.Shawcross, Rt. Hon. Sir HartleyWilley, Octavius (Cleveland)
    Mitchison, G. R.Shinwell, Rt. Hon. E.Williams, David (Neath)
    Moeran, E. W.Shurmer, P. L. E.Williams, Rev. Llywelyn (Abertillery)
    Monslow, W.Silverman, Julius (Erdington)Williams, Ronald (Wigan)
    Moody, A. S.Silverman, Sydney (Nelson)Williams, Rt. Hon. Thomas (Don V'lly)
    Morgan, Dr. H. B.Simmons, C. J.Williams, W. T. (Hammersmith, S.)
    Morley, R.Slater, J.Wilson, Rt. Hon. Harold (Huyton)
    Morris, Hopkin (Carmarthen)Smith, Ellis (Stoke, S.)Winterbottom, Ian (Nottingham, C.)
    Morris, Percy (Swansea, W.)Smith, Norman (Nottingham, S.)Winterbottom, Richard (Brightside)
    Morrison, Rt. Hon. H. (Lewisham, S.)Snow, J. W.Wise, F. J.
    Mort, D. L.Sorensen, R. W.Woodburn, Rt. Hon. A.
    Moyle, A.Soskice, Rt. Hon. Sir FrankWoods, Rev. G. S.
    Mulley, F. W.Sparks, J. A.Wyatt, W. L.
    Murray, J. D.Steele, T.Yates, V. F.
    Nally, W.Stewart, Michael (Fulham, E.)
    Neal, Harold (Bolsover)Stokes, Rt. Hon. R. R.

    TELLERS FOR THE NOES:

    Noel-Baker, Rt. Hon. P. J.Strachey, Rt. Hon. J.Mr. Bowden and Mr. Delargy

    8.15 p.m.

    Before calling the next Amendment, in the name of the hon. Member for Runcorn (Mr. Vosper), might I suggest to the Committee that it would be convenient if that Amendment and the one which follows, in the name of the hon. Member for Cornwall, North (Sir H. Roper), in page 10, line 15, at the end, to add:

    "(7) Subsection (2) of section fifteen of the Finance Act, 1925, shall have effect as if the words 'seven-twelfths' were substituted in the said subsection (2) for the words 'five-eighths.'"
    were discussed together?

    I beg to move, in page 10, line 15, at the end, to add:

    (7) In subsection (2) of section fifteen of the Finance Act, 1925 (which, as amended by subsequent enactments, provides, in a case where an individual or his wife has attained the age of sixty-five years and his total income does not exceed five hundred pounds for a deduction of tax on an amount equal to one-fifth of his income), the words "six hundred pounds" shall throughout be substituted for the words "five hundred pounds."
    I am glad that this Amendment and the one standing in the name of my hon. Friend the Member for Cornwall, North (Sir H. Roper), are to be taken together, because they represent similar methods of achieving the same object, which is to afford a measure of relief to elderly people in times of rising costs. It is a matter to which the Government have recently given some attention, and I believe that the case we are now discussing is a deserving one.

    The Finance Act, 1925, provided among other things that those with an income not exceeding £500, even though that income was not earned in the true sense of the word, could treat it as being earned for a measure of relief, and up to that £500 ceiling the earned income allowance, which today stands at one-fifth, applies. It also provided that where the income exceeded £500 a measure of marginal relief should be allowed, but this was a matter of diminishing returns, and today no income which exceeds £750 benefits under the provision as it now stands in the Finance Act, 1925. It is to that aspect of the problem that the hon. Member for Cornwall, North, is directing his Amendment.

    My Amendment seeks to raise this ceiling, which I think it would be better to call the optimum point, of £500 beyond which the relief begins to diminish. It is a fact that this optimum point, which was fixed at £500 in the 1925 Act, has not been varied in the 26 years that have since elapsed despite the change in the value of money in those years. It is also a fact that under the Finance Act, 1925, the true earned income allowance which was then introduced allowed for a total remission of £250. The figure today stands at £400, as we have just heard. Had the previous Amendment been accepted it would have been raised to £500. As it is there is an increase of 60 per cent. in the true earned income allowance. It would therefore seem logical that Section 15 (2) of the Finance Act, 1925, should show an increase of similar proportions.

    It is important to remember that although this is called unearned income, and is therefore not altogether in favour with Members opposite, in a great number of cases—it is impossible to produce figures of how many—it is income that has been earned, it is savings that have been put aside, diverted from consumption expenditure, which is what the Chancellor particularly wishes. Had the people concerned been in industry where a pension scheme existed they would, I believe, have been able to claim the whole of the earned income relief and would have obtained up to £400 remission of tax. But if the income is unearned it is not pension, and they are limited by this £500 ceiling.

    I think it reasonable to anticipate the difficulties that may be found in accepting the Amendment. It may be said that other allowances have not varied very much from 1925. The marriage allowance stands today at approximately a similar figure, but surely the cases are entirely different. The married allowance is in most cases supplementary to wages and salaries, which have multiplied two or three times during the last 26 years. But this particular allowance is supplementary to income, which has increased but slightly during that period. The amount that investment income has increased over the years depends on the source, but obviously it cannot be more than 50 per cent., and therefore this particular allowance does come in a very different category.

    It may also be suggested that some improvement has been effected because in 1948, I think it was the hon. Gentleman himself who introduced it, an Amendment was made to the Finance Bill which did vary slightly the marginal provisions. But that was three years ago, and there has been a very great change during those three years in the condition of these people. Although that relief was slightly improved in 1948 by altering the marginal provisions as opposed to the ceiling, people with incomes of £600 or thereabouts benefited only slightly. It benefited the higher and not the lower range. It is people who in 1925 had an income of, say, £400 and whose income cannot have been raised to more than £600 today with whom I am particularly concerned.

    I do not know whether hon. Gentlemen opposite feel that an unearned income on retirement of £600 is excessive, but surely it is the sort of income that a doctor on retirement might seek to have, or any other professional man. It is the sort of income which a man in an industry where there is no pension scheme should be entitled to, or a man who is in trade, or even a farmer. Hon. Members receiving a salary of £1,000 a year, part of which is subject to an expense allowance, who hope to obtain an income on retirement of £600 if they are fortunate in receiving on retirement anything in the form of a pension from trade or elsewhere, will get the full relief allowance on the £600; and if that is the case my Amendment might affect them.

    The Chancellor of the Exchequer told us that the rich must expect some cut in their luxuries. I do not know whether he considers people who get £600 or £700 to be rich. I do not think he does. It is not a question of luxury so far as these people are concerned. They are people who have held responsible positions in industry or elsewhere and maintained certain standards and have had to cut those standards. There seems no reason why they should cut their expenses by giving up holidays or selling their car or house, but that is, in fact, happening at the moment, and I believe that in the interests of social justice, about which we hear so much, there is a case for levelling up this relief.

    If this relief cannot be given in the form I have suggested, or in the form to which my hon. Friend the Member for Cornwall, North, will refer, even the raising of the figure from £500 to £550 will be of some benefit. It is the principle with which we are mainly concerned, the bringing up of this allowance, which after all had the support of hon. Gentlemen opposite, because they did help slightly in 1948.

    This Amendment is designed not to favour any one section of the community, but to do for the old people what has already been done for others. The alternatives which face people with these incomes are possibly to cut their standards still further or, even worse, to use some of their capital, and that is what some people are doing. When they do that they damage not only themselves but the rest of our economy. It is in that light that I hope the hon. Gentleman will consider this Amendment.

    The Amendment which stands in my name is closely related to the Amendment of my hon. Friend the Member for Runcorn (Mr. Vosper). I have full sympathy with everything my hon. Friend has just said. The purposes of our Amendments are similar. Both are designed to help old people. In the Budget some relief was given to married couples. I suggest that the old people are another section of the community who deserve consideration. This section of the community includes a number of married couples, but perhaps it is mainly composed of single persons, a very large proportion being widows or widowers. That is why we should give this question serious consideration.

    The incomes of these old people are often derived from the proceeds of life savings, which come almost in the category of earned income. Usually, the habits of these people are set. As my hon. Friend has said, many of them own their own houses. During their life they have worked and reached a certain income level with a certain standard of living. They want to maintain that standard, but they are hit hard by high taxation and the steady rise in the cost of living. My Amendment applies a remedy in a slightly different way to that suggested by my hon. Friend.

    From the Chancellor's point of view, the remedy I propose has the merit that it would cost a good deal less than my hon. Friend's suggestion. The law provides for age relief on the basis that an income of up to £500 is treated as earned income. Above £500 there is a marginal range of income. If the income falls within that margin, partial benefit from the age relief provision is obtained. Above the upper limit there is no relief at all.

    8.30 p.m.

    At the present time, the top limit of that margin for the married man is £763, and for a single man it stands at £816. Within that margin at present, the taxpayer, under the terms of the Act, pays the sum of two figures—the tax on an income of £500 a year plus five-eighths of the total marginal income above £500. On the income which falls within this range of approximately £300, he pays five-eighths of the total of that income, and that amount, if worked out in cost per £, is equivalent to Income Tax on that marginal level of income at 12s. 6d. in the £.

    I maintain that 12s. 6d. in the £ is a very high figure for a man to pay on an income of that approximate level, or even on part of his income, and the effect of my Amendment is to reduce the rate of Income Tax on that marginal range from 12s. 6d. in the £ to 11s. 8d. Incidentally, it also has the effect of raising the upper limit of the margin, in the case of a married man to £864, and in the case of a single man to £938. If it takes up to £938 before the full benefit of the age relief provision tapers off to nothing, in these days of the high cost of living I do not thing we need fear the effect of that or regard it as in any way extravagant.

    The cost of my Amendment, as given to me in an answer to a question two months ago, is £500,000, which is probably no more in the global amount than these same people are being asked to pay in the extra Income Tax at 6d. in the £. It is a very modest Amendment and I deliberately put forward a modest one, in the hope that the Chancellor may be able to accept it. Perhaps the fairest criticism of it may be that it is too modest, but, just because we have to face the re-armament bill, I have preferred to suggest a remedy which will give to the taxpayer less than, or about the same as, the amount which the Chancellor is taking from him.

    I am very pleased to have the opportunity of putting my case before the Chancellor has made up his mind on this matter, because, if he is unable to accept the Amendment, it may be that he dislikes its form but is encouraged by the fact that the cost of conceding it is as modest as it is. If he feels that way, may I ask him, certainly before giving me a negative reply, to consider carefully some intermediate Amendment which he might move on the Report stage, maybe on the lines of the Amendment moved by the hon. Member for Runcorn, but on a lower scale?

    May I just mention the effect of it? Supposing we raised the standard for age relief from £500 to £510. On that last £10, the married man would pay Income Tax at the rate of 5s. 6d. Under the present age provision he pays, not 5s. 6d. but 12s. 6d. Therefore, by granting that £10 the married man would gain to the extent of £3 10s. a year—a very modest figure—and, similarly, the single man would gain 30s. a year.

    I hope that the Minister, instead of giving a negative reply tonight, will look at the matter before the Report stage to see whether he can do something to help the old people who have done their life's work and cannot be regarded as being in the luxury class, for, unless something of this kind is done, there is nothing to prevent their standard of living from steadily declining as the cost of living goes up.

    I rise to support my hon. Friends the Members for Runcorn (Mr. Vosper) and Cornwall, North (Sir H. Roper). These Amendments are designed to serve an extremely deserving cause, and I hope that the Financial Secretary has been given authority to accept the principle underlying them. I do not know whether my hon. Friend the Member for Cornwall, North, was a little optimistic in thinking that the Financial Secretary had not already prepared his speech on this point. In another capacity, I had the experience of addressing a judge who was clearly writing out his judgment while I was doing so.

    It may be that, whatever is said in this debate this evening, the Treasury have already decided that these Amendments cannot be accepted. I hope that is not so, however, because there is no doubt that the rise in the cost of living, or the fall in the value of money, whichever way one prefers to put it, has created a very severe problem for the old people who have retired and who are no longer in the position by their own efforts to adapt themselves to the new and expensive world in which we live.

    In his Budget speech, the Chancellor said, speaking of this problem, that he must remind the Committee again that those dependent on small fixed incomes which they have difficulty in increasing suffer most from the price increases imposed upon us from outside and which are aggravated by the rise in internal costs. I think that hon. Members on both sides of the Committee will have the greatest sympathy with people who are no longer in a position to take any remedial action. We who are younger may also suffer some hardship from the fall in the value of money, but at least we are in a position to do something about it by, possibly, increasing our earnings.

    I hope the hon. Gentleman is not assuming that all the people who claim age relief are on fixed incomes, and that he will not overlook the fact that people living on investments have had substantial increases in their incomes in the last five years.

    That is one of those statements which can neither be proved nor refuted. No doubt some of the old people whom these Amendments are designed to help are living on the proceeds of investments which they could exchange, and, possibly, thereby derive some increased income from them.

    There are other considerations which ought to be taken into account. First, there is this extremely important one. When a man is retired from work, possibly from a salaried position, he is not necessarily any longer—and why should he be asked to be—in a position in which he can manipulate and change his investments from month to month so as to increase the income from them. It is reasonable to say that when a man is retired from active participation in the tasks of life he should be entitled to put his money in Government securities to secure the fixed income and stop worrying. It may not be difficult for us who, if I may use the expression, are "in play" and can take an active part in these things, but in the majority of cases people over 65 or 70 or 75 are no longer able to cope with what has happened to them and to their income since they retired. That is why I think this is such a deserving class.

    A person, of course, may be in a form of occupation from which when he retires he derives a pension, or he may be entitled to a pension under a superannuation scheme. I think I am correct in saying that in that case he is entitled as of right to the normal earned income allowances. But if he has been in one of those forms of occupation where no pension is provided, then during his working life he has to accumulate such a capital sum of savings that he can live on the income from it as his pension on retirement. I cannot see any reason in equity why the income from that sum should not be treated in every way as earned income.

    I see no moral case against an Amendment applying the ordinary earned income allowance, which I think has a maximum of £400 a year, to income from the savings of a retired person of that kind. But this is an extremely modest Amendment. For some reason or other the relief given to a person in that position at present is limited by law to £500. That is to say, his total income must not exceed £500 and the relief he gets on that is only one-fifth or the £500. If he has £600 or £700 by way of income from his savings, then the extra £100 or £200 is treated as unearned income and, as my hon. Friend the Member for Run-corn pointed out, is taxed at the full rate of taxation without any relief whatever.

    I think the Committee will agree that that is a real anomaly. It creates a distinction between those who have pensions and those who rely upon savings, and it creates a distinction between those who are still working and those who have retired. Inasmuch as under present conditions of inflation it is precisely those who have retired who are most in need of the indulgence of the legislature, how wrong it is that they should be the people to be discriminated against by the present system of taxation.

    I have no particular preference for the method which is to be used to grant this relief to those people, whether it is the method proposed in this Amendment by my hon. Friend the Member for Runcorn or the alternative and apparently cheaper method proposed by my hon. Friend the Member for Cornwall, North, which possibly, from the fact that it is cheaper, one ought to adduce gives less relief. I myself tabled an Amendment to this Clause which you, Major Milner, in your discretion have not selected. That Amendment offered a third method of giving additional personal relief to retired people so as to assist them with this problem of dealing with the rise in prices to which the Chancellor so rightly and sympathetically referred in his Budget statement.

    8.45 p.m.

    I am very sorry that the Government this year have felt it right to confine any practical result of their sympathy to those who are in receipt of old age pensions. I fully concede that those are the people who are most hard hit, but there is a group of people who just do not qualify for National Assistance and yet who have very small incomes, say £300, £400, or £500 a year, who are in the greatest difficulty in living and who also would have been worthy objects of relief in this Bill in one of the three ways which have been proposed.

    I ask the Financial Secretary not merely to look at the cost of these proposals, modest though it is, but to regard it as one of those matters of equity and justice which are completely unanswerable. I can see no logical answer at all to the case for these Amendments. Why should not a man who is living upon the proceeds of his savings have earned income allowance? Of course, while he is working and in receipt of his pay or salary the income from his savings may be regarded as a sort of extra.

    Of course, they may be the savings of his parents or something which has been left to him; that is perfectly true, but I would point out that both these Amendments would confer no appreciable benefit to people with large private incomes. The merit of the Amendments is that their benefit, proportionately at any rate, is concentrated upon those lowest income groups above National Assistance level who, I think, are a most deserving category of people.

    I was saying when the hon. Gentleman interrupted me that while people are still earning one may regard the income from their savings as an addition and a supplement to their earnings which ought to be taxed at the standard rate. That is a perfectly tenable point of view, though it is not necessarily the one I hold. But once those people have ceased to earn, then I say it is right that the income from their savings should be regarded in a different light and should receive a different form of treatment from the Treasury. For those reasons, I hope that the Government will accept one of these proposals—I do not ask them to accept them all—and that if they do not the Committee will make them do so.

    My hon. Friend the Member for Buckinghamshire, South (Mr. Bell), in his excellent speech, speculated on what the Treasury might decide about these two Amendments. Whatever the Treasury may decide, I hope that Parliament will insist upon one or other of them being written into the Bill. The changes embodied in these Amendments would both be improvements in the law.

    My three hon. Friends who have spoken have all stated cogently the humanitarian case for taking some kind of action, and that must have appealed to hon. Members in all quarters of the Committee. We are considering the difficulties of people who, because of their age, have little chance to improve their incomes by harder work and enterprise or in any way except the most improbable way that the hon. Member for Sowerby (Mr. Houghton) suggested, when he conjured up a fiction of some of these old ladies and gentlemen examining "The Financial Times" every morning and ringing up their brokers to see if their money could be more profitably invested. Most of the ordinary people who come into the sort of category which we are discussing now—old people with a little over £500 a year—do not speculate with their investments. A great deal of that money of theirs, for safety's sake has to be in fixed interest securities, which nowadays bring in a low return.

    It is not simply on humanitarian grounds that I commend these Amendments. An hour or two ago I spoke about the anomalies which creep into the Income Tax allowances unless we constantly keep them under review. Things have changed so much in 25 years, the value of money has changed so much, the whole of our Income Tax structure has changed so much, that if £500 was the right limit 25 years ago at which to stop the aid for old people, it cannot conceivably be the right limit any longer. That is a point which we should all bear in mind, and we are indebted to my hon. Friend the Member for Runcorn for having brought it before the Committee.

    Secondly, the working of these marginal reliefs must surely trouble the hon. Member for Sowerby a great deal. He it was who introduced into our debates this evening the idea of looking at the graph, and if he looks at the graph he will see that from £500 onwards there is an astonishingly steep rise in the rate at which these elderly people are called upon to pay tax. I doubt whether there are more than one or two hon. Members present at the moment who, before the debate tonight, realised that on the section of their income immediately above the £500 limit these old people are called upon to pay tax at 12s. 6d. in the £. That is a rate which does not fall on anybody else until his income rises above £3,000 a year. It is only then that such a heavy incidence begins to cut into a man's extra income. The result in this case is that, whereas under the Government's proposals the overall rate of tax falling on old people with incomes of £500 a year will be 3s. 3d. in the £, the overall rate then rises, unless we do something about it now, at an altogether unjustified pace until at £600 a year it is 4s. 9½d., and so on. I will not weary the Committee with figures.

    The point on which I think we must concentrate is the anomalous working of the present system of marginal relief which, unless we do something on the lines so ingeniously suggested by my hon. Friend the Member for Cornwall, North (Sir H. Roper), imposes this 12s. 6d. rate of tax on the band immediately above £500. There is a need for us to take action of some sort in this case because, believe me, the people we are discussing have long ago had to give up thinking about running cars; they have reached the stage at which they are wondering how they can get along at all.

    They had looked forward to an old age of simple needs and to the continuance of small enjoyments which they had possessed throughout their lives but, owing to the weight of modern taxation, they find that a great deal on which they had counted has been swept entirely away from them. And there is nothing whatever they can do about it. They must suffer, whereas we who are younger may still have opportunity of improving our position. Unless we can find some means of relieving their need, we are allowing cruelty to be inflicted on those people. This Committee surely never wishes to be cruel, and we must find some means of alleviating such a genuine hardship and grievance.

    Both these Amendments would give relief to persons over 65 years of age living on an investment income of more than £500 a year, and what I have to say will mostly apply to both of them. Clearly, I think, one approaches these proposals with sympathy, and indeed, had there been no Korean war and had there been no need for a re-armament programme, we should, no doubt, have had a festive Budget which would have been able to include many reliefs of this kind. Unhappily, however, those hopes have gone the way of all flesh, as, no doubt, many other such hopes will so long as human beings quarrel with one another on this planet.

    Therefore, in the circumstances which in fact confront us, I am afraid we are forced to the conclusion that this concession is not practicable in relation to our other commitments, mainly for the reason that the two suggested concessions together would cost £3,500,000. As the hon. Gentleman the Member for Cornwall, North (Sir H. Roper) quite rightly said, his own proposal would cost £500,000 and the much larger proposal would cost £3 million.

    The old age relief is, of course, an allowance by which a small unearned income gets the earned income relief, on the ground, as an hon. Gentleman has said, that it is, in a sense, equivalent to a pension. This relief, like the Petrol Duty, is a financial child of the Leader of the Opposition. It was the Leader of the Opposition who, when he introduced it, set the limit to the size of the income at which the relief would operate. [HON. MEMBERS: "When was that?"] That, I think, shows that in his mind the distinction was clear between a reasonably small unearned income which could be justifiably regarded as the equivalent of a pension and a much larger unearned income which, as my hon. Friend the Member for Sowerby (Mr. Houghton) said, would not reasonably result from the savings of the individual concerned.

    This relief would also, of course, benefit those with incomes of over £500 a year. That is, I fully agree, a modest income, but we have to deal at the moment, of course, with people of even more modest incomes than that. Incidentally, the proposal of the hon. Member for Runcorn (Mr. Vosper), who moved the first Amendment, would have a rather anomalous effect on the arithmetic. According to the Government's proposals, all the individuals eligible for this age relief on incomes of £500, £600 and so on upwards will pay more after this Budget than they have paid previously. Under his proposal a single person, or indeed a married couple, with an income of £500 a year would pay more than they did previously, whereas somebody with an income of £700 or £800 a year would actually pay less. That, I think, is rather an anomalous effect which he may not have realised.

    9.0 p.m.

    We must also recognise that those whose situation we are discussing are, of course, eligible for the various other Income Tax reliefs. The marriage allowance, children's allowance, dependent relatives' allowance, and so on, are all available to persons over 65 with more than £500 a year. If they have no dependants, we must be guided by the general principle of this Budget—that in time of rising prices and rising profits the main extra burden of taxation should be placed on profits and on the higher incomes—and the reliefs we are able to give this year must go, as the Committee has already decided on the Government's proposal, to the old age pensioners and to those in receipt of National Assistance. For those reasons, we are sorry to have to come to the conclusion that we cannot conscientiously advise the Committee to accept these proposals this year.

    The Financial Secretary said that this proposal would benefit only people with incomes of over £500 a year. Will he not agree that it equally benefits people with under £1,000 a year?

    Will the hon. Gentleman also explain how higher profits can affect the incomes of people who have fixed incomes?

    The disappointment caused by the remarks of the Financial Secretary will, I am certain, not be confined to this side of the Committee. I thought that when my hon. Friend the Member for Runcorn (Mr. Vosper) moved his Amendment—and may I say how honoured we who sit on the back benches are to have this temporary ascent from Olympus, in a brief respite from his normal task of flagellation—he spoke in such agreeable and convincing terms that the Government would hasten to accept this proposal. Indeed, it was obvious while the Financial Secretary was on his feet that he himself was far from convinced by the utterance he was forced to deliver.

    I hope the Financial Secretary will not take it amiss—he did a year ago when I made the same suggestion, but he has been longer in office now and is more hardened to criticism—when I say that I was pessimistic from the outset, because my experience tells me that when concessions are to be made the Chancellor of the Exchequer comes into the Chamber in person and dons the mantle of Santa Claus, but when a rebuttal awaits us it is the unfortunate Financial Secretary who has to do it; and he does it with an obvious lack of conviction, as he did on this occasion.

    None the less, I feel that we should press this matter, because those who would benefit from this Amendment, unlike those who fell within the previous Amendment moved by my hon. Friend the Member for Edgbaston (Sir P. Bennett), cannot by any conceivable flight of imagination be described as rich. I think we can return here for a moment to a topic I mentioned during the general debate on the Budget Resolutions. When I mentioned it, many hon. Members opposite, in the language of the OFFICIAL REPORT, "indicated assent." I hope I can once again carry the Committee as a whole with me on this matter, because I am sure that on reflection hon. Members will feel that this is not a party point. I even hope to carry with me the hon. Member for Sowerby (Mr. Houghton), because I am confident that at heart he is a kindly character.

    I intend to give my reason for saying that. There was a time when he used to deliver a series of soothing broadcasts entitled "Can I Help You?" It is only when he returns to his political capacity as a Socialist Member of Parliament that, like Pharaoh, he hardens his heart whenever there is any suggestion of relief to taxpayers in any category. None the less, I submit that there is a very strong case here indeed.

    The hon. Member for Stechford (Mr. Jenkins) earlier this evening made what I thought was a most interesting speech, although I was not able to agree with his final conclusion, on the subject of earned and unearned income. He said that he himself would favour a sharper distinction between the two. I am speaking only for myself, but I have said before, and I am on record as having said it, that I would support a distinction between earned and unearned income during all stages of taxation, including Surtax.

    When the hon. Member for Stechford says that, I do not differ from him if we both mean the same thing by unearned income, because I think that it has emerged during the last couple of hours of discussion—the point has been well made by one or two of my hon. Friends already—that to describe the savings of a life-time and the consequences of thrift over a long period of years as unearned income, is really a harsh definition. I do not think that this is a party point at all.

    I should like to see our whole code of taxation altered in such a way as to make possible that definition, because I think that even if one is a Socialist and a devoted disciple of the Welfare State, one would still believe—I think that hon. Members opposite believe it in their heart of hearts—that the man who is self-supporting in these days is a benefactor of the State, if only because he takes himself off the shoulders of the various welfare schemes to which the taxpayer subscribes.

    Therefore, I would urge that the savings of a lifetime are not in the real sense of the word unearned income. When the hon. Member for Bucks, South (Mr. Bell), was speaking a few moments ago, the hon. Member for Sowerby (Mr. Houghton) made one of his interventions, and suggested that the unearned income upon which many of these old people live did not consist of their savings at all, but might have been handed down to them by their parents. Of course, that may be so.

    I do not know how many there are, and I doubt if the hon. Gentleman does, but obviously there are people who would fall within that category; but surely the State has not done badly out of that money already. It has attracted Death Duties before it reached these people. It may, of course, have attracted Death Duties in the days when they were lighter than they are today. None of us have control over the age in which we are born, the circumstances in which we have to live, or the taxes which we have to pay.

    When the Financial Secretary told us—and I think that he soared rather into the stratosphere of imagination—that these people between the ages of 60 and 70 benefited from children's allowances, I thought that he was paying a charming compliment to their virility. But I thought that his argument lacked force, because surely the children of these people have now become adults and, in many cases, parents themselves.

    The hon. Gentleman shakes his head. But it will take more than such oscillations to convince me. After all, statistics are available, and I have a good mind to put down a Question to the Minister of Health on the subject of whether there has been a sharp rise in the birth rate between the ages of 60 and 70. That shows the length to which the Treasury have to go in the year 1951 in order to be mean. If that argument is not laughed out of the Committee. I hope it will be voted out in a few moments.

    While the hon. Member for Sowerby was right when he said that there were certain investments for some, I thought one of my hon. Friends was equally correct when he said that these people had to play for safety. Those with money in fixed interest securities, who have entrusted it during the last five years to His Majesty's Government, have found that something like one-third of the capital has now gone with the wind. I will not give a long list of the securities to prove that, but hon. Members opposite must be familiar with them.

    The hon. Member is wrong. I know he is an expert on various foreign countries, but I am not prepared to listen to him on this particular subject. I happen to know a good deal about it. When we come to tooth brushes I shall listen to the hon. Member with the closest attention, but not on the yield or capital value of Government securities which, in fact, have fallen sharply since the palmy days of the inflationary boom of the present Minister of Local Government and Planning.

    Those who live either on fixed interest securities or are—I think this is a section of the community for whom the Committee should have the greatest sympathy—servants of the State, be they ex-members of the Fighting Services or—and these are a different class of people—civil servants, who contract on entering Government service that at the end of a certain number of years they will draw a certain pension composed of some percentage of their salary at the time of retirement—

    I am grateful to my hon. Friend the Member for Burton (Mr. Colegate). Those who go out of the Fighting Services are in a stronger position, because they generally come out, say, from the Navy—and I am talking of those on the lower deck—in the forties, where they will fall within the definition of the Financial Secretary with regard to reproduction, and are able to supplement their Service pensions by undertaking other work of a remunerative nature. We all know cases where gentlemen with pensions from the Services take other employment to supplement those pensions. Civil servants are not covered by that. It is at 60 or 65 that they retire, and at that age they are unable to keep in step with those who are fighting the cost of living by wage increases and the like.

    Once again I come to the case for this concession. Usually about this period of the Finance Bill, the Financial Secretary—perhaps we have not got to that stage yet—commences to do a certain amount of addition. He then gets up and says that if all the Amendments moved by the Opposition were accepted the cost to the Exchequer would be £100 million, £150 million or the like. That is not a valid argument. It may look well in the newspapers, but it is not valid, because hon. Members on both sides of the Committee know perfectly well that this stage of the Finance Bill is the occasion for putting forward a whole list of easements which hon. Members think desirable.

    Last year I called it the annual parade, and Sir Stafford Cripps seemed somewhat contemptuous of that definition. I do not know why. It is the annual parade or deployment of certain easements of taxation which the Opposition think desirable, and not only the Opposition but some Members on the Government side too. I wish that they would put down some Amendments with a view to easing the burden of taxation. I hope some of them will support this Amendment, for I know that they are all sympathetic. We might appreciate support from the hon. Member for Ealing, North (Mr. J. Hudson). I noticed he disappeared yesterday when we were discussing some concessions to the wine trade, but I hope that was on conscientious grounds. I hope that he will support this Amendment. I am sure he sees the point of it and is sympathetic towards it.

    9.15 p.m.

    It is not too late for the Government to think again. I was a little sorry that my hon. Friend the Member for Cornwall, North, carried out a strategic retreat very early in this Debate, when he said that he hoped that the matter might be considered between now and the Report stage. It is the Amendment of my hon. Friend the Member for Runcorn which should be pressed. Cannot £3 million be found, in this vast expenditure of £4,000 million, from some source or another? It is a very small concession to make. I am sorry that the Government have taken up this extremely hard-hearted attitude. I should like them to divest themselves of the Sowerby mentality which so affects them. Next time the hon. Member for Sowerby goes on the air to advise the people, the title of his broadcast ought to be "Can I hinder you?"

    I hope that my right hon. Friend the Member for Aldershot (Mr. Lyttelton), will not allow this negative reply from the Government to go unchallenged. I hope that the Amendment will be pressed so that the people of the country may see who it is that is endeavouring to relieve their burdens through the acid test of a Division.

    My hon. and gallant Friend the Member for Bristol, North-West (Lieut.-Commander Braithwaite) said that when the Financial Secretary to the Treasury rose to speak his blood ran cold, because he knew that we were going to get nothing. I had the same feelings, for slightly different reasons. The Financial Secretary began by saying that he had the deepest sympathy with the object of the Amendment. That always means that the sympathy is not going to be followed up by any cash. That is exactly what has happened on this occasion.

    During the debate on another Clause, the Financial Secretary used the phrase that some of my hon. Friends had lived long and learned little. Those words have now come home to him in a very obvious way. He pointed out that the £500 limit was originally imposed by my right hon. Friend the Leader of the Opposition, but that happened 25 years ago.

    That is a delicious piece of the old Adam rising in the brain-not the breast—of the Financial Secretary, I was going to say that nothing had happened in the last 26 years to make my right hon. Friend change his opinion about what the appropriate limit should be in this case. That is the first point, which was cogently argued by my hon. Friend the Member for Hampstead (Mr. H. Brooke).

    The next thing, which I am sure came to many hon. Members as a surprise, was

    Division No. 89.]

    AYES

    [9.21 p.m.

    Aitken, W. T.Carr, Robert (Mitcham)Erroll, F. J.
    Alport, C. J. M.Carson, Hon. E.Fisher, Nigel
    Amery, Julian (Preston, N.)Channon, H.Fletcher, Walter (Bury)
    Amory, Heathcoat (Tiverton)Churchill, Rt. Hon. W. S.Fort, R.
    Arbuthnot, JohnClarke, Col. Ralph (East Grinstead)Foster, John
    Ashton, H. (Chelmsford)Clarke, Brig. Terence (Portsmouth, W.)Fraser, Hon. Hugh (Stone)
    Assheton, Rt. Hon. R. (Blackburn, W.)Clyde, J. L.Fraser, Sir Ian (Morecambe & Lonsdale)
    Astor, Hon. M. L.Colegate, A.Fyfe, Rt. Hon. Sir David Maxwell
    Baker, P. A. D.Conant, Maj. R. J. E.Gage, C. H.
    Baldock, Lt.-Cmdr. J. M.Cooper, Sqn. Ldr Albert (Ilford, S.)Galbraith, Cmdr. T. D. (Pollok)
    Baldwin, A. E.Cooper-Key, E. M.Galbraith, T. G. D. (Hillhead)
    Banks, Col. C.Corbett, Lt.-Col. Uvedale (Ludlow)Garner-Evans, E. H. (Denbigh)
    Baxter, A. B.Craddock, Beresford (Spelthorne)Gates, Maj. E. E.
    Beamish, Maj. TuftonCranborne, ViscountGlyn, Sir Ralph
    Bell, R. M.Crookshank, Capt. Rt. Hon. H. F. C.Gomme-Duncan, Col. A.
    Bennett, Sir Peter (Edgbaston)Crosthwaite-Eyre, Col. O. E.Gridley, Sir Arnold
    Bennett, Dr. Reginald (Gosport)Crouch, R. F.Grimond, J.
    Bennett, William (Woodside)Crowder, Capt. John (Finchley)Grimston, Hon. John (St. Albans)
    Bevins, J. R. (Liverpool, Toxteth)Crowder, Petre (Ruislip—Northwood)Grimston, Robert (Westbury)
    Birch, NigelCundiff, F. W.Harden, J. R. E.
    Black, C. W.Cuthbert, W. N.Hare, Hon. J. H. (Woodbridge)
    Boles, Lt.-Col. D. C. (Wells)Darling, Sir William (Edinburgh, $.)Harris, Frederic (Croydon, N.)
    Boothby, R.Davidson, ViscountessHarris, Reader (Heston)
    Bossom, A. C.Davies, Rt. Hon. C. (Montgomery)Harvey, Air Cdre A. V. (Macclesfield)
    Bowen, E. R. (Cardigan)Davies, Nigel (Epping)Harvey, Ian (Harrow, E.)
    Boyd-Carpenter, J. A.de Chair, SomersetHarvie-Watt, Sir George
    Boyle, Sir EdwardDe la Bère, R.Hay, John
    Bracken, Rt. Hon. B.Deedes, W. F.Headlam, Lt.-Col. Rt. Hon. Sir Cuthbert
    Braine, B. R.Digby, S. WingfieldHeald, Lionel
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Dodds-Parker, A. D.Henderson, John (Cathcart)
    Braithwaite, Sir Albert (Harrow, W.)Donner, P. W.Hicks-Beach, Maj. W. W.
    Bromley-Davenport, Lt.-Col. W.Douglas-Hamilton, Lord MalcolmHiggs, J. M. C.
    Brooke, Henry (Hampstead)Drayson, G. B.Hill, Dr. Charles (Luton)
    Browne, Jack (Govan)Dugdale, Maj. Sir Thomas (Richmond)Hill, Mrs. E. (Wythenshawe)
    Buchan-Hepburn, P. G. T.Duncan, Capt. J. A. L.Hinchingbrooke, Viscount
    Bullock, Capt. M.Dunglass, LordHirst, Geoffrey
    Bullus, Wing Commander E. E.Duthie, W. S.Holmes, Sir Stanley (Harwich)
    Burden, F. A.Eccles, D. M.Hope, Lord John
    Butcher, H. W.Eden, Rt. Hon. A.Hopkinson, Henry
    Butler, Rt. Hn. R. A. (Saffron Walden)Elliot, Rt. Hon. W. E.Hornsby-Smith, Miss. P.

    the very steep rise in the rate of tax which these poor people—I say that advisedly—have to pay after the limit has been reached. I think many hon. Members were surprised to know that it is as much as 12s. 6d. as much as in the case of people who get £3,000 a year.

    The case for the Amendment has not only been overwhelmingly upheld by speeches from this side of the Committee but it has been reinforced by the speech of the Financial Secretary himself who, after looking through all the Treasury portfolios, could find no answer except to say that the country, in a time of rearmament, could not find £500,000 a year to relieve this necessitous case, much less £3½ million. If a Division is challenged I shall have great pleasure in voting for this Amendment and trying to get some reasonably generous treatment from the Treasury to accord with that sympathy they say they feel with the objects of the Amendment.

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

    The Committee divided: Ayes, 284; Noes, 295.

    Horsbrugh, Rt. Hon. FlorenceMaude, Angus (Ealing S.)Smithers, Peter (Winchester)
    Howard, Gerald (Cambridgeshire)Maude, John (Exeter)Smyth, Brig. J. G. (Norwood)
    Howard, Greville (St. Ives)Maudling, R.Snadden, W. McN.
    Hudson, Sir Austin (Lewisham, N.)Medlicott, Brig. F.Soames, Capt. C.
    Hudson, Rt. Hon. Robert (Southport)Mellor, Sir JohnSpearman, A. C. M.
    Hudson, W. R. A. (Hull, N.)Molson, A. H. E.Spence, H. R. (Aberdeenshire, W.)
    Hutchinson, Geoffrey (Ilford, N.)Monckton, Sir WalterSpens, Sir Patrick (Kensington, S.)
    Hutchison, Lt.-Com. Clark (E'b'rgh W.)Moore, Lt.-Col. Sir ThomasStanley, Capt. Hon. Richard (N. Fylde)
    Hutchison, Col. James (Glasgow)Morris, Hopkin (Carmarthen)Stevens, G. P.
    Hyde, Lt.-Col. H. M.Morrison, John (Salisbury)Steward, W. A. (Woolwich, W.)
    Hylton-Foster, H. B.Morrison, Rt. Hon. W. S. (Cirencester)Stewart, Henderson (Fife, E.)
    Jeffreys, General Sir GeorgeMott-Radclyffe, C. E.Stoddart-Scott, Col. M.
    Jennings, R.Nabarro, G.Storey, S.
    Johnson, Howard (Kemptown)Nicholls, HarmarStrauss, Henry (Norwich, S.)
    Jones, A. (Hall Green)Nicholson, G.Stuart, Rt. Hon. James (Moray)
    Joynson-Hicks, Hon. L. W.Nield, Basil (Chester)Studholme, H. G.
    Kaberry, D.Noble, Cmdr. A. H. P.Summers, G. S.
    Kerr, H. W. (Cambridge)Nugent, G. R. H.Sutcliffe, H.
    Kingsmill, Lt.-Col. W. H.Nutting, AnthonyTaylor, Charles (Eastbourne)
    Lambert, Hon. G.Oakshott, H. D.Taylor, William (Bradford, N.)
    Lancaster, Col. C. G.Odey, G. W.Teeling, W.
    Langford-Holt, J.O'Neill, Rt. Hon. Sir HughTeevan, T. L.
    Leather, E. H. C.Ormsby-Gore, Hon. W. D.Thomas, J. P. L. (Hereford)
    Legge-Bourke, Maj. E. A. H.Orr, Capt. L. P. S.Thompson, Kenneth Pugh (Walton)
    Lennox-Boyd, A. T.Thompson, Lt.-Cmdr. R. (Croydon, W.)
    Lindsay, MartinOrr-Ewing, Charles Ian (Hendon, N.)Thorneycroft, Peter (Monmouth)
    Linstead, H. N.Orr-Ewing, Ian L. (Weston-super-Mare)Thornton-Kemsley, Col. C. N.
    Llewellyn, D.Osborne, C.Thorp, Brig. R. A. F.
    Lloyd, Rt. Hn. Geoffrey (King's N'rt'n)Peake, Rt. Hon. O.Tilney, John
    Lloyd, Maj. Guy (Renfrew, E.)Perkins, W. R. D.Turner, H. F. L.
    Lloyd, Selwyn (Wirral)Peto, Brig. C. H. M.Turton, R. H.
    Lockwood, Lt.-Col. J. C.Pickthorn, K.Tweedsmuir, Lady
    Longden, Gilbert (Herts, S. W.)Pitman, I. J.Vane, W. M. F.
    Low, A. R. W.Powell, J. EnochVaughan-Morgan, J. K.
    Lucas, Sir Jocelyn (Portsmouth, S.)Price, Henry (Lewisham, W.)Wade, D. W.
    Lucas, P. B. (Brentford)Prior-Palmer, Brig. O.Wakefield, Edward (Derbyshire, W.)
    Lucas-Tooth, Sir HughProfumo, J. D.Wakefield, Sir Wavell (Marylebone)
    Lyttelton, Rt. Hon. O.Raikes, H. V.Walker-Smith, D. C.
    McAdden, S. J.Rayner, Brig. R.Ward, Hon. George (Worcester)
    McCorquodale, Rt. Hon. M. S.Redmayne, M.Ward, Miss. I. (Tynemouth)
    Macdonald, A. J. F. (Roxburgh)Remnant, Hon. P.Waterhouse, Capt. Rt. Hon. C.
    Macdonald, Sir Peter (I. of Wight)Renton, D. L. M.Watkinson, H.
    Mackeson, Brig. H. R.Roberts, Maj. Peter (Heeley)Webbe, Sir H. (London & Westminster)
    McKibbin, A.Robertson, Sir David (Caithness)Wheatley, Maj. M. J. (Poole)
    McKie, J. H. (Galloway)Robinson, Roland (Blackpool, S.)White, Baker (Canterbury)
    Maclay, Hon. JohnRobson-Brown, W.Williams, Charles (Torquay)
    Maclean, FitzroyRodgers, John (Sevenoaks)Williams, Gerald (Tonbridge)
    MacLeod, Iain (Enfield, W.)Roper, Sir HaroldWilliams, Sir Herbert (Croydon, E.)
    MacLeod, John (Ross and Cromarty)Ropner, Col. L.Wills, G.
    Macmillan, Rt. Hon. Harold (Bromley)Russell, R. S.Wilson, Geoffrey (Truro)
    Macpherson, Major Niall (Dumfries)Ryder, Capt. R. E. D.Winterton, Rt. Hon. Earl
    Maitland, Cmdr. J. W.Salter, Rt. Hon. Sir ArthurWood, Hon. R.
    Manningham-Butler, R. E.Savory, Prof. D. L.York, C.
    Marlowe, A. A. H.Scott, Donald
    Marshall, Douglas (Bodmin)Shepherd, William

    TELLERS FOR THE AYES:

    Marshall, Sidney (Sutton)Smiles, Lt.-Col. Sir WalterMr. Vosper and Mr. Heath.

    NOES

    Acland, Sir RichardBottomley, A. G.Cove, W. G.
    Adams, RichardBowden, H. W.Craddock, George (Bradford, S.)
    Albu, A. H.Bowles, F. G. (Nuneaton)Crawley, A.
    Allen, Arthur (Bosworth)Braddock, Mrs. ElizabethCrosland, C. A. R.
    Allen, Scholefield (Crowe)Brook, Dryden (Halifax)Crossman, R. H. S.
    Anderson, Alexander (Motherwell)Brooks, T. J. (Normanton)Cullen, Mrs. A.
    Anderson, Frank (Whitehaven)Broughton, Dr. A. D. D.Daines, P.
    Attlee, Rt. Hon. C. R.Brown, Rt. Hon. George (Belper)Dalton, Rt. Hon. H.
    Awbery, S. S.Brown, Thomas (Ince)Darling, George (Hillsborough)
    Ayles, W. H.Burke. W. A.Davies, A. Edward (Stoke, N.)
    Bacon, Miss. AliceBurton, Miss. E.Davies, Harold (Leek)
    Baird, J.Butler, Herbert (Hackney, S.)Davies, Stephen (Merthyr)
    Balfour, A.Callaghan, L. J.de Freitas, Geoffrey
    Barnes, Rt. Hon. A. J.Carmichael, J.Deer, G.
    Bartley, P.Castle, Mrs. B. A.Delargy, H. J.
    Bellenger, Rt. Hon. F. J.Champion, A. J.Dodds, N. N.
    Benn, WedgwoodChetwynd. G. R.Donnelly, D.
    Benson, G.Clunie, J.Driberg, T. E. N.
    Beswick, F.Cocks, F. S.Dugdale, Rt. Hon. John (W. Bromwich)
    Bevan, Rt. Hon. A. (Ebbw Vale)Coldrick, W.Dye, S.
    Bing, G. H. C.Collindridge, F.Ede, Rt. Hon. J. C.
    Blenkinsop, A.Cook, T. F.Edelman, M.
    Blyton, W. R.Cooper, Geoffrey (Middlesbrough, W.)Edwards, John (Brighouse)
    Boardman, H.Cooper, John (Deptford)Edwards, Rt. Hon. Ness (Caerphilly)
    Booth, A.Corbet, Mrs. Freda (Peckham)Edwards, W. J. (Stepney)

    Evans, Albert (Islington, S. W.)Lee, Frederick (Newton)Robens, Rt. Hon. A.
    Evans, Edward (Lowestoft)Lee, Miss. Jennie (Cannock)Roberts, Goronwy (Caernarvonshire)
    Evans, Stanley (Wednesbury)Lever, Leslie (Ardwick)Robertson, J. J. (Berwick)
    Ewart. R.Lewis, Arthur (West Ham, N.)Robinson, Kenneth (St. Pancras, N.)
    Fernyhough, E.Lewis, John (Bolton, W.)Rogers, George (Kensington, N.)
    Field, Capt. W. J.Lindgren, G. S.Ross, William
    Finch, H. J.Lipton, Lt.-Col. M.Royle, C.
    Fletcher, Eric (Islington, E.)Logan, D. G.Shawcross, Rt. Hon. Sir Hartley
    Follick, M.Longden, Fred (Small Heath)Shinwell, Rt. Hon. E.
    Foot, M. M.McAllister, G.Shurmer, P. L. E.
    Forman, J. C.MacColl, J. E.Silverman, Julius (Erdington)
    Fraser, Thomas (Hamilton)McGhee, H. G.Silverman, Sydney (Nelson)
    Freeman, John (Watford)McGovern, J.Simmons, C. J.
    Freeman, Peter (Newport)McInnes, J.Slater, J.
    Gaitskell, Rt. Hon. H. T. N.Mack, J. D.Smith, Ellis (Stoke, S.)
    Ganley, Mrs. C. S.McKay, John (Wallsend)Smith, Norman (Nottingham, S.)
    Gibson, C. W.Mackay, R. W. G. (Reading, N.)Snow, J. W.
    Gilzean, A.McLeavy, F.Sorensen, R. W.
    Glanville, James (Consett)MacMillan, Malcolm (Western Isles)Soskice, Rt. Hon. Sir Frank
    Gooch, E. G.McNeil, Rt. Hon. H.Steele, T.
    Gordon-Walker, Rt. Hon. P. C.MacPherson, Malcolm (Stirling)Stewart, Michael (Fulham, E.)
    Greenwood, Anthony (Rossendale)Mainwaring, W. H.Stokes, Rt. Hon. R. R.
    Greenwood, Rt. Hn. Arthur (Wakefield)Mallalieu, E. L. (Brigg)Strachey, Rt. Hon. J.
    Grenfell, D. R.Mallalieu, J. P. W. (Huddersfield, E.)Strauss, Rt. Hon. George (Vauxhall)
    Grey, C. F.Mann, Mrs. JeanStross, Dr. Barnett
    Griffiths, David (Rother Valley)Manuel, A. C.Summerskill, Rt. Hon. Edith
    Griffiths, Rt. Hon. James (Llanelly)Marquand, Rt. Hon. H. A.Sylvester, G. O.
    Griffiths, William (Exchange)Mathers, Rt. Hon. G.Taylor, Bernard (Mansfield)
    Gunter, R. J.Mellish, R. J.Taylor, Robert (Morpeth)
    Hale Joseph (Rochdale)Messer, F.Thomas, David (Aberdare)
    Hale, Leslie (Oldham, W.)Middleton, Mrs. L.Thomas, George (Cardiff)
    Hall, John (Gateshead, W.)Mikardo, Ian.Thomas, Iorwerth (Rhondda, W.)
    Hall, Rt. Hon. Glenvil (Colne Valley)Mitchison, G. R.Thomas, Ivor Owen (Wrekin)
    Hamilton, W. W.Moeran, E. W.Thorneycroft, Harry (Clayton)
    Hannan, W.Monslow, W.Thurtle, Ernest
    Hardman, D. R.Moody, A. S.Timmons, J.
    Hardy, E. A.Morgan, Dr. H. B.Tomney, F.
    Hargreaves, A.Morley, R.Turner-Samuels, M.
    Hastings, S.Morris, Percy (Swansea, W.)Ungoed-Thomas, Sir Lynn
    Hayman, F. H.Morrison, Rt. Hon. H. (Lewisham, S.)Usborne, H.
    Henderson, Rt. Hon. Arthur (Tipton)Mort, D. L.Vernon, W. F.
    Herbison, Miss. M.Moyle, A.Viant, S. P.
    Hewitson, Capt. M.Mulley, F. W.Wallace, H. W.
    Hobson, C. R.Murray, J. D.Watkins, T. E.
    Holman, P.Nally, W.Webb, Rt. Hon. M. (Bradford, C.)
    Holmes, Horace (Hemsworth)Neal, Harold (Bolsover)Weitzman, D.
    Houghton, D.Noel-Baker, Rt. Hon. P. J.Wells, Percy (Faversham)
    Hoy, J.O'Brien, T.Wells, William (Walsall)
    Hubbard, T.Oldfield, W. H.West, D. G.
    Hudson, James (Ealing, N.)Oliver, G. H.Wheatley, Rt. Hon. John (Edinb'gh E.)
    Hughes, Emrys (S. Ayrshire)Orbach, M.White, Mrs. Eirene (E. Flint)
    Hughes, Hector (Aberdeen, N.)Padley, W. E.White, Henry (Derbyshire, N. E.)
    Hynd, H. (Accrington)Paget, R. T.Whiteley, Rt. Hon. W.
    Hynd, J. B. (Attercliffe)Paling, Rt. Hon. W. (Dearne Valley)Wilcock, Group Capt. C. A. B.
    Irvine, A. J. (Edge Hill)Paling, Will T. (Dewsbury)Wilkes, L.
    Irving, W. J. (Wood Green)Pannell, T. C.Wilkins, W. A.
    Isaacs, Rt. Hon. G. A.Pargiter, G. A.Willey, Frederick (Sunderland)
    Janner, B.Parker, J.Willey, Octavius (Cleveland)
    Jay, D. P. T.Paton, J.Williams, David (Neath)
    Jeger, George (Goole)Peart, T. F.Williams, Rev. Llywelyn (Abertillery)
    Jeger, Dr. Santo (St. Pancras, S.)Poole, C.Williams, Ronald (Wigan)
    Jenkins, R. H.Popplewell, E.Williams, Rt. Hon. Thomas (Don V'lly)
    Johnson, James (Rugby)Porter, G.Williams, W. T. (Hammersmith, S.)
    Johnston, Douglas (Paisley)Price, Philips (Gloucestershire, W.)Wilson, Rt. Hon. Harold (Huyton)
    Jones, David (Hartlepool)Proctor, W. T.Winterbottom, Ian (Nottingham, C.)
    Jones, Frederick Elwyn (W. Ham, S.)Pryde, D. J.Winterbottom, Richard (Brightside)
    Jones, Jack (Rotherham)Pursey, Cmdr. H.Wise, F. J.
    Jones, William Elwyn (Conway)Rankin, J.Woodburn, Rt. Hon. A.
    Keenan, W.Rees, Mrs. D.Woods, Rev. G. S.
    Kenyon, C.Reeves, J.Wyatt, W. L.
    King, Dr. H. M.Reid, Thomas (Swindon)Yates, V. F.
    Kinghorn, Sqn. Ldr. E.Reid, William (Camlachie)
    Kinley, J.Rhodes, H.

    TELLERS FOR THE NOES:

    Kirk wood, Rt. Hon. D.Richards, R.Mr. Pearson and Mr. Sparks
    Lang Gordon

    9.30 p.m.

    On a point of order, Major Milner. I thought the Division which has just taken place was on the Amendment in the name of my hon. Friend the Member for Runcorn (Mr. Vosper) which, if it had been aceepted, would have cost approximately £3 million. There is also the Amendment in the name of my hon. Friend the Member for Cornwall, North (Sir H. Roper), which would have cost about £500,000. It was agreed that those should be discussed together, but surely we have a right to vote on the other?

    I assumed that the one covered the other. [HON. MEMBERS: "No."] If right hon. and hon. Gentlemen desire a Division, that is perfectly in order.

    Division No. 90.]

    AYES

    [9.35 p.m.

    Aitken, W. T.Davies, Nigel (Epping)Hutchison, Col. James (Glasgow)
    Alport, C. J. M.de Chair, SomersetHyde, Lt.-Col. H. M.
    Amery, Julian (Preston, N.)De la Bère, R.Hylton-Foster, H. B.
    Amory, Heathcoat (Tiverton)Deedes, W. F.Jeffreys, General Sir George
    Arbuthnot, JohnDigby, S. WingfieldJennings, R.
    Ashton, H. (Chelmsford)Dodds-Parker, A. D.Johnson, Howard (Kemptown)
    Assheton, Rt. Hon. R. (Blackburn, W.)Donner, P. W.Jones, A. (Hall Green)
    Astor, Hon. M. L.Douglas-Hamilton, Lord MalcolmJoynson-Hicks, Hon. L. W.
    Baker, P. A. D.Drayson, G. B.Kaberry, D.
    Baldock, Lt.-Cmdr. J. M.Dugdale, Maj. Sir Thomas (Richmond)Kerr, H. W. (Cambridge)
    Baldwin. A. E.Duncan, Capt. J. A. L.Kingsmill, Lt.-Col. W. H.
    Banks, Col. C.Dunglass, LordLambert, Hon. G.
    Baxter, A. B.Duthie, W. S.Lancaster, Col. C. G.
    Beamish, Maj. TuftonEccles, D. M.Langford-Holt, J.
    Bell, R. M.Eden, Rt. Hon. A.Leather, E. H. C.
    Bennett, Sir Peter (Edgbaston)Elliot, Rt. Hon. W. E.Legge-Bourke, Maj. E. A. H.
    Bennett, Dr. Reginald (Gosport)Fisher, NigelLennox-Boyd, A. T.
    Bennett, William (Woodside)Fletcher, Walter (Bury)Lindsay, Martin
    Bevins, J. R. (Liverpool, Toxteth)Fort, R.Linstead, H. N.
    Birch, NigelFoster, JohnLlewellyn, D.
    Black, C. W.Fraser, Hon. Hugh (Stone)Lloyd, Rt. Hn. Geoffrey (King's N'rt'n)
    Boles, Lt.-Col. D. C. (Wells)Fraser, Sir Ian (Morecambe & Lonsdale)Lloyd, Maj. Guy (Renfrew, E.)
    Boothby, R.Fyfe, Rt. Hon. Sir David MaxwellLloyd, Selwyn (Wirral)
    Bossom, A. C.Gage, C. H.Lockwood, Lt.-Col. J. C.
    Bowen, E. R. (Cardigan)Galbraith, Cmdr. T. D. (Pollok)Longden, Gilbert (Herts, S. W.)
    Boyd-Carpenter, J. A.Galbraith, T. G. D. (Hillhead)Low, A. R. W.
    Boyle, Sir EdwardGarner-Evans, E. H. (Denbigh)Lucas, Sir Jocelyn (Portsmouth, S.)
    Bracken, Rt. Hon. B.Gates, Maj. E. E.Lucas, P. B. (Brentford)
    Braine, B. R.George, Lady Megan LloydLucas-Tooth, Sir Hugh
    Braithwaite, Sir Albert (Harrow, W.)Glyn, Sir RalphLyttelton, Rt. Hon. O.
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Gomme-Duncan, Col. A.McAdden, S. J.
    Bromley-Davenport, Lt.-Col. W.Gridley, Sir ArnoldMcCorquodale, Rt. Hon. M. S.
    Brooke, Henry (Hampstead)Grimond, J.Macdonald, A. J. F. (Roxburgh)
    Browne, Jack (Govan)Grimston, Hon. John (St. Albans)Macdonald, Sir Peter (I. of Wight)
    Buchan-Hepburn, P. G. T.Grimston, Robert (Westbury)Mackeson, Brig. H. R.
    Bullock, Capt. M.Harden, J. R. E.McKibbin, A.
    Bullus, Wing Commander E. E.Hare, Hon. J. H. (Woodbridge)McKie, J. H. (Galloway)
    Burden, F. A.Harris, Frederic (Croydon, N.)Maclay, Hon. John
    Butcher, H. W.Harris, Reader (Heston)Maclean, Fitzroy
    Butler, Rt. Hn. R. A. (Saffron Walden)Harvey, Air Cdre. A. V. (Macclesfield)MacLeod, Iain (Enfield, W.)
    Carr, Robert (Mitcham)Harvey, Ian (Harrow, E.)MacLeod, John (Ross and Cromarty)
    Carson, Hon. E.Harvie-Watt, Sir GeorgeMacmillan, Rt. Hon. Harold (Bromley)
    Channon, H.Hay, JohnMacpherson, Major Niall (Dumfries)
    Churchill, Rt. Hon. W. S.Headlam, Lt.-Col. Rt. Hon. Sir CuthbertMaitland, Cmdr. J. W.
    Clarke, Col. Ralph (East Grinstead)Heald, LionelManningham-Buller, R. E.
    Clarke, Brig. Terence (Portsmouth, W.)Henderson, John (Cathcart)Marlowe, A. A. H.
    Clyde, J. L.Hicks-Beach, Maj. W. W.Marshall, Douglas (Bodmin)
    Colegate, A.Higgs, J. M. C.Marshall, Sidney (Sutton)
    Conant, Maj. R. J. E.Hill, Dr. Charles (Luton)Maude, Angus (Ealing S.)
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Hill, Mrs. E. (Wythenshawe)Maude, John (Exeter)
    Cooper-Key, E. M.Hinchingbrooke, ViscountMaudling, R.
    Corbett, Lt.-Col. Uvedale (Ludlow)Hirst, GeoffreyMedlicott, Brig. F.
    Craddock, Beresford (Spelthorne)Holmes, Sir Stanley (Harwich)Mellor, Sir John
    Cranborne, ViscountHope, Lord JohnMolson, A. H. E.
    Crookshank, Capt. Rt. Hon. H. F. C.Hopkinson, HenryMonckton, Sir Walter
    Crosthwaite-Eyre, Col. O. E.Hornsby-Smith, Miss. P.Moore, Lt.-Col. Sir Thomas
    Crouch, R. F.Horsbrugh, Rt. Hon. FlorenceMorris, Hopkin (Carmarthen)
    Crowder, Capt. John (Finchley)Howard, Gerald (Cambridgeshire)Morrison, John (Salisbury)
    Crowder, Petre (Ruislip—Northwood)Howard, Greville (St. Ives)Morrison Rt. Hon. W. S. (Cirencester)
    Cundiff, F. W.Hudson, Sir Austin (Lewisham, N.)Mott-Radclyffe, C. E.
    Cuthbert, W. N.Hudson, Rt. Hon. Robert (Southport)Nabarro, G.
    Darling, Sir William (Edinburgh, S.)Hudson, W. R. A. (Hull, N.)Nicholls, Harmar
    Davidson, ViscountessHutchinson, Geoffrey (Ilford, N.)Nicholson, G.
    Davies, Rt. Hon. C. (Montgomery)Hutchison, Lt.-Com. Clark (E'b'rgh W.)Nield, Basil (Chester)

    Amendment proposed: In page 10, line 15, at end, add:

    (7) Subsection (2) of section fifteen of the Finance Act, 1925, shall have effect as if the words "seven-twelfths," were substituted in the said subsection (2) for the words "five-eighths."—[Sir H. Roper.]

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

    The Committee divided: Ayes, 285; Noes, 295.

    Noble, Cmdr. A. H. P.Ropner, Col. L.Thompson, Lt.-Cmdr. R. (Croydon, W.)
    Nugent, G. R. H.Russell, R. S.Thorneycroft, Peter (Monmouth)
    Nutting, AnthonyRyder, Capt. R. E. D.Thornton-Kemsley, Col. C. N.
    Oakshott, H. D.Salter, Rt. Hon. Sir ArthurThorp, Brig. R. A. F.
    Odey, G. W.Savory, Prof. D. L.Tilney, John
    O'Neill, Rt. Hon. Sir HughScott, DonaldTurner, H. F. L.
    Ormsby-Gore, Hon. W. D.Shepherd, WilliamTurton, R. H.
    Orr, Capt. L. P. S.Smiles, Lt.-Col. Sir WalterTweedsmuir, Lady
    Orr-Ewing, Charles Ian (Hendon, N.)Smithers, Peter (Winchester)Vane, W. M. F.
    Orr-Ewing, Ian L. (Weston-super-Mare)Smyth, Brig. J. G. (Norwood)Vaughan-Morgan, J. K.
    Osborne, C.Snadden, W. McN.Wade, D. W.
    Peake, Rt. Hon. O.Soames, Capt. C.Wakefield, Edward (Derbyshire, W.)
    Perkins, W. R. D.Spearman, A. C. M.Wakefield, Sir Wavell (Marylebone)
    Peto, Brig. C. H. M.Spence, H. R. (Aberdeenshire, W.)Walker-Smith, D. C.
    Pickthorn, K.Spens, Sir Patrick (Kensington, S.)Ward, Hon. George (Worcester)
    Pitman, I. J.Stanley, Capt. Hon. Richard (N. Fylde)Ward, Miss. I. (Tynemouth)
    Powell, J. EnochStevens, G. P.Waterhouse, Capt. Rt. Hon. C.
    Price, Henry (Lewisham, W.)Steward, W. A. (Woolwich, W.)Watkinson, H.
    Prior-Palmer, Brig. O.Stewart, Henderson (Fife, E.)Webbe, Sir H. (London & Westminster)
    Profumo, J. D.Stoddart-Scott, Col. M.Wheatley, Maj. M. J. (Poole)
    Raikes, H. V.Storey, S.White, Baker (Canterbury)
    Rayner, Brig. R.Strauss, Henry (Norwich, S.)Williams, Charles (Torquay)
    Redmayne, M.Stuart, Rt. Hon. James (Moray)Williams, Gerald (Tonbridge)
    Remnant, Hon. P.Studholme, H. G.Williams, Sir Herbert (Croydon, E.)
    Renton, D. L. M.Summers, G. S.Wilts, G.
    Roberts, Emrys (Merioneth)Sutcliffe, H.Wilson, Geoffrey (Truro)
    Roberts, Maj. Peter (Heeley)Taylor, Charles (Eastbourne)Winterton, Rt. Hon. Earl
    Robertson, Sir David (Caithness)Taylor, William (Bradford, N.)Wood, Hon. R.
    Robinson, Roland (Blackpool, S.)Teeling, W.York, C.
    Robson-Brown, W.Teevan, T. L.
    Rodgers, John (Sevenoaks)Thomas, J. P. L. (Hereford)

    TELLERS FOR THE AYES:

    Roper, Sir HaroldThompson, Kenneth Pugh (Walton)Mr. Vosper and Mr. Heath.

    NOES

    Acland, Sir RichardCorbet, Mrs. Freda (Peckham)Grenfell, D. R.
    Adams, RichardCove, W. G.Grey, C. F.
    Albu, A. H.Craddock, George (Bradford, S.)Griffiths, David (Rother Valley)
    Allen, Arthur (Bosworth)Crawley, A.Griffiths, Rt. Hon. James (Llanelly)
    Allen, Scholefield (Crewe)Crosland, C. A. R.Griffiths, William (Exchange)
    Anderson, Alexander (Motherwell)Crossman, R. H. S.Gunter, R. J.
    Anderson, Frank (Whitehaven)Cullen, Mrs. A.Hale, Joseph (Rochdale)
    Attlee, Rt. Hon. C. R.Daines, P.Hale, Leslie (Oldham, W.)
    Awbery, S. S.Dalton, Rt. Hon. H.Hall, John (Gateshead, W.)
    Ayles, W. H.Darling, George (Hillsborough)Hall, Rt. Hon. Glenvil (Come Valley)
    Bacon, Miss. AliceDavies, A. Edward (Stoke, N.)Hamilton, W. W.
    Baird, J.Davies, Harold (Leek)Hannan, W.
    Balfour, A.Davies, Stephen (Merthyr)Hardman, D. R.
    Barnes, Rt. Hon. A. J.de Freitas, GeoffreyHardy, E. A.
    Bartley, P.Deer, C.Hargreaves, A.
    Bellenger, Rt. Hon. F. J.Delargy, H. J.Hastings, S.
    Benn, WedgwoodDodds, N. N.Hayman, F. H.
    Benson, G.Donnelly, D.Henderson, Rt. Hon. Arthur (Tipton)
    Beswick, F.Driberg, T. E. N.Herbison, Miss. M.
    Bevan, Rt. Hon. A. (Ebbw Vale)Dugdale. Rt. Hon. John (W. Bromwich)Hewitson, Capt. M.
    Bing, G. H. C.Dye, S.Hobson, C. R.
    Blenkinsop, A.Ede, Rt. Hon. J. C.Holman, P.
    Blyton, W. R.Edelman, M.Holmes, Horace (Hemsworth)
    Boardman, H.Edwards, John (Brighouse)Houghton, D.
    Booth, A.Edwards, Rt. Hon. Ness (Caerphilly)Hoy, J.
    Bottomley, A. G.Edwards, W. J. (Stepney)Hubbard, T.
    Bowden, H. W.Evans, Albert (Islington, S. W.)Hudson, James (Ealing, N.)
    Bowles, F. G. (Nuneaton)Evans, Edward (Lowestoft)Hughes, Emrys (S-Ayrshire)
    Braddock, Mrs. ElizabethEvans, Stanley (Wednesbury)Hughes, Hector (Aberdeen, N.)
    Brook, Dryden (Halifax)Ewart, R.Hynd. H. (Accrington)
    Brooks, T. J. (Normanton)Fernyhough, E.Hynd, J. B. (Attercliffe)
    Broughton, Dr. A. D. D.Field, Capt. W. J.Irvine, A. J. (Edge Hill)
    Brown, Rt. Hon. George (Belper)Finch, H. J.Irving, W. J. (Wood Green)
    Brown, Thomas (Ince)Fletcher, Eric (Islington, E.)Isaacs, Rt. Hon. G. A.
    Burke, W. A.Follick, M.Janner. B.
    Burton, Miss. E.Foot, M. M.Jay, D. P. T.
    Butler, Herbert (Hackney, S.)Forman, J. C.Jeger, George (Goole)
    Callaghan, L. J.Fraser, Thomas (Hamilton)Jeger, Dr. Santo (St. Pancras, S.)
    Carmichael, J.Freeman, John (Watford)Jenkins, R. H.
    Castle, Mrs. B. A.Freeman, Peter (Newport)Johnson, James (Rugby)
    Champion, A. J.Gaitskell, Rt. Hon. H. T. N.Johnston, Douglas (Paisley)
    Chetwynd, G. R.Ganley, Mrs. C. S.Jones, David (Hartlepool)
    Clunie, J.Gibson, C. W.Jones, Frederick Elwyn (W. Ham, S.)
    Cocks, F. S.Gilzean, A.Jones, Jack (Rotherham)
    Coldrick, W.Glanville, James (Consett)Jones, William Elwyn (Conway)
    Collindridge, F.Gooch, E. G.Keenan, W.
    Cook, T. F.Gordon-Walker, Rt. Hon. P. C.Kenyon, C.
    Cooper, Geoffrey (Middlesbrough, W.)Greenwood, Anthony (Rossendale)King, Dr. H. M.
    Cooper, John (Deptford)Greenwood, Rt. Hn. Arthur (Wakefield)Kinghorn, Sqn. Ldr. E.

    Kinley, J.O'Brien, T.Strauss, Rt. Hon. George (Vauxhall)
    Kirkwood, Rt. Hon. D.Oldfield, W. H.Stross, Dr. Barnett
    Lang, GordonOliver, G. H.Summerskill, Rt. Hon. Edith
    Lee, Frederick (Newton)Orbach, M.Sylvester, G. O.
    Lee, Miss. Jennie (Cannock)Padley, W. E.Taylor, Bernard (Mansfield)
    Lever, Leslie (Ardwick)Paget, R. T.Taylor, Robert (Morpeth)
    Lewis, Arthur (West Ham, N.)Paling, Rt. Hon. W. (Dearne Valley)Thomas, David (Aberdare)
    Lewis, John (Bolton, W.)Paling, Will T. (Dewsbury)Thomas, George (Cardiff)
    Lindgren, G. S.Pannell, T. C.Thomas, Iorwerth (Rhondda, W.)
    Lipton, Lt.-Col. M.Pargiter, G. A.Thomas, Ivor Owen (Wrekin)
    Logan, D. G.Parker, J.Thorneycroft, Harry (Clayton)
    Longden, Fred (Small Heath)Paton, J.Thurtle, Ernest
    McAllister, G.Peart, T. F.Timmons, J.
    MacColl, J. E.Poole, C.Tomney, F.
    McGhee, H. G.Popplewell, E.Turner-Samuels, M.
    McGovern, J.Porter, G.Ungoed-Thomas, Sir Lynn
    McInnes, J.Price, Philips (Gloucestershire, W.)Usborne, H.
    Mack, J. D.Proctor, W. T.Vernon, W. F.
    McKay, John (Wallsend)Pryde, D. J.Viant, S. P.
    Mackay, R. W. G. (Reading, N.)Pursey, Cmdr. H.Wallace, H. W.
    McLeavy, F.Rankin, J.Watkins, T. E.
    MacMillan, Malcolm (Western Isles)Rees, Mrs. D.Webb, Rt. Hon. M. (Bradford, C.)
    McNeil, Rt. Hon. H.Reeves, J.Weitzman, D.
    MacPherson, Malcolm (Stirling)Reid, Thomas (Swindon)Wells, Percy (Faversham)
    Mainwaring, W. H.Reid, William (Camlachie)Wells, William (Walsall)
    Mallalieu, E. L. (Brigg)Rhodes, H.West, D. G.
    Mallalieu, J. P. W. (Huddersfield, E.)Richards, R.Wheatley, Rt. Hon. John (Edinb'gh E.)
    Mann, Mrs. JeanRobens, Rt. Hon. A.White, Mrs. Eirene (E. Flint)
    Manuel, A. C.Roberts, Goronwy (Caernarvonshire)White, Henry (Derbyshire, N. E.)
    Marquand, Rt. Hon. H. A.Robertson, J. J. (Berwick)Whiteley, Rt. Hon. W.
    Mathers, Rt. Hon. G.Robinson, Kenneth (St. Pancras, N.)Wilcock, Group Capt. C. A. B.
    Mellish, R. J.Rogers, George (Kensington, N.)Wilkes, L.
    Messer, F.Ross, William (Kilmarnock)Wilkins, W. A.
    Middleton, Mrs. L.Royle, C.Willey, Frederick (Sunderland)
    Mikardo, Ian.Shawcross, Rt. Hon. Sir HartleyWilley, Octavius (Cleveland)
    Mitchison, G. R.Shinwell, Rt. Hon. E.Williams, David (Neath)
    Moeran, E. W.Shurmer, P. L. E.Williams, Rev. Llywelyn (Abertillery)
    Monslow, W.Silverman, Julius (Erdington)Williams, Ronald (Wigan)
    Moody, A. S.Silverman, Sydney (Nelson)Williams, Rt. Hon. Thomas (Don V'lly)
    Morgan, Dr. H. B.Simmons, C. J.Williams, W. T. (Hammersmith, S.)
    Morley, R.Slater, J.Wilson, Rt. Hon. Harold (Huyton)
    Morris, Percy (Swansea, W.)Smith, Ellis (Stoke, S.)Winterbottom, Ian (Nottingham, C.)
    Morrison, Rt. Hon. H. (Lewisham S.)Smith, Norman (Nottingham, S.)Winterbottom, Richard (Brightside)
    Mort, D. L.Snow, J. W.Wise, F. J.
    Moyle, A.Sorensen, R. W.Woodburn, Rt. Hon. A.
    Mulley, F. W.Soskice, Rt. Hon. Sir FrankWoods, Rev. G. S.
    Murray, J. D.Steele, T.Wyatt, W. L.
    Nally, W.Stewart, Michael (Fulham, E.)Yates, V. F.
    Neal, Harold (Bolsover)Stokes, Rt. Hon. R. R.
    Noel-Baker, Rt. Hon. P. J.Strachey, Rt. Hon. J.

    TELLERS FOR THE NOES:

    Mr. Pearson and Mr. Sparks.

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

    9.45 p.m.

    As the Amendment standing in my name and those of some of my hon. Friends has not been called, I should like to take this opportunity of calling attention to it and of giving some explanation why we put it down. I think I can do so briefly by drawing a comparison, and the particular comparison which I would like to draw is between the family of a married man with no children, who has a personal allowance of £190 under this Bill, and a family of different composition but of the same size, namely, a widow with a child, whose aggregate personal allowance amounts to £110 for herself and £70 for the child, making up £180 in all, or £10 less than the married man with no children. I quite see that it may be argued that young people cost less to feed and clothe, but very often they eat a great deal, and, of course, the more they eat, the quicker they grow out of their clothes.

    When we consider the general position and the financial strength of these two families, we see that the married man with no children is in a far stronger position, because, in most cases, both he and his wife are in a position to go out and earn a full wage, whereas the widow with a child to tend will undoubtedly find it very much more difficult to earn even a single full wage. I feel, therefore, that it is very wrong that the widow with her child should be more heavily taxed than any other section of the community, and the remedying of that situation was, briefly, the object of our Amendment.

    On the subject of personal allowances, the person who seems to come out best is the man who, having selected his prospective wife, then refrains from going through any of the normal forms of marriage. In that case, the couple would have an aggregate personal allowance of £220, or £40 more than the widow with her child. I should like to know what peculiar ramification of the Treasury mind gives the man living in sin the most favourable form of tax relief, and the unfortunate widow with her child the highest rate of tax. I ask the Committee to consider this matter between now and Report stage.

    I believe that this anomaly can best be remedied by increasing the allowance for the child of the widow, and that is how we sought to do it in our Amendment. I should be grateful if the Financial Secretary would consider this matter and would let us know what it would have cost the Revenue to concede what we were asking for in the Amendment, and, also, if he would consider the matter between now and the Report stage.

    I should like to take this opportunity to say a few words in regard to the children's allowance. That allowance has been raised to £80 per child. That is an excellent thing, but I think we ought to take cognisance of the fact that £80 is still far too low. If we really take seriously what has been found by the Royal Commission on Population, then we ought to do everything we can to make the lot of the parents of the children of the coming generation as tolerable as possible. The Royal Commission have found that the tendency will be for a steady fall of population, and they have drawn careful attention, in a very fine way indeed, to the way in which the cost of families is keeping down the rate of reproduction of the people of this country.

    There is an excellent summary of that Royal Commission's Report published by the "News Chronicle." A short passage from that summary says:
    "The progressive raising of the school leaving age is an obvious way in which a social improvement operates to handicap larger families. With the raising of the age to 16 in the future, a working-class family of three children will experience an income loss greater on average than the gain they will derive over the period of the children's dependency from the payment of family allowances."
    It is perfectly true that, in so far as it refers to family allowances, that is out of order, except that the family allowances, as the Committee will know, are brought back into the income of the parent and he has to pay his Income Tax on the family allowance when he receives it. Therefore, at our present rate of 9s. 6d.—I will not worry the Committee with the fractional calculations—anybody who pays the full rate of tax is not receiving 5s. a week for the second child but only 2s. 6d. a week.

    The consequence of what we are talking about is very well set out in a publication by "Political and Economic Planning" called "Population Policy in Great Britain." In that book published in April, 1948, there is on page 188 a table showing the net result after family allowances, taxation and the estimated cost per child. I have re-worked it out having regard to the changes that have taken place in the marriage allowance and in the children's allowance—both of which have improved the situation—in the earned income allowance, and also in the increased cost of living.

    That table gives figures for a man with no children, a man with one child, a man with two children and a man with three children, and of course the ages of the children are assumed to vary fairly considerably; that is, a man with three children has some who are older, and, judging by my own family, fairly voracious eaters and fairly destructive of clothing, and naturally in that table the cost of the child goes up. They have done their very best in their surveys to find out what the people of this country spend on their children. They have found—and we quite understand it—that as a man's wages go up and his family income increases, he likes to spend a little more on his children. He likes to give his children the very best he can, and in consequence, with each raising of his "take home" pay, he is paying a larger sum out of his income to his children.

    The extraordinary situation which arises is that, even after allowing for the increased allowances which this Budget contains and after taking into account a 5 per cent. increase for each of the four years for maintaining children, we still get a very serious situation. With a salary of £260 a year—that is to say, £5 a week—the father and mother with three children have only £166 per annum left for themselves after paying tax and after feeding and clothing, but not educating, their children. On the other hand, the married couple with no children whatever have a net spendable income of £257. In other words, we are penalising the father and mother with three children to the extent of £91 a year, and £91 a year is a very heavy penalty on somebody who is drawing only £5 a week.

    It may be said that that particular level of wages is not relevant to this Clause because people at that level are not paying Income Tax at all if they have three children. But the moment we consider salaries of about £9 12s. a week, we find the same sort of thing happening. We find a penalisation of the man and woman with three children of no less than £140 10s. a year, and when we get to the figure of £750 the penalisation there is as high as £266 3s. a year.

    Any taxation system ought to be adjusted to the ability to pay. That is what we have always prided ourselves upon in our Income Tax system and in our Finance Acts, and I do not think we ought to let this Clause pass without realising that we are denying that very principle of the ability to bear taxes. The Financial Secretary will appreciate that my argument becomes stronger with the more children involved, but I have limited myself to a calculation of the effect of the new rates of tax based upon the table in this book which I have obtained from the Library.

    I ask the Chancellor of the Exchequer to consider carefully the question of raising the children's allowance to such a height that within the terms of this very fair calculation we do not impose a higher burden on the father and mother with a big family and that we do not, therefore, discourage large families, and put a high premium on families with no children at all.

    10.0 p.m.

    My hon. Friend the Member for Bath (Mr. Pitman) has pointed out an anomaly and an imperfection in this Clause. I think he was right to point it out, and I should like to draw attention to another imperfection. I hope that the Financial Secretary will realise that this is a discrepancy or an anomaly which has escaped the eye of scrutiny of the Treasury and which they never intended to continue. It may be that the hon. Gentleman will have time to look at it before the Report stage, but if not I hope that he will look at it before next year.

    I think the Committee will agree that we must in no way discourage a young man about to enter industry from becoming skilled in that industry and from taking up an apprenticeship in the proper way. Such people form one of the components of a successful industrial machine. Under the Finance Act, 1920, which was later amended, a parent was allowed a deduction of £60—which was later raised to £70—from his chargeable income for any child under 16, provided that child had not in his own right £70 a year.

    I wonder if I could have the hon. Gentleman's attention for a moment; I shall not keep the House long; possibly the Financial Secretary knows the story already, but I do not believe he does. The same allowance can be obtained for a child over 16 who is continuing to carry on full education in an educational establishment. In that case the father is still entitled to a taxation deduction of £70 for his child, if the child is not in possession of £70 a year of his own. But if the child becomes an apprentice, being over the age of 16, then he is allowed to have an income of only £13 a year before his father begins to lose the deduction from his chargeable income.

    That is clearly quite wrong. In the case of the child going to a university, who is entitled to have his education free by bursary or scholarship, he is entitled to £70 income of his own; whereas, on the other hand, we have the case of another child of the same age—both being over 16—who is trying to learn a trade and who has become a skilled apprentice; and in that case the father is discouraged from allowing his son to become an apprentice because of the fact that he is deprived of the tax allowance. I do not believe this was ever intended. As a result, the tendency is for the father to urge the child to go into a dead-end job instead of becoming an apprentice—which is the very thing we wish to avoid at the present time.

    May I leave the matter in the hands of the Financial Secretary, because I believe it is an anomaly which has not been spotted? I tried to put down an Amendment on the subject, but, because of my uninstructed method of writing Amendments, it was out of order. Had it been in order I should have had a better opportunity of arguing the whole case. I will leave the matter with the Financial Secretary, asking him if he will look into it, if possible before the Report stage and, if not, at any rate before another Budget.

    There is one other point I should like to leave in the Chancellor's mind before we pass from the Clause. All of us look upon this Clause as extremely important, because it gives facility to the right hon. Gentleman to try to ease the burden where it is almost too heavy to bear. When hon. Members opposite in their party publications, as for example the Labour Party Handbook for 1951, say:

    "The main burden of direct taxation is placed fairly on those who can best bear it"
    we can only assume that they believe it; but we certainly speak truthfully when we say that we know of many cases in our own constituencies of people who are suffering real hardship and who are not those who can best bear it.

    There is one category which I ask the Committee, and particularly the right hon. Gentleman, not to forget. There are some people who, when the National Insurance Act of 1946 came into operation, were not qualified to receive an increased old age pension or, indeed, in some cases were not qualified to receive any old age pension at all because they had not paid the necessary number of contributions or had not started to pay at the right date, whatever it may have been. Some of these people are also widows or widowers and, as matters stand today, they cannot obtain the allowance to which a married person is entitled, even though many of their married responsibilities still continue. It is those people, I believe, who are having a very hard time indeed today.

    I am not saying that they are necessarily in the lowest income groups in the country, but I think that, although hon. Members opposite feel that it is desirable that everybody should have exactly the same income, they would agree that today incomes are not all equal and that, therefore, comparative values are very im- portant when considering this matter, and that if someone has had a very reasonable expectation of a certain standard of living at the end of his or her life there is very great bitterness and very great hardship suffered if, for reasons purely of taxation, that person is unable to enjoy that standard of living.

    I have a particular case in mind of a man aged 67. He has a daughter. He has pointed out to me that if he were prepared to employ his daughter as his housekeeper he would get some slight relief for that, but that if he were to do so it would be a gross injustice to her, because she can earn a far higher income elsewhere than he is able to pay her for working for him. He is trying to do his best for his daughter, and he is not employing her as his housekeeper. She is employed elsewhere. He is finding the cost of maintaining the house he saved up to buy—I know that in the opinion of some hon. Members opposite that is a cardinal sin these days—harder and harder to bear. He has a fixed pension by virtue of his employment, and its value is getting less and less. That man is suffering—and many people in the same category are suffering—very severely.

    Judging by what the right hon. Gentleman has been able to do for us so far in this debate, it does not appear that we have yet reached that stage at which he is prepared to distribute that little bit he has got in reserve. We have understood from past Chancellors in the last Parliament and in this that a Chancellor keeps something in reserve to try to meet particular hardships brought to light in debates on Finance Bills. Apparently, we have not reached the right stage yet at which the right hon. Gentleman can help, and, therefore I suppose that the right hon. Gentleman will not be able to do very much about this sort of hardship that I have mentioned.

    In the light of that, I hope the Committee will forgive me if I call attention to one very important feature of our political activity that is going on at the moment, and that is the work of the Royal Commission which was announced by the Prime Minister on 27th July last year—the Royal Commission looking into taxation problems. The Royal Commission has sent out a questionnaire—though to whom it has been sent out I am not quite certain. It has formulated a list of questions which it would welcome evidence, and one of the questions—No. 11—is:
    "Are alterations necessary in the rules governing personal and other allowances?"
    If the right hon. Gentleman were to argue that while this Royal Commission is sitting we really cannot alter personal allowances, I should say that there may be some force in that argument; but I do not think it would ever absolve him from his responsibility of doing something to rectify a real hardship or injustice which is noticed and is proved beyond all doubt. If he has any doubts about the measure of the injustice which I have tried to indicate to him, I hope that anyone in circumstances similar to those of the person I have mentioned will take the opportunity of putting his or her case before the Royal Commission.

    I should like to see that Royal Commission inundated with paper. Every post should be a bumper post for that Royal Commission, because one knows from going round one's constituency that there are 101 cases of hardship—all of them with slightly different features, but all of them disclosing a very real hardship or a very real grievance. It seems to me that this Royal Commission should be better known. I very much doubt whether 10 per cent. of the country realise that that Commission is sitting at the moment. If the Chancellor is not able tonight to give any satisfaction in this matter, will he at once take steps to ensure that every taxpayer is made aware of this Royal Commission, which has invited observations on present tax injustice, because judging by the number of pieces of paper the tax office sends to me—

    The hon. and gallant Gentleman is now going beyond the terms of Clause 15.

    I appreciate that if I had made the main burden of my case what the Royal Commission ought to do and ought not to do, I should have been out of order. What I am trying to do here is to put before the Committee what I believe to be a genuine grievance, and to suggest one way in which the Chancellor might help to overcome that grievance. It is a grievance arising out of something in the Clause, namely, per- sonal allowances, and I am trying to suggest how the Chancellor might rectify this matter.

    The hon. and gallant Gentleman cannot now discuss grievances, which are not in the Clause. He can discuss only what is in the Clause, and there is nothing in it about the Royal Commission. I have been very generous to him so far, but I must ask him now to confine his remarks to what is in the Clause.

    Surely if an hon. Member has a suggestion about how to overcome a grievance which arises out of the Clause under discussion, it is his duty to put forward that suggestion.

    On the Question "That the Clause stand part of the Bill" nothing can be discussed except that which is in the Clause. I have already been very generous in allowing the hon. and gallant Gentleman to go far beyond that.

    I will do my best to abide by your Ruling.

    I have put before the Chancellor what I believe to be a genuine grievance. I believe that the personal allowances, which have been increased as a result of this Clause, are by no means adequate. The Clause leaves out a section of the community which deserves more consideration, and I believe that the Chancellor has a duty to those people to use some of the paper sent out by the tax offices to let them know how they can air their grievances before the Royal Commission.

    After the well-reasoned statements of the hon. Member for Bath (Mr. Pitman) and the hon. and gallant Member for Scotstoun (Colonel Hutchison), surely the Committee is entitled to at least the courtesy of some reply.

    I did not wish to take up the time of the Committee, but out of courtesy to the hon. and gallant Member for Merton and Morden (Captain Ryder), I should like to answer one question which he put to me. He asked what would be the cost of the Amendment standing in his name, which unfortunately for him was not called, affecting child allowances for widows. The cost would be £1 million in a full year. Secondly, I should like to assure the hon. and gallant Member for Scotstoun (Colonel Hutchison) that the point he raised concerning apprentices will not be overlooked.

    Question put, and agreed to.

    Clause ordered to stand part of the Bill.

    Clause 16—(Suspension Of Initial Allowances)

    10.15 p.m.

    I beg to move, in page 10, line 20, at the end, to insert:

    "excepting only expenditure on the following classes of equipment:—
  • (a) Boilers, firegrates, lagging and insulating plant and similar equipment installed as replacements of existing plant, in industrial, commercial and farming establishments, demonstrably for the purpose of economising in the consumption of coal and/or other solid fuel.
  • (b) Electrical generating equipment installed in industrial, commercial and farming establishments to provide local electricity supplies, independent of mains supplies."
  • We pass from the question of personal allowances for Income Tax purposes to the question of industrial allowances, and while, no doubt, the wider issues involved in the Chancellor's withdrawal or abrogation of initial allowances for Income Tax purposes will be dealt with on the Motion, "That the Clause stand part of the Bill," my purpose is to draw the Committee's attention to what I consider will be very damaging effects on our national economy if the initial allowances are withdrawn from plant, machinery and equipment to be installed in industry primarily for the purpose of saving solid fuel.

    I am sure that in this connection I shall have an exceptionally sympathetic hearing from the Treasury Bench, because I believe it is without precedent in the history of this House that the Chancellor should, immediately prior to going to the Treasury, have held the position of Minister of Fuel and Power. The present Chancellor of the Exchequer was Parliamentary Secretary to that Ministry from May, 1946, to October, 1947, and Minister of Fuel and Power from October, 1947, until March, 1950. During that period, he will, no doubt, have had ample experience of the benefits that can accrue to our national economy by pursuing an energetic policy of fuel economy in industry and the optimum utilisation of our available fuel and power resources.

    Perhaps, at the outset, I should quote the present Minister of Fuel and Power in support of the Amendment which I am moving. On 1st February, 1951, he said:
    "I could say much about our measures to promote the better use of coal, and the future may well depend upon our success in that regard. In my view, we need a national plan, not only for coal production but for saving coal."—[OFFICIAL REPORT, 1st February, 1951; Vol. 483, c. 1115.]
    What is the Minister of Fuel and Power doing about it? So far as I can see nothing, other than to continue and perhaps enlarge certain advisory services that he has at his Ministry, with their regional offices in 12 areas of the country.

    It is fortunate for the purpose of my Amendment that we did not reach it last evening, because only last night the fifth Annual Report of the National Coal Board was published, and I like to think that I am the first Member of this House to quote from it. There is something in that Report which precisely fits the purpose of this Amendment. I have given the Chancellor prior warning that I intend to quote from that Report and, in particular, Chapter 5, entitled "Efficient Use of Coal." On page 32, paragraph 123, there appear the following words:
    "More important still, there is the question whether it is better for the nation to use capital and labour to expand coal production or to apply some of these resources to ensuring that each ton of coal is converted into a greater amount of useful heat or energy."
    That is the purpose of this Amendment—to induce by fiscal measures the installation of more efficient coal-saving equipment in industry. The Coal Board's Report continues—and this is even more pertinent—in paragraph 124:
    "Much of the 200 million tons of coal used in this country every year is wastefully burnt. An irreplaceable asset on which the country's industrial future depends is too often being squandered."
    Paragraph 125 sets out three problems. The first is to make coal go further. The second and third problems would, Sir Charles, be out of order. [Interruption.] The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) will know that his own smoke-polluted atmosphere in the Potteries is a glaring example of the inefficient use of coal in industry.

    There are two methods of inducing more efficient equipment for burning coal and other solid fuels in industry. The first is through the medium of the advisory services to which I have referred and which are run by the Ministry of Fuel and Power; and the second is the method which has not yet been used in this country, the use of the fiscal weapon as an inducement, through the weapon of taxation, for persuading industry to install more efficient plant.

    While initial allowances were in force, there was some mild inducement to industry to spend capital sums on putting in more efficient plants for burning coal and other solid fuels, but there is quite a different argument to be applied to consideration of fuel saving equipment from other forms of capital equipment, which the Chancellor referred to in his Budget speech of 10th April last, when he said:
    "The initial allowances, after all, were introduced at the end of the war as a means of stimulating re-equipment and modernisation. That is, of course, a very desirable aim, but in our present circumstances to stimulate capital expenditure in this way would, I am satisfied, positively endanger the defence and export programmes too much."—[OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 842.]
    There might be a good case—although the general arguments against it will, no doubt, be adduced on a later Amendment to this Clause—for opposing the withdrawal of initial allowances on capital equipment generally. In my view, there is no case for supporting the withdrawal of these initial allowances on fuel saving equipment, because if anything is likely to endanger the progress of our defence programme and the programme of exports, it is a shortage of coal. One cannot begin to envisage re-armament in Britain unless we are assured of a continuous flow of coal to industry.

    Therefore, considering that out of our total coal consumption in Britain last year we used no less than 105 million tons for the purposes of industrial production, excluding power house consumption, it follows then, that every ton of coal saved in industry is equivalent to another ton of coal deep-mined. That is the measure of the problem. On many occasions in the House hon. Members have referred to the potentialities for saving coal in industry. I hope the Committee will bear with me this evening if I give just a few technical but very glaring examples of what can be achieved by fuel-saving plants.

    I purposely select these from a large number of such items available, because it is the class of equipment which I have specifically referred to in this Amendment. At the beginning of the Amendment, boilers are referred to. Every hon. Member will know the effect upon fuel consumption of using an old Lancashire boiler. The hon. Member for Rotherham (Mr. Jack Jones) would be an expert in the matter. The effect very often is to increase fuel consumption from 50 per cent., to 100 per cent.

    The period to which the hon. Member is referring is presumably until 1939 and, so far as I am aware, the National Coal Board was not in existence then. Therefore, there was no shortage of fuel.

    In the period to which the hon. Gentleman refers, there was a surplus of coal because people could not afford to buy it and industry could not afford to waste it.

    I am sure that I should be out of order if I replied to the hon. Member for Rotherham as to the economic implications of the coal surplus in the 1930's. The question whether we should replace fuel consuming equipment in industry is a problem which applies to 1951.

    My first example is of an industrial concern that spent £13,500 upon installing a waste-heat boiler, the life of which was approximately 20 years. It was capable of saving 3,000 tons of coal a year. That figure means little unless it is related to miners' effort. For the purpose of simplicity, I take the average output of one British miner as 300 tons in a full year. Therefore that one piece of equipment was capable of saving the efforts of one miner for 10 years or of 10 miners for one year. Surely it is worth the Chancellor's while as a matter of broad national policy to provide every possible form of tax and fiscal inducement to British industry to install equipment of that sort.

    My second example concerns the fitting of an economiser to a Lancashire boiler. There are many similar examples in recent issues of "Fuel Efficiency News." It was installed for the modest expenditure of £2100 and again the life of the plant was 20 years. In this case the coal saving was 580 tons in one year. At the average rate of output of 300 tons of coal per year by one miner that represents a saving in the first year of installation of not less than two years' effort on the part of one miner or one year's effort on the part of two miners. Hon. Members will recognise that there must be tens of thousands of Lancashire boilers installed in all parts of the United Kingdom. Inducements should be provided for many of the smaller industrial undertakings to look to their heating equipment.

    The third example again concerns a Lancashire boiler with a superheater fitted to it for a capital expenditure of only £675. The fuel saving is of the order of 255 tons in one year, representing approximately nine months' output on the part of one miner. The fourth example, which I have picked purposely because it can apply not only to industry but to farming and to any commercial building in the country heated by steam methods, refers to sectional magnesia lagging applied to a 4-inch steam pipe. Hon. Members will be aware that the efficiency of steam for thermal purposes depends in large degree upon the efficiency of the lagging applied to the pipes. The cost of this equipment was only £1,815 and the life was 10 years. It seems incredible to say so, but the fuel saving amounted to 1,985 tons of coal in the first year.

    10.30 p.m.

    If the hon. Gentleman will allow me to continue, I will come to the strictly taxation aspect of all this in a moment. There are advantages other than the direct saving of coal—

    The hon. Member sits for Tottenham, which is a suburb of North London, a long way removed from the coal mines. He would be well advised to study the principle for which I am pleading which is, that not one minute of a miner's labour should be wasted.

    I am very interested in this able speech of the hon. Gentleman, and I want to give him some further information which he can use. In 1919 and 1920, I advocated and negotiated a coal-saving bonus scheme for the men on the furnace to which he is referring, long before the management thought of doing so.

    I am indebted to the hon. Gentleman for his intervention. He has always been a principal exponent of joint consultation in industry and of the advantages that may be derived from recommendations made from the workers' side. I also support that, as he knows well enough.

    The fifth example that I want to give, which fits closely the Amendment, is in connection with insulation. There is not a building in this country that is heated by steam methods, or by many of the other similar methods which is not capable of showing fuel economy by improved insulation. Only 48 hours ago I was talking privately to one of the present Ministers about this Amendment, and in discussing insulation with him he confirmed my view. He said that in his experience of over 25 years in industry, he had rarely come across an industrial building in which the insulation could not be improved by the use of a moderate amount of material. From the use of that material the direct derivative is a great economy in the use of coal or other solid fuel.

    I have endeavoured to demonstrate, from the technical point of view, all the advantages to be derived from improved fuel utilisation, and I now want to turn to the fiscal aspect for a few moments. There are some paradoxical considerations inherent in this Amendment. I believe that if the Chancellor would agree not to withdraw the initial allowance for fuel-saving equipment in industry, it would result in an increased revenue to the Treasury in the course of the next few years. That is the paradox to which I refer.

    Clearly wasteful coal burning in industry represents an excess expenditure on the part of an industrial undertaking burning the coal; but that excess expenditure is admitted by the Inland Revenue as a charge for trading purposes for computing Income Tax and Profits Tax. Therefore, it results in a diminution of tax collected by the Treasury. Every ton of coal that is burned excessively in a British industrial undertaking today represents a decline in tax yield to the Treasury of approximately £3, assuming that the pithead price of coal is £3 a ton. An initial allowance costs the Treasury nothing. Hon. Members opposite have often argued this point with me. They seem to think that it is money given by the Treasury to the industrial undertaking. It is only an interest-free loan from the Treasury.

    I would remind the hon. Gentleman, now that he has been good enough to give way, that in the third year the suspension of initial allowances will yield and save the Treasury £170 million.

    It would not, and that is where I must cross swords with even so eminent an authority as the former Financial Secretary to the Treasury. Over a period of a decade, that is, 10 years—the right hon. Gentleman well knows that it does not cost the Treasury one iota. All that it means is that, the Treasury grants 40 per cent. in the first year and commensurately less in the remaining life of the plant. Before the introduction of initial allowances the plant or equipment was allowed for depreciation purposes in equal annual sums over the whole life of the plant. Therefore, the initial allowance is only an interest-free loan.

    What I am trying to explain to the learned Attorney-General, who I hope will be answering me—[Interruption.]—I apologise to the Economic Secretary to the Treasury, who I understand is to answer—is that there is an indisputable argument in the case of fuel-saving equipment. If initial allowances are not withdrawn, it will result in an increase of revenue for the Treasury. I hope that argument will not be considered disingenuous. Also there is a complementary argument which I think the Committee should consider at this stage.

    As things are and assuming an industrialist did not regard as important the national aspect of saving coal, it would pay him to go on wasting coal in old boilers and fire grates rather than to spend money on new capital equipment. It would pay that undertaking to go on wasting coal—

    —because of the cost of every ton of coal that was wasted in outworn equipment £2 out of every £3 would be paid by the Treasury. The Chancellor of the Exchequer takes approximately two-thirds of the gross profits of industry in the form of Income Tax and Profits Tax and the fuel costs of an industrial undertaking are admitted as a charge for the purposes of computing those taxes.

    Once the Chancellor withdraws the initial allowances, there is no inducement to an industrial undertaking to spend capital on fuel-saving plant, which, in fact, would be very low down on the list of that undertaking's capital equipment priorities. There is scarcely a business today that is not short of working capital due to the high cost of raw materials and replacement of productive machinery, such as lathes, machine tools and other similar plant. Therefore, fuel saving equipment would stand well down on the list of priorities, especially as there is no direct inducement to such industries to install such plant.

    I pass now to consideration of the possible reactions of the Chancellor to these proposals. I know he will have objections, and I think it is fair to anticipate what some of those objections may be, for there is an effective answer to each of them. He will undoubtedly say that he cannot create a precedent by retaining initial allowances on only one group of plant and equipment in industry and treat it under a special heading. I would remind the Chancellor that under the 1944 Finance Act, Part IV, and under Part VI of the 1945 Finance Act, special provisions and allowances were given for every form of scientific research. That, in itself, creates a fiscal precedent, and in the 1945 Finance Act, under Part IV, a special allowance was given in respect of agricultural buildings.

    The Chancellor will undoubtedly ask—and this objection has often been advanced to me by other people interested in this problem—how the Inland Revenue can obtain proof that the plant and equipment installed in a certain industrial undertaking is capable of saving fuel. That is why I, perhaps inadvisedly, used the rather clumsy word "demonstrably" in this Amendment. According to the English dictionary, "demonstrably" means "capable of positive proof". The positive proof I want provided for the Inland Revenue in regard to the certification of fuel-saving plant in industry should come from the advisory services of the Minister of Fuel and Power which he maintains in the 12 regions of the country for—by exhortation mostly at present—advising industrialists how best they can improve their methods of fuel utilisation. Therefore the method of certification for fuel saving plant to rank for continued initial allowances is in the hands of a Department other than the Treasury, but a Government Department nevertheless—the Ministry of Fuel and Power.

    May I pass now to the second group of equipment under this Amendment, that is, the independent generating plant which is shown under paragraph (b). It comprises electrical generating equipment installed in industrial, commercial and farming establishments to provide local electricity supplies, independent of mains supplies. That equipment falls broadly into two important groups. It is either generating plant which is independent of mains electricity and is worked by waste steam or by similar methods, or the second group, of course, would be independent generating equipment which is worked by Diesel oil.

    I do not suppose that we in the United Kingdom, except in remote rural areas, would have ever seriously considered installing generating plant independent of mains supplies had it not been for the force of the circumstances which have arisen in the last five years. I hope I make this point in no party political or highly controversial vein when I say that hon. Members in all parts of this Committee must be aggravated and often dismayed by the devastating effects of power cuts. And they are not diminishing. The power cuts in the Midlands in the course of the past few weeks have been worse than ever before.

    The purpose of paragraph (b) of the Amendment is to endeavour to provide a fiscal inducement to every industrial undertaking in the country to install for the use of its own factory or workshop or farm a generating plant which can be fired—I use that word metaphorically—by waste steam or by fuel oil, to make that factory independent of mains elec- tricity. Many hundreds of factories have done it already. There is a two-fold advantage. First, it enables the factory to continue its production without interruption when load shedding or power cuts take place. The second, and much more important, point is that if an aggregation of thousands of firms install these independent stand-by generating plants, the effect of abating the load on the electricity mains would be such, particularly at peak hours, that it is probable we could dispense with power cuts and load shedding altogether.

    I have followed the hon. Gentleman's argument carefully up to the present, but the installation of this special equipment does not replace electricity from the point of view of load shedding. It is suitable only for auxiliary services, such as lighting and small matters. The actual cost involved is such that it does not pay an ordinary industrial undertaking to put in sufficient Diesel oil plant to be able to run the whole factory in the event of load shedding.

    10.45 p.m.

    While I am always prepared to listen to an hon. Member who is capable of giving advice, I should state in this instance that I have operated these plants for many years past; furthermore, I have bought such plants, particularly as an insurance policy against power cuts.

    I hope that the Committee will bear with me while I read a letter which expresses the experience of an undertaking in Norwich—[An HON. MEMBER: "It is only one."] The hon. Gentleman says it is only one. This is one example selected from hundreds of such cases. I have already said that I have myself operated these plants for many years, and it is now possible, by mechanical means, to install automatic switchovers so that when the power from the mains is shut off or shed, one can automatically bring into use the stand-by generating plant; and hundreds of commercial undertakings have done just this.

    The undertaking in Norwich to which I have referred, employs 1,500 people, and if the hon. Gentlemen who represent Norwich constituencies are here, they will probably know of the firm to which I refer. After the close-down of power stations in 1947 had necessitated the closing down of three mills, this firm determined that such a thing should never happen again. They therefore installed independent generating sets in each of their three mills. These installations were concluded before the autumn of 1948, and this firm was able to have a full, normal working day. Staggered hours were suggested to it, but staggered hours meant working until 10 p.m. and this was with a staff which consisted in the bulk of young girls living in the country some miles from Norwich. That meant that there was not the transport to get the girls home.

    This is the letter from the Managing Director of Francis Hinde and Hardy of Norwich:
    "After the closing down of all the power stations in 1947 which necessitated the closing down of Messrs. Francis Hinde and Sons, Ltd. for three weeks, we determined that such a thing should never happen to us again. We therefore installed an independent generating set in each of our three mills. The sets installed were 100 KV.A or 80 KW each, 400 volts on 4 core cable for distribution.
    These installations were completed before the autumn of 1948 with the result that when all industries were asked to institute staggered hours, we were able to carry on with our normal day. If we had been obliged to adopt staggered hours, it would have meant that a large number of our workers would have been on duty until 10 p.m. and in view of the fact that the bulk of our workers are young girls, several of them living miles outside Norwich, it would have meant that they would not have been allowed to come and there would not have been any transport for them in any case.
    We normally take over the major part of our load from the end of September till the end of April by arrangement with the local authority, so that during these months we are free from the constant power cuts.
    We should be quite content to carry on providing our own power after this date, but we were advised by the local authority that this was unnecessary. In the event, however, there have been many power cuts since that date, and it would probably have been to our advantage had we continued generating our own power.
    Although we have a standing contract for the supply of power involving the minimum charge, if we take over the load ourselves by agreement with the local authority, this charge is waived.
    With regard to cost, there is very little difference in the two sources of supply. In our opinion, the installation of these power units has been of the utmost service to us, and has well repaid the trouble and expense."
    No one can deny that here are two economic weapons for beating the fuel and power cuts. By installing such independent generating sets, there is continuity of power supply. But, as with solid fuel-saving equipment in industry, unless there is a fiscal inducement to firms to put in the equipment of this sort—which there is not if the initial allowances are withdrawn—then stringency of funds, and the high cost of raw materials and of replacement of production equipment, will mean that this independent generating equipment is not likely to be installed.

    I apologise for having kept the Committee so long, but I am dealing with an issue of primary and fundamental importance; and if, without ranging too far from the precise words of this Amendment, I may give a further warning, I should like to remind the Attorney-General that, notwithstanding that over the first four months of this year, by the magnificent efforts of the miners, there was an increase in coal production of 2,300,000 tons compared with the first four months of 1950, yet coal consumption in the same four months was 2,600,000 tons greater than in the preceding year, and we exported 3 million tons of coal less than we did in the previous year.

    Today coal stocks for this time of year are lower than they have been at any time since 1945, including the disastrous year of 1947. Unless we provide the fiscal inducements for which I ask in this Amendment as part of a national policy and plan for the scientific utilisation of coal, other solid fuels and fuel oil, then in the course of next winter or the winter after, or both, we are likely to face calamity or a major disaster in a repetition of the complete stoppage of all our factories which we experienced in 1947.

    The hon. Member for Kidderminster (Mr. Nabarro) need not have apologised to the Committee for staying so long on his feet. The Committee will agree that it is a long time since we heard such a splendid speech on the question of fuel saving. He has rendered a valuable service to the public in dealing with the matter from the technical aspect. In fact, I think many hon. Members will be convinced by the logic of his arguments, and I hope that my hon. Friend the Economic Secretary to the Treasury will keep an open mind on the first part of the Amendment dealing with the question of allowances as an inducement to industrialists to take steps to ensure that there is the maximum amount of fuel saving.

    I shall not keep the Committee long in what I have to say, but I should like to refer to one point on which I made an intervention, and which I think the hon. Member did not take too well. The installing of independent sets as an auxiliary form of electricity supply so that factories could continue to produce in times when there was a check on the public supply is not, in my view, an argument that can be applied generally to industry as a whole.

    The hon. Member gave an example of sets to produce 80 k.v.a., but that is for a very light industry indeed. In the majority of cases there are 1,000, 2,000 or 3,000 k.v.a. employed, and the hon. Gentleman can accept my assurance that it does not pay a medium or heavy industry to undertake to install independent Diesel oil engines to produce electricity, particularly as they have only to be operated for a few days in the year. So the majority of industrialists in heavy industry could not afford to do so, as it would not be a sound economic policy to install these independent sets.

    I quite agree with the hon. Member's arguments as they apply to light industries. I know something about this, because I have employed one of these sets myself. It is extremely useful when there is load shedding. The only value of independent sets in heavy industry is as a small supplementary supply to keep the auxiliary floaters running and the services in operation.

    The hon. Member used the word "auxiliary." I used the word "alternative." There is a subtle difference between the two. My second point was that the shortage of power megawatts over the country as a whole at the peak period was not more than 10 per cent. It would more than fit our purpose to put independent genertors only in a part of the light industries, for that alone would prevent power cuts over the whole industrial and domestic field.

    I am sorry that on that technical point I must disagree. The amount of capital investment involved in installing sets to do what the hon. Gentle- man said would be necessary to avoid power cuts is such that, if he had the figure before him, he would not contemplate this proposition. I will leave that point, because he made such a magnificent speech on the other aspect of this matter that we are begging the question on this point of particular power sets.

    I will add my voice to his in expressing the hope that the arguments he has advanced in respect of inducing industrialists to take every possible step to install plant in order to save fuel and power—and I can heartily endorse every word he said about fuel-saving equipment, especially in regard to lagging and economic modern boilers, which have a must greater efficiency than the old-fashioned type and in circumstances where the question of coal-saving and fuel-saving is of such vital importance—will lead to my right hon. Friend to indicate that he will give this Amendment, even though tonight he is not prepared to accept it, his consideration and advise the Committee at a later date on the decision which the Treasury are prepared to take on the matter.

    Perhaps it would not be thought inappropriate if I were to intervene briefly on a subject with which I have been familiar for a great many years. I have been one of those who have found it necessary to adopt what years ago I considered to be an absolute heresy. When I was first associated with the management of electric power undertakings, it was our policy to provide a supply so efficient and so cheap that it was quite unnecessary for any power user to do other than take his whole supply from the public service undertakings. Unfortunately, the experience of the last few years has made it essential to modify that policy.

    Now I have no more to do with supplying power, but I have still a fair amount to do with its use. In some of the engineering works with which I am concerned, we have found it necessary to install a certain amount of stand-by plant to assist the national production and, so far as practicable, to maintain our production uninterrupted. I agree with the hon. Member for Bolton, West (Mr. J. Lewis) that there are very few cases in which it would pay to put down a com- plete alternative plant. Nor is it really essential.

    What is required by many firms still—although many firms have spent money on providing a certain amount of alternative stand-by plant—is to find out what percentage of cuts one is expected to submit to during times of peak loads in the area in which one's works may be situated, because it is not quite the same in different parts of the country. In some cases, if one were to provide 150 horsepower where one's ordinary load is 1,000 horse-power, that would probably suffice to meet the cut one was called upon to effect, by cutting out some of the motors which would ordinarily be running. Therefore, although I agree more with the hon. Gentleman the Member for Bolton, West, than with the mover of this Amendment, nevertheless it does not detract in any respect from the arguments submitted by my hon. Friend the Member for Kidderminster (Mr. Nabarro). His argument holds absolutely.

    11.0 p.m.

    I ask the Treasury to give careful consideration to this Amendment for another reason. The more that industrial establishments can be encouraged to install a certain amount of alternative stand-by plant for themselves, the more it will become less necessary for the domestic user to submit to the horrible inconvenience which so many of the women have had to endure during the last few months, and which we are told by Lord Citrine, the head of the British Electricity Authority, are part of a condition which is likely to last for many years.

    He has warned the Government, as plainly as any man in the country, of the serious consequences of the cut in capital expenditure on the provision of more power plant in our power stations. I do not know whether his warnings have fallen on deaf ears so far as the responsible members of the Government are concerned, but unless they pay serious regard to what he and others have said, they are carrying a very heavy responsibility.

    Clearly, one of the ways in which we can meet the situation which, according to those who know best, we are likely to face for some years is to adopt the proposal contained in this Amendment and to facilitate an easement in the situation, which can be brought about only by the installation of a certain amount of standby plant in our industrial establishments, in the absence of a further speedy extension of our power stations. In serving all of us in our homes, the women of this country are being called upon to face most serious handicaps and inconveniences. In this time of austere living, that is a powerful additional argument why the Government should give sympathetic consideration to the Amendment, which I wholeheartedly support.

    I think it would be wrong if one more voice were not added from this side of the Committee in approbation of the speech of the hon. Member for Kidderminster (Mr. Nabarro). As one practical man to another, I should like to compliment him on what I consider to be one of the most brilliant speeches of a practical nature made in the House for a very long time.

    At the same time, I would remind the Committee, and particularly the Tory Party, that that speech was a complete indictment of the utter failure of the industrialists of the past to make the best possible use of what God gave to this country—its coal. I speak as one who has seen several million cubic feet of gas wasted. Today there are still millions of cubic feet of gas being wasted—every day, for 24 hours a day and for seven days a week—all because of the lack of an integrated policy in the use of that gas.

    Let hon. Members come to the place where I live, Irlam, in Lancashire, and see the bleeder which for many years was never out—before the war broke out—burning millions of cubic feet of gas. Go to Kettering, and to Shelton, Stoke. For years there has been a lack of an integrated policy in the use of our most precious possession—coal. One would see these flares lighting up the countryside, while on the road nearby one would see the headlights of ambulances taking to hospital the miners who produced the very commodity which was being wasted.

    I compliment the hon. Member for Kidderminster on a brilliant speech, but I would again remind him that it was a complete indictment of the utter failure of industrialists in this country in the past to make the best use of our coal.

    I want to say a few words in reply to the hon. Member for Rotherham (Mr. Jack Jones). I think he forgets that before the war the problem was the disposal of the coal. We had more coal than we knew what to do with. We were trying all sorts of ways to dispose of it. We spent a lot of money in obtaining plant to make oil from coal. The problem then was to get rid of the coal and to keep the pits going.

    I wish to support this Amendment, which is not only a most practical suggestion for the saving of coal but is in conformity with sound financial doctrine. I bring to my support a document with which I think the Treasury will not be unfamiliar. About two years ago a Committee was set up by the Treasury on the Taxation of Trading Profits—the Tucker Committee—and I want to refer very briefly to one of their recommendations. In paragraph 124 they say:
    "We accordingly recommend that a minimum rate of initial allowance should be prescribed; that any association which represents a particular industry should be entitled to apply for a rate of initial allowance in excess of the minimum"—
    that is exactly what my hon. Friend the Member for Kidderminster (Mr. Nabarro) is doing tonight—
    "and that the authority responsible for determining these applications should be entitled to take into account both the price level of the plant and machinery in question and also the importance of the particular industry to the national economy."
    I suggest that also is what is being done tonight. Finally, they said:
    "It would be more appropriate to entrust the task not to the Inland Revenue, but to the Treasury as the Department responsible for general economic policy."
    That is the third point made by my hon. Friend. It is in the interests of the national economy that this should be done, and should be put straight to the Treasury. In this case an exception should be made to the general rule. I shall not touch on the other points. I approach it merely from the financial point of view. I have quoted the advice the Treasury have already had on the subject, which I hope they will accept.

    I wish to add my support to the most able speech which we have heard from my hon. Friend the Member for Kidderminster (Mr. Nabarro). Whereas we may not be able to install plant to take the full industrial load, as mentioned by the hon. Member for Bolton, West (Mr. J. Lewis), we can make a very useful contribution by permitting these initial allowances and encouraging industries to put in stand-by plant which, if it cannot take the full load, can at least keep many shops in an industrial plant working.

    I think the Committee will appreciate that so many processes in industry today are concerned with sub-assembly and with producing light components which eventually go into the making of the completed product. This sub-assembly and the manufacture of those small components are, in general, undertaken by women, and we have a real obligation to keep these processes going at a time when we suffer fuel cuts. It will be disastrous if this Amendment is rejected and many industries and plants throughout the country are compelled to close down, as they were forced to do last year.

    I ask the Financial Secretary to consider this Amendment, which is put forward with great seriousness, and is designed not only to keep our industries going, but at the same time to make a valuable contribution to the defence of the country. It may be that on some future occasion when we are called upon to defend this country the main supply on which we are so largely dependent may be cut. In those circumstances, a very valuable contribution can be made by standby plants. We have not only a peacetime need, which will take away from our peak load which cannot be met for some years to come, but we have also a wartime need, and we therefore have a very real obligation to support this Amendment which can make a worth-while contribution to the industrial efficiency of this country.

    I should like to support the Amendment moved in the extremely able speech of my hon. Friend the Member for Kidderminster (Mr. Nabarro). He has, I think, put before the Committee the first step in carrying out a practical policy for fuel in this country. We have so often in our debates on this subject confined ourselves in the past to looking to, as it were, blood on the coal and, at the present time for the consumers, stone in the grate. By putting forward very practical proposals, my hon. Friend had made a definite suggestion by which we can make a big step forward in using better the coal we raise in this country.

    In his Amendment he has, in particular, suggested how fuel economy can be carried out. The important word, it seems to me, in the first part of his Amendment is "demonstrably," because it is possible, by putting suitable instruments on to the boilers, to prove to the management, and also to the firemen, the saving they are making by proper control of their boilers. But these instruments will cost money, and if they are to be installed in the numbers that are necessary in order to achieve large economies, they certainly should have the encouragement of the Treasury in the form of the 40 per cent. initial allowances that have been made to date, and which, alas, in the present Budget it is proposed to withdraw.

    With regard to the second part of my hon. Friend's Amendment, that pertaining to electricity, despite what the hon. Gentleman the Member for Bolton (Mr. J. Lewes) has said, there are undoubtedly a great many users of electricity—not the heaviest users, but in the textile mills and many others—who would find it possible to meet cuts which will occur when peak demand comes on to the national grid by installing Diesel-driven generators. Although it may mean that some of the plant will have to be cut out, production will be able to be maintained with only a small loss by installing these Diesel-driven generators. But they are expensive, and again, if this is the policy we should adopt—as I am sure it is—in order to reduce these electricity cuts in this country, those who are prepared to take the risk of installing them should be encouraged by being allowed the initial allowances they have enjoyed to date.

    There is one additional point. In the Amendment my hon. Friend refers to lagging. We lose enormous amounts of heat, and therefore coal, by not lagging our pipes in this country. Let me give the Committee one homely example. We know that very often, when we run the hot water to wash our hands, it takes a minute or so to run off the cold water before the hot water comes. That cold water which first comes has all been heated but has lost its heat in the pipes just because those pipes have not been lagged. Although I do not suggest that this allowance should be given for the in- stallation of pipes in our homes, that homely example does show the loss of heat which results from not lagging our pipes, and it could be multiplied many tens of thousands of times in industry.

    It is for these reasons that I ask the Economic Secretary, when he replies, to consider with great sympathy this Amendment and, if he cannot accept it in the exact wording put before him, to be prepared to say that on the Report stage he will move a formal Government Amendment with which all of us can agree. By doing this he will be forwarding the first attempts to formulate a proper fuel policy in this country.

    11.15 p.m.

    I also support the Amendment which has been particularly ably moved by my hon. Friend the Member for Kidderminster (Mr. Nabarro), and I support it because it seems to me to be a constructive attempt to tackle a fundamental problem in this country.

    When I think of the chances of surmounting the problems connected with re-armament, of meeting the rising cost of living and preserving our standard of life, our one major hope seems to me to lie in the direction of increasing productivity. When, from my experience of industry, I turn my mind to this problem, it seems that one of the major threats to this hope lies in the shortage of fuel and power. After all, when our experts return from America one of the most common things that is said is that the American workman has more horse-power at his elbow than the British worker, and if we are to increase our productivity we have to give British workmen more power at their elbows. That is why I support this Amendment which attempts to deal with this fundamental problem.

    If we are to overcome this threat of a fuel and power shortage, the best hope lies in the great scope which undoubtedly exists in the field of industry for improving our efficiency in fuel consumption. My hon. Friend the Member for Kidderminster gave many examples. I should like to add to them some figures, which I had the privilege of giving in an earlier debate on the coal situation in February of this year, relating to the relative efficiencies which exist in British industry in the matter of steam raising.

    Inquiries have shown that the average cost of raising steam in different factories in this country varies between such wide limits as 3s. per 1,000 lbs. to around 11s. per 1,000 lbs. We must admit that that is an enormous scatter in efficiency. If we could bring the average down to something like the 3s. mark, we should have achieved an enormous saving in our coal consumption in industry. In fact, experts have estimated—and, of course, it is only an estimate—that the potential saving of coal consumption in this way may be as much as 20 million tons of coal a year.

    My hon. Friend the Member for Kidderminster put forward what I thought was an ingenious and able point to the Chancellor of the Exchequer on the financial aspect of this Amendment when he said that it would prove to be a gain and not a loss to the Revenue. If he was right in his argument—if we can save eventually 20 million tons a year—at £3 a ton that is a saving of £60 million. If that is added to the profits spread over industry, the result is £35 million in revenue to the Exchequer. I would support his argument that this Amendment is potentially a revenue raiser if we are prepared to take a long-term view of it.

    But this suggestion of saving coal by putting in this sort of modern equipment is not only offering us a direct saving of coal in steam raising in industry, but is also offering us help in the problem of electricity supplies. I have in mind not so much alternative or auxiliary supplies, such as those whose points were discussed earlier. If we could persuade more firms to use, for example, the back-pressure turbine method of raising steam, we would not only have cheaper steam raising, but also a permanent and not just an alternative method of supply. Many firms, I think, would be able to offer electric power to the common grid, and could do it with greater over-all efficiency than could be achieved by any power station of a public utility. That was admitted by the right hon. Gentleman the present Minister of Labour in replying to the coal debate on 1st February.

    These schemes of fuel saving, however, need new plant. They involve capital expenditure. There is an urgent need to install new plant of this kind. That is the fundamental reason for this Amendment. We know the Chancellor's general argu- ment for repealing initial allowances: he says there is a need to damp down demands for capital equipment. In the present circumstances of the re-armament programme there may be such a need, and I am glad that he has proposed to do it by financial means rather than by direct physical controls. I am not sure that the initial allowances is the right method, but that is not the argument here. I submit that, whether or not we admit the Chancellor's general argument, we certainly ought not to admit the Chancellor's argument in this special context of plant which will stimulate greater economy in fuel consumption. On the contrary, it is vitally important that we should not repeal allowances in this connection, but should stimulate the introduction of this type of plant.

    How can that be done if not by incentives? First, there are propaganda and persuasion. I pay credit to what the Ministry of Fuel and Power are doing in that way, but it will not be sufficient to get the results we want quickly enough. Something must be done to supplement that work of propaganda. Is it to be compulsion? I asked a Question of the Minister on 5th April on that point, and he replied that the Fuel Efficiency Committee advised that the co-operation of consumers was preferable to compulsion. I was very glad to get that answer. I do not think compulsion can possibly work. But if you reject compulsion, then you have to turn to this method of financial incentives, and that is why I think this Amendment should be agreed to.

    What are the Government's possible objections to this Amendment? There may be the objection of administrative difficulties. I also questioned the Minister of Fuel and Power about this, and he replied that the Fuel Efficiency Committee had from time to time suggested various financial incentives but their use raised considerable administrative difficulties. No doubt they do, but I should like to draw attention to the fact that the difficulties were only called considerable, and not insuperable. I appeal to the Chancellor not to hide behind the skirts of this very old lady of an excuse. If there are administrative difficulties, let the Government explain to the Committee something of the nature of these difficulties so that we can weigh them up, and not just use that cliché of these two words.

    If it is not administrative difficulties, what other difficulties can there be? It seems to me to lie in this principle of discrimination. It may be argued that if we discriminate in favour of plant for stimulating fuel efficiency, why not in favour of other plant? That is a difficult path to tread, but, as the hon. Member for Kidderminster said, it is a path which has already been trodden in other applications. In any case, it is a bad argument to refuse to do one good thing because it is not possible to do other good things as well.

    Moreover, if we are to achieve the industrial flexibility, efficiency and enter-price which we must have in this country, coupled with the degree of direction of our economy necessary to avoid some of the abuses which go with a system of unrestrained laissez faire, then the only way we can do it is by means of a fiscal and monetary policy which must be made a more delicate weapon than it has been in the past. Such an attempt must involve a discrimination of the sort represented by this Amendment.

    The Amendment is an example of such a step forward. I hope the Chancellor is going to accept it, because it provides constructive help in this fundamental problem. I make a final appeal to him, if he thinks this Amendment is not acceptable as it stands, to accept at least the principle of financial incentives for this purpose, so that when we come to the Report stage we shall be able to put forward alternative suggestions which are acceptable and on which we can all agree.

    I submit to the Committee that this is not a controversial Amendment, but one of fundamental importance to this country. We must stimulate greater fuel efficiency. I hope hon. Members on all sides are going to support this Amendment or press the Government to put forward one designed for the same purpose when we come to the Report stage.

    I am sure that all hon. Members who have been here since this Amendment was moved will have listened with pleasure to all that has been said about the need for fuel efficiency, and I do not want to say anything which in the slightest way detracts from what has been said about that need.

    I should like to add my congratulations to the hon. Gentleman the Member for Kidderminster (Mr. Nabarro) on what I thought was an admirable exposition of the need for fuel efficiency in our present fuel and power circumstances. If I am not able to accept the conclusions which he and other hon. Gentleman have drawn, it is not because I want in the slightest degree to contest anything they have said about fuel and power efficiency.

    Although we are not at this stage debating the general problem, it is important that we should recognise that this Amendment and others on the Order Paper have to be considered in relation to the general problem. The hon. Member for Mitcham (Mr. Carr) recognised that this was the real problem. The defence programme to which we are committed cannot be fulfilled in addition to current civilian and export demands. That is the real problem, which cannot be avoided. So far as we are concerned, it is important that we should do nothing which undermines in any serious way the measures we propose in order to try by fiscal means to do something to damp down the demand especially for those products needed for the defence programme.

    11.30 p.m.

    The hon. and gallant Member for East Grinstead (Colonel Clarke) quoted the recommendations of the Tucker Committee in aid of his case. I think, as the hon. and learned Gentleman the Member for Wirral (Mr. Selwyn Lloyd) indicated, I believe during the Second Reading debate, that there are very different views about this particular recommendation. I do not want to get drawn into this matter tonight, because it is somewhat complicated and highly controversial, but I hope it will be agreed that there ought to be no question of implementing these recommendations in the existing circumstances. Therefore, it seems to me that in bringing in that recommendation the hon. and gallant Gentleman really is not helping his case forward—at any rate from my point of view, nor, if I may add it, from the point of view of some hon. Gentlemen opposite. I am merely going on what the hon. and learned Member for Wirral said.

    I do not think, whatever we might feel about this Amendment, that we ought to accept it because the Tucker Com- mittee recommended a system of variable initial allowances. It has been said that I would argue against the Amendment because it would be administratively difficult. I think it would be; but I am not concerned to argue against it on those grounds. What I am concerned to argue is that the moment we start on this path of trying to single out particular categories of plant we are in the greatest of difficulties.

    There are other Amendments on the Order Paper dealing with this matter—indeed the hon. Gentleman who moved this one has his name down to another one where he wishes to keep initial allowances, and I can think of a number which have not yet found their place on the Order Paper, and no doubt hon. Gentlemen in all parts of the Committee can do the same. I would not know, nor, I think, would anyone, how to resist the extension of reliefs on other classes, how to draw the line to prevent widespread dissatisfaction among users of plant who were excluded from the scope of the relief.

    It has been suggested that initial allowances are only a mild form of inducement, and it is also worth while to point out that expenditure on this kind of plant does pay for itself fairly rapidly, even without any taxation relief. I was interested to note that the hon. Gentleman, in one of his examples, said that it had been worth the trouble and expenditure, and I entirely agree with him. I know from my own experience that some of the devices do pay for themselves in a remarkably short time.

    I am not at all disposed to argue the revenue aspect of this, because the suspension of initial allowances is an economic case, as has been made clear by my right hon. Friend the Chancellor. It seems to me that, if we were to accept this Amendment tonight, we should be put in the position of almost certainly having to accept a large number of other cases, and we should then find that the instrument we had intended to be used to damp down a demand by industry was failing in our hands. While I fully appreciate the need for promoting economy in the consumption of fuel and power, I do not think it would be right to do what is now suggested. If we were to do so, we should find ourselves in the greatest difficulty.

    I think it was the hon. Member for Clitheroe (Mr. Fort) who gave one or two examples of what might be called minor forms of fuel economy, and perhaps it is worth pointing out that where an industrial concern incurs expenditure in making minor or temporary adjustments of the kind to which the hon. Gentleman referred—like the lagging of steam pipes and so on—then in general that is treated as an expense for taxation purposes. Indeed, any expenditure designed to secure fuel economy which is of a genuine revenue nature is so treated.

    So, while I commend everything that has been said about the need for fuel economy, I have to resist the Amendment because, if I were to accept it, I should start on a course which would only end in the complete abandonment of the principle of the suspension of initial allowances which we believe in the present economic circumstances is necessary and which, therefore, I put it to the Committee, should continue.

    I am sure the Economic Secretary to the Treasury will forgive me if I make a paraphrase of his argument. It is this: "We have made up our minds to cancel the initial allowances, and when we come to examine the perfectly sensible exceptions which people wish to make to that general rule, we find they are so many that we cannot agree to them without upsetting our original decision." Really that will not do, and all hon. Members who have heard the speeches from this side of the Committee, and indeed the speech of the hon. Member for Rotherham (Mr. Jack Jones), thought that the case for these fuel conservation plants was amply made out and would not commit the Treasury to any further concessions, and we propose to press this matter to a Division.

    The whole of our industrial effort depends upon our getting enough coal and we must increase, as several hon. Members have said, the horse-power behind the men at the bench. This is one of the ways by which that can be done. I do not wish to follow the fiscal argument into the effect upon the Revenue, but I impress upon the Economic Secretary that here is a means of greatly increasing our industrial effort. The hon. Gentleman said that in the present circumstances we have to turn over to armaments and, so on, and that he did not wish to stimu- late capital equipment; but I do not think that argument applies when we are considering the particular form of fuel conservation which my hon. Friend has ably described.

    Therefore, unless we can get some statement from the Treasury Bench that they will look at this matter again before the Report stage, my hon. Friends and I will challenge the Government in a Division.

    My right hon. Friend has already indicated the disappointment which we feel on this side of the Committee, and which I am sure is shared by hon. Members opposite, at the response which the Economic Secretary to the Treasury has made to the proposals in this Amendment. The hon. Gentleman said that the type of development which it envisages would undermine the defence programme, but I should have thought that anything which would assist in solving the recurrent fuel crises in this country would be of as much assistance to our real defence as would the manufacture of arms itself.

    The provision of adequate coal and power for Britain in the future seems to me to be an essential part of our security, not only economic but military, for future years. If I might go further, I would draw his attention to paragraph (b) of the Amendment, which has a definite defence consequence. The possession of auxiliary electrical generating plants throughout the industrial centres of the country would not only be of advantage in the case of power cuts in peace-time, but also of the greatest assistance in the event of bombing in air raids; and I should have thought that it would have been wise and prudent for the Government to encourage in every way possible the type of development which is envisaged in this Amendment.

    It would perhaps not be acceptable to hon. Members opposite, or even to my hon. Friends on this side of the Committee, if I gave as my opinion that in actual fact the efforts to increase coal production in the immediate future, at any rate, will not succeed in covering the gap between production and consumption. Therefore, we must find other means of bridging that gap. I draw the Committee's attention to the article, which has already been referred to, by Sir Charles Lidbury, who stated that leading fuel technicians claim that industry's efforts are the best means of saving coal, on balance, to bridge the gap between production and consumption in the immediate future.

    Then we have the Annual Report of the National Coal Board, which says that the British Iron and Steel Federation estimates that in 1923 it took 62.7 cwts. of coal to produce one ton of finished steel, but in 1949 only 36.1 cwts. to produce the same amount. In the same Report, it is stated that the annual saving involved was in the nature of 15 million. Now, in case it should be thought that I am partial to private enterprise by quoting that example, let me tell the Committee that in the same Annual Report the National Coal Board states that in 1948 the colliery consumption of coal was 11.3 million tons for an output of 197.6 million tons, whereas in 1950 it was 10.7 million tons for an output of 204.1 million tons.

    I merely introduce these figures to give an example of what has been done in practice to save this precious raw material, coal, by two great industries—perhaps the most important that we have. The National Coal Board states that economies on the scale that I have referred to would reduce consumption of 36 million tons a year to about 28 million tons, and I should have thought that that saving would have been something which we should use every endeavour to bring about.

    I think that under the Socialist Government the conception of the Finance Act may have changed from the original conception in the past, which was that one of the most important considerations was inducements, and not deterrents, to gain desirable economic ends. Here, surely, is a way in which the Chancellor could achieve the most desirable of economic ends by providing a financial inducement.

    I cannot accept the argument, which is the typical, unimaginative argument of the Treasury, that if one exception is made to the general rule, it will be difficult not to allow a large number of other exceptions. After all, what is the purpose of a Government who intend to govern and to have a definite policy in coming to this Committee and saying that, if they make this exception in the case of fuel-saving equipment and electrical generators, they will find it hard to draw the line between those and other forms of desirable improvements and will, there- fore, cause dissatisfaction to other users? Maybe they will, but surely it is public policy at the present time to make every effort to solve the central industrial problem of Britain, which is shortage of the raw material of coal.

    11.45 p.m.

    I should like now to turn briefly to other aspects of this Amendment. It happens that there is in my constituency one of the firms that is mainly concerned with the production of Diesel generating engines. When the first fuel crisis took place in 1947, this firm, with the enterprise which has perhaps been associated with it, decided the time had come to make a special drive to sell its engines as supplementary generating units. During the subsequent campaign, it sold 700 engines of various horse-power, with a total horse-power of 150,000 and with a combined generating capacity of 100,000 kilowatts.

    I merely use those figures because it is interesting to compare that total generating capacity with the generating capacity of one of the newest and most up-to-date generating stations built by the British Electricity Authority, the station at Ipswich, which within the last few weeks had a capacity of 120,000 kilowatts, although it will rise in the future to something like 160,000 kilowatts. The point I am trying to make is that this firm, by means of the small Diesel engines which it produces, has not only been able to assist in meeting the problem of dislocation of British industry which resulted from power cuts, but has added to the generating capacity of this country by almost the equivalent of one of the most modern power stations.

    I believe that anything that can be done by His Majesty's Government to encourage this type of development will not only be in the interests of the efficiency of industry, and thereby incidentally and indirectly increase the revenue coming to the Treasury, but also will be of immense assistance in solving that great problem, which has been referred to so often on this Amendment, the shortage of coal in Britain.

    I did not intend to intervene in this debate, but I found it impossible to sit here silent listening to the many speeches-which have been delivered by hon. Members opposite. I listened entranced to the speech that was made by the hon. Member for Kidderminster (Mr. Nabarro). I thought it was brilliant. Its brilliance lay in wrapping up almost complete nonsense and selling it hook, line and sinker to an otherwise intelligent Committee.

    I may be completely wrong, but I must declare my interest. I happen to have been in this trade for 20 years. My firm has manufactured, designed, sold, supplied and installed fuel-saving appliances, and I do know something about it. At least, I ought to know something about it. It may be, again, that I am entirely wrong, but at least I think I am right when I say I am the only Member of Parliament in this Committee who is in this particular trade. The hon. Member for Kidderminster made two points which I should like to discuss, but before I come to them I should like to take up one point made by the hon. Member for Clitheroe (Mr. Fort) which was typical of some of the specious points made in so many of the speeches.

    The hon. Member made a short speech indicating that it is extremely inefficient because, when one turns on a hot water tap, it is a minute or two before the water runs hot, and therefore there ought to be greater lagging. Does he realise that if, in fact, one had a hot water tap which instantly it was turned on provided hot water, it would have to be so efficiently lagged that one would also have to lag one's cold water pipes otherwise they would freeze in winter? One of the reasons one does not lag hot water pipes is that one wants the radiation from the hot water pipes to prevent the cold water pipes from freezing if one happens to leave a window open in winter. Of course, it is possible so to arrange the pipes for hot water that the water does run hot immediately. One can have a ring-main; but it is sometimes more inefficient to put in double pipes and so to save a certain amount of heat at the expense of putting in the extra pipes. The net result is inefficiency.

    Now let me come to the points made by the hon. Member for Kidderminster. He is claiming in his Amendment that the Government would be wise to provide a financial inducement from these firms which would install fuel-saving machines or appliances. I have sold these things for some 20 years of my life and I would not be honest if I did not say that most firms do waste an inordinate amount of their fuel by sheer inefficiency. It is not the least bit surprising that manufacturers of appliances, such as my firm make, can indicate that by fitting them they can save sometimes as much as 50 per cent. of the fuel bill.

    This is possible because any engineer who goes to those firms, by giving them a few simple tips, can often save 25 per cent. in nine cases out of 10. Firms generally under-pay the individual who stokes the boilers because they think this is a ham-handed job, but in fact they could save a large sum of money if they paid a man who is more intelligently-trained to stoke their boilers in a different fashion, The case for installing fuel-saving appliances is often the case for doing mechanically what an intelligent stoker ought to be able to do himself.

    Therefore, the real thing to do with a firm that wastes a great deal of its fuel is to show it what can be done most simply and most economically to save some of that fuel. Let me say perfectly frankly that it pays firms not to buy some of the appliances which are sold. [Interruption.] I happen to know that there is on the market an appliance which is not worth buying. I have said it often, and I make a boast that my firm have said time and again that it is not good business in the long run to sell a man a machine which he does not really require. There are appliances that are sold which, at a price of about £50 or more, can be applied to a boiler and which often save 10 per cent. of the fuel; but one can save precisely the same 10 per cent. by putting a wedge in the boiler door and letting secondary air into it. It is merely that the carbon monoxide is not being burned. Let a little extra air in, and the boiler is more efficient.

    I am glad that the Government do not intend to accept the Amendment. If they were to give financial inducement for the use of appliances of this kind, they would be tackling the problem of fuel efficiency from the wrong end. It is logical to say that if a firm spends money in order to be more efficient in its fuel burning, there should be some financial inducement, but at lease there is a good case for saying that a higher-paid stoker is often a better investment than an expensive mechanical appliance. One could advance an argument for some inducement for expenditure on fuel saving which is not shown in any of the items listed in the Amendment.

    I will go further and add that fuel saving is desperately important, but we do not always save fuel most efficiently by putting in mechanical contrivances. There are other ways of saving fuel. Incidentally, the most efficient way I know of saving fuel in this country is the new mobile fuel efficiency vans which the National Coal Board are hiring out to any firms which will make use of them. These vans are staffed by experts who, for a period of a week or two, will give to a firm expert advice in order to save its fuel. That is the best investment I know. Obtaining that van and those experts is often better than buying any of the equipment which manufacturers advertise. That is honest advice which I am happy to give.

    Is it not a fact that the experts to whom the hon. Gentleman refers who give advice, and have, in fact, given the advice, recommend the use of the very gadgets on which he speaks so disparagingly?

    No doubt they do. I could not have survived in business, nor could my firm have survived, unless very often there had been a sound case for installing the things we were supplying. All I say is that a firm should not buy mechanical appliances until it has discovered whether it is not more efficient to save its fuel in some other way. I will not labour the point, however.

    I should like to make one further comment on the very skilful speech of the hon. Member for Kidderminster. I thought his case for the installation of independent stand-by generating equipment was about as specious as the rest of his speech, and just about as short-sighted. It is perfectly true that it often pays many firms to install this generating equipment at great expense for use perhaps on only two or three days in a year. It certainly pays some firms to avoid the difficulties which arise from a sudden power cut. That is perfectly true. But why are there power cuts at all? [HON. MEMBERS: "Oh! "] Power cuts happen because industry is now so thriving that the demand for power is very great and the power stations, being short of equipment and of generating equipment in particular, are not able to keep pace with the rapidly growing demand.

    The point is this: there is a shortage of manufacturing materials and human skill to provide electrical generating equipment. That skill can be used, to a certain degree, either in making individual generating sets which are supplied to some firms to be used on one or two days in a year; or it can be used for manufacturing the main equipment to go to the big power generating stations which are used almost continually.

    The hon. Member for Kidderminster proposes that it is more efficient for hundreds of firms to have hundreds of stand-by equipments, which are very seldom used, because it pays each of them individually; on the other hand, we know that it pays the nation, and all of them collectively, far more that they should not have it but that that equipment and that skill should go direct to the central power generating stations. The hon. Gentleman in effect suggests that it might pay to rob Peter to pay Paul. I suggest that his suggestion is a question of robbing a bob from Peter to pay only a penny to Paul. The thing is absolutely absurd. I am glad that the Opposition propose to divide the Committee to support such a silly Amendment, and I hope they will enjoy doing so.

    12 midnight.

    The hon. Member for Yardley (Mr. Usborne) referred to the remarkable speech of my hon. Friend the Member for Kidderminster (Mr. Nabarro) as specious and short-sighted, and he applied the word "nonsense" to it. In doing that he was in direct contradiction with his hon. Friend the Economic Secretary to the Treasury, who went out of his way to compliment the hon. Member for Kidderminster, and indeed I thought endeavoured to marshal serious arguments to rebut the case he had put forward.

    I should like to examine some of the arguments used by the Economic Secretary. He referred to this, in his opening remarks, as a general problem, which of course it is. What we must guard against is allowing the Treasury in this matter to treat the general problem of fuel economy solely as a Treasury matter. We believe that it is a general problem which must be considered on the broadest possible ground, and that therefore it is right that the Treasury and the Ministry of Fuel and Power should be associated in such a scheme as my hon. Friend has put forward.

    There is no dispute that this Committee is eager to find a way in which the provisions of this Finance Bill can best assist the defence programme. The Economic Secretary thought that this proposal might interfere with the implementation of the defence programme. Those of us who support the Amendment believe that it will make a very real contribution to the defence programme, on these grounds: first, that we are modernising the industrial plant of the country; secondly, we are relieving the mines and the mining industry, to some extent, of their capital expenditure; and, above all, we are economising—I shall not go over the ground covered by my hon. Friend—in the work and the labour of miners.

    The Economic Secretary then went on to even more dubious ground when he said one could not pick out particular categories of plant which should receive initial allowances. I believe that that is exactly what my hon. Friend has done. If the words proposed are not acceptable to the Treasury, I am quite sure that satisfactory words could be found. As I understand it, the argument which is being applied in the speeches supporting the Amendment is that great economies can be made on the steam-raising equipment in factories throughout the country.

    Indeed, so clearly defined is that steam-raising equipment that factories which have been laundries, or breweries, or cotton mills, are sold, and before being sold are gutted of their technical machinery, but the boiler and shafting and generating set are left in because they are of almost universal application to any trader who rents or buys that equipment. Therefore, to say that it is not possible to pick out one particular form of machinery is, I believe, quite wrong. I believe my hon. Friend has put his finger on the one kind of machine which it is possible to pick out.

    To pass to another argument used by the Economic Secretary, he said that there would be some feeling of injustice if certain users were excluded from the scope of relief. I do not think that argument would hold water for a moment. I do not believe the user of a motor van is going to feel any sense of grievance at all because he does not receive on his motor van at the present time exactly and precisely the same initial allowances as are to be extended to the man who instals a new boiler and who is going to make a substantial economy in finance and, above all, in fuel.

    We have listened with great interest to the speeches from the hon. Members for Rotherham (Mr. Jack Jones) and the hon. Member for Bolton, West (Mr. J. Lewis), both of whom have experience in industrial management. I believe this is one of the cases where the Treasury have looked at the thing from far too narrow a point of view. The Treasury are not infallible. I remember, back in the days of the war, that a proposal was put forward that a scheme of war damage insurance should be instituted. The Treasury decided it was quite impossible. The Minister responsible advised the House in that way.

    The Economic Secretary will find some interesting correspondence in his Treasury files from a former hon. Member for Spen Valley, in which the Treasury said how extremely difficult it was to institute a system of Pay-As-You-Earn. The fact remains that, when these matters are pressed by practical means upon the Treasury, the Treasury, by great skill, find an admirable way of carrying out the decisions of the House. I believe this is a matter where similar results can be obtained.

    I support this Amendment, and I wish to say what a very poor argument the Economic Secretary used in turning it down. With regard to the speech of the hon. Member for Yardley (Mr. Usborne), I thought his main trouble was that he was trying to be too fair-minded. He started by giving a certain amount of advertisement to his firm, and he had to end by running down his own sales policy.

    I was impressed by the speeches of the hon. Member for Bolton, West (Mr. J. Lewis) and the hon. Member for Rotherham (Mr. Jack Jones), and I should like to know whether they are satisfied with the speech by the Economic Secretary. I was much impressed by the point of view they both expressed that this, in itself, was a good idea, and I do not think they have heard any sound reason against it from the Government Front Bench. I shall await with great interest to see which way they vote when we divide.

    Only for a very short time during this fairly long discussion have I seen the Minister of Fuel and Power upon the Front Bench. He came in for about two minutes. The question I should like to ask the junior Minister is whether there have been consultations with the Minister of Fuel and Power about this matter, because it is obviously one about which the Ministry must be very keen.

    What did the Economic Secretary actually say in his speech? He said that he wanted to deter current demand and to damp off the demand for such products. Is he really telling the Committee that he wants to damp off demand for products that are going to save fuel?

    I am sure the hon. Gentleman would not want to misrepresent what I said. I made it perfectly clear that I was talking about products required for the defence programme, and he must not use my words in any other sense.

    Very well. Does that mean, therefore, that he does not wish to damp down the demand for these economising users of coal?

    Very well. I see that the Minister of Supply is here. I am sure he would tell the Committee that steel is very necessary indeed for the defence programme. In point of fact, I understand there has been an agreement between the Minister of Fuel and Power and the Minister of Supply to give priority to steel, and I will tell the Economic Secretary that one cannot make steel without coal. It comes to this, that we are at the moment importing something like £4 million worth of coal from America, and here are practical suggestions whereby a large amount of coal could be saved, unless the Minister wishes to damp off the demand.

    It is no argument for the Economic Secretary to say that he wants to refuse this Amendment because he feels that it might create a demand which might hamper the defence programme. This demand is very necessary to the defence programme, and I shall strongly advise all Members of the Committee, including those who have supported the Amendment from the other side, to go into the Division Lobby against the Government.

    Listening to the Economic Secretary, I formed the opinion that no matter how good the Amendments are, he is going to refuse all of them. I should like to ask him whether he has considered them in relation to how far they go towards helping the re-armament programme, because I am certain from his reply that he has not appreciated what this equipment means in the furtherance of the defence programme. I beg him, instead of giving a bald refusal, to consult those who know what would be the full effect of these Amendments. It is pretty evident that the Minister does not know of their effect, because he accepted the proposition of the hon. Member for Kidderminster (Mr. Nabarro) as perfectly sound; but he did not give the Committee any idea that he has considered the full effect of these Amendments on re-armament, and I beg him to do so.

    12.15 a.m.

    The very unsatisfactory reply of the Economic Secretary will come as a great disappointment to a number of industrial concerns in my constituency and throughout the whole of the North of England. In fact, he has earned for himself, not the title of Economic Secretary to the Treasury, but that of Uneconomic Secretary to the Treasury.

    The hon. Member for Kidderminster (Mr. Nabarro) dealt very extensively with

    Division No. 91.]

    AYES

    [12.18 a.m.

    Aitken, W. T.Black, C. W.Carson, Hon. E.
    Alport, C. J. M.Boles, Lt.-Col. D. C. (Wells)Channon, H.
    Amery, Julian (Preston, N.)Boothby, R.Churchill, Rt. Hon. W. S.
    Amory, Heathcoat (Tiverton)Bossom, A. C.Clarke, Col. Ralph (East Grinstead)
    Arbuthnot, JohnBowen, E. R. (Cardigan)Clarke, Brig. Terence (Portsmouth, W.)
    Ashton, H. (Chelmsford)Boyd-Carpenter J. A.Colegate, A.
    Assheton, Rt. Hon. R. (Blackburn, W.)Boyle, Sir EdwardConant, Maj. R. J. E.
    Astor, Hon. M. L.Bracken, Rt. Hon. B.Cooper, Sqn. Ldr. Albert (Ilford, S.)
    Baker, P. A. D.Braine, B. R.Cooper-Key, E. M.
    Baldock, Lt.-Cmdr. J. M.Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Corbett, Lt.-Col. Uvedale (Ludlow)
    Baldwin, A. E.Braithwaite, Sir Albert (Harrow, W.)Craddock, Beresford (Spelthorne)
    Banks, Col. G.Bromley-Davenport, Lt.-Col. W.Cranborne, Viscount
    Baxter, A. B.Brooke, Henry (Hampstead)Crookshank, Capt. Rt. Hon. H. F. C.
    Beamish, Major TuftonBrowne, Jack (Govan)Crosthwaite-Eyre, Col. O. E.
    Bell, R. M.Buchan-Hepburn, P. G. T.Crouch, R. F.
    Bennett, Sir Peter (Edgbaston)Bullock, Capt. M.Crowder, Capt. John (Finchley)
    Bennett, Dr. Reginald (Gosport)Bullus, Wing Commander E. E.Crowder, Petre (Ruislip—Northwood)
    Bennett, William (Woodside)Burden, Squadron Leader F. A.Cundiff, F. W.
    Bevins, J. R. (Liverpool, Toxteth)Butcher, H. W.Cuthbert, W. N.
    Birch, NigelButler, Rt. Hon. R. A. (Saffron Walden)Darling, Sir William (Edinburgh, S.)
    Bishop, F. P.Carr, Robert (Mitcham)Davidson, Viscountess

    the question of Lancashire boilers which are the normal power unit in the cotton and woollen mills in Yorkshire and Lancashire, and I know myself of a number of instances where schemes of fuel economy have been under consideration which will now be postponed owing to the withdrawal of the high initial allowance. As has been pointed out, because wasteful fuel consumption in many instances ranks as a normal charge on industry, it will continue because more economical plants cannot be contemplated.

    I should like to repudiate the unwarrantable attack on stokers made from the benches opposite. The stokers in our industrial plants today are some of the finest workers we have, and they have had to put up with a great deal from the Socialist Government, especially in the form of dirty coal which has been provided for them and which has added enormously to their work. Many of them, by sheer skill and hard work, have managed to maintain steam in the factories in spite of the poor quality of the fuel the Government have supplied them. Many of them had hoped that with the more ample supply of fuel-saving devices now becoming available, much of their heavy work, and many of the difficulties they have had to put up with in the past few years, would have been overcome.

    I hope that the Government will look at this matter again, and see whether they cannot do something to help not only these men but industry in general.

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

    The Committee divided: Ayes, 284; Noes, 292.

    Davies, Nigel (Epping)Kerr, H. W. (Cambridge)Profumo, J. D.
    de Chair, SomersetKingsmill, Lt.-Col. W. H.Raikes, H. V.
    De la Bère, R.Lambert, Hon. G.Rayner, Brig. R.
    Deedes, W. F.Lancaster, Col. C. G.Redmayne, M.
    Digby, S. W.Langford-Holt, J.Remnant, Hon. P.
    Dodds-Parker, A. D.Law, Rt. Hon. R. K.Renton, D. L. M.
    Donner, P. W.Leather, E. H. C.Roberts, Emrys (Merioneth)
    Douglas-Hamilton, Lord MalcolmLegge-Bourke, Maj. E. A. H.Roberts, Major Peter (Heeley)
    Drayson, G. B.Lennox-Boyd, A. T.Robertson, Sir David (Caithness)
    Dugdale, Maj. Sir Thomas (Richmond)Lindsay, MartinRobinson, Roland (Blackpool, S.)
    Duncan, Capt. J. A. L.Linstead, H. N.Robson-Brown, W. (Esher)
    Dun glass, LordLlewellyn, D.Rodgers, John (Sevenoaks)
    Duthie, W. S.Lloyd, Rt. Hn. Geoffrey (King's Norton)Roper, Sir Harold
    Eccles, D. M.Lloyd Maj. Guy (Renfrew, E.)Ropner, Col. L.
    Lloyd, Selwyn (Wirral)Russell, R. S.
    Eden, Rt. Hon. A.Lockwood, Lt.-Col. J. C.Ryder, Capt. R. E. D.
    Elliot, Rt. Hon. W. E.Longden, Gilbert (Herts, S-W.)Salter, Rt. Hon. Sir Arthur
    Erroll, F. J.Low, A. R. W.Scott, Donald
    Fisher, NigelLucas, Sir Jocelyn (Portsmouth. S.)Shepherd, William
    Fletcher, Walter (Bury)Lucas, P. B. (Brentford)Smiles, Lt.-Col. Sir Waiter
    Fort, R.Lucas-Tooth, Sir HughSmithers, Peter (Winchester)
    Foster, JohnLyttelton, Rt. Hon. O.Smyth, Brig. J. G. (Norwood)
    Fraser, Hon. Hugh (Stone)McAdden, S. J.Snadden, W. McN
    Fraser, Sir Ian (Morecambe & Lonsdale)McCorquodale, Rt. Hon. M. S.Soames, Capt. C.
    Fyfe, Rt. Hon. Sir David MaxwellMacdonald, A. J. F. (Roxburgh)Spearman, A. C. M.
    Gage, C. H.Macdonald, Sir Peter (I. of Wight)Spence, H. R. (Aberdeenshire, W.)
    Galbraith, Cmdr. T. D. (Pollok)Mackeson, Brig. H. R.Spens, Sir Patrick (Kensington, S.)
    Galbraith, T. G. D. (Hillhead)McKibbin, A.Stanley, Capt. Hon. Richard (N. Fylde)
    Garner-Evans, E. H. (Denbigh)McKie, J. H. (Galloway)Stevens, G. P.
    Gates, Maj. E. E.Maclay, Hon. JohnSteward, W. A. (Woolwich, W.)
    Glyn, Sir RalphMaclean, FitzroyStewart, Henderson (Fife, E.)
    Gomme-Duncan, Col. A.MacLeod, Iain (Enfield, W.)Stoddart-Scott, Col. M.
    MacLeod, John (Ross and Cromarty)Storey, S.
    Gridley, Sir ArnoldMacmillan, Rt. Hon. Harold (Bromley)Strauss, Henry (Norwich, S.)
    Grimond, J.MacPherson, Major Niall (Dumfries)Stuart, Rt. Hon. James (Moray)
    Grimston, Hon. John (St. Albans)Maitland, Cmdr. J. W.Studholme, H. G.
    Grimston, Robert (Westbury)Manningham-Buller, R. E.Summers, G. S.
    Harden, J. R. E.Marlowe, A. A. H.Sutcliffe, H.
    Hare, Hon. J. H. (Woodbridge)Marples, A. E.Taylor, Charles (Eastbourne)
    Harris, Frederic (Croydon, N.)Marshall, Douglas (Bodmin)Taylor, William (Bradford, N.)
    Harris, Reader (Heston)Marshall, Sidney (Sutton)Teeling, W.
    Harvey, Air Cdre. A. V. (Macclesfield)Teevan, T. L.
    Harvey, Ian (Harrow, E.)Maude, Angus (Ealing, S.)Thomas, J. P. L. (Hereford)
    Harvie-Watt, Sir GeorgeMaude, John (Exeter)Thompson, Kenneth Pugh (Walton)
    Hay, JohnMaudling, R.Thompson, R. H. M. (Croydon, W.)
    Head, Brig. A. H.Medlicott, Brig. F.Thorneycroft, Peter (Monmouth)
    Headlam, Lieut.-Col. Rt. Hon. Sir C.Mellor, Sir JohnThornton-Kemsley, Col. D. N.
    Heald, LionelMolson, A. H. E.Thorp, Brig. R. A. F.
    Heath, EdwardMonckton, Sir WalterTilney, John
    Henderson, John (Cathcart)Moore, Lt.-Col. Sir ThomasTurner, H. F. L.
    Hicks-Beach, Maj. W. W.Morrison, John (Salisbury)Turton, R. H.
    Higgs, J. M. C.Morrison, Rt. Hon. W. S. (Cirencester)Tweedsmuir, Lad
    Hill, Mrs. E. (Wythenshawe)Mott-Radclyffe, C. E.Vane, W. M. F.
    Hill, Dr. Charles (Luton)Nabarro, G.Vaughan-Morgan J. K.
    Hinchingbrooke, ViscountNicholls, HarmarWade, D. W.
    Hirst, GeoffreyNicholson, G.Wakefield, Edward (Derbyshire, W.)
    Holmes, Sir Stanley (Harwich)Nield, Basil (Chester)Wakefield, Sir Wavell (Marylebone)
    Hope, Lord JohnNoble, Cmdr. A. H. P.Walker-Smith, D. C.
    Hopkinson, HenryNugent, G. R. H.Ward, Hon. George (Worcester)
    Hornsby-Smith, Miss. P.Nutting, AnthonyWard, Miss. I. (Tynemouth)
    Horsbrugh, Rt. Hon. FlorenceOakshott, H. D.Waterhouse, Capt. Rt. Hon. C.
    Howard, Gerald (Cambridgeshire)Odey, G. W.Watkinson, H.
    Howard, Greville (St. Ives)O'Neill, Rt. Hon. Sir HughWebbe, Sir H. (London)
    Hudson, Sir Austin (Lewisham, N.)Ormsby-Gore, Hon. W. D.White, Baker (Canterbury)
    Hudson, Rt. Hon. Robert (Southport)Orr, Capt. L. P. S.Williams, Charles (Torquay)
    Hudson, W. R. A. (Hull, N.)Orr-Ewing, Charles Ian (Hendon, N.)Williams, Gerald (Tonbridge)
    Hutchinson, Geoffrey (Ilford, N.)Orr-Ewing, Ian L. (Weston-super-Mare)Williams, Sir Herbert (Croydon, E.)
    Hutchison, Lt.-Com. Clark (E'b'rgh W.)Osborne, C.Wills, G.
    Hutchison, Colonel James (Glasgow)Peake, Rt. Hon. O.Wilson, Geoffrey (Truro)
    Hyde, Lt.-Col. H. M.Perkins, W. R. D.Winterton, Rt. Hon. Earl
    Hylton-Foster, H. B.Peto, Brig. C. H. M.Wood, Hon. R.
    Jennings, R.Pickthorn, K.York, C.
    Johnson, Howard (Kemptown)Pitman, I. J.
    Jones, A. (Hall Green)Powell, J. Enoch

    TELLERS FOR THE AYES:

    Joynson-Hicks, Hon. L. W.Price, Henry (Lewisham, W.)Mr. Digby and Mr. Foster.
    Kaberry, D.Prior-Palmer, Brig. O.

    NOES

    Acland, Sir RichardAwbery, S. S.Benn, Wedgwood
    Adams, RichardAyles, W. H.Benson, G.
    Albu, A. H.Bacon, Miss. AliceBeswick, F.
    Allen, Arthur (Bosworth)Baird, J.Bevan, Rt. Hon. A. (Ebbw Vale)
    Allen, Scholefield (Crewe)Balfour, A.Bing, G. H. C.
    Anderson, Alexander (Motherwell)Barnes, Rt. Hon. A. J.Blenkinsop, A.
    Anderson, Frank (Whitehaven)Bartley, P.Blyton, W. R.
    Attlee, Rt. Hon. C. R.Bellenger, Rt. Hon. F. J.Boardman, H.

    Booth, A.Hardy, E. A.Oldfield, W. H.
    Bottomley, A. G.Hargreaves, A.Oliver, G. H.
    Bowden, H. W.Hastings, S.Orbach, M.
    Bowles, F. G. (Nuneaton)Hayman, F. H.Padley, W. E.
    Braddock, Mrs. ElizabethHenderson, Rt. Hon. A. (Rowley Regis)Paget, R. T.
    Brook, Dryden (Halifax)Herbison, Miss. M.Paling, Rt. Hon. W. (Dearne Valley)
    Brooks, T. J. (Normanton)Hewitson, Capt. M.Paling, Will T. (Dewsbury)
    Broughton, Dr. A. D. D.Hobson, C. R.Pannell, T. C.
    Brown, Rt. Hon. George (Belper)Holman, P.Pargiter, G. A.
    Brown, Thomas (Ince)Holmes, Horace (Hemsworth)Parker, J.
    Burke, W. A.Houghton, D.Paton, J.
    Burton, Miss. E.Hoy, J.Pearson, A.
    Butler, Herbert (Hackney, S.)Hubbard, T.Peart, T. F.
    Callaghan, L. J.Hudson, James (Ealing, N.)Poole, C.
    Carmichael, J.Hughes, Emrys (S. Ayrshire)Popplewell, E.
    Castle, Mrs. B. A.Hughes, Hector (Aberdeen, N.)Porter, G.
    Champion, A. J.Hynd, H. (Accrington)Price, Philips (Gloucestershire, W.)
    Chetwynd, G. R.Hynd, J. B. (Attercliffe)Proctor, W. T.
    Clunie, J.Irvine, A. J. (Edge Hilt)Pryde, D. J.
    Cocks, F. S.Irving, W. J. (Wood Green)Pursey, Cmdr. H. Rankin, J.
    Coldrick, W.Isaacs, Rt. Hon. G. A.Rees, Mrs. D.
    Collindridge, F.Janner, B.Reeves, J.
    Cook, T. F.Jay, D. P. T.Reid, Thomas (Swindon)
    Cooper, Geoffrey (Middlesbrough, W.)Jeger, George (Goole)Reid, William (Camlachie)
    Cooper, John (Deptford)Jeger, Dr. Santo (St. Pancras, S.)Rhodes, H.
    Corbet, Mrs. Freda (Peckham)Jenkins, R. H.Richards, R.
    Cove, W. G.Johnson, James (Rugby)Robens, A.
    Craddock, George (Bradford, S.)Johnston, Douglas (Paisley)Roberts, Goronwy (Caernarvonshire)
    Crawley, A.Jones, David (Hartlepool)Robertson, J. J. (Berwick)
    Crosland, C. A. R.Jones, Frederick Elwyn (West Ham, S.)Robinson, Kenneth (St. Pancras, N.)
    Crossman, R. H. S.Jones, Jack (Rotherham)Rogers, George (Kensington, N.)
    Cullen, Mrs. A.Jones, William Elwyn (Conway)Ross, William (Kilmarnock)
    Dalton, Rt. Hon. H.Keenan, W.Royle, C.
    Darling, George (Hillsborough)Kenyon, C.Shawcross, Rt. Hon. Sir Hartley
    Davies, A. Edward (Stoke, N.)Key, Rt. Hon. C. W.Shinwell, Rt. Hon. E.
    Davies, Harold (Leek)King, Dr. H. M.Shurmer, P. L. E.
    de Freitas, GeoffreyKinghorn, Sqn. Ldr E.Silverman, Julius (Erdington)
    Deer, G.Kinley, J.Silverman, Sydney (Nelson)
    Dodds, N. N.Lang, GordonSimmons, C. J.
    Donnelly, D.Lee Frederick (Newton)Slater, J.
    Driberg, T. E. N.Lee, Miss. Jennie (Cannock)Smith, Ellis (Stoke, S.)
    Lee, Leslie (Ardwick)Smith, Norman (Nottingham, S.)
    Dugdale, Rt. Hon. John. (W. Bromwich)Lewis, Arthur (West Ham, N.)Sorensen, R. W.
    Dye, S.Lewis, John (Bolton, W.)Soskice, Rt. Hon. Sir Frank
    Ede, Rt. Hon. J. C.Lindgren, G. S.Sparks, J. A.
    Edelman, M.Lipton, Lt.-Col. M.Steele, T.
    Edwards, John (Brighouse)Logan, D. G.Stewart, Michael (Fulham, E.)
    Edwards, Rt. Hon. Ness (Caerphilly)Longden, Fred (Small Heath)Stokes, Rt. Hon. R. R.
    Edwards, W. J. (Stepney)McAllister, G.Strachey, Rt. Hon. J.
    Evans, Albert (Islington, S. W.)MacColl, J. E.Strauss, Rt. Hon. George (Vauxhall)
    Evans, Edward (Lowestoft)McGhee, H. G.Stross, Dr. Barnett
    Evans, Stanley (Wednesbury)McInnes, J.Summerskill, Rt. Hon. Edith
    Ewart, R.Mack, J. D.Sylvester, G. D.
    Fernyhough, E.McKay, John (Wallsend)Taylor, Bernard (Mansfield)
    Field, Capt. W. J.Mackay, R. W. G. (Reading, N.)Taylor, Robert (Morpeth)
    Finch, H. J.McLeavy, F.Thomas, David (Aberdare)
    Fletcher, Eric (Islington, E.)MacMillan, Malcolm (Western Isles)Thomas, George (Cardiff)
    Follick, M.McNeil, Rt. Hon. H.Thomas, Iorwerth (Rhondda, W.)
    Foot, M. M.MacPherson, Malcolm (Stirling)Thomas, Ivor Owen (Wrekin)
    Forman, J. C.Mainwaring, W. H.Thorneycroft, Harry (Clayton)
    Fraser, Thomas (Hamilton)Mallalieu, E. L. (Brigg)Thurtle, Ernest
    Freeman, John (Watford)Mallalieu, J. P. W. (Huddersfield, E.)Timmons, J.
    Freeman, Peter (Newport)Mann, Mrs. JeanTomney, F.
    Gaitskell, Rt. Hon. H. T. N.Manuel, A. C.Turner-Samuels, M.
    Ganley, Mrs. C. S.Marquand, Rt. Hon. H. A.Ungoed-Thomas A. L.
    Gibson, C. W.Mathers, Rt. Hon. G.Usborne, H.
    Gilzean, A.Mellish, R. J.Vernon, W. F.
    Glanville, James (Consett)Messer, F.Viant, S. P.
    Gooch, E. G.Middleton, Mrs. L.Wallace, H. W.
    Gordon-Walker, Rt. Hon. P. C.Mikardo, IanWatkins, T. E.
    Greenwood, Anthony (Rossendale)Mitchison, G. R.Webb, Rt. Hon. M. (Bradford, C.)
    Greenwood, Rt. Hon. Arthur (Wakefield)Moeran, E. W.Weitzman, D.
    Grenfell, D. R.Monslow, W.Wells, Percy (Faversham)
    Grey, C. F.Moody, A. S.Wells, William (Walsall)
    Griffiths, David (Rother Valley)Morley, R.West, D. G.
    Griffiths, Rt. Hon. James (Llanelly)Morris, Percy (Swansea, W.)Wheatley, Rt. Hn. John (Edinb'gh, E.)
    Griffiths, William (Exchange)Morrison, Rt. Hon. H. (Lewisham, S.)White, Mrs. Eirene (E. Flint)
    Gunter, R. J.Mort, D. L.White, Henry (Derbyshire, N. E.)
    Hale, Joseph (Rochdale)Moyle, A.Whiteley, Rt. Hon. W.
    Hale, Leslie (Oldham, W.)Mulley, F. W.Wilcock, Group Capt. C. A. B.
    Hall, John (Gateshcad, W.)Murray, J. D.Wilkes, L.
    Hall, Rt. Hon. Glenvil (Colne Valley)Nally, W.Willey, Frederick (Sunderland)
    Hamilton, W. W.Neal, Harold (Bolsover)Willey, Octavius (Cleveland)
    Hannan, W.Noel-Baker, Rt. Hon. P. J.Williams, David (Neath)
    Hardman, D. R.O'Brien, T.Williams, Rev. Llywelyn (Abertillery)

    Williams, Ronald (Wigan)Winterbottom, Richard (Brightside)Younger, Hon. K.
    William, Rt. Hon. Thomas (Don Valley)Wise, F. J.
    Williams, W. T. (Hammersmith, S.)Woodburn, Rt. Hon. A.

    TELLERS FOR THE NOES:

    Wilson, Rt. Hon. Harold (Huyton)Wyatt, W. L.Mr. Wilkins and Mr. Delargy.
    Winterbottom, Ian (Nottingham, C.)Yates, V. F.

    I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

    I move this Motion to elicit from the Leader of the House what the Government's ideas are about the future course of business today. We have had a very valuable and well-sustained debate from both sides of the Committee, in which matters have been examined with great attention and thoroughness by both parties, and we have reached just that period, or thereabouts, in the sitting at which the right hon. Gentleman the Leader of the House moved a similar Motion last night. It seems to me that, as he saw there was no need to utilise, as he could have done, another two hours, we ought to put to the Government a question whether we should not follow the course he indicated last night, and let the Committee terminate their labours for this particular sitting at a reasonable time.

    I should like to know what their intentions are—[Interruption.]—I was asking the Leader of the House. I think it is much better to have a series of sittings terminating at a reasonable hour, rather than the trial of strength or tour de force that the Government are trying to put on us by driving us through the night. Two hours could have been expended in useful discussion last night, and we could consume another two hours tonight, but I should like to know from the right hon. Gentleman what view he takes. Why was a pathetic appeal made by an hon. Member of the House even older than myself not to choose Thursday night for a particularly late sitting? I really think the matter should be clarified by the Leader of the House. Two hours were wasted last night. We could do another two hours tonight. After all, there is plenty of time this Session. As I said earlier in the day, the Government have no legislation to propose—

    12.30 a.m.

    On a point of order, Major Milner. Are we here to do serious business or to listen to this mockery which is now being carried on?

    I should like an indication from the right hon. Gentleman of his intentions.

    I thank the right hon. Gentleman for this opportunity of making clear our intentions. As I said some hours ago, we do not regard adjourning at this time or in two hours' time as being something that meets with the general convenience of the Committee. [HON. MEMBERS: "Why?"] Therefore, we propose to sit for some hours yet, and we hope that during that period we may be able to make substantial progress with the Bill.

    May I say that if we sit through the night there are some extremely technical Clauses which have to be discussed raising very fine legal points. Does not the Leader of the House think it undesirable, when such matters of grave public importance and such fine legal points are concerned, that they should be discussed at a time when proper consideration cannot be given to them?

    No, I should not have thought so. I see that the right hon. Gentleman is himself supported with considerable legal talent, and I have noticed that my right hon. and learned Friend the Attorney-General seems to shine brighter the smaller the hours of the morning.

    Might I, with great respect, put another consideration to the right hon. Gentleman? We are about to enter upon that part of the Bill which deals with initial allowances for shipbuilding—in which the Government have an Amendment of their own—a matter which vitally affects both the general public and our constituents, who are entitled to know what steps are being taken to stimulate our merchant shipping in the event of war. Is it proper that this discussion should take place at a time when, owing to the shortage of newsprint, it is most unlikely that that debate will receive adequate reporting in the Press?

    Question put, "That the Chairman do report Progress, and ask leave to sit again."

    Division No. 92.]

    AYES

    [12.34 a.m.

    Aitken, W. T.Erroll, F. J.Lucas-Tooth, Sir Hugh
    Alport, C. J. M.Fisher, NigelLyttelton, Rt. Hon.
    Amery, Julian (Preston, N.)Fletcher, Walter (Bury)McAdden, S. J.
    Amory, Heathcoat (Tiverton)Fort, R.McCorquodale, Rt. Hon. M. S.
    Arbuthnot, JohnFoster, JohnMacdonald, A. J. F. (Roxburgh)
    Ashton, H. (Chelmsford)Fraser, Hon. Hugh (Stone)Macdonald, Sir Peter (I. of Wight)
    Assheton, Rt. Hon. R. (Blackburn, W.)Fraser, Sir Ian (Morecambe & Lonsdale)Mackeson, Brig. H. R.
    Astor, Hon. M. L.Fyfe, Rt. Hon. Sir David MaxwellMcKibbin, A.
    Baker, P. A. D.Gage, C. H.McKie, J. H. (Galloway)
    Baldock, Lt.-Cmdr. J. M.Galbraith, Cmdr. T. D. (Pollok)Maclay, Hon. John
    Baldwin, A. E.Galbraith, T. G. D. (Hillhead)Maclean, Fitzroy
    Banks, Col. C.Garner-Evans, E. H. (Denbigh)MacLeod, Iain (Enfield, W.)
    Baxter, A. B.Gates, Maj. E. E.MacLeod, John (Ross and Cromarty)
    Beamish, Major TuftonGlyn, Sir RalphMacmillan, Rt. Hon. Harold (Bromley)
    Bell, R. M.Gomme-Duncan, Col. A.Macpherson, Major Niall (Dumfries)
    Bennett, Sir Peter (Edgbaston)Gridley, Sir ArnoldMaitland, Cmdr. J. W.
    Bennett, Dr. Reginald (Gosport)Grimond, J.Manningham-Buller, R. E.
    Bennett, William (Woodside)Grimston, Hon. John (St. Albans)Marlowe, A. A. H.
    Bevins, J. R. (Liverpool, Toxteth)Grimston, Robert (Westbury)Marples, A. E.
    Birch, NigelHarden, J. R. E.Marshall, Douglas (Bodmin)
    Bishop, F. P.Hare, Hon. J. H. (Woodbridge)Marshall, Sidney (Sutton)
    Black, C. W.Harris, Frederic (Croydon, N.)Maude, Angus (Eating, S.)
    Boles, Lt.-Col. D. C. (Wells)Harris, Reader (Heston)Maude, John (Exeter)
    Boothby, R.Harvey, Air Cdre. A. V. (Macclesfield)Maudlins, R.
    Bossom, A. C.Harvey, Ian (Harrow, E.)Medlicott, Brig. F.
    Bowen, E. R. (Cardigan)Harvie-Watt, Sir GeorgeMellor, Sir John
    Boyd-Carpenter, J. A.Hay, JohnMolson, A. H. E.
    Boyle, Sir EdwardHead, Brig. A. H.Monckton, Sir Walter
    Bracken, Rt. Hon. B.Headlam, Lieut.-Col. Rt. Hon. Sir C.Moore, Lt.-Col. Sir Thomas
    Braine, B. R.Heald, LionelMorrison, John (Salisbury)
    Braithwaite, Sir Albert (Harrow, W.)Heath, EdwardMorrison, Rt. Hon. W. S. (Cirencester)
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Henderson, John (Cathcart)Mott-Radclyffe, C. E.
    Bromley-Davenport, Lt.-Col. W.Hicks-Beach, Maj. W. W.Nabarro, G.
    Brooke, Henry (Hampstead)Higgs, J. M. C.Nicholls, Harmar
    Browne, Jack (Govan)Hill, Mrs. E. (Wythenshawe)Nicholson, G.
    Buchan-Hepburn, P. G. T.Hill, Dr. Charles (Luton)Nield, Basil (Chester)
    Bullock, Capt. M.Hinchingbrooke, ViscountNoble, Cmdr. A. H. P.
    Bullus, Wing Commander E. E.Hirst, GeoffreyNugent, G. R. H.
    Burden, Squadron Leader F. A.Holmes, Sir Stanley (Harwich)Nutting, Anthony
    Butcher, H. W.Hope, Lord JohnOakshott, H. D.
    Butler, Rt. Hon. R. A. (Saffron Walden)Hopkinson, HenryOdey, G. W.
    Carr, Robert (Mitcham)Hornsby-Smith, Mist P.Ormsby-Gore, Hon. W. D.
    Carson, Hon. E.Horsbrugh, Rt. Hon. FlorenceOrr, Capt. L. P. S.
    Channon, H.Howard, Gerald (Cambridgeshire)Orr-Ewing, Charles Ian (Hendon, N.)
    Churchill, Rt. Hon. W. S.Howard, Greville (St. Ives)Orr-Ewing, Ian L. (Weston-super-Mare)
    Clarke, Col. Ralph (East Grinstead)Hudson, Sir Austin (Lewisham, N.)Osborne, C. Peake, Rt. Hon. O.
    Clarke, Brig. Terence (Portsmouth, W.)Hudson, Rt. Hon. Robert (Southport)Perkins, W. R. D.
    Colegate, A.Hudson, W. R. A. (Hull, N.)Peto, Brig. C. H. M.
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Hutchinson, Geoffrey (Ilford, N.)Pickthorn, K.
    Cooper-Key, E. M.Hutchison, Lt.-Com. Clark (E'b'rghW.)Pitman, I. J.
    Corbett, Lt.-Col. Uvedale (Ludlow)Hutchison, Colonel James (Glasgow)Powell, J. Enoch
    Craddock, Beresford (Spelthorne)Hyde, Lt.-Col. H. M.Price, Henry (Lewisham, W.)
    Cranborne, ViscountHylton-Foster, H. B.Prior-Palmer, Brig. O.
    Crookshank, Capt. Rt. Hon. H. F. C.Jennings, R.Profumo, J. D.
    Crosthwaite-Eyre, Col. O. E.Johnson, Howard (Kemptown)Raikes, H. V.
    Crouch, R. F.Jones, A. (Hall Green)Rayner, Brig. R.
    Crowder, Capt. John (Finchrey)Joynson-Hicks, Hon. L. W.Redmayne, M.
    Crowder, Petre (Ruislip—Northwood)Kaberry, D.Remnant, Hon. P.
    Cundiff, F. W.Kerr, H. W. (Cambridge)Renton, D. L. M.
    Cuthbert, W. N.Kingsmill, Lt.-Col. W. H.Roberts, Emrys (Merioneth)
    Darling, Sir William (Edinburgh, S.)Lambert, Hon. G.Roberts, Major Peter (Heeley)
    Davidson, ViscountessLancaster, Col. C. G.Robertson, Sir David (Caithness)
    Davies, Nigel (Epping)Langford-Holt, J.Robinson, Roland (Blackpool, S.)
    de Chair, SomersetLaw, Rt. Hon. R. K.Robson-Brown, W. (Esher)
    De la Bère, R.Leather, E. H. C.Rodgers, John (Sevenoaks)
    Deedes, W. F.Legge-Bourke, Maj. E. A. H.Roper, Sir Harold
    Digby, S. W.Lennox-Boyd, A. T.Ropner, Col. L.
    Dodds-Parker, A. D.Lindsay, MartinRussell, R. S.
    Donner, P. W.Linstead, H. N.Ryder, Capt. R. E. D.
    Douglas-Hamilton, Lord MalcolmLlewellyn, D.Salter, Rt. Hon. Sir Arthur
    Drayson, G. B.Lloyd, Rt. Hn. Geoffrey (King's Norton)Scott, Donald
    Dugdale, Maj. Sir Thomas (Richmond)Lloyd, Maj. Guy (Renfrew, E.)Shepherd, William
    Duncan, Capt. J. A. L.Lloyd, Selwyn (Wirral)Smiles, Lt.-Col. Sir Walter
    Dunglass, LordLockwood, Lt.-Col. J. C.Smithers, Peter (Winchester)
    Duthie, W. S.Longden, Gilbert (Herts, S. W.)Smyth, Brig. J. G. (Norwood)
    Eccles, D. M.Low, A. R. W.Snadden, W. McN.
    Eden, Rt. Hon. A.Lucas, Sir Jocelyn (Portsmouth, S.)Soames, Capt. C.
    Elliot, Rt. Hon. W. E.Lucas, P. B. (Brentford)Spearman, A. C. M.

    The Committee divided: Ayes, 282; Noes. 292.

    Spent, Sir Patrick (Kensington, S.)Thompson, Kenneth Pugh (Walton)Ward, Hon. George (Worcester)
    Stanley, Capt. Hon. Richard (N. Fylde)Thompson, R. H. M. (Croydon, W.)Ward, Miss. I. (Tynemouth)
    Stevens, G. P.Thorneycroft, Peter (Monmouth)Waterhouse, Capt. Rt. Hon. C.
    Steward, W. A. (Woolwich, W.)Thornton-Kemsley, Col. C. N.Watkinson, H.
    Stewart, Henderson (Fife, E.)Thorp, Brig. R. A. F.Webbe, Sir H. (London)
    Stoddart-Scott, Col. M.Tilney, JohnWhite, Baker (Canterbury)
    Storey, S.Turner, H. F. L.Williams, Charles (Torquay)
    Strauss, Henry (Norwich, S.)Turton, R. H.Williams, Gerald (Tonbridge)
    Stuart, Rt. Hon. James (Moray)Tweedsmuir, LadyWilliams, Sir Herbert (Croydon, E.)
    Studholme, H. G.Vane, W. M. F.Wills, G.
    Sutcliffe, H.Vaughan-Morgan. J. K.Wilson, Geoffrey (Truro)
    Taylor, Charles (Eastbourne)Vosper, D. F.Winterton, Rt. Hon. Earl
    Taylor, William (Bradford, N.)Wade, D. W.Wood, Hon. R.
    Teeling, W.Wakefield, Edward (Derbyshire, W.)York, C.
    Teevan, T. L.Wakefield, Sir Wavell (Marylebone)
    Thomas, J. P. L. (Hereford)Walker-Smith, D. C.TELLERS FOR THE AYES:
    Major Wheatley and Major Conant.

    NOES

    Acland, Sir RichardDriberg, T. E. N.Janner, B.
    Adams, RichardDugdale, Rt. Hon. John (W. Bromwich)Jay, D. P. T.
    Albu, A. H.Dye, S.Jeger, George (Goole)
    Allen, Arthur (Bosworth)Ede, Rt. Hon. J. C.Jeger, Dr. Santo (St. Panoras, S.)
    Allen, Scholefield (Crewe)Edelman, M.Jenkins, R. H.
    Anderson, Alexander (Motherwell)Edwards, John (Brighouse)Johnson, James (Rugby)
    Anderson, Frank (Whitehaven)Edwards, Rt. Hon. Ness (Caerphilly)Johnston, Douglas (Paisley)
    Attlee, Rt. Hon. C. R.Edwards, W. J. (Stepney)Jones, David (Hartlepool)
    Awbery, S. S.Evans, Albert (Islington, S. W.)Jones, Frederick Elwyn (West Ham, S.)
    Ayles, W. H.Evans, Edward (Lowestoft)Jones, Jack (Rotherham)
    Bacon, Miss. AliceEvans, Stanley (Wednesbury)Jones, William Elwyn (Conway)
    Baird, J.Ewart, R.Keenan, W.
    Balfour, A.Fernyhough, E.Kenyon, C.
    Barnes, Rt. Hon. A. J.Field, Capt. W. J.Key, Rt. Hon. C. W.
    Bartley, P.Finch, H. J.King, Dr. H. M.
    Bellenger, Rt. Hon. F. J.Fletcher, Eric (Islington. E.)Kinghorn, Sqn. Ldr E.
    Benn, WedgwoodFollick, M.Kinley, J.
    Benson, G.Foot, M. M.Lang, Gordon
    Beswick, F.Forman, J. C.Lee, Frederick (Newton)
    Bevan, Rt. Hon. A. (Ebbw Vale)Fraser, Thomas (Hamilton)Lee, Miss. Jennie (Cannock)
    Bing, G. H. C.Freeman, John (Watford)Lever, Leslie (Ardwick)
    Blenkinsop, A.Freeman, Peter (Newport)Lewis, Arthur (West Ham, N.)
    Blyton, W. R.Gaitskell, Rt. Hon. H. T. N.Lewis, John (Bolton, W.)
    Boardman, H.Ganley, Mrs. C. S.Lindgren, G. S.
    Booth, A.Gibson, C. W.Lipton, Lt.-Col. M.
    Bottomley, A. G.Gilzean, A.Logan, D. G.
    Bowden, H. W.Glanville, James (Consett)Longden, Fred (Small Heath)
    Bowles, F. G. (Nuneaton)Gooch, E. G.McAllister, G.
    Braddock, Mrs. ElizabethGordon-Walker, Rt. Hon. P. C.MacColl, J. E.
    Brook, Dryden (Halifax)Greenwood, Anthony (Rossendale)McGhee, H. G.
    Brooks, T. J. (Normanton)Greenwood, Rt. Hon. Arthur (Wakefield)McInnes, J.
    Broughton, Dr. A. D. D.Grenfell, D. R.Mack, J. D.
    Brown, Rt. Hon. George (Belper)Grey, C. F.McKay, John (Wallsend)
    Brown, Thomas (Ince)Griffiths, David (Rother Valley)Mackay, R. W. G. (Reading, N.)
    Burke, W. A.Griffiths, Rt. Hon. James (Llanelly)McLeavy, F.
    Burton, Miss. E.Griffiths, William (Exchange)MacMillan, Malcolm (Western Isles)
    Butler, Herbert (Hackney, S.)Gunter, R. J.McNeil, Rt. Hon. H.
    Callaghan, L. J.Hale, Joseph (Rochdale)MacPherson, Malcolm (Stirling)
    Carmichael, J.Hale, Leslie (Oldham, W.)Mainwaring, W. H.
    Castle, Mrs. B. A.Hall, John (Gateshead, W.)Mallalieu, E. L. (Brigg)
    Champion, A. J.Hall, Rt. Hon. Glenvil (Colne Valley)Mallalieu, J. P. W. (Huddersfield, E.)
    Chetwynd, G. R.Hamilton, W. W.Mann, Mrs. Jean
    Clunie, J.Hannan, W.Manuel, A. C.
    Cocks, F. S.Hardman, D. R.Marquand, Rt. Hon. H. A.
    Coldrick, W.Hardy, E. A.Mathers, Rt. Hon. G.
    Collindridge, F.Hargreaves, A.Mellish, R. J.
    Cook, T. F.Hastings, S. Messer, F.
    Cooper, Geoffrey (Middlesbrough, W.)Hayman, F. H.Middleton, Mrs.
    Cooper, John (Deptford)Henderson, Rt. Hon. A. (Rowley Regis)Mikardo, Ian
    Corbet, Mrs. Freda (Peckham)Mitchison, G. R.
    Cove, W. G.Herbison, Miss. M.Moeran, E. W.
    Craddock, George (Bradford, S.)Hewitson, Capt. M.Monslow, W.
    Crawley, A.Hobson, C. R.Moody, A. S.
    Crosland, C. A. R.Holman, P.Morgan, Dr. H. B.
    Crossman, R. H. S.Holmes, Horace (Hemsworth)Morley, R.
    Cullen, Mrs. A.Houghton, D.Morris, Percy (Swansea, W.)
    Daines, P.Hoy, J.Morrison, Rt. Hon. H. (Lewtsham, S.)
    Dalton, Rt. Hon. H.Hubbard, T.Mort, D. L.
    Darling, George (Hillsborough)Hudson, James (Ealing, N.)Moyle, A.
    Davies, A. Edward (Stoke, N.)Hughes, Emrys (S. Ayrshire)Mulley, F. W.
    Davies, Harold (Leek)Hughes, Hector (Aberdeen, N.)Murray, J. T.
    Davies, Stephen (Merthyr)Hynd, H. (Accrington)Nally, W.
    de Freitas, GeoffreyHynd, J. B. (Attercliffe)Neal, Harold (Bolsover)
    Deer, G.Irvine, A. J. (Edge Hill)Noel-Baker, Rt. Hon. P.
    Dodds, N. N.Irving, W. J. (Wood Green)O'Brien, T.
    Donnelly, D.Isaacs. Rt. Hon. G. A.Oldfield, W. H.

    Oliver, G. H.Shurmer, P. L. E.Wallace. H. W.
    Orbach, M.Silverman, Julius (Erdington)Walkins, T. E.
    Padley, W. E.Silverman, Sydney (Nelson)Webb, Rt. Hon. M. (Bradford, C.)
    Paget, R. T.Simmons, C. J.Weitzman, D.
    Paling, Rt. Hon. Wilfred (Dearne vally)Slater, J.Wells, Percy (Faversham)
    Paling, Will T. (Dewsbury)Smith, Ellis (Stoke, S.)Wells, William (Walsall)
    Pannell, T. C.Smith, Norman (Nottingham, S.)West, D. G.
    Pargiter, G. A.Sorensen, R. W.Wheatley, Rt. Hn. John (Edinb'gh. E.)
    Parker, J.Soskice, Rt. Hon. Sir FrankWhite, Mrs. Eirene (E. Flint)
    Paton, J.Sparks, J. A.While, Henry (Derbyshire, N. E.)
    Pearson, A.Steele, T.Whiteley, Rt. Hon. W.
    Peart, T. F.Stewart, Michael (Fulham. E.)Wilcock, Group Capt. C. A
    Porter, G.Stokes, Rt. Hon. R. R.Wilkes, L.
    Price, Philips (Gloucestershire, W.)Strachey, Rt. Hon. J.Wilkins, W. A.
    Proctor, W. T.Strauss, Rt. Hon. George (Vauxhall)Willey, Frederick (Sunderland)
    Pryde, D. J.Stross, Dr. BarnettWilley, Octavius (Cleveland)
    Pursey, Cmdr. H.Summerskill, Rt. Hon. EdithWilliams, David (Neath)
    Rankin J.Sylvester, G. O.Williams, Rev. Llywelyn (Abertillery)
    Rees, Mrs. D.Taylor, Bernard (Mansfield)Williams, Ronald (Wigan)
    Reeves, J.Taylor, Robert (Morpeth)Williams, Rt. Hon. Thomas (Don Valley)
    Rent, Thomas (Swindon)Thomas, David (Aberdare)Williams, W. T. (Hammersmith, S.)
    Reid, William (Camlachie)Thomas, George (Cardiff)Wilson, Rt. Hon. Harold (Huyton)
    Rhodes, H.Thomas, Iorwerth (Rhondda, W.)Winterbottom, Ian (Nottingham, C.)
    Richards, R.Thomas, Ivor Owen (Wrekin)Winterbottom, Richard (Brightside)
    Roberts, A.Thorneycroft, Harry (Clayton)Wise, F. J.
    Roberts, Goronwy (Caernarvonshire)Thurtle, ErnestWoodburn, Rt. Hon. A.
    Robertson, J. J. (Berwick)Timmons, J.Wyatt, W. L.
    Robinson, Kenneth (St. Pancras, N.)Tomney, F.Yates, V. F.
    Rogers, George (Kensington, N.)Turner-Samuels, M.Younger, Hon. K.
    Ross, William (Kilmarnock)Ungoed-Thomas A. L.
    Royle, C.Usborne, H.

    TELLERS FOR THE NOES:

    Shawcross, Rt. Hon. Sir HartleyVernon, W. F.Mr. Popplewell and Mr. Delargy.
    Shinwell, Rt. Hon. E.Viant, S. P.

    12.45 a.m.

    I beg to move, in page 10, line 20, at the end to insert:

    "excepting only expenditure on the installation or improvement of plant and equipment for the purification of trade effluents discharged into a public sewer or a stream."
    I should say that, while I agree absolutely with the recent remarks of my right hon. Friend in regard to reporting Progress, as an inexperienced Member of this Committee I should personally have been heart-broken. I understand that this Amendment might have been called 24 hours ago. Had it not been for the stubbornness of the Government in considering the constructive propositions put forward by the Opposition, I should have got this speech, with which I have been so long pregnant, off my chest a very long time ago. To delay that step for another 24 hours or longer would be more than I could bear. The object of the Amendment is in a way similar to that of the last Amendment, in that it is to provide an incentive to industry.

    In this case it is an incentive so to improve trade effluents as to maintain and improve again the purity of our rivers. I am unfortunate that I cannot plead this case with the eloquence of my hon. Friend the Member for Kidderminster (Mr. Nabarro), nor indeed is it so attractive in that it does not promise the same sort of immediate and productive results; but nevertheless I do claim, and I hope I can prove, that it is of great national importance. In fact, if anyone who is interested in this particular subject cares to think for a moment of the effect of two great wars on the state of our rivers, and to think of what the added effect of a further expansion of production may be on these rivers, I think the importance of my Amendment will be appreciated.

    It is perhaps a pity that we are dealing with this Clause, to some extent putting the cart before the horse. That, perhaps, cannot be helped, but at least, from my point of view it would have been far easier to put my arguments in this limited case if the main arguments relating to the Clause had already been put. I can very well imagine that hon. Gentlemen who accept the fact that there should be a suspension of initial allowances may regard it as absurd that I should put forward an Amendment with an apparently insignificant object compared with the other enormous problems which face industry at this time.

    Personally, I do not at all believe that initial allowances should be wholly suspended. I agree that the 40 per cent. allowance has in some small measure encouraged capital extravagance, but only in minor matters. It is true that when we consider capital expenditure having in mind the initial allowance, some of us are apt to show as much irresponsibility in our own affairs as does a woman in a hat shop with the housekeeping money. But these extravagances are only in minor matters. It may be that they require some change in the system, but I am certain that complete suspension is a bad policy.

    In passing, I would say that in the initial allowances we have the one feature of our system of taxation which has, for a purpose, encouraged the purchase of quality goods, whereas other taxes have simply driven us to standards of the cheapest and the nastiest. That is at least one excellent argument which can be applied to the initial allowances. Already there is an acknowledged exception to the Chancellor's Budget intention—ship-building; and if I judge correctly, apart from the false impression given by a Division under present circumstances, it is the feeling of the Committee that fuel economy should also be an exception.

    On a point of order. There are some Members lying down in the Members' Gallery who appear to be in distress. Do they require a doctor?

    Without going further into the general principle of the allowances, I suggest that there should be an allowance, first, for capital investment which can justify itself as having an immediate effect on productivity; secondly, for capital investment which has as its object some means of national economy, as in the case of fuel economy; and thirdly, for capital investment which has within it some point of great national interest, in which category I claim we should regard this question of pure rivers.

    Now may I turn briefly to the detailed points of the Amendment? It is a logical sequel to the Rivers (Prevention of Pollution) Bill, which had its Third Reading in the House as recently as last Thursday; so at least it is topical. Hon. Members are familiar with the arguments which were deployed in favour of the principle of the Bill and there is no need for me to repeat them. [HON. MEMBERS: "Hear, Hear."] I can only hope that hon. Members who say "Hear, Hear" have read the OFFICIAL REPORT, if they did not take part in the debate on the Bill, because the arguments were extremely cogent.

    This Amendment is aimed not only at helping the installation of equipment for anti-pollution work, but also at the improvement of existing equipment. One of the points made in the discussion on the Bill was that although industry was prepared to do its best with the position today, it very much doubted whether it could cope with the great extension which will arise out of the defence programme and with the extra pollution problems attached thereto.

    The second point, which I believe to be very important, is that this Amendment purposely relates to effluents discharged, not only into streams and rivers, but also into public sewers. Under the Public Health (Drainage of Trade Premises) Act, local authorities have a great responsibility for the receipt of these effluents and for their purification, and in discussion on the Rivers (Prevention of Pollution) Bill fears were expressed that grants for the improvement of sewerage schemes of such a size as to cope with the ever-increasing problem would not be forthcoming from the Government.

    While it is the Government's duty to help local authorities with those schemes in so far as the outflow is concerned, this Amendment will greatly ease the burden on local authorities by lessening the problem at the point whether the effluent is received into the sewer. I believe that for that reason alone it will be welcomed by local authorites. It should also be welcomed by the Government as decreasing the demands that are likely to be made on them for grants to help local authorities with their sewerage schemes.

    The other point that came up constantly throughout discussion on the Rivers (Prevention of Pollution) Bill was the cost of anti-pollution measures—the cost today and the cost as it would be in an expanding programme. Those objections were made before the Budget Statement, when initial allowances were still an accepted fact. Now the objections must be greatly increased. There is no question of anti-pollution plant paying for itself, as the Economic Secretary said fuel economy plant would do. Anti-pollution pays for nothing from the point of view of industry. All it provides for is the quality of the water in our rivers below the particular industry for the use of other people.

    This Amendment offers only a mite towards the burden of the cost; really only an encouragement; but if it were accepted it would at least prove that this Committee supports, with good will, the spirit and the purpose of legislation which it has only just passed. It is sometimes thought that the reason for having pure rivers is limited. I know hon. Members may have heard it all before, but this supports the Amendment, and I shall be as brief as I can.

    On a point of order. Are we discussing the Rivers (Prevention of Pollution) Bill or the Finance Bill?

    We are discussing the Amendment on the Order Paper, and the hon. Gentleman is perfectly in order. I have been listening to him very carefully.

    If the hon. Lady had paid me the small compliment of listening to my inexperienced discourse, she would have heard me say that this was a logical sequel to the Rivers (Prevention of Pollution) Bill. I will not keep her from the pleasure of listening to other hon. Members for more than another two or three minutes.

    Pure rivers are wanted, above all, by industry, and that is the important thing. Any one trade or factory has a responsibility to other trades and other factories below its outflow. In the past, industry has done much to destroy the purity of rivers and has subsequently done a great deal to restore it, but not enough. I submit that this Amendment will help to maintain the trend towards restoration. Pure rivers are wanted by water undertakings for the people. I feel sure that would appeal to the hon. Lady. Pure rivers are wanted, too, by people for recreation and amenities. Lastly, and I purposely put it last, pure rivers are wanted by fish. First of all because fish are a criterion of purity, and secondly because there are two million fishermen.

    1.0 a.m.

    The cost of this Amendment would not be large in a technical sense, and it does not make any drain on re-armament. It is an exactly similar point to fuel economy, and I trust that hon. Members on both sides of the Committee, who showed such great interest in this subject in the previous discussion of it—and there are hon. and right hon. Members who can at least adopt an attitude of benevolent neutrality—will help to convince the Chancellor, if he needs convincing, that this concession is one that I put forward with the purest motive, unpolluted by political bias.

    I cannot conceive that anyone can really object to this Amendment. The hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann) drew attention to the fact that there had been a good many arguments heard about the prevention of pollution. I am reminded that on no side of the House was there anything but extreme enthusiasm for that particular case. We passed that Bill on Monday of this week, and I can imagine no better send-off to the river boards in their new task, which is a very heavy task, than that the Chancellor of the Exchequer should show some imagination and give them this concession. It would cost little and has none of the objections that the Economic Secretary made out the previous Amendment had.

    Let me remind the Committee of what he said. He said, with regard to that plant, that he wanted to do anything that damped down demand for products that competed with the re-armament programme. Anyone who knows about the installation of equipment for sewerage works, knows that one can hardly find any activity which competes less with the rearmament programme. Talking in general terms of accepting this suspension of initial allowances, the Economic Secretary made out that there were considerable administrative difficulties. Here, again, there is no administrative difficulty whatever, because the whole of the administration would be done by the river boards which the Government have just taken steps to set up. So that argument is disposed of.

    The third argument used was that if we gave the concessions to certain pieces of plant, there would be jealousy in other directions; there would be great dissatisfaction in other trades and in respect of other machines. But I can assure the Economic Secretary, even if it does not leap to his eye as it should, that there will be no dissatisfaction on the part of people who are offered a reduction of the money they spend on providing the plant to deal with effluents. The people most likely to show dissatisfaction are the people required by the river boards to undertake this work.

    When we were discussing the river boards, we all realise that it must not be a case merely of uniting people to do things they do not necessarily want to do, and on every occasion one need not invoke the law. We all hope—and there is considerable experience to justify the hope—that the whole work of river purification will be carried out largely by co-operation between the people concerned in it. Therefore, it is essential that we should give the maximum amount of financial inducement to people to cooperate with the river boards to undertake to install and improve their plant and equipment for this purpose. It has already been said that this does not pay for itself. There can be no question of that in the short-term view. Of course, in the long-term view one might say that any worth-while improvement pays for itself, but in that respect this matter cannot be placed in the same category as the fuel economisers.

    The acceptance of this Amendment would not make any call on the mechanical engineering industry. It would fall almost entirely on civil engineering. For these reasons—and I do not wish to develop the argument at any greater length—it is quite clear that this particular form of plant has a greater and unique claim compared with any other category of plant that can be named. It will help this new crusade we are undertaking for the purification of rivers, and by showing good will, benevolence and a little imagination—a quality of which I am sorry to say the Chancellor has shown himself to be completely destitute—these new boards can be given a good send-off in a task which received the unanimous approval of the House last Monday.

    The hon. Gentleman who moved this Amendment said that it was similar to the last one. I think I need not weary the Committee by going over all the arguments I used on that occasion, but the mere fact that he has said that it is similar proves one of my main points against the last Amendment. If, let us suppose, the last Amendment had been accepted, the hon. Gentleman would at once have used that acceptance in favour of our acceptance of this Amendment.

    The hon. Gentleman made that perfectly plain. He said that it was of the same kind, but the right hon. Member for Aldershot (Mr. Lyttelton) said on the last Amendment that we could accept it without commitment on anything else. It is, however, quite clear that already we are in the process where Members are trying to build one case on the other, and I have no doubt that when we come to other Amendments we shall see the same effect. It looks as if hon. Gentlemen opposite are trying to achieve their purpose on the side, instead of making it explicit that they want to avoid the suspension of initial allowances.

    Is not the truth of the matter that any one of us could make out a very good case for any one of our enthusiasms? This particular matter happens to be one of my enthusiasms. I made a number of speeches in the last Parliament on river pollution. I had a great deal to do with what I might term the incubation of the Rivers (Prevention of Pollution) Bill, because I was concerned with it when Parliamentary Secretary to the Ministry of Health. There is nothing I would rather see than our rivers free from pollution. I said once that there was a time when the difficulty was to catch the fish, and now the difficulty was to find the fish to catch. It is, of course, one of the blots on our rural life, and to some extent on our urban life, that our rivers are so badly polluted.

    We can all find things of this kind which we are keen about. The truth is that we cannot adopt the principle of saying "Let us wait until we have done everything else we want to do before we give really serious consideration to the defence programme." If we were to take the word of the hon. Member for Burton (Mr. Colegate), we would have more civil engineering people engaged in this work; but it would be difficult to find an industry which is more pressed, and is going to be more hardly pressed, because of the defence programme.

    In these circumstances it would be the height of folly to do anything which encouraged a greater use of these resources, which is what the hon. Gentleman is asking for. In circumstances in which our first and real endeavours must be devoted to the defence programme, we must not do anything which diverts resources from that programme; and we must not take too narrow a view of what resources are. In this case they include manpower. Although we might be keen to see more of this work done, we should be doing a great disservice if at present we asked for more of it to be done.

    I agree with what both hon. Members have said, that the sooner we can get to the day when we can turn our attention to these matters in the way we would like, the better; but in present circumstances we cannot do everything at once. We cannot do all these good things about which we are agreed and yet carry on the defence programme to which I think we are all committed. For these reasons, together with those which I gave on the last Amendment, I must ask the Committee to reject this Amendment.

    I was much disappointed to hear the Economic Secretary, who has such deep sympathy with the object of this Amendment, reject it in so few words. While it is true that all of us are here to support re-armament, I was unconvinced by his argument that the additional civil engineering which might result from the implementation of this Amendment would draw away a noticeable quantity of manpower from re-armament industries. If we are to put into effect the Bill we sent to another place a few days ago, industry will be involved in the expenditure of large sums of money. If industry is to spend these large sums, and the law lays upon it the obligation to do so, these initial allowances will be very necessary.

    The best information I can get is that in a very large range of manufacturing industries—chemicals and textiles, dyeing and printing, steel—about 10 per cent. of the total capital cost at present replacement rates will have to be spent on the treatment of effluent and the necessary sewers to carry it away. On a factory costing about £3 million, a sum of £300,000 will have to be spent on the equipment necessary to treat effluent. Similarly, with a textile finishing concern going up now at a cost of £450,000, the effluent treatment will cost £50,000. If industry is to be called upon to spend these sums, and implement the Bill we passed so recently, it is only fair and reasonable that it should have some assistance by being allowed to continue these initial allowances.

    1.15 a.m.

    I was surprised to hear the Economic Secretary sweep aside this Amendment with a far too elementary argument, drawing his deductions from the previous Amendment. In the light of the figures I have put before the House and the recent passing of the Bill to prevent river pollution, I ask the Economic Secretary to reconsider his decision and the Committee to agree to this Amendment.

    I would not have spoken but for the extraordinary argument made by the Economic Secretary. I understood him to say that the Government do not wish to encourage by any means the erection of purification plants.

    I do not think that anything I said could in any way be interpreted to mean that. I was trying to refute the arguments that had been advanced for more and more of this work to be done now. We cannot afford to do more and more of this work with the defence programme upon us. We should have competition in the civil engineering industry which would make it difficult for the defence programme to be carried out.

    That is a very different paraphrase of what the hon. Gentleman said; but if there is any difference, I gladly withdraw what I said. What have the Government done? Within the last six months they have made it a statutory offence for any industry to put effluent into a river without treating it. At the time they brought in that Bill there was a 40 per cent. initial allowance. While the Bill was passing through the House, the Chancellor, no doubt for a very good reason—perhaps for a bad one—withdrew the initial allowance. Either the Government should withdraw or postpone the Rivers (Prevention of Pollution) Bill or the Chancellor should accept this Amendment.

    The Economic Secretary told us earlier that he was present at the incubation of that Bill. I cannot congratulate him on the success of his incubating efforts, because when it was brought to the House hon. Members found it completely unworkable and it had to be altered so that it would do what was intended. I think that, in view of the attitude he has taken and the attitude the Chancellor has taken, the Chancellor ought to consider whether he should not postpone the obligation which that Bill places on industry or accept this Amendment. If an enterprise does not carry out this obligation, it is liable to heavy financial penalties, and in cases of repeated failure to observe the conditions of the Bill, there is a sentence of imprisonment. I think it is a matter of grave regret that the Economic Secretary addressed such an argument to the Committee.

    The main argument of the Economic Secretary was that we should not do anything to hinder the re-armament programme. I suggest to him that one of the most important things that can be done to further the security and safety of this country is to set up plant to stop the pollution of rivers. We know that at the present moment a considerable amount of raw materials do pass into rivers, and it is of the utmost importance that these raw materials should be conserved wherever possible. Sulphuric acid is but one of those materials, and I should have thought that it was of the utmost importance that every encouragement should be given to firms to get on as rapidly as possible with the installation of this type of equipment, for in doing so they would conserve raw materials, which in case of war or national emergency would be urgently needed.

    I make this plea—will not the hon. Gentleman look at this matter again to see whether he can discover the value, which I believe to be considerable, of raw materials which ought to be saved by the installation of this plant? If my arguments are sound, as I believe them to be. I think I have put forward something which might make the hon. Gentleman reconsider his attitude. I hope he will consider the point I have made and in doing so find that he has full reason to change his mind.

    In view of the fact that the main discussion on this matter is evidently to be postponed until we have taken the Amendments, I propose to reserve my argument for the main debate. On this particular Amendment, I wish to indicate that we have here a typical example of Government planning. They deliberately included in the Gracious Speech as the chief piece of legislation the matter of river pollution, and obviously they intended that Bill, which has passed through this House, to have priority, otherwise there was no need to mention it in the Gracious Speech.

    In view of the speech of my hon. Friend the Member for Thirsk and Malton (Mr. Turton) and also because the hon. Gentleman the Economic Secretary says he has a special interest in the subject, we shall take the matter to a Division, because we consider that it should be pressed in that way because of the priority the Government have given to the matter.

    In endorsing what my right hon. Friend has said, may I add one word? I think that all hon. Members were concerned in the debate on the Rivers (Prevention of Pollution) Bill were impressed by the way it was treated on a completely non-party basis. Hon. Gentlemen on all sides were dealing with the matter absolutely objectively, and it is rather disappointing to find that no one from the other side, except the Economic Secretary, has expressed any view about it now.

    I think all of us can say that what the Economic Secretary has said is in conflict with what the Minister of Local Government and Planning had to say during the passage of that Bill. The right hon. Gentleman certainly gave an indication that he was in favour of the earliest possible action being taken to prevent river pollution. I do not think we should forget what the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) said, when he intervened during the Report stage. He remarked:
    "Just because the factory is man-made and the river God-made, it does not follow that man ought to be in front of God there."—[OFFICIAL REPORT, 31st May, 1951; Vol. 488, c. 473.]
    The right hon. Gentleman placed it on a high theological plane, but the Economic Secretary has brought us down to earth and drowned us in a polluted river. He has certainly brought us back to more mundane matters and it was unfair of him to compare the Amendment of my hon. Friend with the one which preceded it. I think there is something rather more important, and perhaps more eternal, wrapped up in this Amendment than there was in the preceding one. I am one of those people who believe that one of the greatest sins we can commit is to do something ugly, something which destroys natural beauty. I think that all the hon. Members who took part in the debate on the Rivers (Prevention of Pollution) Bill would agree about that.

    The Minister of Local Government and Planning said that his right hon. Friend the Member for Ebbw Vale was the father of the Bill, and added that he thoroughly agreed with what his right hon. Friend had said. What the Economic Secretary has said tonight shows that he certainly does not agree with what the Minister of Local Government and Planning said throughout the proceedings on that Bill, which was that he wanted every step to be taken that could be taken to stop river pollution as early as possible.

    The hon. Gentleman tonight has laid some emphasis on the fact that we do not want to interrupt our defence programme. Of course, we do not; but will he bear in mind one important point, that there are some aspects of defence and preparation for defence which are particularly injurious to rivers. Not the least of those is the manufacture of explosives, because there is nothing which is more harmful to a river than TNT if the effluent is not properly controlled. Its manufacture has presented great problems in the past, and it is highly possible that there will be an increase in the manufacture of such materials.

    If we have new factories starting up, shall we deliberately encourage them, by the refusal of this Amendment, to start operations with no proper equipment for the prevention of pollution? If so, it is a very different story we are being told tonight from what the Minister of Local Government and Planning had to say. It is another example of the complete and utter lack of liaison between any of the Government Departments. What the hon. Gentleman has said tonight is a crying scandal. It has dashed the hopes of hon. Members on all sides of the Committee, and I certainly hope that some of them who spoke so forcibly in favour of the Rivers (Prevention of Pollution) Bill will join us in the Lobby.

    With the main argument of the Economic Secretary I personally find myself in agreement; that is, that owing to the rearmament programme, however desirable it may be to install this equipment, we may have to postpone it. But I did hope that we could have some remark from the Government Front Bench on this point, which struck me, as it struck the hon. Member for Thirsk and Malton (Mr. Turton), and the right hon. Member for Saffron Walden (Mr. R. A. Butler).

    There may be certain statutory obligations on companies to install this machinery with which they have to comply and on which they may now find their initial allowances removed; but that is inevitable when there is a Bill for the purpose of compelling the installation of this machinery. On the other hand, there is the valid argument that this installation ought to be postponed because it interferes with the re-armament programme. I think, therefore, that the Front Bench ought to indicate that they will take this point into consideration, and that either some instructions will be given on this matter to public authorities and others who may become liable to install that machinery under the Rivers (Prevention of Pollution) Bill, or, as suggested by the hon. Member for Thirsk and Malton, some Amendment to the Bill ought to be introduced.

    I want to add a word to what my hon. Friend the Member for Thirsk and Malton (Mr. Turton) and my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) have said. It may have escaped the notice of the Minister that, in addition to the Rivers (Prevention of Pollution) Bill for England, there is a similar Bill for Scotland, put forward by his right hon. Friend the Secretary of State for Scotland. The right hon. Gentleman put his Bill forward in forcible terms, explaining how urgently necessary it was that the rivers of Scotland should be freed from this pollution to the greatest possible extent. One of the inducements held out was that plant installed for the purpose would carry the benefit of this initial allowance.

    1.30 a.m.

    Has the hon. Gentleman or the Chancellor of the Exchequer consulted with the Secretary of State for Scotland about these statements which have been made on behalf of Scotland? I doubt it very much, because I am quite convinced that the Secretary of State for Scotland is seldom consulted or considered in anything. If we are to have two Bills going through the House, both of which carry implied guarantees, more or less, of these initial allowances being made, why are we now told that they are all washed out?

    The Economic Secretary said, if I understood him correctly, that we on this side seemed to think that re-armament was not necessary, or that we had tried to hinder it. But why is it so much more urgent, and so vastly more costly, today? Because the Government did not take our warnings and start it three years earlier.

    I do not propose to answer all the questions, but I say this again, referring to this Government—and it is this Government with which we are concerned—that if they had taken our advice, the position would have been very different.

    The hon. and gallant Member belonged to the silent Service, and it is no use his pointing at me and making remarks. I did not belong to a Service which professed to be silent, but he did, and he should be quiet. If the Government had taken our advice on re-armament, it would not have been so urgent or so costly as today. When the Minister says this is because of urgent re-armament, it is not for hon. Members opposite to point an accusing finger at us. We were going to have all this a great deal earlier, and not, if I may so describe it, by the easy instalment system.—[An HON. MEMBER: "What about Korea?"]—The Korean conflict did not happen yesterday.

    The hon. Member is wrong. They were being polluted yesterday just as much as today, and we want this machinery so that we may improve the state of our rivers which are polluted.

    I cannot repeat what I have said, but I hope that those who interrupt me will have a word with the Government on the subject we are debating at the moment, because I have an uncomfortable feeling that they are left out of the consideration; and I think that includes the Secretary of State for Scotland. As I have said, there is an implied guarantee in this matter which seems to have been deliberately washed out by the Chancellor in his action in producing this Clause on initial allowances, and I hope that we shall go into the Lobby against it.

    I shall not detain the Committee for more than a minute, but while all these speeches have been going on I have turned over in my mind this thought. Why are the Government so persistent in their attitude of refusing to accept any Amendment we have proposed this evening? I have come to the conclusion that this can only be an indication that the Government have lost their grip on affairs. It seems to me that a decision must have been taken that in no circumstances, in case they got themselves into further difficulties, must they make any concession, however valid might be the arguments put forward. If the hon. Gentleman had come to the Committee and been prepared to consider each case on its merits—

    We are considering one case at the moment.

    I was only discussing why this particular Amendment had been refused. All I want to say is that presumably the hon. Gentleman had decided that in no circumstances, and no matter how valid the arguments advanced were, would he agree to any suggestions in case he got into future difficulties. The Government are losing their grip on affairs, and instead of being a "Oui, oui" Government they are a "non, non" Government.

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

    The Committee divided: Ayes, 278; Noes, 297.

    Division No. 93.]

    AYES

    [1.36 a.m.

    Aitken, W. T.Fraser, Hon. Hugh (Stone)MacLeod, John (Ross and Cromarty)
    Alport, C. J. M.Fraser, Sir Ian (Morecambe & Lonsdale)Macmillan, Rt. Hon. Harold (Bromley)
    Amery, Julian (Preston, N.)Fyfe, Rt. Hon. Sir David MaxwellMacPherson, Major Niall (Dumfries)
    Amory, Heathcoat (Tiverton)Gage, C. H.Maitland, Cmdr. J. W.
    Arbuthnot, JohnGalbraith, Cmdr. T. D. (Pollok)Manningham-Buller, R. E.
    Ashton, H. (Chelmsford)Galbraith, T. G. D. (Hillhead)Marlowe, A. A. H.
    Assheton, Rt. Hon. R. (Blackburn W.)Garner-Evans, E. H. (Denbigh)Marples, A. E.
    Astor, Hon. M. L.Gates, Maj. E. E.Marshall, Douglas (Bodmin)
    Baker, P. A. D.Glyn, Sir RalphMarshall, Sidney (Sutton)
    Baldock, Lt.-Cmdr. J. M.Gomme-Duncan, Col. A.Maude, Angus (Ealing, S.)
    Baldwin, A. E.Gridley, Sir ArnoldMaude, John (Exeter)
    Banks, Col. C.Grimston, Hon. John (St. Albans)Maudling, R.
    Baxter, A. B.Grimston, Robert (Westbury)Medlicott, Brig. F.
    Beamish, Major TuftonHarden, J. R. E.Mellor, Sir John
    Bell, R. M.Hare, Hon. J. H. (Woodbridge)Molson, A. H. E.
    Bennett, Sir Peter (Edgbaston)Harris, Frederic (Croydon, N.)Monckton, Sir Walter
    Bennett, Dr. Reginald (Gosport)Harris, Reader (Heston)Moore, Lt.-Col. Sir Thomas.
    Bennett, William (Woodside)Harvey, Air Cdre. A. V. (Macclesfield)Morrison, John (Salisbury)
    Morrison, Rt. Hon. W. S. (Cirencester)
    Bevins, J. R. (Liverpool, Toxteth)Harvey, Ian (Harrow, E.)Mott-Radclyffe, C. E.
    Birch, NigelHarvie-Watt, Sir GeorgeNabarro, G.
    Bishop, F. P.Hay, JohnNicholls, Harmar
    Black, C. W.Head, Brig. A. H.Nicholson, G.
    Boles, Lt.-Col. D. C. (Wells)Headlam, Lieut.-Col. Rt. Hon. Sir C.Nield, Basil (Chester)
    Boothby, R.Heald, LionelNoble, Cmdr. A. H. P.
    Bossom, A. C.Heath, EdwardNugent, G. R. H.
    Boyd-Carpenter, J. P.Henderson, John (Cathcart)Nutting, Anthony
    Boyle, Sir EdwardHicks-Beach, Maj. W. W.Oakshott, H. D.
    Bracken, Rt. Hon. B.Higgs, J. M. C.Odey, G. W.
    Braine, B. R.Hill, Mrs. E. (Wythenshawe)O'Neill, Rt. Hon. Sir Hugh
    Braithwaite, Sir Albert (Harrow, W.)Hill, Dr Charles (Luton)Ormsby-Gore, Hon. W. D.
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Hinchingbrooke, ViscountOrr, Capt. L. P. S.
    Bromley-Davenport, Lt.-Col. W.Hirst, GeoffreyOrr-Ewing, Charles Ian (Hendon, N.)
    Brooke, Henry (Hampstead)Holmes, Sir Stanley (Harwich)Orr-Ewing, Ian L. (Weston-super-Mare)
    Browne, Jack (Govan)Hope, Lord JohnOsborne, C.
    Buchan-Hepburn. P. G. T.Hopkinson, HenryPeake, Rt. Hon. O.
    Bullock, Capt. M.Hornsby-Smith, Miss. P.Perkins, W. R. D.
    Bullus, Wing Commander E. E.Horsbrugh, Rt. Hon. FlorencePeto, Brig. C. H. M.
    Burden, Squadron Leader F. A.Howard, Gerald (Cambridgeshire)Pickthorn, K.
    Butcher, H. W.Howard, Greville (St. Ives)Pitman. I. J.
    Butler, Rt. Hon. R. A. (Saffron Walden)Hudson, Sir Austin (Lewisham, N.)Powell, J. Enoch
    Carr, Robert (Mitcham)Hudson, Rt. Hon. Robert (Southport)Price, Henry (Lewisham, W.)
    Carson, Hon. E.Hudson, W. R. A. (Hull, N.)Prior-Palmer, Brig. O.
    Channon, H.Hutchinson, Geoffrey (Ilford, N.)Profumo, J. D.
    Churchill, Rt. Hon. W. S.Hutchison, Lt.-Com. Clark (E'b'rgh W.)Raikes, H. V.
    Clarke, Col. Ralph (East Grinstead)Hutchison, Col. James (Glasgow)Rayner, Brig. R.
    Clarke, Brig. Terence (Portsmouth, W.)Hyde, Lt.-Col. H. M.Redmayne, M.
    Colegate, A.Hylton-Foster, H. B.Remnant, Hon. P.
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Jennings, R.Renton, D. L. M.
    Cooper-Key, E. M.Johnson, Howard (Kemptown)Roberts, Major Peter (Heeley)
    Corbett, Lt.-Col. Uvedale (Ludlow)Jones, A. (Hall Green)Robertson, Sir David (Caithness)
    Craddock, Beresford (Spelthorne)Joynson-Hicks, Hon. L. W.Robinson, Roland (Blackpool, S.)
    Cranborne, ViscountKaberry, D.Robson-Brown, W.
    Crookshank, Capt. Rt. Hon. H. F. C.Kerr, H. W. (Cambridge)Rodgers, John (Sevenoaks)
    Crosthwaite-Eyre, Col. O. E.Kingsmill, Lt.-Col. W. H.Roper, Sir Harold
    Crouch, R. F.Lambert, Hon. G.Ropner, Col. L.
    Crowder, Capt. John (Finchley)Lancaster, Col. C. G.Russell, R. S.
    Crowder, Petre (Ruislip—Northwood)Langford-Holt, J.Ryder, Capt. R. E. D.
    Cundiff, F. W.Law, Rt. Hon. R. K.Salter, Rt. Hon. Sir Arthur
    Cuthbert, W. N.Leather, E. H. C.Scott, Donald
    Darling, Sir William (Edinburgh, S.)Legge-Bourke, Maj. E. A. H.Shepherd, William
    Davidson, ViscountessLennox-Boyd, A. T.Smiles, Lt.-Col. Sir Walter
    Davies, Nigel (Epping)Lindsay, MartinSmithers, Peter (Winchester)
    de Chair, SomersetLinstead, H. N.Smyth, Brig. J. G. (Norwood)
    De la Bère, R.Llewellyn, D.Snadden, W. McN
    Deedes, W, F.Lloyd, Rt. Hn. Geoffrey (King's Norton)Soames, Capt. C.
    Digby, S. W.Lloyd, Maj. Guy (Renfrew, E.)Spearman, A. C. M.
    Dodds-Parker, A. D.Lloyd, Selwyn (Wirral)Spence, H. R. (Aberdeenshire, W.)
    Donner, P. W.Lockwood, Lt.-Col. J. C.Spens, Sir Patrick (Kensington, S.)
    Douglas-Hamilton, Lord MalcolmLongden, Gilbert (Herts, S. W.)Stanley, Capt. Hon. Richard (N. Fylde)
    Drayson, G. B.Low, A. R. W.Stevens, G. P.
    Dugdale, Maj. Sir Thomas (Richmond)Lucas, Sir Jocelyn (Portsmouth, S.)Steward, W. A. (Woolwich, W.)
    Duncan, Capt. J. A. L.Lucas, P. B. (Brentford)Stewart, Henderson (Fife, E.)
    Dunglass, LordLucas-Tooth, Sir HughStoddart-Scott, Cot M.
    Duthie, W. S.Lyttelton, Rt. Hon. O.Storey, S.
    Eccles, D. M.McCorquodale, Rt. Hon. M. S.Strauss, Henry (Norwich S.)
    Eden, Rt. Hon. A.Macdonald, Sir Peter (I. of Wight)Stuart, Rt. Hon. James (Moray)
    Elliot, Rt. Hon. W. E.Mackeson, Brig. H. R.Studholme, H. G.
    Erroll, F. J.McKibbin, A.Summers, G. S.
    Fisher, NigelMcKie, J. H. (Galloway)Sutcliffe, H.
    Fletcher, Walter (Bury)Maclay, Hon. JohnTaylor, Charles (Eastbourne)
    Fort, R.Maclean, FitzroyTaylor, William (Bradford, N.)
    Foster, JohnMacLeod Iain (Enfield, W.)Teeling, W.

    Teevan, T. L.Vane, W. M. F.Williams, Charles (Torquay)
    Thomas, J. P. L. (Hereford)Vaughan-Morgan, J. K.Wakefield, Sir Wavell (Marylebone)
    Thompson, Kenneth Pugh (Walton)Wakefield, Edward (Derbyshire, W.)Williams, Gerald (Tonbridge)
    Thompson, R. H. M. (Croydon, W.)Walker-Smith, D. C.Williams, Sir Herbert (Croydon E.)
    Thorneycroft, Peter (Monmouth)Ward, Hon. George (Worcester)Wills, G.
    Thornton-Kemsley, Col. C. N.Ward, Miss. I. (Tynemouth)Wilson, Geoffrey (Truro)
    Thorp, Brig. R. A. F.Waterhouse, Capt. Rt. Hon. C.Winterton, Rt. Hon. Earl
    Tilney, JohnWatkinson, H.Wood, Hon. R.
    Turner, H. F. L.Webbe, Sir H. (London)York, C.
    Turton, R. H.Wheatley, Major M. J. (Poole)

    TELLERS FOR THE AYES:

    Tweedsmuir, LadyWhite, Baker (Canterbury)Major Conant and Mr. Vosper.

    NOES

    Acland, Sir RichardEde, Rt. Hon. J. C.Jones, David (Hartlepool)
    Adams, RichardEdelman, M.Jones, Frederick Elwyn (West Ham, S.)
    Albu, A. H.Edwards, John (Brighouse)Jones, Jack (Rotherham)
    Allen, Arthur (Bosworth)Edwards, Rt. Hon. Ness (Caerphilly)Jones, William Elwyn (Conway)
    Allen, Scholefield (Crewe)Edwards, W. J. (Stepney)Keenan, W.
    Anderson, Alexander (Motherwell)Evans, Albert (Islington, S. W.)Kenyon, C.
    Anderson, Frank (Whitehaven)Evans, Edward (Lowestoft)Key, Rt. Hon. C. W.
    Attlee, Rt. Hon. C. R.Evans, Stanley (Wednesbury)King, Dr. H. M.
    Awbery, S. S.Ewart, R.Kinghorn, Sqn. Ldr E.
    Ayles, W. H.Fernyhough, E.Kinley, J.
    Bacon, Miss. AliceField, Capt. W. J.Lang, Gordon
    Baird, J.Finch, H. J.Lee, Frederick (Newton)
    Balfour, A.Fletcher, Eric (Islington, E.)Lee, Miss. Jennie (Cannock)
    Barnes, Rt. Hon. A. J.Follick, M.Lever, Leslie (Ardwick)
    Hartley, P.Foot, M. M.Lewis, Arthur (West Ham, N.)
    Bellenger, Rt. Hon. F. J.Forman, J. C.Lewis, John (Bolton, W.)
    Benn, WedgwoodFraser, Thomas (Hamilton)Lindgren, G. S.
    Benson, G.Freeman, John (Watford)Lipton, Lt.-Col. M.
    Beswick, F.Freeman, Peter (Newport)Logan, D. G.
    Bevan, Rt. Hon. A. (Ebbw Vale)Gaitskell, Rt. Hon. H. T. N.Longden, Fred (Small Heath)
    Bing, G. H. C.Ganley, Mrs. C. S.McAllister, G.
    Blenkinsop. A.Gibson, C. W.MacColl, J. E.
    Blyton, W. R.Gilzean, A.Macdonald, A. J. F. (Roxburgh)
    Boardman, H.Glanville, James (Consett)McGhee, H. G.
    Booth, A.Gooch, E. G.McInnes, J.
    Bottomley, A. G.Gordon-Walker, Rt. Hon. P. C.Mack, J. D.
    Bowden, H. W.Greenwood, Anthony (Rossendale)McKay, John (Wallsend)
    Bowen, E. R. (Cardigan)Greenwood, Rt. Hon. Arthur (Wakefield)Mackay, R. W. G. (Reading, N.)
    Bowles, F. G. (Nuneaton)Grenfell, D. R.McLeavy, F.
    Braddock, Mrs. ElizabethGrey, C. F.MacMillan, Malcolm (Western Isles)
    Brook, Dryden (Halifax)Griffiths, David (Rother Valley)McNeil, Rt. Hon. H.
    Brooks, T. J. (Normanton)Griffiths, Rt. Hon. James (Llanelly)MacPherson, Malcolm (Stirling)
    Broughton, Dr. A. D. D.Griffiths, William (Exchange)Mainwaring, W. H.
    Brown, Rt. Hon. George (Belper)Grimond, J.Mallalieu, E. L. (Brigg)
    Brown, Thomas (Ince)Gunter, R. J.Mallalieu, J. P. W. (Huddersfield, E.)
    Burke, W. A.Hale, Joseph (Rochdale)Mann, Mrs. Jean
    Burton, Miss. E.Hale, Leslie (Oldham, W.)Manuel, A. C.
    Marquand, Rt. Hon. H. A.
    Butler, Herbert (Hackney, S.)Hall, John (Gateshead, W.)Mathers, Rt. Hon. G.
    Callaghan, L. J.Hall, Rt. Hon. Glenvil (Colne Valley)Mellish, R. J.
    Carmichael, J.Hamilton, W. W.Messer, F.
    Castle, Mrs. B. A.Hannan, W.Middleton, Mrs. L.
    Champion, A. J.Hardman, D. R.Mikardo, Ian
    Chetwynd, G. R.Hardy, E. A.Mitchison, G. R.
    Clunie, J.Hargreaves, A.Moeran, E. W.
    Cocks, F. S.Hastings, S.Monslow, W.
    Coldrick, W.Hayman, F. H.Moody, A, S.
    Cook, T. F.Henderson, Rt. Hon. A. (Rowley Regis)Morgan, Dr. H. B.
    Cooper, Geoffrey (Middlesbrough, W.)Herbison, Miss. M.Morris, Percy (Swansea, W.)
    Cooper, John (Deptford)Hewitson, Capt. M.Morrison, Rt. Hon. H. (Lewisham S.)
    Corbet, Mrs. Freda (Peckham)Hobson, C. R.Moyle, A.
    Cove, W. G.Holman, P.Mulley, F. W.
    Craddock, George (Bradford, S.)Holmes, Horace (Hemsworth)Murray, J. T.
    Crawley, A.Houghton, D.Nally, W.
    Crosland, C. A. R.Hoy, J.Neal, Harold (Bolsover)
    Crossman, R. H. S.Hubbard, T.Noel-Baker, Rt. Hon. P. J.
    Cullen, Mrs. A.Hudson, James (Eating, N.)O'Brien, T.
    Daines, P.Hughes, Emrys (S. Ayrshire)Oldfield, W. H.
    Dalton, Rt. Hon. H.Hughes, Hector (Aberdeen, N.)Oliver, G. H.
    Darling, George (Hillsborough)Hynd, H. (Accrington)Orbach, M.
    Davies, A. Edward (Stoke, N.)Hynd, J. B. (Attercliffe)Padley, W. E.
    Davies, Harold (Leek)Irvine, A. J. (Edge Hill)Paget, R. T.
    Davies, Stephen (Merthyr)Irving, W. J. (Wood Green)Paling, Rt. Hon. Wilfred (Dearne Vaily)
    de Freitas, GeoffreyIsaacs, Rt. Hon. G. A.Paling, Will T. (Dewsbury)
    Deer, G.Janner, B.Pannell, T. C.
    Delargy, H. J.Jay, D. P. T.Pargiter, G. A.
    Dodds, N. N.Jeger, George (Goole)Parker, J.
    Donnelly, D.Jeger, Dr. Santo (St. Pancras, S.)Paton, J.
    Driberg, T. E. N.Jenkins, R. H.Pearl, T. F.
    Dugdale, Rt. Hon. John (W. Bromwich)Johnson, James (Rugby)Popplewell, E.
    Dye, S.Johnston, Douglas (Paisley)Porter, G.

    Price, Philips (Gloucestershire, W.)Soskice, Rt. Hon. Sir FrankWeitzman, D.
    Proctor, W. T.Sparks, J. A.Wells, Percy (Faversham)
    Pryde, D. J.Steele, T.Wells, William (Walsall)
    Pursey, Cmdr. H.Stewart, Michael (Fulham, E.)West, D. G.
    Rankin, J.Stokes, Rt. Hon. R. R.Wheatley, Rt. Hn. John (Edinb'gn E.)
    Rees, Mrs. D.Strachey, Rt. Hon. J.White, Mrs. Eirene (E. Flint)
    Reeves, J.Strauss, Rt. Hon. George (Vauxhall)White, Henry (Derbyshire, N. E.)
    Reid, Thomas (Swindon)Stross, Dr. BarnettWhiteley, Rt. Hon. W.
    Reid, William (Camlachie)Summerskill, Rt. Hon. EdithWilcock, Group Capt. C. A. B.
    Rhodes, H.Sylvester, G. O.Wilkes, L.
    Richards, R.Taylor, Bernard (Mansfield)Wilkins, W. A.
    Roberts, A.Taylor, Robert (Morpeth)Willey, Frederick (Sunderland)
    Roberts, Emrys (Merioneth)Thomas, David (Aberdare)Willey, Octavius (Cleveland)
    Roberts, Goronwy (Caernarvonshire)Thomas, George (Cardiff)Williams, David (Neath)
    Robertson, J. J. (Berwick)Thomas, Iorwerth (Rhondda, W.)Williams, Rev. Llywelyn (Abertillery)
    Robinson, Kenneth (St. Pancras, N.)Thomas, Ivor Owen (Wrekin)Williams, Ronald (Wigan)
    Rogers, George (Kensington, N.)Thorneycroft, Harry (Clayton)Williams, Rt. Hon. Thomas (Don Valley)
    Ross, William (Kilmarnock)Thurtle, ErnestWilliams, W. T. (Hammersmith, S.)
    Royle, C.Timmons, J.Wilson, Rt. Hon. Harold (Huyton)
    Shawcross, Rt. Hon. Sir HartleyTomney, F.Winterbottom, Ian (Nottingham, C.)
    Shinwell, Rt. Hon. E.Turner-Samuels, M.Winterbottom, Richard (Brightside)
    Shurmer, P. L. E.Ungoed-Thomas A. L.Wise, F. J.
    Silverman, Julius (Erdington)Usborne, H.Woodburn, Rt. Hon. A.
    Silverman, Sydney (Nelson)Vernon, W. F.Wyatt, W. L.
    Simmons, C. J.Viant, S. P.Yates, V. F.
    Slater, J.Wade, D. W.Younger, Hon. R.
    Smith, Ellis (Stoke, S.)Wallace, H. W.
    Smith, Norman (Nottingham S.)Watkins, T. E.

    TELLERS FOR THE NOES:

    Sorensen, R. W.Webb, Rt. Hon. M. (Bradford. O.)Mr. Pearson and Mr. Collindridge.

    1.45 a.m.

    I beg to move, in page 10, line 20, at the end, to insert:

    "except that when machinery is required for new processes of manufacture or packaging in industry an initial allowance of one-fifth shall be retained."
    I believe that this Amendment is totally different from the two Amendments which have preceded it and I hope, therefore, that it will meet a happier fate. It deals with a matter which is important to the whole of our national life and I trust that it will receive support from both sides of the Committee.

    I am fully aware of the vital need for the Government to gear the machine tool industry and the general engineering industry of the country to the re-armament drive so that we get full production of the necessary equipment, but we must remember that if we are to maintain our standards of living and prevent economic collapse, we, more than any other country in the world, must see that our efficiency in production becomes even greater so that we can always maintain and develop export from this country—and it is by exports that we live.

    That can be done only if we are prepared to encourage all our manufacturers to continue to improve their production methods and the way they package their goods so that they are more saleable in world markets. If we do not give manufacturers financial encouragement to continue improving their methods, they are likely to retain in practice many of the older machines which have long ceased to be satisfactory in competing with more efficient machines of other countries.

    At the end of the war, because of our far greater mobilisation per man in the war effort than any of the allied countries—and I do not mean this in any disparaging way of America—we found that America had captured most of the world's markets. This was due to her great wealth, her enormous manpower and perhaps to the fact that she came into the total war later than we did. During the war she had been able to develop research and improved manufacturing methods in all types of industry which gave her a considerable lead in export markets at the end of the war. This country and many of its industries have made tremendous and very gallant strides to recover that lost place, and they have succeeded, but I do not wish to see them fall into that difficulty again, either during or at the end of this rearmament drive. I believe that we can prevent it if the Chancellor will give some financial encouragement to all industries to keep on improving their processes by the introduction of new methods, and I feel that they must have some financial inducement and assistance to do so.

    We can only pay for our re-armament drive and for our ever-increasing standard of living if our efficiency is greater than that of any other country in the world so that we produce better goods, and produce them more cheaply, and thus maintain the largest export trade in the world. That can be done only by a continual improvement in industry, with better and better machines. I realise that it is necessary for the Treasury to secure the maximum revenue by deflecting capital investment into the re-armament drive, but I believe that the small amount that I suggest should be put aside for encouraging this development in machinery would not be felt by the Government in their re-armament drive, and yet it would give a tremendous impetus to improving industry generally.

    I wish to make my remarks very brief indeed, because I think the point is obvious to all hon. Members, and because others may wish to speak on this vitally important matter. I hope the Chancellor will give an assurance that he will give careful consideration to this proposal between now and the Report stage.

    This Amendment warrants the consideration of all hon. Members because it is vitally important that all companies concerned in manufacturing and handling finished goods today for sale, both in this country and abroad, should be given every inducement to install new machinery to assist them. At present we are in many respects still quite a long way behind, in competing with the United States in particular, in the packaging of many of our goods that we sell in competition abroad, and we are in many ways behind in the presentation and appearance of the finished article.

    That can be overcome only by the installation of more modern and up-to-date machinery, and can only be put into effect, particularly by small concerns, if some financial inducement is given to the companies concerned. This Amendment is extremely well designed because, although it might rightly be said that in the difficulties of the moment it is not fully justifiable for our own home trade at present, it is essential to remember that if we are to be competitive in our overseas markets we must have machinery which will enable us to have the length of runs in our production to make that possible. It is not possible to go out to get export trade unless we have a good production turnover upon which to base our manufacture. How can a company install machinery of this kind unless it has sufficient markets and the financial support to make it really worth while from that company's point of view.

    I suggest that the Government would do well to consider granting allowances of this kind because, if they do not do so, there will obviously be a continuing tendency to carry on with the machinery the companies have had in store for a considerable time, and which they cannot afford to modernise under present conditions. It is becoming very difficult for many companies to find the necessary finance to keep going with their increasing stocks and all the additional finance required for getting going today, and initial allowances of this kind are necessary to help in the installation of machinery to get the most modern production in these competitive times.

    The marketing abroad of many of our light industries, in particular, is becoming increasingly difficult, and it is not easy today to obtain the orders we received some years back. I feel that, unless British industry is in a position to be competitive in its efforts by means of modern machinery, we shall gradually lose money on our markets abroad, and give ground to our competitors. German, and indeed Japanese, competition, which is starting to develop now and make itself felt quite considerably in many markets, is going to be a matter we shall have to face realistically.

    I hope the Government, when they respond, will give us a definite assurance that something will, and can, be done, bearing in mind that it is essential to be in a position to maintain our markets. I think that the suggestion of the initial allowance of one-fifth being retained, does not go too far in asking for reasonable help for most manufacturing and packaging concerns. The food industries and light industries should be able to get modern equipment to make us competitive in the appearance of our products. Much of the work has to be done on machines to be excellent in appearance. I hope that, after due consideration, the Government will decide that this is a worthy Amendment and will be prepared to accept it.

    I imagine that we would all agree, in general terms at any rate, with what the hon. Gentleman had to say in moving the Amendment. It would indeed be a sorry day for us if we in any way impaired the development and undertaking of radically new processes. As I understood him, the hon. Gentleman is not concerned with the mere replacement of machines. He is concerned with those changes that take place in industry when a process really takes a leap forward. I myself have had experience where processes have been almost completely revolutionised and the change has been so radical that one really produced everything new in relation to it.

    2.0 a.m.

    The Government have appreciated this and, as hon. Members know, we have at work now a new corporation which exists for the development of inventions and for the introduction of these new inventions or new processes into industry. I think, however, that in terms of the Amendment as it stands it is a very difficult matter. I think everyone would agree that it would not be easy to define the processes. I am not sure, anyhow, whether this is the way any help should be given, and I am also in considerable difficulty because the proposal—and I know the hon. Gentleman is trying to be helpful—does in fact introduce the principle of what would be regarded as a differential allowance, and that in itself is a great difficulty.

    I shall not, therefore, conceal from the Committee my own feeling that this proposal is not really a practical one, although the purpose behind it, namely, that we should help the development and introduction of essential new processes, is one which has my sympathy. Therefore, while I do not really see how the essential point that the hon. Gentleman has in mind can be made in the way proposed. I will consider what he and his hon. Friend have said.

    I do not propose to contest, although I feel it is contestable, what the hon. Gentleman has said. I propose to address myself to the part of the Amendment to which he has made no reference. I hope that when he has had an opportunity of considering it, he will give us another reply. I support this Amendment because it also includes the part to which the Economic Secretary did not refer, namely, the machinery required for packaging.

    I was very careful not to say new processes in manufacturing. I was talking about new processes in any kind of industry. The hon. Gentleman must not assume I was excluding packaging.

    I am dealing with that part of the Amendment which does not deal with new processes. He will see that the machinery to which I am referring is packaging for industry, and not for new processes. That is an entirely different matter. It is machinery required for packaging, either by old or new processes, but as far as that particular part is concerned, processes, new or old, do not come into the matter at all.

    I want to refer to that aspect of packaging which has occupied the attention of the House in recent weeks and which deals materially with the agricultural and horticultural side of the industry. It is a branch of the main packaging industry of the country, and one which, particularly in Britain, owing to the improvement which can result therefrom to health, hygiene, and the marketing and distribution of food as a whole, is important. I am glad that the Minister of Agriculture is present now, and I hope he will support us in this Amendment. The Government have already expressed considerable interest. We have had three debates on this subject. We are all agreed that a considerable debt is owed to the hon. Lady the Member for Coventry, South (Miss. Burton), who has pursued this matter with great diligence and who has at least succeeded in catching the ear of the Parliamentary Secretary to the Ministry of Food, who has replied to her on numerous occasions.

    The exhortation addressed by the Government to the industry has quite rightly been one that agriculturists and horticulturists should take steps to improve the packaging of all goods of a perishable character which they offer for sale through the shops. The Committee do not need any assurance that it is the desire of the horticulturists to be able to improve those conditions of marketing over which they have any control, and packaging is one over which they should have control, but grave difficulties are experienced in the supply of materials and particularly the supply of machinery. It is very difficult for the industry to take steps by itself to introduce machinery for this purpose.

    As the hon. Gentleman may or may not know, the agricultural industry has this year accepted a contribution to be found from itself of about £45 million towards increased costs being incurred by the industry. In addition, it has now been saddled with another 4½d. a gallon on the cost of petrol, which is of substantial incidence to the industry. There is no suggestion which I have heard of any special price review.

    I mention these matters to show that the industry is unable without further assistance to embark on such long-term capital projects as the installation of machinery for packaging the goods and articles it wants to sell in first-class condition. If the industry is to do this job which the Government are exhorting them to do, it is essential that they should have some assistance, as implied in this Amendment, whereby they will obtain an initial allowance.

    I was not surprised but much disappointed with what the Economic Secretary said. It is such a familiar gambit now from hon. Members opposite. They have the greatest sympathy, they think industry should be equipped with the latest tools and equipment, but not a single sign of practical assistance is given. Crocodile tears are shed over the industry, and the crocodile then proceeds to eat the industry. We are entitled to ask the Government what alternative they have. They are familiar with the technique of, "What would you do, chum?" It is now our turn to say that to them. If the Government think British industry should be equipped with the latest tools and machinery, and that the newest processes should be introduced, what proposals have they to bring that about?

    This Amendment may not be a practical proposal; it may be undesirable to introduce differentiation into taxation: but it is a proposal, and there is no other proposal before the Committee. We are entitled to ask the Government to accept this Amendment or to introduce proposals of their own directed to the same end. My hon. Friend the Member for Chichester (Mr. Joynson-Hicks) has been dealing with the second part of the Amendment which refers to packaging processes.

    I think there is probably a misunderstanding. I think the hon. Gentleman who moved the Amendment will confirm what I am about to say. As I understood it, when he talked about machinery required "for new processes of manufacture or packaging," he meant that the words "new processes" should cover both manufacture and packaging. That is the point I was making in an earlier Interruption. I merely make this intervention because it would be a pity if we got at cross purposes.

    Perhaps it shows that the Amendment was drafted in a confused manner. At the same time the principle underlying the Amendment is the same, that new processes of manufacture or packaging should have preferential treatment. What a revolting word "packaging" is. It is a word of trans-Atlantic origin and the Americans are streets ahead of the British industry in matters of packaging. I would support this Amendment with equal fervour if it dealt with packaging alone, because the success of our export trade depends on the adoption of the latest methods of packaging. This applies particularly to the smaller industries and concerns, where the burden of the cost of machinery falls heavily.

    To sum up, if the Government do not like this Amendment and are genuine and not hypocritical in the views they express with regard to British industry being equipped with the latest processes and machinery, it is up to them to produce their proposals. We on this side have produced ours.

    I read this Amendment and found it, like many Liberal Amendments, a trifle obscure. I thought it meant that new machinery and packaging were intended, and I was brought to my fleet because I know of export markets which have been already lost. From 1935 to 1939 there were several large firms in this country doing a profitable business in importing wood from the Scandinavian countries and Latvia, turning it into three-ply boxes and exporting them to India and the Straits for packing tea, rubber and other goods which came back here I know that in 1951 that market has been largely lost.

    I thought this Amendment might help manufacturers to regain this market, because competition is very keen. These firms employ a great number of workpeople. I am afraid that if they are not helped by the Finance Bill this will be another of our export markets lost.

    I must confess to a certain degree of mental confusion, not entirely due to the lateness of the hour. I do not understand what the Economic Secretary meant when he said he was going to consider this subject. If that was just a soft answer to turn away any possibility of Liberal wrath, we should know. What does he mean by his answer and where are we getting to?

    2.15 a.m.

    I think this is a thoroughly bad Clause as a whole. It is a mistake of Government policy to withdraw the initial allowances at the present time. The hon. Gentleman referred to what I said about the Millard Tucker Report. What I did not like about the Report was that it suggested that the initial allowance should be varied according to the value of the industry concerned. I thought that would open all sorts of difficulties. I think that different considerations' apply to this Amendment, because we have a thoroughly bad Clause, and the more industries and processes we can get outside the scope of it, the better it will be, and to that extent it will be improved.

    Therefore, I find no difficulty, so far as consistency is concerned, in supporting the Amendment, but I should like to learn from the Economic Secretary, when he says he is going to consider the suggestion carefully, whether it is with a view to maintaining initial allowances in manufacture and packaging, or possibly the proper assessment of profits so that such industries, in common with others, should only pay tax on true profits but not on false profits as now. What has the hon. Gentleman in mind when he says he is going to consider carefully the suggestion? Unless he can give some definite information about the kind of action he is going to take, I hope that this Amendment will be pressed to a Division.

    The Government are showing great ingenuity in turning down these Amendments one after another. I do not think I can ever remember arriving at such a stage of the Finance Bill when so few concessions have been made. It seems to me that an order has gone forth that no concessions will be made on this Bill, and that we shall have to swallow it practically unamended. If some of the ingenuity in turning the Amendments had been devoted to helping industry in a constructive way, it would have been much better.

    I should like to refer to the packaging side of this Amendment. If there is one series of blunders the Government have committed during the past few years, it has been in the obtaining of the particular raw materials required for this industry from overseas. It started with the great mistake made three years ago with Canada, and since then there has been one mistake after another and one handicap after another. It would be bare justice if, on this occasion, this Amendment could be accepted just to rectify the wrong that has been done to, and the handicaps that have been fastened on, the packaging side of industry.

    I do a good deal of export business all over the world in a considerable range of articles—textiles among them—and one of the great handicaps in the textile industry alone is that of packaging, and it is well known to everybody who has had anything to do with it. If the hon. Gentleman, who has considerable knowledge of these things, could sit and think what his refusal means, he would, after the reconsideration he has promised, come forward perhaps with a differently worded Amendment which would have the practical effect of assisting those who have to compete against the brilliant presentation of goods from well-equipped countries such as the United States, Japan and Germany.

    So long as the consumer has any choice in the world he will go for those goods which are presented more attractively. It is no good saying that the quality of goods will sell them in the end. It is no longer true in the world today. It is packaging which will attract the consumer and the Economic Secretary should talk a little less lightheartedly and not dismiss this Amendment in so cavalier a fashion.

    In the moment or two during which I wish to intervene in this debate, I should like to put a question to those who are going to speak after me, because I am puzzled by an apparent contradiction between two set speeches we have heard from hon. Gentlemen opposite. The second of the set speeches on the Amendment referred to exports, and it was suggested that we can overcome the difficulty only by increasing expenditure on new packaging equipment and seeking concessions in terms of initial allowances and a reduction of the Profits Tax to encourage the maximum possible expenditure on new capital equipment. The other set speech, of which we have had a great number during the Finance Bill, is that which calls for higher rates of interest and dear money, presumably to have the reverse effect of reducing what we are spending on capital investment and capital equipment.

    I want to ask the Opposition speakers who will follow me what is their attitude? Do they believe in dear money in order to restrain capital investment, or do they believe in putting back initial allowances and reducing the Profits Tax in order to expand capital equipment?

    I am sure that not only the Economic Secretary but all Members of the Committee are in sympathy with the line of thought which lies behind this Amendment. The British nation at the present time is trying to have its cake and eat it; that is to say, we are trying to embark on an increasing re-armament programme and, at the same time, to make the absolute minimum reductions in our standard of living. There is only one possible way in which these two things can be done at the same time, and that is by increased industrial production in this country.

    How can one get increased industrial production? We all know that raw materials are exceedingly short. So also is the labour. There is no surplus labour worth talking about in the country at the present time. The machines cannot turn any faster than they do, and no one suggests that we should work longer hours. Therefore, increased production must come not only by improved management but by improved machinery and manufacturing techniques of one kind or another. So any fiscal policy which will have the effect of making it more difficult for manufacturers continually to turn to modernisation and new processes is extremely harmful.

    I agree with the Economic Secretary that it is impossible to define what is a new process, because so many of what may be called new processes are only an improvement in one way or another on a previous process. Therefore, I think that in this respect the Amendment of the hon. Member for Roxburgh and Selkirk (Mr. Macdonald) is completely impracticable. I wish it went much further and proposed that the initial allowances be one-fifth not only for new manufacturing processes and packaging but for all replacements of industrial plant, which would restore the situation to what it was in 1945. At that time, when the proposal of the initial allowances was introduced, it was considered necessary to encourage replacement of plant and machinery. But what have been the increases in the cost of replacement since 1945? If the initial allowance were necessary then, how much more necessary they are today?

    In view of the sympathetic remarks which the Economic Secretary made a few minutes ago, for what they were worth. I hope the hon. Gentleman will consider bringing forward a new Clause to restore the initial allowances to the figure of 20 per cent. for all replacements, and not only for those which are covered by this Amendment.

    The hon. Member for Gloucestershire, South (Mr. Crosland) tried to put the Opposition in a difficulty, but perhaps his mind would be made clearer on the subject if he looked at the Government's own difficulty in this problem. What the Government are intending, or trying, to do by this Clause is to restrict capital investment; and whether that is done by a high rate of interest or a Clause such as this is for the Government to decide. What we have to do is to see that, on the one hand, the maximum resources available are put to the re-armamentand export drive; and this Clause surely goes some way in helping the export drive which must run simultaneously with our re-armament effort.

    Some of my hon. Friends say that they are not in agreement with a differentiation of taxation and allowances, but it seems that the principle of supporting the packaging and processing industries—so essential to our export efforts—should be given special consideration. In the period of difficulty through which we are bound to go over the next few years, the question of pure equity in dealing with industries, as with individuals, in this country must unfortunately be abandoned to some extent.

    But the method of taxing to get the maximum effort where it is most economically possible by giving special privileges and assistance to certain industries should be followed and the packaging industries should be given these special allowances which the Liberal Party has put forward in an Amendment self-obfuscating and difficult to comprehend. But the main object is clear enough, even if the verbiage is so thick that it is all difficult to follow. What the Liberals need here is some processing and good packaging but perhaps the Liberals may divide, some going into one Lobby and some into the other. None the less, their hearts are in the right place and when the Minister replies I hope he, at least, will be quite clear in his own mind as to what needs to be done.

    Surely what is needed is a special allowance for industries which benefit us so much and industries whose capital expenditure will not be on a vast scale. In putting forward this Clause, surely the object has been to restrict capital expenditure. Whether the Clause does that is, I think, doubtful, and possibly the hon. Member for Gloucestershire, South, may wonder if it will work. But surely the Government can agree that in the stage we are in now—when it is vital that there should be maximum efficiency—there are certain key industries where special allowances can, and should, be made; and the packaging and processing industries should have devised for them something supported by so many hon. Members on this side of the Committee.

    There is a danger, and the Economic Secretary will agree with me, in regarding the re-armament drive as contained within a short-term programme. It will succeed only if we are able to finance it, and the nation will not be able to finance it unless industry is modernised and becomes more efficient with everything possible being done to encourage new processes. Something should be done; it is of vital importance. In that connection, I think a useful purpose has been served by bringing forward this Amendment and allowing the Committee to have the discussion which has taken place. I was glad to hear the support that has been given to this Amendment. Views were expressed about the wording of the Amendment, but I do not think it is difficult to understand. It is a very difficult point. The important thing is that something should be done.

    2.30 a.m.

    I welcome the remarks of the Economic Secretary, which were encouraging, and certainly more so than some of the replies given on other Amendments. I hope that consideration of the subject will produce some really practical results. As I have said, the main thing is that something should be done. It is a matter of vital importance not only to the industries concerned, but to the country as a whole. I hope the Economic Secretary will give us some more specific assurance than he has been able to do hitherto.

    On a point of order. It may be my personal feeling, but is not this place getting rather hot? It seems to me that hon. Members are going to sleep in all quarters of the Committee. I think the temperature—the physical temperature I mean—is rising.

    The air should be the same in all quarters, but I will have inquiries made.

    I wonder whether the Economic Secretary could give us a little more assurance than he has done. It may be that the arguments he has heard, or the intrinsic merits of the case or some other consideration which has not been expressed, may have made him doubt whether he should continue to resist the Amendment. I do not think the Committee are altogether satisfied with the vague and ambiguous reference to some consideration. Could the hon. Gentleman give us some idea of the direction in which his mind is moving, or the new Amendment or Clause which his further consideration is likely to crystallise? That would have a considable effect upon the continuance and the conclusion of the debate.

    On previous Amendments which I felt bound to reject I was accused of having a closed mind. I listened very carefully to what the hon. Member for Roxburgh and Selkirk (Mr. Macdonald) had to say in moving this Amendment. I appreciate, as I think all hon. Members do, that these revolutionary changes in technique are important. I made it perfectly clear to the Committee that I did not think that the initial allowances method was the method that could be used to further a matter of this kind. Having listened to what was said, I said that I would consider those views, and I hope the Committee think I was behaving honestly by them; but I should be dishonest if I were to suggest to the Committee that this particular way of doing it is the best way. I said that before, and I am saying it again in order to make the issue perfectly plain.

    I feel that the Committee as a whole are grateful to the hon. Member for Roxburgh and Selkirk (Mr. Macdonald) for initiating this extremely valuable and interesting debate, which at one time or another looked as if it might develop on perhaps a wider front than the hon. Member intended. For instance, the hon. Member for Gloucestershire, South (Mr. Crosland), who happens to be my Parliamentary neighbour, extended a courteous but alluring invitation to have a discussion on dear money, Major Milner. But on a Clause confined to initial allowances, one cannot discuss whether the bank rate should be raised. One might get into conflict with the Chair, which I am anxious to avoid. We can only discuss the question of initial allowances on the lines indicated by the hon. Gentleman who moved the Amendment. The Economic Secretary, in his first reply—I think I have the words down correctly—said it would indeed be a sorry day when the Government sought to impede British industry.

    The words "sorry day" were used but I was concerned with these new and radical changes in the processes of industry. I did say it would be a sorry day if we discouraged these revolutionary changes of technique, which are important.

    I think that is what I understood the hon. Gentleman to say. It is therefore a sorry day, because that is precisely what the Economic Secretary has done in his remarks. I frankly was disappointed, following the speech of my hon. Friend the Member for Chichester (Mr. Joynson-Hicks), when the debate took a course which denied us from hearing the Minister of Agriculture, because when the right hon. Gentleman entered the Committee a short time ago, I felt pleasurable anticipation that he was going to intervene. I realise he is here in his capacity of Minister of Fisheries as well and as we know the shipbuilding Amendment follows this one, I shall hope to hear him then.

    I think the moral of this debate emerges quite clearly, as it did from the previous Amendment, and as, I think, it is likely to emerge again when we move on to the next Amendment. The moral of the story surely is the ham-fisted methods which-the Government have employed in this matter in removing at this moment these initial allowances obviously without considering what the impact of their action was going to be in various spheres. The river pollution has just been debated, and I cannot return to that, but the hon. Gentleman the Member for Roxburgh and Selkirk, in one of his opening sentences, said this would have a deleterious effect upon machine-tool production which was in itself an important and vital factor in a re-armament programme.

    My actual words were that I realised how vital it was for the Government to gear the machine-tool production and general engineering to the re-armament drive but at the same time to give encouragement to new processes.

    On a point of order. Is it in order for the hon. Member for Newcastle-under-Lyme (Mr. Mack) to be flat out on a seat over there with his legs up and fast asleep?

    Further to that point of order. Surely it is essential that we should preserve the dignity of Parliament?

    Surely, there must be some lengths beyond which we should not go in taking part-relaxation whilst sitting in the Chamber? I ask you, Major Milner, if we should unwittingly per-haps, transcend the bounds of dignity that perhaps you will call us to order?

    I am obliged to the hon. Member. I will certainly do so. I am afraid that if I were to call attention to every apparent infraction of the rules, I should be intervening in the debate most of the time.

    On a point of order. Is it not specifically laid down in Erskine May that it is out of order to lie at full length on the bench?

    I should not like to say offhand whether that is so, but according to my observation the hon. Member is not lying at full length.

    Major Milner, may I call your attention to the hon. Member at the end of the Opposition bench?

    I think it would be best, Major Milner, if I were to take the blame for the whole incident, for it is obviously the soporific nature of my remarks which is responsible. I do not at all complain of hon. Members taking their rest so long as they do so in an orderly manner. When this interlude came upon us, I was about to remark that this Amendment—[Interruption]—hon. Members should permit me to develop my argument; one of the disadvantages of these all-night Sittings is that when this sort of thing happens it is difficult to conduct the business. I am endeavouring to make a serious contribution on a matter of some importance, and it is difficult to do so in face of this hilarity. I do not know what the hon. Member for Accrington (Mr. H. Hynd) is pointing at—I hope it is not at me.

    Order! We must keep order. I hope that the hon. and gallant Member for Bristol, North-West (Lieut.-Commander Braithwaite) will conclude his remarks.

    May I say that I propose to continue my remarks, Major Milner, and that they will reach their conclusion in due course?

    The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) will wish to support this Amendment because the effect of it would be greatly to strengthen British industry in its forthcoming contest with Japanese competition, to which he so rightly called our attention yesterday. May I say that I, for one, support his attitude on that matter and hope that he will succeed in getting a debate on it, although that is outside the Clause about initial allowances which, if continued, would do much to help in that problem. I shall look forward to walking through the Lobby very shortly, arm-in-arm with the hon. Member for Stoke-on-Trent, South.

    I feel that in this matter the Government have allowed their greed for revenue to overcome their better judgment and in so doing have gravely neglected certain re-armament processes. That is why I was disappointed that the Economic Secretary, in speaking a second time, removed the impression he had first created—at least, the impression which he had made on me. I thought the hon. Gentleman was saying that he thought the form of words was unworkable; and I am sure the hon. Member for Roxburgh and Selkirk is not wedded to any particular verbiage and would be pleased to see another Amendment, accepting this principle, moved by the Government on Report stage and carried into effect.

    2.45 a.m.

    I hope the Economic Secretary will not abandon his task because the assistance of the skill of learned Law Officers is readily available to him—one of whom, now sitting on his right hand, is noted for his industry and assiduity and who, I am quite sure, could before the Report stage produce a form of words to give effect to the hon. Member's intention. I hope that will be done. It is always easy to criticise the wording of Amendments which are drafted by Private Members; we have not the facilities which are afforded to Ministers; we have to do our best, and very often our wording is imperfect; we all know that.

    However, I should like to hear the Government say that they agree in principle to the suggestion and policy put forward by the hon. Member for Roxburgh and Selkirk. If they do not say so, and if there is to be no consideration of this matter between now and the Report stage, then, speaking in my own capacity, although I do not think I am alone, I hope that the hon. Gentleman will press this matter to a Division. If he does so, I shall be pleased to support him.

    I shall not detain the Committee for more than a moment or two, but there is one point I particularly want to make. Again and again Ministers have emphasised the great importance of, first, re-armament, and secondly, the export trade. If Ministers mean what they say, they could implement it by agreeing to accept this Amendment, because there are certain processes of packaging in the United States which would be of the utmost importance to our re-armament programme, and which ought to be encouraged in this country.

    I speak with some special knowledge of this business and I beg the Economic Secretary to examine the matter, if he does not already know about it, because we ought not to be left behind in these new processes of packaging, which are taking place across the Atlantic, if our rearmament programme is not to suffer. Other hon. Members have dealt with the importance of making our packaging efficient and up to date for our export trade and I do not want to speak further on that. I beg the Economic Secretary to implement what Ministers have said by agreeing to this Amendment and so showing that Ministers mean what they say.

    In supporting this Amendment—although a change of wording might be necessary, and I am sure the hon. Member for Roxburgh and Selkirk (Mr. Macdonald) would not mind provided the effect were the same—I should like to refer to what was said by my hon. Friend the Member for Chichester (Mr. Joynson-Hicks) on the effect of this on the horticultural industry, which is of the greatest importance in both Scotland and England, and which every year will become of greater importance.

    The greatest difficulty facing the horticultural industry is that of imports, and the greatest feature in that difficulty is the fact that the stuff from abroad is packed in non-returnable containers of the highest quality and of the best possible design, which our own horticulturists cannot produce because they have not the materials. They are discouraged by this Clause from installing the machinery to produce those containers. I am sure the Minister of Agriculture will agree that that is the greatest difficulty facing the horticultural industry at present.

    I shall not harrow his soul by referring to the vagaries of the Minister of Food who imports masses of foreign stuff when British crops are ready for cropping. It is a fact that on the production of non-returnable containers will largely depend whether or not the British horticultural industry is successful. If the encouragement they hope for under this Amendment is not given, they will have an added burden, which the Minister of Agriculture will recognise.

    I was not going to detain the Committee for very long, but in view of the welcome given to my rising, it may be I shall be able to expatiate on this matter for some time. It seems to me that the hon. Member for Stafford and Stone (Mr. H. Fraser), who, having made his oration, is no longer in his place, was rather concerned to belittle this Amendment merely because it was a Liberal Amendment. Having said it was rather obscure, he then said its main object is perfectly clear. Another hon. Member above the Gangway said the same thing.

    The hon. Member for Stafford and Stone indicated that there was a risk that the Liberal Party might find itself divided, but on this occasion it is the ranks of the Conservatives which are divided, because some Conservative Members indicated that they would not be able to support the Amendment, while others said they would support it. It is perfectly clear that in all parts of the Committee the main purpose of this Amendment has been well received, and hon. Members have realised the fundamental importance of it.

    It is generally realised that the initial allowances the Government introduced since the war have played a very great part in modernising the equipment of British industry. I only wish we had had these allowances during the years between the wars when we had the labour force. The Economic Secretary has twice said he will give the most careful consideration to this matter. For my part, I think we can leave it at that, but if my hon. Friend wishes to divide, we shall of course support him in the Lobby.

    The Economic Secretary will now have had an opportunity of realising the views of the Committee. I feel there has been no opposition to the main terms of the Amendment from the other side. In view of the Economic Secretary's helpful assurance, which he

    Division No. 94.]

    AYES

    [2.55 a.m.

    Aitken, W. T.Craddock, Beresford (Spelthorne)Harvey, Ian (Harrow, E.)
    Alport, C. J. M.Cranborne, ViscountHarvie-Watt, Sir George
    Amery, Julian (Preston, N.)Crookshank, Capt. Rt. Hon. H. F. C.Hay, John
    Amory, Heathcoat (Tiverton)Crosthwaite-Eyre, Col. O. E.Head, Brig. A. H.
    Arbuthnot, JohnCrouch, R. F.Headlam, Lt.-Col. Rt. Hn. Sir Cuthbert
    Ashton, H. (Chelmsford)Crowder, Capt. John (Finchley)Heald, Lionel
    Assheton, Rt. Hon. R. (Blackburn, W.)Crowder, Petre (Ruislip—Northwood)Henderson, John (Cathcart)
    Astor, Hon. M. L.Cundiff, F. W.Hicks-Beach, Maj. W. W.
    Baker, P. A. D.Cuthbert, W. N.Higgs, J. M. C.
    Baldock, Lt.-Cmdr. J. M.Darling, Sir William (Edinburgh, $.)Hill, Mrs. E. (Wythenshawe)
    Baldwin, A. E.Davidson, ViscountessHill, Dr. Charles (Luton)
    Banks, Col. C.Davies, Nigel (Epping)Hinchingbrooke, Viscount
    Baxter, A. B.de Chair, SomersetHirst, Geoffrey
    Beamish, Major Tufton.De la Bère, R.Holmes, Sir Stanley (Harwich)
    Bell, R. M.Deedes, W. F.Hope, Lord John
    Bennett, Sir Peter (Edgbaston)Digby, S. W.Hopkinson, Henry
    Bennett, Dr. Reginald (Gosport)Dodds-Parker, A. D.Hornsby-Smith, Miss. P.
    Bennett, William (Woodside)Donner, P. W.Horsbrugh, Rt. Hon. Florence
    Bevins, J. R. (Liverpool, Texteth)Douglas-Hamilton, Lord MalcolnHoward, Gerald (Cambridgeshire)
    Birch, NigelDrayson, G. B.Howard, Greville (St. Ives)
    Bishop, F. P.Dugdale, Maj. Sir Thomas (Richmond)Hudson, Sir Austin (Lewisham, N.)
    Black, C. W.Duncan, Capt. J. A. L.Hudson, W. R. A. (Hull, N.)
    Boles, Lt.-Col. D. G. (Wells)Dunglass, LordHutchinson, Geoffrey (Ilford, N.)
    Boothby, R.Duthie, W. S.Hutchison, Lt.-Com. Clark (E'b'rgh W.)
    Bossom, A. C.Eccles, D. M.Hutchison, Colonel James (Glasgow)
    Bowen, E. R. (Cardigan)Eden, Rt. Hon. A.Hyde, Lt.-Col. H. M.
    Boyd-Carpenter, J. A.Elliot, Rt. Hon. W. E.Hylton-Foster, H. B.
    Boyle, Sir EdwardErroll, F. J.Jennings, R.
    Bracken, Rt. Hon. B.Fisher, NigelJohnson, Howard (Kemptown)
    Braine, B. R.Fletcher, Walter (Bury)Jones, A. (Hall Green)
    Braithwaite, Lt.-Cr G. (Bristol, N. W.)Fort, R.Joynson-Hicks. Hon. L. W.
    Bromley-Davenport, Lt.-Col. W.Foster, JohnKaberry, D.
    Brooke, Henry (Hampstead)Fraser, Hon. Hugh (Stone)Kerr, H. W. (Cambridge)
    Browne, Jack (Govan)Fraser, Sir Ian (Morecambe & Lonsdale)Kingsmill, Lt.-Col. W. H.
    Buchan-Hepburn, P. G. T.Fyfe, Rt. Hon. Sir David MaxwellLambert, Hon. G.
    Bullock, Capt. M.Gage, C. H.Lancaster, Col. C. G.
    Bullus, Wing Commander E. E.Galbraith, Cmdr. T. D. (Pollok)Langford-Holt, J.
    Burden, Squadron Leader F. A.Galbraith, T. G. D. (Hillhead)Law, Rt. Hon. R. K.
    Butcher, H. W.Garner-Evans, E. H. (Denbigh)Leather, E. H. C.
    Butler, Rt. Hon. R. A. (Saffron Walden)Gates, Maj. E. E.Legge-Bourke, Maj. E. A. R.
    Braithwaite, Sir Albert (Harrow, W.)Glyn, Sir RalphLennox-Boyd, A. T.
    Carr, Robert (Mitcham)Gomme-Duncan, Col. A.Lindsay, Martin
    Carson, Hon. E.Gridley, Sir ArnoldLinstead, H. N.
    Channon, H.Grimond, J.Llewellyn, D.
    Churchill, Rt. Hon. W. S.Grimston, Hon. John (St. Albans)Lloyd, Rt. Hn. Geoffrey (King's Norton)
    Clarke, Col. Ralph (East Grinstead)Grimston, Robert (Westbury)Lloyd, Maj. Guy (Renfrew, E.)
    Clarke, Brig. Terence (Portsmouth, W.)Harden, J. R. E.Lloyd, Selwyn (Wirral)
    Colegate, A.Hare, Hon. J. H. (Woodbridge)Lockwood, Lt.-Col. J. C.
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Harris, Frederic (Croydon, N.)Longden, Gilbert (Herts, S. W.)
    Cooper-Key, E. M.Harris, Reader (Heston)Low, A. R. W.
    Corbett. Lt.-Col. Uvedale (Ludlow)Harvey, Air Codre, A. V. (Macclesfield)Lucas, Sir Jocelyn (Portsmouth, S.)

    has given twice to the Committee within the last few minutes, that he will give consideration to the matter contained in this Amendment, I feel that no good purpose would be served in taking it to a Division. I beg to ask leave to withdraw the Amendment.

    The hon. Gentleman has asked leave to withdraw the Amendment, but there are processes to prevent that. I shall delay the Committee only for a moment to say to the hon. Member from some part of Scotland that he cannot humbug us in this way.

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

    The Committee divided: Ayes. 283, Noes, 291.

    Lucas, P. B. (Brentford)Orr, Capt. L. P. S.Storey, S.
    Lucas-Tooth, Sir HughOrr-Ewing, Charles Ian (Hendon, N.)Strauss, Henry (Norwich, S.)
    Lyttelton, Rt. Hon. O.Orr-Ewing, Ian L. (Weston-super-Mare)Stuart, Rt. Hon. James (Moray)
    McAdden, S. J.Osborne, C.Studholme, H. G.
    McCorquodale, Rt. Hon. M. S.Peake, Rt. Hon. O.Summers, G. S.
    Macdonald, A. J. F. (Roxburgh)Perkins, W. R. D.Sutcliffe, H.
    Macdonald, Sir Peter (I. of Wight.)Peto, Brig. C. H. M.Taylor, Charles (Eastbourne)
    Mackeson, Brig. H. R.Pickthorn, K.Taylor, William (Bradford, N.)
    McKibbin, A.Pitman, I. J.Teeling, W.
    McKie, J. H. (Galloway)Powell, J. EnochTeevan, T. L.
    Maclay, Hon. JohnPrice, Henry (Lewisham, W.)Thomas, J. P. L. (Hereford)
    Maclean, FitzroyPrior-Palmer, Brig. O.Thompson, Kenneth Pugh (Walton)
    MacLeod, Iain (Enfield, W.)Profumo, J. D.Thompson, R. H. M. (Croydon, W.)
    MacLeod, John (Ross and Cromarty)Raikes, H. V.Thorneycroft, Peter (Monmouth)
    Macmillan, Rt. Hon. Harold (Bromley)Rayner, Brig. R.Thornton-Kemsley, Col. C. N.
    MacPherson, Major Niall (Dumfries)Redmayne, M.Thorp, Brig. R. A. F.
    Maitland, Cmdr. J. W.Remnant, Hon. P.Tilney, John
    Manningham-Buller, R. E.Renton, D. L. M.Turner, H. F. L.
    Marlowe, A. A. H.Roberts, Emrys (Merioneth)Turton, R. H.
    Marples, A. E.Roberts, Major Peter (Heeley)Tweedsmuir, Lady
    Marshall, Douglas (Bodmin)Robertson, Sir David (Caithness)Vane, W. M. F.
    Marshall, Sidney (Sutton)Robinson, Roland (Blackpool, S.)Vaughan-Morgan, J. K.
    Maude, Angus (Ealing, S.)Robson-Brown, W. (Esher)Vosper, D. F.
    Maude, John (Exeter)Rodgers, John (Sevenoaks)Wade, D. W.
    Maudling, R.Roper, Sir HaroldWakefield, Edward (Derbyshire, W.)
    Medlicott, Brig. F.Ropner, Col. L.Wakefield, Sir Wavell (Marylebone)
    Mellor, Sir JohnRussell, R. S.Walker-Smith, D. C.
    Molson, A. H. E.Ryder, Capt. R. E. D.Ward, Hon. George (Worcester)
    Monckton, Sir WalterSailor, Rt. Hon. Sir ArthurWard, Miss. I. (Tynemouth)
    Moore, Lt.-Col. Sir Thomas)Scott, DonaldWaterhouse, Capt. Rt. Hon. C.
    Morrison, John (Salisbury)Shepherd, WilliamWatkinson, H.
    Morrison, Rt. Hon. W. S. (Cirencester)Smiles, Lt.-Col. Sir WalterWebbe, Sir H. (London)
    Mott-Radclyffe, C. E.Smithers, Peter (Winchester)Wheatley, Major M. J. (Poole)
    Nabarro, G.Smyth, Brig. J. G. (Norwood)White, Baker (Canterbury)
    Nicholls, HarmarSnadden, W. McNWilliams, Charles (Torquay)
    Nicholson, G.Soames, Capt. C.Williams, Gerald (Tonbridge)
    Nield, Basil (Chester)Spearman, A. C. M.Williams, Sir Herbert (Croydon, E.)
    Noble, Cmdr. A. H. P.Spence, H. R. (Aberdeenshire, W.)Wills, G.
    Nugent, G. R. H.Spens, Sir Patrick (Kensington, S.)Wilson, Geoffrey (Truro)
    Nutting, AnthonyStanley, Capt. Hon. Richard (N. Fylde)Winterton, Rt. Hon. Earl
    Oakshott, H. D.Stevens, G. P.Wood, Hon. R.
    Odey, G. W.Steward, W. A. (Woolwich, W.)York, C.
    O'Neill, Rt. Hon. Sir HughStewart, Henderson (File, E.)

    TELLERS FOR THE AYES:

    Ormsby-Gore, Hon. W. D.Stoddart-Scott, Col. M.Major Conant and Mr. Edward Heath,

    NOES

    Acland, Sir RichardCallaghan, L. J.Evans, Albert (Islington, S. W.)
    Adams, RichardCarmichael, J.Evans, Edward (Lowestoft.)
    Albu, A. H.Castle, Mrs. B. A.Evans, Stanley (Wednesbury)
    Allen, Arthur (Bosworth)Champion, A. J.Ewart, R.
    Allen, Scholefield (Crowe)Chetwynd, G. R.Fernyhough, E.
    Anderson, Alexander (Motherwell)Clunie, J.Field, Capt. W. J.
    Anderson, Frank (Whitehaven)Cocks, F. S.Finch, H. J.
    Attlee, Rt. Hon. C. R.Coldrick, W.Fletcher, Eric (Islington, E.)
    Awbery, S. S.Collindridge, F.Follick, M.
    Ayles, W. H.Cook, T. F.Foot, M. M.
    Bacon, Miss. AliceCooper, Geoffrey (Middlesbrough, W.)Forman, J. C.
    Baird, J.Cooper, John (Deptford)Fraser, Thomas (Hamilton)
    Balfour, A.Corbet, Mrs. Freda (Peckham)Freeman, John (Watford)
    Barnes, Rt. Hon. A. J.Cove, W. G.Freeman, Peter (Newport)
    Bartley, P.Craddock, George (Bradford, S.)Gailskell, Rt. Hon. H. T. N.
    Bellenger, Rt. Hon. F. J.Crawley, A.Ganley, Mrs. C. S.
    Benn, WedgwoodCrosland, C. A. R.Gibson, C. W.
    Benson, G.Crossman, R. H. S.Gilzean, A.
    Beswick, F.Cullen, Mrs. A.Glanville, James (Consett)
    Bevan, Rt. Hon. A. (Ebbw Vale)Dalton, Rt. Hon. H.Gooch, E. G.
    Bing, G. H. C.Darling, George (Hillsborough)Gordon-Walker, Rt. Hon. P. C.
    Blenkinsop, A.Davies, A. Edward (Stoke, N.)Greenwood, Anthony (Rossendale)
    Blyton, W. R.Davits, Harold (Leek)Greenwood, Rt. Hon. Arthur (Wakefield)
    Boardman, H.Davies, Stephen (Merthyr)Grenfell, D. R.
    Booth, A.de Freitas, GeoffreyGrey, C. F.
    Bottomley, A. G.Deer, G.Griffiths, David (Rother Valley)
    Bowdon, H. W.Delargy, H. J.Griffiths, Rt. Hon. James (Llanelly)
    Bowles, F. G. (Nuneaton)Dodds, N. N.Griffiths, William (Exchange)
    Braddock, Mrs. ElizabethDonnelly, D.Gunter, R. J.
    Brook, Dryden (Halifax)Driberg, T. E. N.Hale, Joseph (Rochdale)
    Brooks, T. J. (Normanton)Dugdale, Rt. Hon. John (W. Bromwich)Hale, Leslie (Oldham, W.)
    Broughton, Dr. A. D. D.Dye, S.Hall, John (Gateshead, W.)
    Brown, Rt. Hon. George (Belper)Ede, At. Hon. J. C.Hall, Rt. Hon. Glenvil (Colne Valley)
    Brown, Thomas (Ince)Edelman, M.Hamilton, W. W.
    Burke, W. A.Edwards, John (Brighouse)Hannan, W.
    Burton, Miss. E.Edwards, Rt. Hon. Ness (Caerphilly)Hardman, D. R.
    Butler, Herbert (Hackney, S.)Edwards. W. J. (Stepney)Hardy, E. A.

    Hargreaves, A.Mann, Mrs. JeanSimmons, C. J.
    Hastings, S.Manuel, A. C.Slater, J.
    Hayman, F. H.Marquand, Rt. Hon. R.)Smith, Ellis (Stoke, S.)
    Henderson, Rt. Hon. A. (Rowley Regis)Mathers, Rt. Hon. G.smith, Norman (Nottingham, S.)
    Her bison, Miss. M.Mellish, R. J.Sorensen, R. W.
    Hewitson, Capt. M.Messer, F.Soskice, Rt. Hon. Sir Frank
    Hobson, C. R.Middleton, Mrs. L.Steele, T.
    Holman, P.Mikardo, IanStewart, Michael (Fulham, E.)
    Holmes, Horace (Hemsworth)Mitchison, G. R.Stokes, Rt. Hon. R. R.
    Houghton, D.Moeran, E. W.Strachey, Rt. Hon. J.
    Hoy, J.Monslow, W.Strauss, Rt. Hon. George (Vauxh)
    Hubbard, T.Moody, A. S.Stross, Dr. Barnett
    Hudson, James (Ealing, N.)Morgan, Dr. H. B.Summerskill, Rt. Hon. Edith
    Hughes, Emrys (S. Ayrshire)Morley, R.Sylvester, G. O.
    Hughes, Hector (Aberdeen, N.)Morris, Percy (Swansea, W.)Taylor, Bernard (Mansfield)
    Hynd, H. (Accrington)Mort, D. L.Taylor, Robert (Morpeth)
    Hynd, J. B. (Attercliffe)Moyle, A.Thomas, David (Aberdare)
    Irvine, A. J. (Edge Hill)Mulley, F. W.Thomas, George (Cardiff)
    Irving, W. J. (Wood Green)Murray, J. T.Thomas, Iorwerth (Rhondda, W.)
    Isaacs, fit. Hon. G. A.Nally, W.Thomas, Ivor Owen (Wrekin)
    Janner, B.Neal, Harold (Bolsover)Thorneycroft, Harry (Clayton)
    Jay, D. P. T.Noel-Baker, Rt. Hon. P. J.Thurtle, Ernest
    Jeger, George (Goole)O'Brien, T.Timmons, J.
    Jeger, Dr. Santo (St. Pancras, S.)Oldfield, W. H.Tomney, F.
    Jenkins, R. H.Oliver, G. H.Turner-Samuels, M.
    Johnson, James (Rugby)Orbach, M.Ungoed-Thomas A. L.
    Johnston, Douglas (Paisley)Padley, W. E.Usborne, H.
    Jones, David (Hartlepool)Paget, R. T.Vernon, W. F.
    Jones, Frederick Elwyn (West Ham, S.)Paling, Rt. Hon. Wilfred (Dearne Vally)Viant, S. P.
    Jones, Jack (Rotherham)Paling, Will T. (Dewsbury)Wallace, H. W.
    Jones, William Elwyn (Donway)Pannell, T. C.Watkins, T. E.
    Keenan, W.Pargiter, G. A.Webb, Rt. Hon. M. (Bradford, C.)
    Kenyan, C.Parker, J.Weitzman, D.
    Key, Rt. Hon. C. W.Paton, J.Wells, Percy (Faversham)
    King, Dr. H. M.Pearson, A.Wells, William (Walsall)
    Kinghorn, Sqn. Ldr. E.Peart, T. F.West, D. G.
    Kinley, J.Poole, C.Wheatley, Rt. Hn. John (Edinb'gh, E.)
    Lang, GordonPopplewell, E.White, Mrs. Eirene (E. Flint)
    tee, Frederick (Newton)Porter, G.White, Henry (Derbyshire, N. E.)
    Lee, Miss. Jennie (Cannock)Price, Philips (Gloucestershire, W.)Whiteley, Rt. Hon. W.
    Lever, Leslie (Ardwick)Proctor, W. T.Wilcock, Group Cap. C. A. R.
    Lewis, Arthur (West Ham, N.)Pryde, D. J.Wilkes, L.
    Lewis, John (Bolton, W.)Pursey, Cmdr. H.Wilkins, W. A.
    Lindgren, G. S.Rartkin, J.Willey, Frederick (Sunderland)
    Lipton, Lt.-Col. M.Rees, Mrs. D.Willey, Octavius (Cleveland)
    Logan, D. G.Reeves, J.Williams, David (Neath)
    Longden, Fred (Small Heath)Reid, Thomas (Swindon)Williams, Rev. Llywelyn (Abertillery)
    McAllister, G.Reid, William (Camlachie)Williams, Ronald (Wigan)
    MacColl, J. E.Rhodes, H.Williams, Rt. Hon. Thomas (Don Valley)
    McGhee, Ht. G.Richards, R.Williams, W. T. (Hammersmith, S.)
    McInnes, J.Robens, A.Wilson, Rt. Hon. Harold (Huyton)
    Mack, J. D.Roberts, Goronwy (Caernarvonshire)Winterbottom, Ian (Nottingham, C.)
    McKay, John (Wallsend)Robertson, J. J. (Berwick)Winterbottom, Richard (Brightside)
    Mackay, R. W. G. (Reading, N.)Robinson, Kenneth (St. Pancras, N.)Wise, F. J.
    McLeavy, F.Rogers, George (Kensington, N.)Woodburn, Rt. Hon. A.
    MacMillan, Malcolm (Western Isles)Ross, William (Kilmarnock)Wyatt, W. L.
    McNeil, Rt. Hon. H.Shawcross, Rt. Hon. Sir HartleyYates, V. F.
    MacPherson, Malcolm (Stirling)Shinwell, Rt. Hon. E.Younger, Hon. K.
    Mainwaring, W. H.Shurmer, P. L. E.
    Mallalieu, E. L. (Brigg)Silverman, Julius (Erdington)

    TELLERS FOR THE NOES:

    Mallalieu, J. P. W. (Huddersfield, E.)Silverman, Sydney (Nelson)Mr. Sparks and Mr. Royle.

    I beg to move, in page 10, line 20, at the end, to insert:

    Provided that this subsection shall not apply to expenditure on the provision of a ship for the purposes of a trade if it is shown to the satisfaction of the Commissioners of Inland Revenue that on the tenth day of April, nineteen hundred and fifty-one, the ship was actually under construction for the persons who were carrying on the trade on the said tenth day of April or who were on that date about to carry it on.
    During the Budget debates, although little anxiety was expressed about the suspension of initial allowances in general, a number of hon. Members referred to the exceptional case of shipping. On the Second Reading of the Finance Bill, my hon. Friend the Financial Secretary said that, in view of the special importance and circumstances of shipping, it had been decided that we would put down an Amendment at this stage of the Bill excepting from the suspension of initial allowances any expenditure on the provision of a ship even though it may have been made after 5th April, 1952, on account of ships that were actually in course of building on Budget day. This Amendment gives effect to that undertaking.

    I think it would be for the convenience of the Committee, Major Milner, if you would allow me to move the Amendment to the Amendment standing in my name and then permit discussion to range over the subject matter of both the Government Amendment and mine.

    I do not see any objection to that course, especially if it will expedite business in any way.

    I beg to move, as an Amendment to the proposed Amendment, in line 1, to leave out from "that," to the end and to insert:

    "nothing in this subsection shall apply to expenditure incurred in pursuance of a contract for the sale of a ship."
    The effect of this Amendment, if adopted, will be to exclude altogether from shipping the operation of this Clause withdrawing the initial allowances. After the rather lively interchanges we have had, I am glad we are now discussing a subject which is politically non-controversial and on which we are not divided by any question of principle, as has been made clear by the fact that the Government have proposed an Amendment which goes some way, although I regret to say a very little way—certainly not far enough—to meet the case which we raised in the Budget debate. At the same time, I am sorry that a subject which will I hope excite neither levity nor angry emotion should come before the Committee at an hour with which levity and anger are both frequently associated.

    By the Amendment they have proposed, the Government have clearly recognised that the full application of the Clause as it stands to shipping would be against the national interest. As the Chancellor has stated clearly—and the Economic Secretary repeated it today—the object of the Clause is not to get revenue at all; it is to effect a certain economic purpose—namely, to reduce the pressure of home demand on the engineering industry for plant and equipment for civilian purposes.

    If that is the object of this Clause, the first consideration that must occur to one's mind is whether or not a Clause applying to all industries would really have that effect. One would have thought there would have been a distinction between the application of the Clause to industries which in time of national stress should not be encouraged to extend and its application to others which the very defensive preparations themselves make it desirable should have some extension. The Chancellor recognises this. In his Budget speech he said:
    'The production Departments will, of course, take whatever measures are necessary to ensure that the suspension of these allowances does not result, in the case of undertakings engaged on the re-armament programme, in difficulty in providing any necessary addition to their equipment.—[OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 842–3.]
    That may be a sufficient measure of countering the evils to some of the munition industries that would otherwise result from Clause 16, but it is quite clear that it has no application at all to shipping. If the shipowners cancel their contracts for new ships now, the Minister of Transport can do nothing to secure that addition to the Mercantile Marine that would otherwise have resulted. The Government have given some recognition to that, but I think it is a very inadequate recognition.

    The reason I am proposing this Amendment which goes so much further is that I think the Government's proposal is in some respects both ambiguous and inadequate. It is ambiguous because it limits the concession to shipping that is "already under construction." I do not know whether the Government know what "under construction" means. Does it mean a ship whose keel has already been laid? If it means that, then it certainly does not really cover construction in the full sense.

    A few years ago I was in another country where I have seen the interval between the laying of the keel and the launching of a ship to be only three days, because the greater part of the construction was pre-fabricated. We have not got to that stage yet in this country, but we have got to the point where, although the keel has not been laid, the essential parts of the ship, such as the engines, have been begun in pursuance of an order. I do not know whether under the Government's Amendment, if passed in its present form, the ship which had been partly pre-fabricated outside in the yard, as in the example I have just quoted, would be counted as a ship under construction, but I should imagine that probably it would not.

    There are, however, much more serious objections to the Clause. It is completely inadequate in its scope. It applies only to ships that are in some sense or another under construction. That concession would doubtless have the effect of enabling some of the orders that have been placed not to be cancelled. But other orders where the keels have not actually been laid, but which are waiting for their turn on the slips, would be cancelled. When those orders were placed the shipowners had in mind the financial situation of their respective companies. One of the factors was the expectation of the 40 per cent. allowance, and they had no knowledge that this was going to be withdrawn suddenly this year. It is inevitable—and the Government appear to have recognised this—that some of these contracts will have to be cancelled.

    What is the result of that? The places vacant on the slips which would have been occupied by ships constructed for British shipowners will be used to meet orders from shipowners of foreign nations, who may, if war comes, be allies or not. They may be neutrals. Do the Government really want at the present time to have slips which should be occupied by British ships occupied by foreign orders to the exclusion of British orders that have already been given?

    3.15 a.m.

    I can hardly believe that this Amendment proposed by the Government is their last word on this subject. I am proposing my Amendment, which goes so much further, not only from an intellectual conviction that the national interest will be served. It so happens that in each of the two great wars of this century I have been associated with the control of shipping. I have been in a position where I have seen directly, and not merely learned as I otherwise should have done, that the fate of this country at a time when the fate of the free world and its security against aggression depended upon the adequacy of our Mercantile Marine in the face of a serious and dangerous submarine attack.

    In each of those two wars I have had the responsibility at some time or another of actually finding and allotting ships to the different Departments—to the Munitions Department and to the Supply Departments of our Forces overseas— and I have been through months of wearing anxiety as to whether an inability to find and allot the ships might not fatally impair the success of our Armies abroad, or fatally injure the economic life of our country at home.

    Does the right hon. Gentleman remember National Shipbuilding Securities and their effect?

    Let me say this to the hon. Member, that with that experience in the first war, when I came into this Parliament between the wars—[An HON. MEMBER: "Get on with the job."]—I devoted myself, more than to any other subject—[Interruption.]

    I think it would be better if we had fewer Interruptions.

    If I may continue—I devoted myself more than to any other object to supporting any measure which would to any degree reduce the danger of a shortage of shipping if another war should come. That is true as regards stockpiling and as regards such measures as affected the shipyards at that time, to which the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) has referred.

    The scope of any special provision—and the Government admits that some special provision must be made for shipping—depends not only on the importance which is attached to securing an adequate Mercantile Marine, but to some idea of the scale of Mercantile Marine which it is desirable in the national interest should be attained in this country. Therefore, I beg the Committee to listen while I suggest certain considerations why it is vitally important that the Mercantile Marine should be increased beyond its present size, and increased more than it would be if nothing more than the Government's Amendment were now passed.

    The British Mercantile Marine has made a wonderful recovery in the last few years. After losing in the war no less than 11½ million gross tons—considerably more than half the total tonnage with which we started the war—we have practically got back to the same total tonnage as before. But that does not mean that we are as well equipped as before to face the dangers of another war, even if that war were not greater in scale than the one through which we have passed; because there are certain sections of the fleet, particularly ordinary deadweight tramp tonnage, which have not reached their former dimensions. The total has been brought up because we have had, for reasons everybody can understand, to increase our tanker fleet so much.

    But even if we had in every part of the Mercantile Marine as big a tonnage as at the beginning of the war, it would be a terrible thing to have to go through, once more, with so very small a margin even if submarine attack did not increase; and let me remind the Committee that my right hon. Friend the Leader of the Opposition has warned the nation in stern phrases that we must expect to prepare for an even more dangerous submarine attack in any future war.

    But it is not only for the eventuality of war that I urge so very strongly the full encouragement of an increase of the Mercantile Marine. British owners have ordered ships, and would be prepared to order ships, unless discouraged by the sudden withdrawal of these allowances. I cannot believe that the Government really desire, by financial methods, to restrict the increase of the Mercantile Marine sailing under the British flag and in British hands which would otherwise occur.

    Let me ask the Government how far they really think it desirable, by a special provision for shipping to encourage British shipping, to go. They certainly do not want to stop orders as much as the full application of Clause 16 would do. The Government have shown that by their own Amendment. Do they really wish to restrict the cancellation of orders already given where construction has not begun in the shipyards? Do they really desire this as an economic purpose? Surely if they do they would not help the re-armament preparations as a whole? They would surely weaken our position. Surely they must regard the Mercantile Marine as a fourth arm of defence, which, if deliberately weakened, must make our defences suffer and not gain? The Government can have DO other purpose. Their declared purpose is not to increase revenue. It is solely to help our defence preparations, but here is a financial method which apparently has the deliberate purpose of cancelling orders given by British owners.

    I would go even a little further and say that I think it is extremely undesirable that the withdrawal of these allowances should have the effect of discouraging owners from placing new orders which they have not actually placed for ships which they may have intended to built to complete the general pattern of their respective fleets. What is the reason for stopping short of the complete exclusion of shipping from the operation of the Clause altogether? I can hardly think, unless the Government contest some of my arguments, not only as to the importance of shipping in our defensive preparations and not only in war if it comes, but also as an essential adjunct to our munitions and defence preparations in other spheres, that they really desire this. The whole of our defensive preparations depend on an adequate supply of vessels to carry the raw materials, as much as we depend on the Royal Navy for purely warlike activity.

    Will the right hon. Gentleman admit that our Mercantile Marine is now more efficient and modern than it has ever been? Will he admit that there is more tonnage being built than ever before and that the shipbuilding industry of this country has greater orders on its books than ever in its history?

    First I would say to the hon. Member for Stoke-on-Trent, South that I wish I could agree that the British Mercantile Marine is in all its essential parts more efficient and greater than it has been in the past. That is true of some classes, but not of all. Secondly, I wish still more that I could say that for any future danger of submarine attack it was as well equipped to meet that danger as in the past. Thirdly, I wish I could agree that as many ships are being built as ever. Our shipbuilding industry had a higher rate of output in the past. Fourthly, what is the use of the hon. Member saying that the order books are full, when it is the whole point of my contention that the Government, by withdrawing this initial allowance in this way and at this time, subject only to the limit proposed in their Amendment which covers only ships that are being constructed, will be the means of depleting those order books by what they propose? That is why I ask for an extension of this special provision beyond the narrow limits of the Government's Amendment.

    What can be the reason for limiting this special provision to ships actually under construction? Special provision is admitted to be necessary. Why is its scope so narrow? I cannot believe that the Government desire to restrict the increase in the British Mercantile Marine, for all the reasons I have mentioned. I can only feel that perhaps one reason has operated. They perhaps feel that this might be a precedent which could be used by other industries in their claims for similar special provisions. That is the kind of consideration which arises heavily in a Government Department. I also have been in Whitehall, and I know that well. It is argued, "If we give this concession to one industry, will not others claim it, too?"

    I suggest to the Government that perhaps in this case the danger of a wide extension beyond what they would desire or think wise might be greater if in the very special case of shipping they devised a provision which was not clearly impossible or impracticable for many other industries. If the Government take shipping, which differs by so many characteristics from any other industry, and make special provision for it along the lines which I have advanced in my Amendment, then I suggest that they are less likely to have it used as a precedent for other industries.

    I have attempted to put my case for this Amendment on broad lines, and solely from the point of view of what I believe to be vital to the national interest. I am not concerned in any degree whatever by its effect upon the finances of the shipowning firms except in so far as there is a financial effect which induces a reduction in the British Mercantile Marine below what it would otherwise be. The effect of the Amendment which I propose would be to cancel any danger of that kind.

    This is not a revenue point, on the one hand, any more than on the other, it is a question of reducing taxation falling upon a particular class. It is what economic purpose we desire to serve, and what is the best method of achieving that purpose. I believe, beyond any doubt, that the reasons I have mentioned for the complete exemption I propose would serve our purpose best. My hon. Friends who follow me will doubtless, with their current and daily contact with and knowledge of the shipping industry, which goes far beyond mine, add a great many technical considerations to those I have put before the Committee. I venture to put these broad reasons on the wider Amendment I have submitted.

    3.30 a.m.

    I am not clear which Amendment the right hon. Gentleman is discussing.

    I am sorry. Would you allow me to take this Amendment of mine, the one for the complete exclusion? It is an Amendment to the Government's Amendment, in line 1, to leave out from "that," to the end, and to insert:

    "nothing in this subsection shall apply to expenditure incurred in pursuance of a contract for the sale of a ship."
    I was proposing that it should be taken now as an Amendment to the Amendment proposed by the Economic Secretary on behalf of the Government. I was not proposing that we should cover now the other Amendments on this subject that appear later on the Order Paper.

    To some extent I feel I should discount my own remarks by saying that in the matter of taxation I think one is predisposed to hold the view that an industry with which one is connected merits special or exceptional consideration. Certainly I believe that the shipping industry and ship-building do deserve special consideration in connection with these initial allowances. After hearing what the right hon. Gentleman the Member for Ormskirk (Sir A. Salter) has said, and whatever additional remarks are made by myself and other right hon. and hon. Gentlemen on this side of the Committee, it will, of course, be for the Committee and, in particular, the Chancellor of the Exchequer and his Economic Secretary, to decide whether our convictions are justified or not.

    The question of initial allowances for the shipping industry can be tackled from a large number of angles but, in presenting the case for special consideration, I desire only to adduce two arguments either of which I feel would be conclusive, but which taken together must prevail.

    The first point I want to make arises out of a consideration in connection with defence itself. I would say that surely this is not the moment to do anything to discourage the building of ships. When the Committee has been dealing with previous Amendments to this Clause, attention has been drawn to the fact that initially these special allowances were introduced to stimulate the modernisation and the re-equipment of industry. It is, however, understandable that in the special circumstances of today and over a large field of civilian expenditure, the Chancellor should desire to restrain capital expenditure because of the over-riding need to fulfil our defence programme.

    But surely the provision of an adequate Mercantile Marine must be considered as part and parcel of our defence programme. If he will forgive me for saying so, the Chancellor of the Exchequer is commendably young, but he must recall—indeed he has been reminded of it today—the grave peril in which this nation, and indeed the whole free world, found itself in World War II because of the shortage of ships. I think he has probably heard of the similar and equally grave dangers which faced this nation in World War I.

    We have been told on more than one occasion of the large number of submarines which Russia is building—far-ranging submarines of high speed. The power of the bomber certainly does not grow less. Should there be another war, I am sure that this nation and other participants will have to face grave losses in their Mercantile Marine. I am glad that the right hon. Member for Ormskirk drew attention to the truly miraculous recovery which the shipbuilding industry has made and the very large replacement programme which has already been carried out, although of course he was right in warning the Committee that by no means all the gaps left by comparison with the pre-war strength of our Mercantile Marine have been made good.

    I am glad to see the Minister of Transport on the Government Front Bench. On grounds of security he still prohibits the sale of certain classes of British ships to foreigners. I think that that is a wrong decision from every point of view. It is a pity that over the last four or five years British owners have not been allowed to sell their old ships and to be enabled thereby to place more orders for new ships, but that is not a question I want to discuss now, and I should be out of order if I attempted to do so.

    If the Minister of Transport holds the view that the British Mercantile Marine is not sufficiently strong today, then surely it must be wrong to discourage the construction of new tonnage. Either the Minister of Transport is right in his view that the Mercantile Marine is still inadequate or the Chancellor of the Exchequer is right in discouraging further building. But both Ministers cannot be right. I want to point out to the Chancellor and the Economic Secretary—and, indeed, to the Committee—that purely on grounds of defence it must be obvious that this nation should do all it possibly can to add to the strength and efficiency of its Mercantile Marine as soon as possible.

    My second argument is based on the fact that the ships of all nations compete in the same freight market. Competition is truly international; it is ship against ship and flag against flag. In this competition and international market British ships already carry a load of taxation which in the past has placed, and today still places, serious disadvantages on British shipping vis-à-vis that of foreign countries. The consequence of that is that when rates of freight are high, foreign competitors are able to acquire large reserves.

    They can buy modern ships more easily than British shipowners can, and generally they are able to increase the efficiency of their fleets more easily than are British shipowners. When freights are low—and the freight market will fall some day—foreign owners will be able, by the reserves they can acquire today on a greater scale than British ship owners, to keep their ships running because of the efficiency of the modern tonnage they are able to buy today. I hope I am in order in reminding the Chancellor that in other Clauses the difficulties of British shipowners are being added to. There is to be a higher Profits Tax and higher Income Tax, and those two are adding to the direct taxation which is already more onerous on British shipping than any burden borne by ships sailing under any other flag.

    That was the last point I wanted to make. I do not want to detain the Committee further. I feel that on the grounds of defence alone, and of the ability of British shipowners to compete in an international market, the Chancellor should be very careful before refusing to agree to the Amendment so ably moved by my right hon. Friend the Member for Ormskirk.

    As the Committee has already been reminded, the Financial Secretary, in his speech on Second Reading, recognised the very special importance of shipbuilding. He used the word "very," and he made a promise. It was a wise and understanding promise, but since I have been in this House I have learned that Treasury promises are not always fulfilled by wise deeds, and this was no exception, because the Chancellor's Amendment is, quite honestly, no credit to the wisdom of either the Treasury or the draftsman who prepared it. My answer to the Chancellor's Amendment would be: "Thank you for nothing."

    Let me list my objections. First of all, we are not dealing here with a low-priced article. We are dealing with an industry in which Britain is supreme the world over. We are dealing with an industry on which Britain depends more than any other for her life. We are dealing with an industry which, twice in my lifetime, we have called upon for our very survival, and which, twice in my lifetime, has answered the call.

    If the Chancellor is worried about establishing a precedent, I am sure I can speak for hon. Members on both sides in saying that no one will mind if he does establish a precedent for the British shipbuilding industry. The British shipbuilding industry is without precedent and therefore no special treatment given to this industry can create a precedent for other industries.

    The proposals of the Chancellor are, to my mind, remarkable for their lack of elementary common sense. Why give the concession to ships that are actually under construction? What does that mean? When and where does construction start? It leads me to suppose that the Treasury are completely removed from what actuaally goes on in life and in industry today. Where does construction start? Does it start on the drawing board? Does it start in the sub-contractor's shop? Does it start in the tool maker's shop or the pattern maker's shop? Does it start when special components are ordered by the shipowner from an outside firm even before the order for the hull is placed?

    It starts, as we know, in a variety of ways and in a variety of places, and a great deal of expenditure can already be incurred before the actual keel is laid. Why pick on one feature of this complicated and long-term process and say, "That is the point to which I am going to apply the concession"? Why exclude components and machinery that are ordered by the owner or shipbuilder direct from outside firms? If the Chancellor wishes to bring chaos into the shipbuilding industry, this is the way to do it. The only practical dividing line is either when the order is placed or when the ship is completed.

    3.45 a.m.

    I have another complaint about the Chancellor's Amendment. The proposal of the Chancellor is to come into force at once. When a Government Department wants to make a change, they can have plenty of time to do it. We are told that changes cannot be made suddenly. I remember that the right hon. Lady the Minister of Pensions came to the House only a few weeks ago wanting to make a change. She wished to give 4s. 0d. rise in the National Assistance scales for old folk. The change should have been made right away, and yet she gets five months in which to do it.

    She is only dealing with paper—there is plenty of paper in Government Departments—but we are dealing with ships, ships that take years to build, some of which are ordered now, and thank God for it, but may not be completed until 1955, 1956, or even 1957. It takes time, it takes courage, and it takes considerable financial adjustment to find hundreds of thousands of pounds—nay, millions—to build a ship. This sudden change of policy is wrong. The shipbuilding industry is one on which I consider we should take a five-year view. It is an industry which cannot expand unless they do take a five-year view.

    But why not exclude shipbuilding altogether from that cancellation of the 40 per cent.? The arguments are indeed powerful. There is a queue waiting to place orders for ships now. If British shipowners withdraw their orders—and there are already, I am told, orders that have been suspended—there are foreign owners ready to take up the berths. Does the Chancellor really want to endanger the British merchant fleet to the advantage of foreign fleets? I cannot believe it. Britain depends on her merchant fleet. The ravages of war have not yet been made good, in spite of what one hon. Member on the other side of the Committee said. The tramp fleet has still a long way to go before we get back to our pre-war state. If armaments are needed, are ships not armaments?

    I will sum up. First, the Chancellor's Amendment as it stands is going to do nothing but sabotage the industry. Secondly, to alter the concession to the date when the order is placed, or will be placed, will seriously injure or damage the industry according to the date when the concession comes into force. To discontinue these allowances altogether, however hedged in they may be with safeguards, is to endanger not only the shipping industry, but Britain herself—Britain's superiority in peace and Britain's defence in war—and to do one more thing to break the chain that holds the Empire together. I think the Committee should consider very carefully before, in these times, they take that step.

    I think I should start in the correct way by declaring that I have an interest in the matter we are discussing inasmuch as, in the past, I have been concerned with, and interested in, a shipbuilding yard. I hope, when this Bill has had its day, week or month, to be able to look into the yard again. Therefore, I must say that I have rather more than a nodding acquaintance with the shipbuilding industry.

    The purpose of the abandonment of the initial allowances has been made abundantly clear not only this evening, but when the Chancellor made his Budget speech, and it is that there should be a curtailment of capital expenditure at the present time. I should like to contrast those words with the words of his pre- decessor, Sir Stafford Cripps, two years before, when he said that the Government were constantly stressing the need for higher productivity, and both sides of industry agreed that one important factor in this was more and better mechanisation, and when, later on, he stated that owing to a further rise in prices, he had decided to double the existing initial allowance.

    I think it has been recognised—and every hon. Gentleman who has spoken so far to the Chancellor's Amendment has stated so—that ships are in a special category. They are virtually the fourth line of defence. Indeed, the Chancellor has recognised that by the Amendment we are considering, but, in my view it does not go far enough. His action must do one of two things. Either it must result in the cancellation of those orders with which the yards are very full—and in that case we shall be short of the most modern type of our fourth line of defence and we shall not have ships which in terms of productivity would have satisfied his predecessor—or, on the other hand, if it does not result in cancellation, then the Chancellor will not have achieved his purpose.

    So whichever happens, there is bound to be either a disappointment in the quality of our ships, and consequently in the mechanisation of our fleet, or in his hope that he would curtail capital expenditure. Indeed, in the short term it will not affect the curtailment of capital expenditure because the sub-contracting work—all the components of the ships—for some time ahead has already been ordered and will in due course be delivered, and there will be full yards for a year or so ahead.

    For an independent ship-owning concern the question of financing these expensive vessels is very acute. The initial allowance helped to solve this problem for some of the companies which wished to bring their fleets up to modern standards because, in spite of what was said by the hon. Gentleman the Member for Stoke-on-Trent, South (Mr. Ellis Smith) the British Mercantile Marine is not as modern as it was before the war. The 40 per cent. initial allowance, which was supported in general terms by the Millard Tucker Committee as being a method of dealing with this financial problem, was a very considerable factor in the calcula- tions of shipowners when placing their orders.

    I should like to have a look at one or two problems arising from the actual wording of the Chancellor's Amendment. The Amendment talks, as the original Clause does, of the expenditure that is incurred. I would like to know from whoever is to reply when is expenditure incurred. No doubt in terms of Treasury intrepretation it is incurred when it is actually made, but to the ordinary lay mind it is when the contract for the ship has been placed and the undertaking has been given to make certain payments by instalments that the expenditure has been incurred. That point should be cleared up before we can properly understand what we are discussing. If it is when the actual payment takes place, there is nothing to prevent a shipowner from abandoning the normal system of payment by instalments and making a lump sum payment within the year to 5th April, and he can circumvent the wording of the Clause in such a way.

    One case has come to my notice of the considerable confusion which has been caused by the abandoning of the initial allowance. Early in 1950 a certain company placed an order for one tanker, for delivery in 1953—and note the lapse of time that takes place in all this. At the beginning of 1951, a second order was placed for a tanker to be delivered early in 1954. For part of the cost of the second tanker the company had to double its capital, the intention being that the balance would be met by a loan, which it was estimated would be paid off in 2½ years. The company's estimates were based on and took into account the full effect of the initial allowance. The cancellation of that allowance has thrown the whole financial plan into confusion, the construction of neither tanker has yet begun, and the company has stated that its plans have been completely upset.

    The industry is waiting intently on the result of this debate. At the moment companies can make no definite decisions. They know the Minister has certain concessions in mind. The Committee has learned today what sort of concessions they are. We believe they do not go far enough. It would be very helpful if we could have from the Government something to clear our minds.

    I should like to give some illustrations on the observations by the hon. and gallant Member for Barkston Ash (Colonel Ropner) that shipping in this country is not a favoured industry. It is not being treated half as well by this Government as many foreign Governments treat their shipping industry. In Norway the excess value of ships on a 1938 basis plus 20 per cent. may be written down over five years, up to a maximum in any one year of half the profits for that year, and this allowance generally amounts to more than 40 per cent.

    In Sweden ships may be written down practically by any amount without restriction. In Denmark allowances work out so that the whole ship may be written down in 12 years. United States shipowners are entitled to receive from the Government financial assistance to bring, the building costs of vessels down to the level of building costs in other countries. When these vessels are operating in the liner trade allowance is made, by subsidy, for the difference between United States working costs and the costs in other countries.

    We had this initial allowance. It helped us a good bit. It is now being cancelled. That makes the situation all the worse. I want to ask the hon. Gentleman who, for the purposes of trade, is the trader in this matter. Is it the shipowner; and if so, is a sub-contractor who is supplying a shipbuilder with an engine, or lifeboats, or davits, or any other apparatus, precluded from the 40 per cent. allowances because they are not for the purposes of the trade? Will the concessions in the Amendment apply to all floating craft, to tugs, lighters and other floating appliances belonging to dock authorities? I imagine they will be, but dock authorities will be happy to know that that is the interpretation of the Government.

    In supporting the Amendment to the Amendment, I hope we shall draw some further elucidation from the hon. Gentleman who is to reply that will show that something more worthwhile will be-granted than what has already been promised by the Government.

    4.0 a.m.

    I shall detain the Committee only briefly on a somewhat narrow point. I have no interest in any shipyard, I am sorry to say, but I saw at the start of the last war the appalling shortage of certain specialist types of ship, and then at the conclusion of the war, I saw resolutions come from all sides, from the Services and the politicians, asking that steps should be taken to subsidise the building of these types of ship so that that would never occur again. So far as I know, nothing was subsequently done, despite all those pious resolutions, as often happens when peace breaks out.

    The effect of this Treasury Amendment will not only be that nothing is done, but that the very types of ships most required will be reduced, because these types are fast infantry-carrying ships which are expensive to build, take a long time to build and if they are to be used most effectively, should incorporate certain special fittings for rapid conversion. With expenses going up and allowances going down, the likelihood of people building these types unless given assistance by the Treasury seems to me to be practically nil.

    My experience of the Treasury is that when they have any real power of fixing matters regarding defence and are not fought tooth and nail by the Service Ministers, defence is cut well below the safety mark. It has always been my opinion that, with the best will in the world, the Treasury have played a large part in causing two world wars. I maintain that opinion. Nobody wants to see that going on again, and therefore I say to the Economic Secretary, who is now paying attention—

    The hon. and gallant Member must not say anything like that. I have been paying close attention to everything that has been said and it is wrong of him to suggest I was not listening. I was surprised that the hon. and gallant Gentleman should attack successive Chancellors in this rather personal way.

    I withdraw unreservedly. No doubt the hon. Gentleman was paying full attention, but I know that at this time of the morning it is very easy for people not to do so.

    The hon. Member seemed to pay particular attention when I made that remark about the Treasury, about which I am unrepentant. I may be wrong, but it has been a bee in my bonnet for a long time. I suggest that the hon. Gentleman should look into the question of these types of ship. They were known as L.S.I., and were large, fast passenger ships easily convertible for carrying troops. We are an island Power, very short of forces and very much needing mobility. It is the sea that confers mobility to a large number of troops. Once again we shall enter war with world-wide commitments. Once again, if we are not careful, we shall feel the appalling scarcity of such ships. A little foresight now, some concession now, and that difficulty will be overcome. If nothing is done now or next year or two we shall be short of this essential type of equipment. I do beg the hon. Gentleman to reconsider this matter.

    I hope that the hon. Gentleman the Economic Secretary will pass on to his right hon. Friend the Chancellor of the Exchequer how seriously some of us feel about this matter. I think it is clear to us that the shipping industry is in a unique position, because the ships themselves are the tools of that industry, and there is nothing quite the same in any other industry. In order to build a ship it necessarily takes a long time to plan it, and a much longer time to construct it; it has to be built in one piece. In other trades persons can develop equipment and plant and add to it as they want. In the shipping industry one has to keep up to date, especially in the liner trade, and if there is any dropping behind traffic is lost. People insist on travelling in ships that are up-to-date, and shipowners have to be in a position of being able to keep their fleet up to date.

    I can assure the Economic Secretary that it is impossible for shipowners to do that, with the tremendous burden of taxation which falls on them, or to maintain their fleets in that condition if the initial allowance is removed, I do beg the hon. Gentleman to realise that once this thing goes it means a great many British ships will be withdrawn from the builders. Foreign owners will occupy the slips and it will result in that additional tonnage taking the water so that by 1956 the British flag will be flown by far fewer vessels. I am convinced that the Treasury have not grasped that this business of shipbuilding, especially of the vast passenger liner is a complicated business and we are being overhauled by certain other countries, which, with the allowances they have, are able to build superior accommodation, not only for the passengers they get but for other purposes. There is the case of the Panama vessels. There is a minute country, which has developed an enormous mercantile marine and which is out to chase other ships off the seas.

    This, of all times, is not the moment for the British to risk their fleet. Surely it is not only a question of the United Kingdom, but of the British Commonwealth as well. We are anxious to see British shipyards full of orders from shipowners and firms domiciled in the Commonwealth. They will only come to this country if we can maintain the efficiency of our shipyards, which are by far the most efficient in the world; otherwise, foreign owners would not be clamouring to have their ships built here, but there have been cases brought to my knowledge, that because of the threat of the withdrawal of the initial allowances, vacancies are likely to appear in some British yards.

    Because the boards of shipping companies are so uncertain about the future they make their plans for many years but the tremendous weight of taxation which has come upon them, especially in this Budget, is bearing extremely hard on the industry. The situation is such—and I can assure the hon. Gentleman that he can get any amount of evidence—that there is a feeling of real anxiety. There is only one course, and that is to leave the shipping industry in possession of the initial allowances.

    Did I understand the hon. Member to say that there were vacancies in British yards?

    No. What I said was that there is such congestion now for building in British yards that the managers of the yards have to allocate berths well ahead. It may be that if a slip is occupied today one knows when the ship is to be launched and who will next occupy that berth. It may be a British ship. But if the owners become uncertain about it, the managers of the yard must go to the next person, who may be a foreign owner, and that would mean the occupation of that berth by a foreign owner.

    I assure the hon. Gentleman that it is not only in regard to the actual hull. People seem to think that when one lays down the keel that is all that has to be done. It is necessary now for orders for some of the dead, auxiliary machinery which is scarce to be placed by the shipyard a long way ahead in expectation of an order. For instance, it is hard to get auxiliary diesel engines and a lot of electrical equipment in view of the demand for the re-armament programme. Therefore, anything which leads to uncertainty either for the boards of directors of shipping companies or for the managements and boards of shipbuilding berths at this juncture will mean a severe risk not only for the industry but for the future of this country.

    I desire to add a few words in support of this Amendment from the point of view of the shipbuilders. My reason is that the part of the world which I represent is vitally concerned in that industry, which is possibly one of the largest centres of shipbuilding in the world. As I see it, one of the real dangers of the withdrawal of this allowance is that it may well cause a dislocation in the pattern of shipbuilding.

    Anyone concerned in that industry—and we in Belfast have cause to know this—realises the importance of having a rhythmic flow of orders coming into the yards. It is not so important to have a tremendous number of orders at one time, some of which one cannot fulfil, and at another very few, as to have the rhythmic pattern which has prevailed over the past year or so in the industry. The withdrawal of this allowance may well have the effect of causing shipping companies to cancel orders if they can do so, and so throw out of gear the pattern of the shipbuilding of this country.

    Would the hon. Gentleman allow me to put this question to him? A lot of argument has come from the other side of the Committee about shipbuilding being part of the rhythmic pattern. Why was not this dealt with three or four years ago, when there were practically no orders in the shipyards? [HON. MEMBERS: "Nonsense."] Oh, yes. [HON. MEMBERS: "No."] One hon. Gentleman opposite said order books were full now, but that they were not full a year ago. [HON. MEMBERS: "NO."] There were periods where important shipyards lacked orders because of the failure of the shipowners to give orders so as to keep up this rhythm of shipbuilding about which we have heard.

    4.15 a.m.

    The hon. and gallant Member may be familiar with ships but I cannot say that he seems familiar with shipbuilding. Nobody who knows anything about shipbuilding can support the statement that there were empty slips. There might have been two or three here and there but at the vast yards of Messrs. Harland and Wolff there has been no empty space since the end of the war for the simple reason that replacement has been going on to make good that which we lost during the war. So the hon. and gallant Member's point falls to the ground. But, when the replacement for the Merchant Navy is almost complete, it may well be now that shipping companies will hesitate to order when they know that these allowances are withdrawn.

    There is another important aspect. As some hon. Members have pointed out, the building of a ship is a tremendous undertaking. It grows with the size of the ship ordered, and this is not the kind of industry where one says "Well, I think I will order a ship tomorrow." Ships laid down now have probably been planned and ordered some years ago when it was not even thought that these allowances would be withdrawn. The Government has recognised this difficulty to some extent and have made an endeavour to meet it by saying that in the case of ships under construction, the allowances will not be withdrawn.

    Other hon. Members have pointed out that the Government should say how it is going to define "under construction." There, I think, the Chancellor will run into a great deal of difficulty. As the hon. Member who has just spoken pointed out, it very often happens that a great deal of work on parts of equipment and on the engines is done before even the keel is laid. Generally speaking, anybody ordering a ship has to wait for a vacant slip; but in a great yard like Harland and Wolff's the diesel engines or something else for the ship are started before work begins on the hull if there is no space. In such a case, who can say if that ship is "under construction"? There may be many important or expensive parts constructed although there is no appearance of a ship.

    Then, let us remember that before any construction work at all can be done there has to be a tremendous lot of designing and drawing which is also very expensive. Is it to be said that when all these preliminary things have been carried out, although there is no keel on the slipway, that the vessel is "under construction"? I suggest that it would be very much better, instead of saying "under construction", to say "when the contract for the construction has been made". That would be a very much better yardstick.

    The Economic Secretary to the Treasury has pointed out on several occasions in this debate that Amendments have been excellent and has said that he was much in favour of them and would be very willing to grant them; but then, in the final sentence he has said that owing to there-armament programme, and for one or two other reasons which I cannot now remember, it was impossible to make the concession sought. There is one thing that cannot be said about this Amendment, that it has no effect on the re-armament programme. There is practically no class of vessel or craft that cannot be used and is not used in war. From the yacht to the liner they all have their uses, and they are nearly always used as part of the defence programme. That argument certainly is not one that can be put forward.

    Ships are in an entirely different category to an ordinary type of factory. Shipping is a trade in itself. It is very important to distinguish ships from any other form of plant to which allowances may apply, for ships are the centre of the whole industry. For that reason, if for no other reason, I think that this Amendment should be accepted.

    There is one further point that has not been mentioned and that is the design of ships. The design of ships has changed more in the last six or seven years than ever before in the history of shipping, which is because of the continuous flow of new orders. If once that is interfered with, or anything is done to prevent or make it difficult for shipping companies to place orders for ships, not only will it be disastrous for those employed in the industry, but it will affect the design of the vessels. Shipping in this country should never be neglected, for it is indeed one of our greatest industries. In those circumstances, it is regrettable to find the Government attempting to remove these allowances from the industry. I hope that better counsels will prevail, and that the Chancellor will see his way to accept this Amendment.

    As has happened on a number of occasions, I must start my speech by declaring an interest in shipping, and I apologise to the Committee for speaking so often on a subject with which I am very closely connected outside Parliament. The points made so far have been advanced with much strength, and I am not going over them again. The main arguments were most ably put by my right hon. Friend the Member for Ormskirk (Sir A. Salter), who made the major case for taking shipping out of this Clause altogether. However, there are still things that need saying, and I hope they will be listened to with care by hon. Members on the Treasury Bench, and particularly by the Chancellor of the Exchequer when he is considering the results of this debate between now and the Report stage.

    The first thing that we must get absolutely clear is that the shipping industry is only too ready to bear its full and proper share of taxation. Initial allowances, in the long run, make no ultimate difference to what the Treasury receives, with one proviso—that the unit in question in its lifetime makes money. I cannot quickly turn up the quotation, but even the Chancellor himself, or one of the Treasury Ministers, said on the Floor of the House, that, after all, these initial allowances are nothing more than a tax-free loan. That, too, has been said on this side and it has been said outside the House. It is absolutely wrong. To certain types of firms with very big resources who can be reasonably certain the unit involved in the discussion is going to make money over its whole lifetime, it may be true.

    I should like to refer to "tramps" with which I am connected. I remember very well a ship belonging to the firm with which I am associated and which was built in the 1925–26 period. It made money for a short time with only a 4 per cent. depreciation allowance, paid tax on relatively small profits over and above that, and then ran slap into the depression of the 'thirties and never in its lifetime made depreciation. Therefore, the Treasury actually got money to which, over the life-time of the ship, it was not entitled and there was no way of getting it back. Let us get rid of the idea that initial allowances are nothing more than a tax-free loan because they can be vastly more important than that to certain types of industry and to certain types of ships.

    The basic issue is clear. The Chancellor himself really made our case in his Budget speech. Some of his speech has been quoted, and I should like to quote one part of it too. He said:
    "The initial allowances after all were introduced at the end of the war as a means of stimulating re-equipment and modernisation. …"
    And this is the important part. He added:
    "That is, of course, a very desirable aim but in our present circumstances to stimulate capital expenditure in this way would, I am satisfied positive endanger the defence and export programmes too much."—[OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 842.]
    If that is applied to shipping it is entirely our argument upside down. What could do more serious damage not only to the defence programme but also to the export programme than if the British Merchant Marine does not progress as fast as it possibly can in this critical period? There can be no shadow of doubt what effect the suspension of initial allowances must have, and I do not want to exaggerate the case.

    Other hon. Members have mentioned the question of cancellation of contracts. I believe there may well be cancellation of contracts, but I am not certain of it. But, quite apart from that, the whole mood which prevails, and which has prevailed for some time past, in the shipping industry of this country, must change. The decision to build these extremely expensive units is a matter of economic climate and mood to a very considerable extent. Sir John Anderson, immediately after the war, brought in initial allowances of 20 per cent. He was certainly not a Socialist. Only two years ago, Sir Stafford Cripps increased the allowances to 40 per cent. Obviously it must appear to the industry that there was no difference between political parties on this question. They were bound to assume that initial allowances would continue.

    It is no good the Lord Privy Seal shaking his head. It is true that that is what happened. They assumed, in their basic thinking on new construction, that initial allowances would go on. One cannot run an industry so vital to the nation's fate in war and peace with constant changes in essential policy affecting its finances. The uncertainty since the Budget speech has been very damaging. Owners have not known whether they could go ahead or not. Indeed, they are awaiting the result of this debate, and they will not really know the position until the Finance Bill is on the Statute Book. That has done no good.

    4.30 a.m.

    I will leave the question of the background of the placing of orders for new tonnage and turn to two further important points. The hon. and gallant Member for Scotstoun (Colonel J. R. H. Hutchison) mentioned the question of taxation in other countries. That is an extremely important point, and it was a great difficulty for British shipowners before the war—before the initial allowances were introduced. That introduction did go some way to meet the advantage which shipowners of other nations had in the matter of taxation. Are we to lose it?

    Another point is that there has been a serious recrudescence of what is known as flag discrimination. Other nations are discriminating against the use of British tonnage in a way which has not been seen for some time—certainly not since the 1918 war and possibly before that. It began to grow during the inter-war years and we got rid of it. It has become much worse again since 1945 so that we are fighting against not only taxation advantages which other nations have but also against a deliberate diversion by other nations of cargoes into ships under their own flags. There are many other difficulties, of course. We see the straight subsidies which are being given to foreign shipping. We are not asking for a subsidy in this country or anything like it; that is the last thing we want. If we are given a fair deal and fair taxation we can get on in the world, but we must not be in a worse position than our competitors from a taxation point of view.

    Finally, without labouring the point, may I deal with shipbuilding? The hon. and gallant Member for Hull, East (Commander Pursey) made a statement which I think should be corrected because it might go out to the public—and the public ought to know what the true position is. Since the war it has not been possible for an owner wanting to build a ship of 400 feet and upwards to get delivery within a couple of years. At no point has a slip been available for putting down a new keel for a new order which had not been in the order books for some time past. The hon. and gallant Gentleman is right only up to this point—that for a short time about a year ago some of the yards building small ships up to 250 or 300 feet were running short of orders in their order books. But there has been no time at which one could place an order for a big ship and get delivery within less than two, three or four years. That may appear to strengthen the Government's case for taking this action. But of course they must realise that they are risking cancellation.

    Let us look a little further ahead. Even if the Government insist on including shipping in this suspension of the initial allowances, that will not affect the position for the next two years when the whole weight of re-armament will be falling on the country. It cannot stop the ships which are on the stocks now, and the great majority which are on the stocks now will be there for a considerable time. The Government will get no advantage during that time. What they will be doing will be to jeopardise employment in the ship yards two, three, four or five years from now.

    Let it be realised that all shipping—particularly tramp shipping—moves in a cycle and not all the efforts of the planners in Whitehall can stop that for years to come, because whatever they may be able to do in this country they cannot believe that they can influence what is to happen in an international market like this. I hope that the Economic Secretary will convey this information to the Chancellor, because I cannot believe that it is fully appreciated. There was a fall in freights about a year ago and the marginal ship, the old ship, was already being laid up. That was the ship which was less efficient and which could not trade at a profit. The result was that tramp owners in particular were waiting to see how the freight market was going to move, before deciding on their future building programmes.

    We all regret the war in Korea and all that went with it, but it had a staggering effect on the freight market in the early autumn—with in addition, of course, the effect on the freight market of the handling of the import programme by Government Departments during last winter. We must mention that because it is one of the major factors in the very high rise in freights. No one likes the present high level of freights. However, if we maintain initial allowances on new building it will have the effect, three or four years from now, in constituencies like my own, which are very dependent on shipbuilding, of helping to maintain employment, because shipowners will feel that if they can get the initial allowance and, therefore, their ships written down while freights are good, and if money can be put to reserve a bit of a risk can be taken three, four or five years from now, when we must almost certainly go back to a low freight market always assuming that we avoid war.

    Whatever the policy of liner and tanker companies may be, I assure the Chancellor that the policy of a tramp owner has got to be based on building his ship at a period when he hopes he can get some money in the bank to carry him through the depression which is inevitable within the next seven or eight years. That has been the experience through the whole history of shipping; there is an eight to ten year cycle.

    Clearly, if the initial allowance can be maintained when freights are good, one can get a margin which will see one through the bad years. Without it, I am convinced that as soon as the excessive demand on world markets disappears with, as we hope, the disappearance of the threat of war, we are bound to slide fairly quickly back into the position where marginal shipping will again be laid up, and there will be no inducement whatever to an owner who has not a lot of money put away to go in for new building at a time when it will be essential to keep our shipyards going.

    For these and other reasons, which I will not go into now, I strongly support the Amendment of the right hon. Member for Ormskirk, and I sincerely hope that we shall get some indication from the Chancellor that he will be sympathetic to it before the Bill goes through all its stages.

    I must declare my interest in the Government's Amendment. It is a conflicting interest. As a lawyer, of course, I should be all for ambiguity, but as a legislator I have often been chided by His Majesty's judges about some of the legislation passed in the last six years, and I have been asked what it means. I feel that the phrase which has been criticised on the benches opposite is ambiguous. I refer to the phrase

    "ships actually under construction."
    I do not want to develop the argument, but I merely express my view that it is an ambiguous phrase, and I think the Government might look into it again, not for the benefit of the lawyers but for the benefit of the Committee as legislators.

    I think the Committee will appreciate that the fact that the Government have tabled the Amendment is an indication that we recognise shipping to be an exceptional case. The word "unique" has been used, and I should be prepared to accept that as a fair description of the shipping industry. Since this matter was first raised I have, without pretending to any expert knowledge about shipping, been doing my best to understand the essential character of the problem, and I have had the benefit of a discussion with representatives of the General Council of Shipping on the whole matter. I therefore felt that a very large amount of what was said by most hon. Members about the importance of shipping was something which could be accepted on all sides.

    What bothered me was that almost everybody—although I would except to some degree the hon. Member for Renfrew, West (Mr. Maclay), and the hon. Member for Abingdon (Sir R. Glyn)—made a leap to another conclusion—the conclusion that the initial allowance ought to be maintained; that shipping is important and, therefore, the initial allowance ought to be maintained. Quite apart from the logic of that, I should have thought that it was precisely that gap in the argument which it was somebody's business to fill up.

    The two hon. Members to whom I have referred were the only people who, to any extent, tried to fill the gap. The right hon. Gentleman who opened the discussion burked the whole question. He assumed what it was his duty to try to demonstrate. At no point did he ever come to grips with the problem, which was to show that, if the initial allowances are withdrawn, it is going to mean that the shipbuilding companies are going to be in a position where they will not be able to go on with the ships, they will not be able to fulfil the contracts that have been made, and so on.

    The hon. Gentleman on the opposite benches who spoke last did, I think, indicate the character of the problem, and he did it not in any extreme way, as almost everybody else has done. He did it in the most moderate way, and in a way which I accept—that is to say, that the effect of the suspension of these allowances is not something to be thought of as washing out the whole of the contracts, but having a marginal effect in two spheres in particular, namely the small tanker and the small tramp. That seemed to me to be the gap in the right hon. Gentleman's answer. He asserted what I would like him to have demonstrated.

    I did not say or suggest that the withdrawal of these allowances would result in cancellations of the contracts that have now been placed or the major part of those contracts. I did imply, and I thought it was common knowledge and recognised by the Government, that the tendency must be to diminish contracts and result in the cancellation of some of the contracts and, indeed, the placing of further contracts. If the initial allowances had no adverse effect of that kind, I do not know why the Government itself have proposed this limited and, I think, quite inadequate Amendment. If I had thought there would be any doubt about the adverse effect on the placing of contracts, I could have quoted. I do not know whether the Economic Secretary has seen the speech of Sir William Curry of the P. & O. reported in today's issue of "The Times." I can refer him, again, to the representative of a great tanker fleet.

    I am glad to have the right hon. Gentleman's explanation. I am even more pleased to have some of the actual cases which have been given to me as a result of my inquiries into the matter, and I would not deny that at the margin, the withdrawal of the allowances, especially in the cases I have indicated, could have an effect. I cannot understand why the right hon. Gentleman should be so concerned about the placing of orders in the future. I think we all agree there are orders placed which are certainly going to take all our capacity for three or four years. If I understood what the hon. Member for Govan (Mr. J. N. Browne) was saying, the yards are full for years.

    I am dealing with the hon. Gentleman's point that he wants freedom for further orders. I have admitted that, marginally, the withdrawal of the allowances would have an effect. But the gap which was not really filled up, and which I respectfully submit that it was his duty to fill up, is that I would have expected him to say, "This is the position of the industry; Here are its accumulated resources—these are the reserves which I expect the industry to be able to accumulate on the basis of present tax levels"—and then, making some reasonable allowance for borrowing, reach a conclusion about how much new shipping industry in fact can cover with its reserves.

    4.45 a.m.

    That is what I would have expected to happen. Certainly, no one has even begun to demonstrate that the effect of the withdrawal of the initial allowance would have a disastrous effect on the industry. I admit that it would have a marginal effect, but unless the industry is put under a strict inquiry as to its needs, or unless hon. Gentleman who speak for shipping and have a great knowledge of it, can demonstrate the real stress under which the industry is, then I must say I beg leave to express a certain view.

    I did not say that it would have a disastrous effect on the shipping industry. I did say that it would tend to reduce the extent to which the British Merchant Marine is now being very fortunately increased. If the hon. Gentleman says that the yards are full for several years what does it matter? I would say what does it matter for his purpose, which is that of protecting the present re-armament programme, if it is only for that period that the initial allowances have that effect when he can always later, if the situation develops, and the Government no longer desire to see the mercantile fleet increased, withdraw the allowance?

    That does not get away from the fact that the right hon. Gentleman presented only half a case and he drew an exaggerated conclusion on the basis of no evidence whatever. After all, would it be denied that at the present time shipping is booming, and that profits, on the whole, are high? Would it be denied that freight rates are higher now than they have been for a very long time in real terms and not just money terms? Those are factors which have to be taken into account.

    The hon. Gentleman is not taking into calculation the remarks I made on this theme. He is trying to show that the effect of the cancellation or annulment of the initial allowance is not going to have much of an effect. If it does not, the whole of the Chancellor's purpose is defeated because he is trying to stop capital expenditure which the hon. Gentleman is trying to show will not be affected.

    I am not trying to show anything of the kind. I am trying to show that most hon. Gentlemen opposite have presented half a case and that they have exaggerated it. I vastly prefer the case put by the hon. Member for Renfrew, West (Mr. Maclay), which I believe essentially to be the right one.

    While I appreciate the polite remarks of the hon. Gentleman, I take a gloomy view of this Clause, and I do not want there to be any misunderstanding about that. I share the views of my hon. Friend, although I tried to fill up some of the obvious difficulties. This thing, over a period, can have serious consequences.

    I entirely agree, and I am grateful to the hon. Gentleman for filling the gap. It would have been a pity if the case had not been stated during the whole course of the debate. The state of the industry, after all, is very different from the position when there were no initial allowances for shipping, and hon. Gentlemen opposite have the shortest of memories. They get indignant about changes when only a little while ago—within the memory of all of us—they might have reached a somewhat different conclusion.

    One hon. Gentleman—I think the hon. and gallant Gentleman who sits for Scotstoun (Colonel Hutchison)—brought the Millard Tucker report into the argument. I think it will be agreed that it would be a great mistake to take a decision on the basis of that Committee's recommendation because the last thing it would be right for us to do now would be to accept the recommendation, as I said on an earlier Amendment.

    This is the second time the hon. Gentleman has raised this point, without producing any argument to prove it. We have no evidence to show why he should know better than the Millard Tucker Committee, which has been considering this matter two years, whereas he has been considering it only about two weeks since he got his brief.

    All I am saying is that I do not want to prejudge a complicated matter. But my view coincides with that of the hon. Member for Wirral (Mr. Selwyn Lloyd), who put that point of view on Second Reading. If hon. Gentlemen want to argue that the Millard Tucker is on their side, all right. I am only saying that I cannot accept that as an argument in this' case.

    The hon. Member for Renfrew, West, implied that when the initial allowances were introduced, and when they were increased, the implication had been that they were to be permanent. I think that is wrong. Neither the Chancellor of the Exchequer of the time, nor any successive Chancellor as far as I am aware, has ever suggested that this was a permanent part of our tax system. In all these matters we do this year by year. Even if that were the case, it would not constitute an argument in favour of the total exclusion of shipping from the proposal in the Finance Bill. It would constitute an argument in respect of contracts made before Budget day.

    While I feel bound to reject the claim for total exclusion, I shall be very interested, when we come to the following Amendments, to hear what hon. Members have to say on this point of the contracts, and I may then be able to be a little more helpful. It is a pity that we are not discussing all these together, but since we are not I had better content myself with the reasons against total exclusion and reserve my remarks on the contract point till we get to the Amendments.

    I would like to begin by complimenting the Economic Secretary at this hour for complaining that the argument had not been fully developed. That was a capital statement. If the argument has not been fully developed, the reason is that the whole show has been given away by the Chancellor. He said, on 10th April—

    "The importance of this proposal lies, therefore, as I hope the Committee appreciate, not in the yield to the Exchequer but in the effect which I judge it will have on the placing of orders for capital equipment."—[OFFICIAL REPORT, 10th April, 1951; Vol. 485, c. 843.
    That means the Chancellor is doing this because he thinks it will lead to the cancellation of orders for capital equipment.

    The second point I want to make is that, all through, the excuse advanced from the Treasury Bench for not doing anything whatever about anything is that we cannot do it because of the re-armament programme. That is a double-edged argument when it comes to shipping. It recoils on the Government, because there is nothing more important to the defence of this island than a balanced mercantile marine. I thought when my hon. and gallant Friend the Member for Carshalton (Brigadier Head) was developing this case that I saw a great deal of argument opposite to what he was saying.

    All of us who had something to do with the running of the war know that this matter of fast merchant ships became a supreme importance. One would have expected the Treasury Bench to develop the argument that they are sympathetic to this Amendment because they regard these proposals as an integral and important part of the re-armament programme and, therefore, fall outside those concessions for which the Opposition have so far asked. I do not think we can exaggerate the defence aspect of this problem. I believe it would be true to say that there has been an over-construction of tanker tonnage since the war.

    We wish now to build a more balanced Merchant Navy, and this is the moment when the decisions have to be taken. I would point out to the Committee that we are dealing only with a concession given by the Chancellor to ships under construction. Obviously, and the Chancellor agrees with this, that the contracts for these ships will be cancelled in a certain number of cases, which means that over a period of five or six years the possibility of reaching a balanced Merchant Navy will be greatly hampered.

    The Committee will know the large contributions that invisible exports made in restoring the position of our balance of payments last year. Shipping is perhaps the most desirable of all invisible exports, perhaps more desirable than banking and insurance, because if we are carrying a large portion of world trade, we are getting insurance and banking business as a result of the carrying trade. I do not want to develop the argument about invisible exports at this witching hour, but time and again the Government seem to be less anxious about invisible exports than I think they should be.

    The Economic Secretary said that nobody had a right to count on this allowance for ever. I agree with him there. I do not think that any shipowner or shipbuilder regards any of the promises of any Government as permanent in all circumstances. But that is not a good answer to sweeping away to nothing in one day of a 40 per cent. initial allowance.

    It would have been serious if the initial allowance had been cut, but to do away with it altogether and give only one year's notice in an industry in which the period of gestation, if I may so put it, is very long, and in which contracts have to be placed for delivery four and five years ahead, is a typical Whitehall attitude towards industry. Industry cannot carry on when a major factor in their whole programme is subject to these violent changes, which have been extremely mercurial over the last few years.

    I conclude by saying that the Chancellor has told us he expects the result of the cancellation of initial allowances to be the cancellation of a large number of contracts for capital equiup- ment, so it is quite unnecessary to argue that effect. I take words out of the Chancellor's mouth. That is the main point I wish to make. The right hon. Gentleman also said that it was necessary to take action now to restrain investment in 1952 and later years. That is why my hon. Friend did not think it fit to develop that argument as far as he would have liked. The Economic Secretary said he would be glad to receive instances. In Parliamentary language that usually means he is prepared to look at this again. If so, between now and the Report stage we will take action to procure for him information

    Division No. 95.]

    AYES

    [5.0 a.m.

    Acland, Sir RichardDavies, A. Edward (Stoke, N.)Hewitson, Capt. M.
    Adams, RichardDavies, Harold (Leek)Hobson. C. R.
    Albu, A. H.Davies, Stephen (Merthyr)Holman, P.
    Allen, Arthur (Bosworth)de Freitas, GeoffreyHolmes, Horace (Hemsworth)
    Allen, Scholefield (Crewe)Deer, G.Houghton, D.
    Anderson, Alexander (Motherwell)Delargy, H. J.Hoy, J.
    Anderson, Frank (Whitehaven)Dodds, N. N.Hubbard, T.
    Attlee, Rt. Hon. C. R.Donnelly, D.Hudson, James (Ealing, N.)
    Awbery, S. S.Driberg, T. E. N.Hughes, Entrys (S. Ayrshire)
    Ayles, W. H.Dugdale, Rt. Hon. John (W. Bromwich)Hughes, Hector (Aberdeen, N.)
    Bacon, Miss. AliceDye, S.Hynd, H. (Accrington)
    Baird, J.Ede, Rt. Hon. J. C.Hynd, J. B. (Attercliffe)
    Balfour, A.Edelman, M.Irvine, A. J. (Edge Hill)
    Barnes, Rt. Hon. A. J.Edwards, John (Brighouse)Irving, W. J. (Wood Green)
    Bartley, P.Edwards, Rt. Hon. Ness (Caerphilly)Isaacs, Rt. Hon. G. A.
    Bellenger, Rt. Hon. F. J.Edwards, W. J. (Stepney)Janner, B.
    Benn, WedgwoodEvans, Albert (Islington, S. W.)Jay, D. P. T.
    Benson, G.Evans, Edward (Lowestoft)Jeger, George (Goole)
    Beswick, F.Evans, Stanley (Wednesbury)Jeger, Dr. Santo (St. Panoras, S.)
    Bevan, Rt. Hon. A. (Ebbw Vale)Ewart, R.Jenkins, R. H.
    Bing, G. H. C.Fernyhough, E.Johnson, James (Rugby)
    Blenkinsop, A.Field, Capt. W. J.Johnston, Douglas (Paisley)
    Blyton, W. R.Finch, H. J.Jones, David (Hartlepool)
    Boardman, H.Fletcher, Eric (Islington, E.)Jones, Frederick Elwyn (West Ham, S.)
    Booth, A.Follick, M.Jones, Jack (Rotherham)
    Bottomley, A. G.Foot, M. M.Jones, William Elwyn (Conway)
    Bowden, H. W.Forman, J. C.Keenan, W.
    Bowles, F. G. (Nuneaton)Fraser, Thomas (Hamilton)Kenyan, C.
    Braddock, Mrs. ElizabethFreeman, John (Watford)Key, Rt. Hon. C. W.
    Brook, Dryden (Halifax)Freeman, Peter (Newport)King, Dr. H. M.
    Brooks, T. J. (Normanton)Gaitskell, Rt. Hon. H. T. N.Kinghorn, Sqn. Ldr. E.
    Broughton, Dr. A. D. D.Ganley, Mrs. C. S.Kinley, J.
    Brown, Rt. Hon. George (Belper)Gibson, C. W.Lang, Gordon
    Brown, Thomas (Ince)Gilzean, A.Lee, Frederick (Newton)
    Burke, W. A.Glanville, James (Consett)Lee, Miss. Jennie (Cannock)
    Burton, Miss. E.Gooch, E. G.Lever, Leslie (Ardwick)
    Butler, Herbert (Hackney, S.)Gordon-Walker, Rt. Hon. P. C.Lewis, Arthur (West Ham, N.)
    Caffaghan, L. J.Greenwood, Anthony (Rossendale)Lewis, John (Bolton, W.)
    Carmichael, J.Greenwood, Rt. Hon. Arthur (Wakefield)Lindgren, G. S.
    Castle, Mrs. B. A.Grenfell, D. R.Lipton, Lt.-Col. M.
    Champion, A. J.Grey, C. F.Logan, D. G.
    Chetwynd, G. R.Griffiths, David (Rother Valley)Longden, Fred (Small Heath)
    McAllister, G.
    Clunie, J.Griffiths, Rt. Hon. James (Llanlly)MacColl, J. E.
    Cocks, F. S.Griffiths, William (Exchange)McGhee, H. G.
    Coldrick, W.Gunter, R. J.McInnes, J.
    Collindridge, F.Hale, Joseph (Rochdale)Mack, J. D.
    Cook, T. F.Hale, Leslie (Oldham, W.)McKay, John (Wallsend)
    Cooper, Geoffrey (Middlesbrough, W.)Hall, John (Gateshead, W.)Mackay, R. W. G. (Reading, N.)
    Cooper, John (Deptford)Hall, Rt. Hon. Glenvil (Colne Valley)McLeavy, F.
    Corbet, Mrs. Freda (Peckham)Hamilton, W. W.MacMillan, Malcolm (Western Isles)
    Cove, W. G.Hannan, W.McNeil, Rt. Hon. H.
    Craddock, George (Bradford, S.)Hardman, D. R.MacPherson, Malcolm (Stirling)
    Crawley, A.Hardy, E. A.Mainwaring, W. H.
    Crosland, C. A. R.Hargreaves, A.Mallalieu, E. L. (Brigg)
    Crossman, R. H. S.Hastings, S.Mallalieu, J. P. W. (Huddersfield, E.)
    Cullen, Mrs. A.Hayman, F. H.Mann, Mrs. Jean
    Dalton, Rt. Hon. H.Henderson, Rt. Hon. A. (Rowley Regis)Manuel, A. C.
    Darling, George (Hillsborough)Herbison, Miss. M.Marquand, Rt. Hon. H. A.

    that will make good his depleted and imperfect knowledge.

    rose in his place, and claimed to move, "That the Question be now put."

    Question put, "That the Question be now put."

    The House divided: Ayes, 291; Noes, 276.

    Mathers, Rt. Hon. G.Rees, Mrs. D.Timmons, J.
    Mellish, R. J.Reeves, J.Tomney, F.
    Messer, F.Reid, Thomas (Swindon)Turner-Samuels, M.
    Middleton, Mrs. L.Reid, William (Camlachie)Ungoed-Thomas, Sir Lynn
    Mikardo, IanRhodes, H.Usborne, H.
    Mitchison, G. R.Richards, R.Vernon, W. F.
    Moeran, E. W.Roberts, Rt. Hon. A.Viant, S. P.
    Monslow, W.Roberts, Goronwy (Caernarvonshire)Wallace, H. W.
    Moody, A. S.Robertson, J. J. (Berwick)Watkins, T. E.
    Morgan, Dr. H. B.Rogers, George (Kensington, N.)Webb, Rt. Hon. M. (Bradford, C.)
    Morley, R.Ross, William (Kilmarnock)Weitzman, D.
    Morris, Percy (Swansea, W.)Royle, C.Wells, Percy (Faversham)
    Mort, D. L.Shawcross, Rt. Hon. Sir HartleyWells, William (Walsall)
    Moyle, A.Shinwell, Rt. Hon. E.West, D. G.
    Mulley, F. W.Shurmer, P. L. E.Wheatley, Rt. Hn. John (Edinb'gh, E.)
    Murray, J. D.Silverman, Julius (Erdington)White, Mrs. Eirene (E. Flint)
    Nally, W.Silverman, Sydney (Nelson)White, Henry (Derbyshire, N. E.)
    Neal, Harold (Bolsover)Simmons, C. J.Whiteley, Rt. Hon. W.
    Noel-Baker, Rt. Hon. P. J.Slater, J.Wilcock, Group Capt. C. A. B.
    O'Brien, T.Smith, Ellis (Stoke, S.)Wilkes, L.
    Oldfield, W. H.Smith, Norman (Nottingham, S.)Wilkins, W. A.
    Oliver, G. H.Sorensen, R. W.Willey, Frederick (Sunderland)
    Orbach, M.Soskice, Rt. Hon. Sir FrankWilley, Octavius (Cleveland)
    Padley, W. E.Sparks, J. A.Williams, David (Neath)
    Paget, R. T.Steele, T.Williams, Rev. Llywelyn (Abertillery)
    Paling, Rt. Hon. Wilfred (Dearne Vally)Stewart, Michael (Fulham, E.)Williams, Ronald (Wigan)
    Paling, Will T. (Dewsbury)Stokes, Rt. Hon. R. R.Williams, Rt. Hon. Thomas (Don Valley)
    Pannell, T. C.Strachey, Rt. Hon. J.Williams, W. T. (Hammersmith, S.)
    Pargiter, G. A.Strauss, Rt. Hon. George (Vauxhall)Wilson, Rt. Hon. Harold (Huyton)
    Parker, J.Stross, Dr. BarnettWinterbottom, Ian (Nottingham, C.)
    Paton, J.Summerskill, Rt. Hon. EdithWinterbottom, Richard (Brightside)
    Pearson, A.Sylvester, G. O.Wise, F. J.
    Peart, T. F.Taylor, Bernard (Mansfield)Woodburn, Rt. Hon. A.
    Poole, C.Taylor, Robert (Morpeth)Wyatt, W. L.
    Porter, G.Thomas, David (Aberdare)Yates, V. F.
    Price, Philips (Gloucestershire, W.)Thomas, George (Cardiff)Younger, Hon. K.
    Proctor, W. T.Thomas, Iorwerth (Rhondda, W.)
    Pryde, D. J.Thomas, Ivor Owen (Wrekin)

    TELLERS FOR THE AYES:

    Pursey, Cmdr. H.Thorneycroft, Harry (Clayton)Mr. Popplewell and
    Rankin, J.Thurtle, ErnestMr. Kenneth Robinson.

    NOES

    Aitken, W. T.Churchill, Rt. Hon. W. S.Gage, C. H.
    Alport, C. J. M.Clarke, Col. Ralph (East Grinstead)Galbraith, Cmdr. T. D. (Pollok)
    Amery, Julian (Preston, N.)Clarke, Brig. Terence (Portsmouth, W.)Galbraith, T. G. D. (Hillhead)
    Amory, Heathcoat (Tiverton)Colegate, A.Garner-Evans, E. H. (Denbigh)
    Arbuthnot, JohnConant, Maj. R. J. E.Gates, Maj. E. E.
    Ashton, H. (Chelmsford)Cooper, Sqn. Ldr. Albert (Ilford, S.)Glyn, Sir Ralph
    Assheton, Rt. Hon. R. (Blackburn, W.)Cooper-Key, E. M.Gomme-Duncan, Col. A.
    Astor, Hon. M. L.Corbett, Lt.-Col. Uvedale (Ludlow)Gridley, Sir Arnold
    Baker, P. A. D.Craddock, Beresford (Spelthorne)Grimond, J.
    Baldwin, A. E.Cranborne, ViscountGrimston, Hon. John (St. Albans)
    Banks, Col. C.Crookshank, Capt. Rt. Hon. H. F. C.Grimston, Robert (Westbury)
    Baxter, A. B.Crosthwaite-Eyre, Col. O. E.Harden, J. R. E.
    Beamish, Major TuftonCrouch, R. F.Hare, Hon. J. H. (Woodbridge)
    Bell, R. M.Crowder, Capt. John (Finchley)Harris, Frederic (Croydon, N.)
    Bennett, Sir Peter (Edgbaston)Crowder, Petre (Ruislip—Northwood)Harris, Reader (Heston)
    Bennett, William (Woodside)Cundiff, F. W.Harvey, Air Cdre. A. V. (Macclesfield)
    Bevins, J. R. (Liverpool, Toxteth)Cuthbert, W. N.Harvey, Ian (Harrow, E.)
    Birch, NigelDarling, Sir William (Edinburgh, S.)Harvie-Watt, Sir George
    Bishop, F. P.Davidson, ViscountessHay, John
    Black, C. W.Davies, Nigel (Epping)Head, Brig. A. H.
    Boles, Lt.-Col. D. C. (Wells)de Chair, SomersetHeadlam, Lieut.-Col. Rt. Hon. Sir C.
    Boothby, R.Do la Bère, R.Heald, Lionel
    Bossom, A. C.Deedes, W. F.Heath, Edward
    Bowen, E. R. (Cardigan)Digby, S. W.Henderson, John (Cathcart)
    Boyd-Carpenter, J. A.Dodds-Parker, A. D.Hicks-Beach, Maj. W. W.
    Boyle, Sir EdwardDonner, P. W.Higgs, J. M. C.
    Bracken, Rt. Hon. B.Drayson, G. B.Hill, Mrs. E. (Wythenshawe)
    Braine, B. R.Dugdale, Maj. Sir Thomas (Richmond)Hill, Dr. Charles (Luton)
    Braithwaite, Sir Albert (Harrow, W.)Duncan, Capt. J. A. L.Hinchingbrooke, Viscount
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Dunglass, LordHirst, Geoffrey
    Bromley-Davenport, Lt.-Col. W.Duthie, W. S.Holmes, Sir Stanley (Harwich)
    Brooke, Henry (Hampstead)Eccles, D. M.Hope, Lord John
    Browne, Jack (Govan)Eden, Rt. Hon. A.Hopkinson, Henry
    Buchan-Hepburn, P. G. T.Elliot, Rt. Hon. W. E.Hornsby-Smith, Miss. P.
    Bullock, Capt. M.Erroll, F. J.Horsbrugh, Rt. Hon. Florence
    Bullus, Wing Commander E. E.Fisher, NigelHoward, Gerald (Cambridgeshire)
    Burden, F. A.Fletcher, Walter (Bury)Howard, Greville (St. Ives)
    Butcher, H. W.Fort, R.Hudson, Sir Austin (Lowisharm, N.)
    Butler, Rt. Hon. R. A. (Saffron Walden)Foster, JohnHudson, Rt. Hon. Robert (Southport)
    Carr, Robert (Mitcham)Fraser, Hon. Hugh (Stone)Hudson, W. R. A. (Hull, N.)
    Carson, Hon. E.Fraser, Sir Ian (Morecambe & Lonsdale)Hutchinson, Geoffrey (Ilford, N.)
    Channon, H.Fyfe, Rt. Hon. Sir David MaxwellHutchison, Lt.-Com. Clark (E'b'rgh W.)

    Hutchison, Colonel James (Glasgow)Mellor, Sir JohnSpearman, A. C. M.
    Hyde, Lt.-Col. H. M.Molson, A. H. E.Spence, H. R. (Aberdeenshire, W.)
    Hylton-Foster, H. B.Monckton, Sir WalterSpens, Sir Patrick (Kensington, S.)
    Jennings, R.Moore, Lt.-Col. Sir ThomasStanley, Capt. Hon. Richard (N. Fylde)
    Johnson, Howard (Kemptown)Morrison, John (Salisbury)Stevens, G. P.
    Jones, A. (Hall Green)Morrison, Rt. Hon. W. S. (Cirencester)Steward, W. A. (Woolwich, W.)
    Joynson-Hicks, Hon. L. W.Mott-Radclyffe, C. D.Stewart, Henderson (Fife, E.)
    Kaberry, D.Nabarro, G.Stoddart-Scott, Col. M.
    Kerr, H. W. (Cambridge)Nicholls, HarmarStorey, S.
    Kingsmill, Lt.-Col. W. H.Nicholson, G.Strauss, Henry (Norwich, S.)
    Lambert, Hon. G.Nield, Basil (Chester)Stuart, Rt. Hon. James (Moray)
    Lancaster, Col. C. G.Noble, Cmdr. A. H. P.Summers, G. S.
    Langford Holt, J.Nugent, G. R. H.Sutcliffe, H.
    Law, Rt. Hon. R. K.Nutting, AnthonyTaylor, Charles (Eastbourne)
    Leather, E. H. C.Oakshott, H. D.Taylor, William (Bradford, N.)
    Legge-Bourke, Maj. E. A. H.Odey, G. W.Teeling, W.
    Lennox-Boyd, A. T.O'Neill, Rt. Hon. Sir HughTeevan, T. L.
    Lindsay, MartinOrmsby-Gore, Hon. W. D.Thomas, J. P. L. (Hereford)
    Linstead, H. N.Orr, Capt. L. P. S.Thompson, Kenneth Pugh (Walton)
    Llewellyn, D.Orr-Ewtng, Ian L. (Weston-super-Mare)Thompson, R. H. M. (Croydon, W.)
    Lloyd, Rt. Hn. Geoffrey (King's Norton)Osborne, C.Thorneycroft, Peter (Monmouth)
    Lloyd, Maj. Guy (Renfrew, E.)Peake, Rt. Hon. O.Thornton-Kemsley, Col. C. N.
    Lloyd, Selwyn (Wirral)Perkins, W. R. D.Thorp, Brig. R. A. F.
    Lockwood, Lt.-Col. J. C.Peto, Brig. C. H. M.Tilney, John
    Longden, Gilbert (Herts, S. W.)Pickthorn, K.Turner, H. F. L.
    Low, A. R. W.Pitman, I. J.Turton, R. H.
    Lucas, Sir Jocelyn (Portsmouth, S.)Powell, J. EnochTweedsmuir, Lady
    Lucas, P. B. (Brentford)Price, Henry (Lewisham, W.)Vane, W. M. F.
    Lucas-Tooth, Sir HughPrior-Palmer, Brig. O.Vaughan-Mergan, J. K.
    Lyttelton, Rt. Hon. O.Raikes, H. V.Vosper, D. F.
    McAdden, S. J.Rayner, Brig. R.Wakefield, Edward (Derbyshire, W.)
    McCorquodale, Rt. Hon. M. S.Redmayne, M.Wakefield, Sir Wavell (Marylebone)
    Macdonald, Sir Peter (I. of Wight)Remnant, Hon. P.Walker-Smith, D. C.
    McKibbin, A.Renton, D. L. M.Ward, Hon. George (Worcester)
    McKie, J. H. (Galloway)Roberts, Major Peter (Heeley)Ward, Miss. I. (Tynemouth)
    Maclay, Hon. JohnRobertson, Sir David (Caithness)Waterhouse, Capt. Rt. Hon. C.
    Maclean, FitzroyRobinson, Roland (Blackpool, S.)Watkinson, H.
    MacLeod, Iain (Enfield, W.)Robson-Brown, W. (Esher)Webbe, Sir H. (London)
    MacLeod, John (Ross and Cromarty)Rodgers, John (Sevenoaks)White, Baker (Canterbury)
    Macmillan, Rt. Hon. Harold (Bromley)Roper, Sir HaroldWilliams, Charles (Torquay)
    MacPherson, Major Niall (Dumfries)Ropner, Col. L.Williams, Gerald (Tonbridge)
    Maitland, Cmdr. J. W.Russell, R. S.Williams, Sir Herbert (Croydon, E.)
    Manningham-Buller, R. E.Ryder, Capt. R. E. D.Wills, G.
    Marlowe, A. A. H.Salter, Rt. Hon. Sir ArthurWilson, Geoffrey (Truro)
    Marples, A. E.Scott, DonaldWinterton, Rt. Hon. Earl
    Marshall, Douglas (Bodmin)Shepherd, WilliamWood, Hon. R.
    Marshall, Sidney (Sutton)Smiles, Lt.-Col. Sir WalterYork, C.
    Maude, Angus (Ealing, S.)Smithers, Peter (Winchester)
    Maude, John (Exeter)Smyth, Brig. J. G. (Norwood)

    TELLERS FOR THE NOES:

    Maudling, R.Snadden, W. McNMr. Studholme and Major Wheatley.
    Medlicott, Brig. F.Soames, Capt. C.

    Question put accordingly, "That the words proposed to be left out to the word 'to' in line 1, stand part of the proposed Amendment."

    Division No. 96.]

    AYES

    [5.13 a.m.

    Acland, Sir RichardBottomley, A. G.Cove, W. G.
    Adams, RichardBowden, H. W.Craddock, George (Bradford, S.)
    Albu, A. H.Bowles, F. G. (Nuneaton)Crawley, A.
    Allen, Arthur (Bosworth)Braddock, Mrs. ElizabethCrosland, C. A. R.
    Allen, Scholefield (Crewe)Brook, Dryden (Halifax)Crossman, R. H. S.
    Anderson, Alexander (Motherwell)Brooks, T. J. (Normanton)Cullen, Mrs. A.
    Anderson, Frank (Whitehaven)Broughton, Dr. A. D. D.Danies, P.
    Attlee, Rt. Hon. C. R.Brown, Rt. Hon. George (Belper)Dalton, Rt. Hon. H.
    Awbery, S. S.Brown, Thomas (Ince)Darling, George (Hillsborough)
    Ayles, W. H.Burke, W. A.Davies, A. Edward (Stoke, N.)
    Bacon, Miss. AliceBurton, Miss. E.Davies, Harold (Leek)
    Baird, J.Butler, Herbert (Hackney, S.)Davies, Stephen (Merthyr)
    Balfour, A.Callaghan, L. J.de Freitas, Geoffrey
    Barnes, Rt. Hon. A. J.Carmichael, J.Deer, G.
    Bartley, P.Castle, Mrs. B. A.Delargy, H. J.
    Bellenger, Rt. Hon. F. J.Champion, A. J.Dodds, N. N.
    Benn, WedgwoodChetwynd, G. R.Donnelly, D.
    Benson, G.Clunie, J.Driberg, T. E. N.
    Beswick, F.Cocks, F. S.Dugdale, Rt. Hon. John (W. Bromwich)
    Bevan, Rt. Hon. A. (Ebbw Vale)Coldrick, W.Dye, S.
    Bing, G. H. C.Collindridge, F.Ede, Rt. Hon. J. C.
    Blenkinsop, A.Cook, T. F.Edelman, M.
    Blyton, W. R.Cooper, Geoffrey (Middlesbrough, W.)Edwards, John (Brighouse)
    Boardman, H.Cooper, John (Deptford)Edwards, Rt. Hon. Ness (Caerphilly)
    Booth, A.Corbet, Mrs. Freda (Peckham)Edwards, W. J. (Stepney)

    The Committee divided: Ayes, 291; Noes, 281.

    Evans, Albert (Islington, S. W.)Lang, GordonRoberts, Goronwy (Caernarvonshire)
    Evans, Edward (Lowestoft)Lee, Frederick (Newton)Robertson, J. J. (Berwick)
    Evans, Stanley (Wednesbury)Lee, Miss. Jennie (Cannock)Rogers, George (Kensington, N.)
    Ewart, R.Lever, Leslie (Ardwick)Ross, William (Kilmarnock)
    Fernyhough, E.Lewis, Arthur (West Ham, N.)Royle, C.
    Field, Capt. W. J.Lewis, John (Bolton, W.)Shawcross, Rt. Hon. Sir Hartley
    Finch, H. J.Lindgren, G. S.Shinwell, Rt. Hon. E.
    Fletcher, Eric (Islington, E.)Lipton, Lt.-Col. M.Shurmer, P. L. E.
    Follick, M.Logan, D. G.Silverman, Julius (Erdington)
    Foot, M. M.Longden, Fred (Small Heath)Silverman, Sydney (Nelson)
    Forman, J. C.McAllister, G.Simmons, C. J.
    Fraser, Thomas (Hamilton)MacColl, J. E.Slater, J.
    Freeman, John (Watford)McGhee, H. G.Smith, Ellis (Stoke, S.)
    Freeman, Peter (Newport)McInnes. J.Smith, Norman (Nottingham, D.)
    Gaitskell, Rt. Hon. H. T. N.Mack, J. D.Sorensen, R. W.
    Ganley, Mrs. C. S.McKay, John (Wallsend)Soskice, Rt. Hon. Sir Frank
    Gibson, C. W.Mackay, R. W. G. (Reading, N.)Sparks, J. A.
    Gilzean, A.McLeavy, F.Steele, T.
    Glanville, James (Consett)MacMillan, Malcolm (Western Isles)Stewart, Michael (Fulham, R.)
    Gooch, E. G.McNeil, Rt. Hon. H.Stokes, Rt. Hon. R. R.
    Gordon-Walker, Rt. Hon. P. C.MacPherson, Malcolm (Stirling)Strachey, Rt. Hon. J.
    Greenwood, Anthony (Rossendale)Mainwaring, W. H.Strauss, Rt. Hon. George (Vauxhall)
    Greenwood, Rt. Hon. Arthur (Wakefield)Mallalieu, E. L. (Brigg)Stross, Dr. Barnett
    Grenfell, D. R.Mallalieu, J. P. W. (Huddersfield, E.)Summerskill, Rt. Hon. Edith
    Grey, C. F.Mann, Mrs. JeanSylvester, G. D.
    Griffiths, David (Rother Valley)Manuel, A. C.Taylor, Bernard (Mansfield)
    Griffiths, Rt. Hon. James (Llanelly)Marquand, Rt. Hon. H. A.Taylor, Robert (Morpeth)
    Griffiths, William (Exchange)Mathers, Rt. Hon. G.Thomas, David (Aberdare)
    Mellish, R. J.Thomas, George (Cardiff)
    Gunter, R. J.Messer, F.Thomas, Iorwerth (Rhondda, W.)
    Hale, Joseph (Rochdale)Middleton, Mrs. L.Thomas, Ivor Owen (Wrekin)
    Hale, Leslie (Oldham, W.)Mikardo, IanThorneycroft, Harry (Clayton)
    Hall, John (Gateshead, W.)Mitchison, G. R.Thurtle, Ernest
    Hall, Rt. Hon. Glenvil (Colne Valley)Moeran, E. W.Timmons, J.
    Hamilton, W. W.Monslow, W.Tomney, F.
    Hannan, W.Moody, A. S.Turner-Samuels, M.
    Hardman, D. R.Morgan, Dr. H. B.Ungoed-Thomas, Sir Lynn
    Hardy, E. A.Morley, R.Usborne, H.
    Morris, Percy (Swansea, W.)Vernon, W. F.
    Hargreaves, A.Mort, D. L.Viant, S. P.
    Hastings, S.Moyle, A.Vosper, D. F.
    Hayman, F. H.Mulley, F. W.Wallace, H. W.
    Henderson, Rt. Hon. A. (Rowley Regis)Murray, J. T.Waikins, T. E.
    Herbison, Miss. M.Nally, W.Webb, Rt. Hon. M. (Bradford, C.)
    Hewitson, Capt. M.Neal, Harold (Bolsover)Weitzman, D.
    Hobson, C. R.Noel-Baker, Rt. Hon. P. J.Wells, Percy (Faversham)
    Holman, P.O'Brien, T.Wells, William (Walsall)
    Holmes, Horace (Hemsworth)Oldfield, W. H.West, D. G.
    Houghton, D.Wheatley, Rt. Hn. John (Edinb'gh, E.)
    Hoy, J.Oliver, G. H.White, Mrs. Eirene (E. Flint)
    Hubbard, T.Orbach, M.White, Henry (Derbyshire. N. E.)
    Hudson, James (Ealing, N.)Padley, W. E.Whiteley, Rt. Hon. W.
    Hughes, Emrys (S. Ayrshire)Paget, R. T.Wigg, G.
    Hughes, Hector (Aberdeen, N.)Paling, Rt. Hon. Wilfred (Dearne Vally)Wilcock, Group Capt. C. A. R.
    Hynd, H, (Accrington)Paling, Will T. (Dewsbury)Wilkes, L.
    Hynd, J. B. (Attercliffe)Pannell, T. C.Wilkins, W. A.
    Irvine, A, J. (Edge Hill)Pargiter, G. A.Willey, Frederick (Sunderland)
    Irving, W. J. (Wood Green)Parker, J.Willey, Octavius (Cleveland)
    Isaacs, Rt. Hon. G. A.Paton, J.Williams, David (Neath)
    Janner, B.Pearson, A.Williams, Rev. Llywelyn (Abertillery)
    Jay, D. P. T.Peart, T. F.Williams, Ronald (Wigan)
    Jeger, George (Goole)Poole, C.Williams, Rt. Hon. Thomas (Don Valley)
    Jenkins, R. H.Porter, G.Williams, W. T. (Hammersmith, S.)
    Johnson, James (Rugby)Price, Philips (Gloucestershire, W.)Wilson, Rt. Hon. Harold (Huyton)
    Johnston, Douglas (Paisley)Proctor, W. T.Winterbottom, Ian (Nottingham, C.)
    Jones, David (Hartlepool)Pryde, D. J.Winterbottom, Richard (Brightside)
    Jones, Frederick Elwyn (West Ham, S.)Pursey, Cmdr. H.Wise, F. J.
    Jones, Jack (Rotherham)Rankin, J.Woodburn, Rt. Hon. A.
    Jones, William Elwyn (Conway)Rees, Mrs. D.Wyatt, W. L.
    Keenan, W.Reeves, J.Yates, V. F.
    Kenyon, C.Reid, Thomas (Swindon)Younger, Hon. K.
    Key, Rt. Hon. C. W.Reid, William (Camlachie)
    King, Dr. H. M.Rhodes, H.

    TELLERS FOR THE AYES:

    Kinghorn, Sqn. Ldr. E.Richards, R.Mr. Popplewell and
    Kinley, J.Robens, Rt. Hon. A.Mr. Kenneth Robinson.

    NOES

    Aitken, W. T.Baldock, Lt.-Cmdr. J. M.Bevins, J. R. (Liverpool, Toxteth)
    Alport, C. J. M.Baldwin, A. E.Birch, Nigel
    Amery, Julian (Preston, N.)Banks, Col. C.Bishop, F. P.
    Amory, Heathcoat (Tiverton)Baxter, A. B.Black, C. W.
    Arbuthnot, JohnBeamish, Major TuftonBoles, Lt.-Col. D. C. (Wells)
    Ashton, H. (Chelmsford)Bell, R. M.Boothby, R.
    Assheton, Rt. Hon. R. (Blackburn, W.)Bennett, Sir Peter (Edgbaston)Bossom, A. C.
    Astor, Hon. M. L.Bennett, Dr. Reginald (Gosport)Bowen, E. R. (Cardigan)
    Baker, P. A. D.Bennett, William (Woodside)Boyd-Carpenter J. A.

    Boyle, Sir EdwardHiggs, J. M. C.Ormsby-Gore, Hon. W. D.
    Bracken, Rt. Hon. B.Hill, Mrs. E. (Wythenshawe)Orr, Capt. L. P. S.
    Brains, B. R.Hill, Dr. Charles (Luton)Orr-Ewing, Charles Ian (Hendon, N.)
    Braithwaite, Sir Albert (Harrow, W.)Hinchingbrooke, ViscountOrr-Ewing, Ian L. (Weston-super-Mare)
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Hirst, GeoffreyOsborne, C.
    Bromley-Davenport, Lt.-Col. W.Holmes, Sir Stanley (Harwich)Peake, Rt. Hon. O.
    Brooke, Henry (Hampstead)Hope, Lord JohnPerkins, W. R. D.
    Browne, Jack (Govan)Hopkinson, HenryPeto, Brig. C. H. M.
    Buchan-Hepburn, P. G. T.Hornsby-Smith, Miss. P.Pickthon, K.
    Bullock, Capt. M.Horsbrugh, Rt. Hon. Flare-neePitman, I. J.
    Bullus, Wing Commander E. E.Howard, Gerald (Cambridgeshire)Powell, J. Enoch
    Burden, F. A.Howard, Greville (St. Ives)Price, Henry (Lewisham, W.)
    Butcher, H. W.Hudson, Sir Austin (Lewisham, N.)Prior-Palmer, Brig. O.
    Butler, Rt. Hon. R. A. (Saffron Walden)Hudson, Rt. Hon. Robert (Southport)Profumo, J. D.
    Carr, Robert (Mitcham)Hudson, W. R. A. (Hull, N.)Raikes, H. V.
    Carson, Hon. E.Hutchinson, Geoffrey (Ilford, N.)Rayner, Brig. R.
    Channon, H.Hutchison, Lt.-Com. Clark (E'b'rghW.)Redmayne, M.
    Churchill, Rt. Hon. W. S.Hutchison, Colonel James (Glasgow)Remnant, Hon. P.
    Clarke, Col. Ralph (East Grinstead)Hyde, Lt.-Col. H. M.Renton, D. L. M.
    Clarke, Brig. Terence (Portsmouth, W.)Hylton-Foster, H. B.Roberts, Major Peter (Heeley)
    Colegate, A.Jennings, R.Robertson, Sir David (Caithness)
    Conant, Maj. R. J. E.Johnson, Howard (Kemptown)Robinson, Roland (Blackpool, S.)
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Jones, A. (Hall Green)Robson-Brown, W.
    Cooper-Key, E. M.Joynson-Hicks, Hon. L. W.Rodgers, John (Sevenoaks)
    Corbett, Lt.-Col. Uvedale (Ludlow)Kaberry, D.Roper, Sir Harold
    Craddock, Beresford (Spelthorne)Kerr, H. W. (Cambridge)Ropner, Col. L.
    Cranborne, ViscountKingsmill, Lt.-Col. W. H.Russell, R. S.
    Crookshank, Capt. Rt. Hon. H. F. C.Lambert, Hon. G.Ryder, Capt. R. E. D.
    Crosthwaite-Eyre, Col. O. E.Lancaster, Col. C. G.Salter, Rt. Hon. Sir Arthur
    Crouch, R. F.Langford-Holt, J.Scott, Donald
    Crowder, Capt. John (Finchley)Law, Rt. Hon. R. K.Shepherd, William
    Crowder, Petre (Ruislip—Northwood)Leather, E. H. C.Smiles, Lt.-Col. Sir Walter
    Cundiff, F. W.Legge-Bourke, Maj. E. A. H.Smithers, Peter (Winchester)
    Cuthbert, W. N.Lennox-Boyd, A. T.Smyth, Brig. J. G. (Norwood)
    Darling, Sir William (Edinburgh, S.)Lindsay, MartinSnadden, W. McN
    Davidson ViscountessLinstead, H. N.Soames, Capt. C.
    Davies, Nigel (Epping)Llewellyn, D.Spearman, A. C. M.
    de Chair, SomersetLloyd, Rt. Hn. Geoffrey (King's Norton)Spence, H. R. (Aberdeenshire, W.)
    De la Bère, R.Lloyd, Maj. Guy (Renfrew. E.)Spens, Sir Patrick (Kensington, S.)
    Deedes, W. F.Lloyd, Selwyn (Wirral)Stanley, Capt. Hon. Richard (N. Fylde)
    Digby, S. W.Lockwood, Lt.-Col. J. C.Stevens, G. P.
    Dodds-Parker, A. O.Longden, Gilbert (Herts, S. W.)Steward, W. A. (Woolwich, W.)
    Donner, P. W.Low, A. R. W.Stewart, Henderson (Fife. E.)
    Douglas-Hamilton, Lord MalcolmLucas, Sir Jocelyn (Portsmouth, S.)Stoddart-Scott, Col. M.
    Drayson, G. B.Lucas, P. B. (Brentford)Storey, S.
    Dugdale, Maj. Sir Thomas (Richmond)Lucas-Tooth, Sir HughStrauss, Henry (Norwich, S.)
    Duncan, Capt. J. A. L.Lyttelton, Rt. Hon. O.Stuart, Rt. Hon. James (Moray)
    Dunglass, LordMcAdden, S. J.Summers, G. S.
    Duthie, W. S.McCorquodale, Rt. Hon. M. S.Sutcliffe, H.
    Eccles, D. M.Macdonald, Sir Peter (I. of Wight)Taylor, Charles (Eastbourne)
    Eden, Rt. Hon. A.Mackeson, Brig. H. R.Taylor, William (Bradford, N.)
    Elliot, Rt. Hon. W. E.McKibbin, A.Teeling, W.
    Erroll, F. J.McKie, J. H. (Galloway)Teevan, T. L.
    Fisher, NigelMaclay, Hon. JohnThomas, J. P. L. (Hereford)
    Fletcher, Walter (Bury)Maclean, FitzroyThompson, Kenneth Pugh (Walton)
    Fort, R.MacLeod, Iain (Enfield, W.)Thompson, Lt.-Cmdr. R. (Croydon, W.)
    Foster, JohnMacLeod, John (Ross and Cromarty)Thorneycroft Peter (Monmouth)
    Fraser, Hon. Hugh (Stone)Macmillan, Rt. Hon. Harold (Bromley)Thornton-Kemsley, Col. C. N.
    Fraser, Sir Ian (Morecambe & Lonsdale)MacPherson, Major Niall (Dumfries)Thorp, Brig. R. A. F.
    Fyfe, Rt. Hon. Sir David MaxwellMaitland, Cmdr. J. W.Tilney, John
    Manningham-Buller, R. E.Turner, H. F. L.
    Gage, C. H.Marlowe, A. A. H.Turton, R. H.
    Galbraith, Cmdr. T. D. (Pollok)Marples, A. E.Tweedsmuir, Lady
    Galbraith, T. G. D. Hillhead)Marshall, Douglas (Bodmin)Vane, W. M. F.
    Garner-Evans, E. H. (Denbigh)Marshall, Sidney (Salton)Vaughan-Morgan J. K.
    Gates, Maj. E. E.Maude, Angus (Ealing, S.)Vosper, D. F.
    Glyn, Sir RalphMaude, John (Exeter)Wakefield, Edward (Derbyshire, W.)
    Gomme-Duncan, Col. A.Maudling, R.Wakefield, Sir Wavell (Marylebone)
    Gridley, Sir ArnoldMedlicott, Brig. F.Walker-Smith, D. C.
    Grimond, J.Mellor, Sir JohnWard, Hon. George (Worcester)
    Grimston, Hon. John (St. Albans)Molson, A. H. E.Ward, Miss. I. (Tynemouth)
    Grimston, Robert (Westbury)Monckton, Sir WallerWaterhouse, Capt. Rt. Hon. C.
    Harden, J. R. E.Moore, Lt.-Col. Sir ThomasWatkinson, H.
    Hare, Hon. J. H. (Woodbridge)Morrison, John (Salisbury)Webbe, Sir H. (London)
    Harris, Frederic (Croydon, N.)Morrison, Rt. Hon. W. S. (Cirencester)White, Baker (Canterbury)
    Harris, Reader (Heston)Mott-Radclyffe, C. E.Williams, Charles (Torquay)
    Harvey, Air Cdre. A. V. (Macclesfield)Nabarro, G.Williams, Gerald (Tonbridge)
    Harvey, Ian (Harrow, E.)Nicholls, HarmarWilliams, Sir Herbert (Croydon, E.)
    Harvie-Watt, Sir GeorgeNicholson, G.Wills, G.
    Hay, JohnNield, Basil (Chester)Wilson, Geoffrey (Truro)
    Head, Brig. A. H.Noble, Cmdr. A. H. P.Winterton, Rt. Hon. Earl
    Headlam, Lieut.-Col. Rt. Hon. Sir C.Nugent, G. R. H.Wood, Hon. R.
    Heald, LionelNutting, AnthonyYork, C.
    Heath, EdwardOakshott, H. D.
    Henderson, John (Cathcart)Odey, G. W.

    TELLERS FOR THE NOES:

    Hicks-Beach, Maj. W. W.O'Neill, Rt. Hon. Sir HughMr. Studholme and Major Wheatley.

    I beg to move as an Amendment to the proposed Amendment, in line 1, to leave out from "apply," to the end, and to insert:

    "save only that where there is a contract for the sale of a ship made before the said sixth day of April and either—
  • (a) the price becomes payable on or after that date; or
  • (b) the price is payable in instalments, some of which are payable before that date and some of which are payable on or after that date;
  • so much of the price as becomes payable on or after the said sixth day of April shall for the purposes of this subsection be deemed to be expenditure incurred on the fifth day of April, nineteen hundred and fifty-two."
    We have been listening to the main arguments upon the general and broad purpose our Amendments are intended to cover. I believe that it would be for the convenience of the Committee if this Amendment and the remaining Amendment to line 1 of the proposed Amendment, which are both narrower, were discussed together. The Economic Secretary indicated that he would wait to hear what we had to say on them before he came to a final decision upon the whole matter. While we believe that we shall be able to persuade him to do something more satisfactory for the industry, we should like to reserve the right, in taking these two Amendments together, to take a vote on each of them if necessary.

    The words of the Economic Secretary were very guarded, and I am afraid that he may have been prompted to be so guarded because the wording of our Amendments is perhaps rather doubtful for the purpose we intend. He knows well, and I have no doubt the whole Committee will realise, that the issue which these two Amendments bring forward is really very easy of comprehension.

    The whole story of the special position in which ships are placed as a result of the suspension of the initial allowances has already been discussed, so I can confine myself to the narrow point which the first Amendment seeks to establish—that the shipowner shall be able to claim the full 40 per cent. initial allowance on any expenditure incurred on a contract placed between now and April, 1952. In other words, we ask that the shipowner shall be placed on a basis similar to that of other industrialists in the country. The intention of the Chancellor was clear, both in what he said and in the Clause. He intended that there should be a year's warning of what is to happen, that orders could be placed within that year, and that the goods delivered would still be eligible for the 40 per cent. initial allowance.

    That is all right. If one sees an expensive piece of plant lying about and buys it, and it is delivered straightaway—that is all right. But ships are not bought like that; ships do not sit on shelves. Ships have to be designed over a long period, and a long time is taken in their construction. If we were allowed this year of grace for the ordering of a ship, and if ships were treated in the same way as other capital plant, that would place us on a reasonable basis. It was suggested earlier that the dry tonnage fleet of the United Kingdom had largely been replaced since the war. I want to correct that misapprehension. In numbers that may be the case, but in quality there is still a great deal to be done to bring the mercantile fleet of this country up to the 1939 standard.

    I submit to the Chancellor and to the Economic Secretary that the only way this matter can be dealt with is to take the date of the placing of the contract. We have already asked the Chancellor, if he adopts any other method, when a ship is regarded as "under construction." In my yard, we have an order for a hull for an engine which was bought by the owner of the vessel some time ago. Would that be a vessel "under construction"? All kinds of such complications will arise, and I am sure the Chancellor is beginning to understand that the only clean and tidy method, and the only method free from the possibility of great argument and discussion, is that of taking the date at which the contract was placed.

    I should like to support what has been said by my hon. and gallant Friend the Member for Scotstoun (Colonel J. R. H. Hutchison) and at the same time declare my interest in the subject I am about to discuss—that is in distant fishing vessels, large trawlers. That is a part of the industry to which no reference has been made today. Although it is a small part of the fishing industry, it is important from the point of view of providing food, of sustaining this country and of providing the necessary naval reserve in time of emergency.

    It is generally thought that distant fishing vessels have had a prosperous time. I can assure hon. Members opposite that for the last two years 90 per cent. of them have lost money. The hon. Member for Coatbridge and Airdrie (Mrs. Mann) frequently raises the question of the high price at which fish is sold in the shops. That may be true during periods of bad weather and gales, but usually the landings are sold at a very low price indeed. Only yesterday 10 stone of cod was sold for 36s. Hundreds of tons of fine fish are going to the fish-meal factories.

    5.30 a.m.

    The fishing industry is not in such a good position as the merchant shipping companies. The shipping industry has far less capital to work on. A modern fishing trawler today costs something like £200,000; it is fitted with radar, depth meters and very modern quarters for the crew in the aft of the vessels, and unless something is done to assist the industry it may well die in the next two or three years.

    I beg the Economic Secretary to give this aspect of the shipping industry his full and sympathetic consideration, for two reasons: first, to supply food which we require more than ever before; and, secondly, because in the event of an emergency these vessels will be required. Many owners have taken their courage in both hands and built new vessels, but today they are seeing German and Swedish vessels competing with them at East Coast ports, and I hope something will be done to sustain them.

    I hope that the Economic Secretary will not expect us to produce at short notice the sort of details he apparently expected us to produce when he was replying to the debate on the last Amendment. However, at the short notice he has given us I should like to put some facts to him on a particular aspect of this subject in which I have an interest, and that is the ore carrying trade. I am sorry that the Chancellor is not here, because he is the individual who has recently done very great harm to the steel industry of this country by denying a Treasury allocation of dollars to obtain rich iron ore from abroad. This matter was before us when the Economic Secretary was in rather warmer climes on other business.

    In addition, in the last eight months or so, since the war broke out in Korea, through Government mismanagement the shipping of this ore has not been possible because forward contracts have not been met.

    I was just coming to that.

    I have an interest in trying to obtain shipping, and the particular point at issue was whether two or three ships should be constructed, largely for the purpose of this trade. Since this declaration of the abolition of the initial allowance, the whole project is now in the melting pot once more awaiting the decision of the Chancellor on whether or not these initial allowances will be permitted.

    I can put a specific case to the Economic Secretary, and I assure him that this is not raised now because this is a rather inconvenient time. This is of very great importance to the shipping industry of this country. He having refused to accept our previous Amendment, I hope he will accept this Amendment, which will mean that if a contract is made between now and April, 1952, it will make a considerable difference to the future of our shipping.

    When my hon. and gallant Friend the Member for Scotstoun (Colonel Hutchison) opened this debate he indicated that, with the agreement of yourself, Major Milner, and the Committee, we might discuss the Amendment standing in my name at the same time. He pointed out that, "woolly" as our speeches might be at this hour of the morning, there is also a certain "woolliness" in the drafting of the Amendments. I am guilty of that. The reason is probably obvious. Here, I pay tribute to those at the Treasury who drafted their Amendment after our original Amendments were put down so that we had to make rather hasty alterations.

    However, the object of both Amendments is quite clear. There is an important difference between the Amendment of my hon. and gallant Friend and my Amendment. Both disagree with "under construction" as a possible means of determining the operative date for this allowance. My hon. and gallant Friend's Amendment would make much the most desirable alteration to the Chancellor's proposed Amendment, namely, that a contract placed by April, 1952, should be eligible for maintaining the initial allowance; whereas mine is really the last line of defence. It provides only for ships contracted for on Budget day of this year, as distinct from ships "under construction" on Budget day as in the Chancellor's Amendment.

    I suggest most strongly that the Amendment moved by my hon. and gallant Friend deserves most serious consideration. He pointed out that it would produce a most remarkable anomaly if what was given to every other industry should be denied to shipping companies because it happens that ships take a long time to produce. If one goes into a shop tomorrow and buys a tractor it is possible to get it and the initial allowance, but if one goes into a shipyard tomorrow and orders a ship there is not a hope of getting the initial allowance. It just does not make sense to me.

    I do not think the Government realise the surprising anomaly that arises out of the date position. As regards "contracts" as distinct from "under construction," I cannot imagine how the Commissioners of Inland Revenue would ever decide whether a ship was actually under construction, or at what point it came under construction. I think it would be an impossible power to give them. In the old days it was quite normal for a keel to be laid and the ship to grow around the keel.

    That does not happen these days, for many reasons. One is the relatively modern technique of prefabrication. Another is that if an owner has been in the last four years contemplating building a ship, he thinks what is the most likely thing to be difficult to get quickly. If he thinks the hull is a serious matter, he goes to the builder first, but most likely, particularly if he is having a diesel engined ship, he knows that diesel engines are difficult to get, so he will order the diesel engine long before he finds a berth for the hull. He may order his lifeboats before the hull. When he finds a yard which has a berth available for a hull he says: "Thank goodness. There is my hull. I have already got the engine." When does that ship start construction? The only practicable interpretation is when the intention to build first comes into the mind of the ship- owner and he takes some positive action to achieve the building of that ship. That I believe can be expressed by the word "contract," but it simply cannot be expressed by the words "under construction."

    I feel that when the Chancellor has really thought over the implications and, possibly, had further consultation with technical experts outside the Treasury—because this is now entering into very technical work connected with the building of ships which is unlike any other industry—he will be ready to give us both the points raised by the Amendments.

    I would first of all assure hon. Members opposite that while the placing of our Amendment on the Order Paper may have embarrassed them, it was by accident and not by design. I accept that it was a question of working against time with their Amendment, but to say that it was "woolly" was a masterpiece of understatement. The first of the Amendments that have been moved would, strictly speaking, require the initial allowance to be continued generally. The second is almost as bad, because it would mean going back on the debate we have just had. Nevertheless, the intention of the movers of the Amendment has been made perfectly plain, and it is with that that the Committee will expect me to deal.

    The Amendment of the hon. and gallant Member for Scotstoun (Colonel Hutchison) seeks to provide for 12 months' warning to be given to the industry in the sense that any contracts placed in the next 12 months would be covered by this exemption. I think that is not reasonable. It is not a fair comparison to take the shipping industry with, as we know, four years' work—and one hon. Gentleman suggested more—in hand, and say it will have another year in which to place orders. I think it would be contrary to all practice for anything like that to be done.

    On the other hand, I see greater justification for the viewpoint in the second Amendment, which is concerned with contracts made before Budget day. My advisers and the Board of Inland Revenue do not take the same view about the treatment of ships under construction. They believe it is quite possible to operate this because the Committee will recollect that if there were difficulties or differences of opinion there is an elaborate system for appeal to Special or General Commissioners.

    Nevertheless, in the light of what has been said, in the light of discussions with representatives of the industry, and in the light of inquiries I have been able to make, and while not wishing to make a final commitment, there is a case for further examination on the point of contracts. I am authorised by my right hon. Friend to say, while he could not possibly agree in any circumstances to the substance of the first Amendment, that we will between now and the Report stage consider the points in the second amendment, and consider, looking at the thing comprehensively, whether it is possible for us to agree that ships contracted to be bought before Budget day shall get the benefit. If there are any technical views that any hon. Gentleman or any of the bodies concerned would like to put, we shall be glad to receive their representations.

    It seems to me that this is an eminently reasonable approach to the problem, and that if we are able to approach it in the way I have now indicated it will go a long way to meeting the needs of the marginal cases where real difficulty is likely to be experienced. I hope the Amendment will not be pressed, and that we shall be allowed to have our Amendment.

    The Economic Secretary has undoubtedly made a big move forward, far further than he has done during a great deal of this sitting. We obviously thank him for that, but I would have liked to argue for a long time on what he said about the reasonableness of the other Amendment. I am sorry the Chancellor feels strongly that he is not able to consider it in any circumstances. By pure bad luck, by the run of the date of Budget day, I believe that two very large and expensive ships had their contracts signed a couple of days, or something like that, after. It does not make sense, decisions having been taken months and months ago, perhaps years, that the fact of the contract being signed after the Budget speech should result in firms suddenly finding themselves in an utterly different position over the initial allowance.

    As far as this concession is concerned, the Chancellor has moved stage by stage towards it. He took up a flat position in presenting his Budget. By the end of the Budget he had moved a little towards us. Now we have reached another stage, and I would personally ask my hon. Friend to agree to withdraw the Amendment because I hope that between now and Report stage, after full consideration and consultation, the Chancellor will realise the strength of our arguments for 1952. I think the case is really there, and when he hears the arguments he will move to the final stage. As far as I am concerned, I should be quite happy to leave the matter as it stands and see what happens on Report.

    5.45 a.m.

    Before the hon. Member takes the course proposed, I would ask if the Economic Secretary will leave the door slightly open for reconsideration of the first Amendment. It may be that the period of a full 12 months is too long, but as the matter stands now it would appear that the fixing of an arbitrary date which might affect contracts completely planned and carried through except for the formal signing is an arbitrary distinction. I would ask him to reconsider what he has just said, and to indicate that that matter also will be considered by the Chancellor.

    I have said that we think it would be unreasonable to give 12 months notice on this contract point. It would be contrary to every precedent I know, and would constitute the kind of precedent that might make things extremely difficult. The only grounds on which I feel able to agree to consider sympathetically the point of contracts made before Budget day is because I agree that in the shipping industry we have something that is unique. To go further would be to create all kinds of trouble and grievances, and I would have thought we had gone a very long way to meet the real difficulties of the industry. I hope I shall not be pressed to go further in this matter, because I am not able to do so.

    The hon. Gentleman said it would be contrary to any precedent to give notice in this way. Surely on the wording of the Clause as it stands it is not limited to contracts entered into before Budget day?

    If the hon. and learned Member cannot differentiate between the kind of transaction which is settled in the year after the Budget and the kind of transaction involved in ordering a new ship now for delivery in 1954, I cannot at this stage begin to explain it.

    In considering whether I should ask leave to withdraw the Amendment I am placed in something of a dilemma. I agree that the Economic Secretary has gone some way to meet us. I do not think that he has gone far enough. I hope that in the intervening period he will come to realise the force of our argument that he is putting the shipping industry into a prejudicial position compared with others. But having gone to the Treasury to get a correct drafting for the Amendment, we find now that we have got such a draft that if I were to press it we should not get what we want. I think the only course open to me is to beg to ask leave to withdraw the Amendment.

    Amendment to the proposed Amendment, by leave, withdrawn.

    Amendment agreed to.

    I beg to move, in page 10, line 20, at the end, to insert:

    Provided that this section shall have no effect upon any initial allowance which apart from this subsection would have been given in respect of any works undertaken by any statutory water undertaking prior to the eleventh day of April, nineteen hundred and fifty-one.
    The purpose of this Amendment is to exclude from the operation of this Clause new works by water undertakings. Perhaps it is unduly optimistic at this stage of our proceedings to expect the Committee to take any passionate interest in the subject of the initial allowances for waterworks. Nevertheless, this is an important subject and one which, so far as I have followed the arguments used by the Economic Secretary on previous Amendments, no answer which he has given hitherto seems to fit.

    This Amendment applies only to works actually commenced at the date of the Budget. Therefore, the objection that they will make undue demands upon supplies of material and labour seems to have no relevance to this matter. The Chancellor said in his Budget speech that this is not a revenue question. If both the question of priority of materials and labour and the revenue aspect are excluded, there seems to be no reason why the Economic Secretary should not accept this Amendment. This Amendment really stands on quite a different footing to any other Amendment that has been pressed on him tonight.

    The merits or otherwise of this proposal depend entirely on the effect it will have on the financial arrangements of the water undertakings. Most of these undertakings are owned by local authorities or joint boards of local authorities. There are some companies, but water companies are not trading companies in the same way as ordinary commercial companies. Waterworks take a long time to complete and unlike capital works of other undertakings they do not bring any new revenue for a long time after their completion. In many cases the new works may lead to no increased revenue at all. Water undertakings do not, generally speaking, earn their revenue by selling the commodity which they supply in the way that gas and electricity undertakings do. It does not matter how much water they distribute, their revenues are not affected. New works do not, therefore, necessarily produce additional revenue.

    What will be the effect on an undertaking that works in that way of the withdrawal of the initial allowance? Clearly, if no new revenue is attracted, the capital cost of new works has to be borne on the existing revenue of the undertaking. The result will probably be that by losing the initial allowance they will have to put up the rates. The revenue of water undertakings is, generally speaking, derived from rates and not from charges. That means that, unlike gas or electricity, a reduction in consumption will not enable the consumer to reduce the amount which he has to pay. The consumer of water cannot escape the payment of the rate by using less water. Because of the capital cost of new works, which they might have been able to carry had they retained the initial allowance, without recourse to any increase in their rates, many water undertakings will now have to increase their water rates.

    Questions of labour and materials are not the only questions of importance at this moment. The question of the cost of living is also of importance, and rates, including water rates, play their part in the cost of living. Any increases in the water rate will be reflected in the rent of every council house and every controlled dwelling. The withdrawal of the initial allowances will mean that smaller undertakings, which have embarked on major capital works relying on these allowances to tide them over the period until they can expect an increased revenue, will now have to go to the Ministry of Local Government and Planning to get the Minister's consent to an increase in the rates. I am sure that is not a result the Economic Secretary desires to bring about.

    If no question of increased demand for supplies of materials is involved, because these works have already been begun and have to be completed, and if revenue questions are not involved, the only thing which is really of importance is the effect on the finances of the local undertakings. The matter can be brought within that narrow compass, and I hope that the Economic Secretary will be able to give an assurance that all exception will be made in the case of works of water undertakings. The strongest criticism of the way the right hon. Gentleman has dealt with this question is that he has always been unwilling to make any exceptions.

    This is essentially a matter which falls on different classes of undertakings in different ways. It is essentially a matter on which the right hon. Gentleman ought to have been willing to consider the conditions of each individual industry and make necessary exceptions when it is clear that an industry will be affected in some special way. I hope the Economic Secretary will be able to say that in this case he finds himself able to make an exception.

    6.0 a.m.

    The case of my hon. and learned Friend the Member for Ilford, North (Mr. Hutchinson) was cogently put. Hon. Members opposite who laughed and jeered at some of the remarks he made to the Committee did a great disservice to themselves, because few of them have anything like the experience of water undertakings of my hon. and learned Friend. In his case for this concession—which I support by saying that I consider it to be a very reasonable one—he is doing something to help those of us who represent rural con- stituencies where the problem of water supply is becoming more and more acute as time passes. Anything, therefore, which can be done to help the small village, miles from a large town, to get a supply of piped water, is to be commended by this Committee. Therefore, I hope that the Economic Secretary, when he replies to the points raised by my hon. and learned Friend, will say that the Government are prepared to consider this Amendment favourably.

    I said earlier, I think it was yesterday, that we could all make speeches about our own enthusiasms. We know that the hon. and learned Member for Ilford, North (Mr. Hutchinson) has a passion for water and a great knowledge of it. I agree that he put the case cogently, or at any rate clearly. Like all the others who have moved any Amendments, either last night or this morning, however, he has insisted that this is on an entirely different footing from anything else. We have had one hon. Member after another moving Amendments, a veritable parade of people, all saying, "This is exceptional." There would be no end to the people who would join in if we began to give way.

    The hon. and learned Gentleman is correct in saying that there are Statutory differences involved here, but I do not accept the view of the hon. Member for Henley (Mr. Hay) that this will be of any interest in regard to the supply of piped water in the way he described. The hon. and learned Member for Ilford, North, was at pains to say precisely the opposite. He said that this was really a technical matter and that we ought not to bother about it in this way, that it would make a complicated matter of raising money, but that it would not affect the water.

    The Economic Secretary will admit that it would raise the cost of rural water and make it more difficult to connect with a main supply when it was brought into a village.

    I do not think that necessarily follows, and certainly the hon. and learned Gentleman said it would not make any difference to the labour supply, to materials, or anything of that sort.

    But in this matter, as in the others on which I have spoken, there is the genuine problem of where to draw the line. The case of shipping seemed to be exceptional, but if this case were considered one could at once see a number of other cases concerning constructional works of this kind being brought forward, and before we knew where we were we should be driven to concede the principle, which I have no doubt will be argued in due course, that we ought not to have suspended the initial allowances at all. [HON. MEMBERS: "Hear, hear."] Quite. In fact, the arguments put before us have all been designed to try to pave the way for the general debate which is to follow, and I am not prepared to make any concessions other than the concession that has been made on shipping. I believe that we cannot single out these other cases that have been argued in such a way as to distinguish them from all the other cases that could be put forward. Therefore, while I appreciate the enthusiasm of the hon. and learned Gentleman, I am afraid that I cannot help him tonight.

    I must say that I am not very impressed by the reply of the Economic Secretary. [An HON. MEMBER: "He is not very impressed with the hon. Member, either."] Whether he is impressed with me or not, has no bearing on the observation I have made. He says that if he makes this concession the whole of the Clause will be in peril; but, surely that proves that it must be a very bad Clause. The degree of hardship resulting from change must vary from case to case, and I submit that it is entirely without any intellectual value for him to say to my hon. and learned Friend—who I consider has made out a very strong case, although I do not claim any special knowledge of the subject—that the Amendment cannot be considered because there have been similar Amendments.

    Here we have a body of traders in water, and they have a fixed revenue, based almost entirely on rateable value, a small amount of water also being sold through industrial meters. These traders in water have to incur, may be, certain capital expenditure, because even in spite of the former Minister of Health the Government are producing a few houses somehow, and those houses ought to have a piped water supply. That supply has to be provided before the fixed revenue begins to come in.

    There is the great Metropolitan Water Board. About two-thirds of the water supply of this country is in the hands of this vast and amorphous body, the Metropolitan Water Board, and municipal undertakings. It is absurd for hon. Members opposite to think that this is some private enterprise undertaking. I know that they think all private enterprise is bad because it exposes incompetence in businesses run by the Government. May I remind the Committee that the Chancellor is not with us? Unless the Treasury has changed its habits, all those on the Front Bench who represent the Treasury have their printed briefs, and can do nothing without the boss. He is away, quite properly, having some refreshment, I suppose, but we shall have some dummy replying from his brief because he has not the authority to give any other sort of reply. Of course, if someone is going to get up and assert that he has the freedom to give a concession, then I shall be delighted to give him the opportunity.

    I would say to the hon. Gentleman that if he had been here during the whole of the last eight hours, as some hon. Members have been, he would not make such a stupid statement about printed briefs. Had he been here for the last eight hours, he would have seen that I have replied from notes which I have made. It is because he has been here only a short time that he adopts this stupid role.

    I am delighted to hear that the Economic Secretary indulges in note taking. I was wondering why his speeches were so dull. I have listened to a great deal of this debate, and also of the whole of the debate which dealt with shipping. Obviously, the Economic Secretary was so busy making notes that he had not time to look round the Chamber and see who was here. I want to know what sound logic is to be presented against our case, apart altogether from the argument that if this concession is given in one case it has to be given in all the rest.

    The Chancellor of the Exchequer has returned. It might be as well if he devoted himself to this problem. He has been talking to one of his secretaries and is in a position to give his mind to the problem. What is to happen to a water undertaking, which is to incur capital expenditure and will not get any revenue for some little time? Is it any wonder that some villages lack water supplies? We all know the emotion of the right hon. Gentleman about water supplies, but perhaps he will tell us on what ground he proposes to refuse the modest request of this Amendment.

    I wanted to say a word about rural water supplies. The Economic Secretary completely misunderstood the position when he said that if he gave way on rural water supplies it would mean great demands on materials and manpower. It would not mean anything of the kind.

    I did not say anything of the kind. The only time I mentioned that was when I said that the hon. and learned Gentleman the Member for Ilford. North (Mr. Hutchinson) had stated that it would make no difference to labour and materials. That was the only time I mentioned it, and the hon. Member for Burton (Mr. Colegate) has completely misrepresented what I said.

    Certainly not. The Economic Secretary confirms that my hon. and learned Friend said that it would not make any difference to labour and materials, and he denied it. Otherwise,

    Division No. 97.]

    AYES

    [6.15 a.m.

    Aitken, W. T.Brooke, Henry (Hampstead)De la Bère, R.
    Alport, C. J. M.Browne, Jack (Govan)Deedes, W. F.
    Amery, Julian (Preston, N.)Buchan-Hepburn, P. G. T.Digby, S. W.
    Amory, Heathcoat (Tiverton)Bullock, Capt. M.Dodds-Parker, A. D.
    Arbuthnot, JohnBullus, Wing Commander E. E.Donner, P. W.
    Ashton, H. (Chelmsford)Burden, F. A.Douglas-Hamilton, Lord Malcolm
    Assheton, Rt. Hon. R. (Blackburn, W.)Butcher, H. W.Drayson, G. B.
    Astor, Hon. M. L.Butler, Rt. Hon. R. A. (Saffron Walden)Dugdale, Maj. Sir Thomas (Richmond)
    Baker, P. A. D.Braithwaite, Sir Albert (Harrow. W.)Duncan, Capt. J. A. L.
    Baldock, Lt.-Cmdr. J. M.Carr, Robert (Mitcham)Dunglass, Lord
    Baldwin, A. E.Carson, Hon. E.Duthie, W. S.
    Banks, Col. C.Channon, H.Eccles, D. M.
    Baxter, A. B.Churchill, Rt. Hon. W. S.Eden, Rt. Hon. A.
    Beamish, Major TuftonClarke, Col. Ralph (East Grinstead)Elliot, Rt. Hon. W. E.
    Bell, R. M.Clarke, Brig. Terence (Portsmouth, W.)Erroll, F. J.
    Bennett, Sir Peter (Edgbaston)Colegate, A.Fisher, Nigel
    Bennett, Dr. Reginald (Gosport)Cooper, Sqn. Ldr. Albert (Ilford, S.)Fort, R.
    Bennett, William (Woodside)Cooper-Key, E. M.Foster, John
    Bevins, J. R. (Liverpool, Toxteth)Corbett, Lt.-Col. Uvedale (Ludlow)Fraser, Hon. Hugh (Stone)
    Birch, NigelCraddock, Beresford (Spelthorne)Fraser, Sir Ian (Morecambe & Lonsdale)
    Bishop, F. P.Cranborne, ViscountFyfe, Rt. Hon. Sir David Maxwell
    Black, C. W.Crookshank, Capt. Rt. Hon. H. F. C.Gage, C. H.
    Boles, Lt.-Col. D. C. (Wells)Crosthwaite-Eyre, Col. O. E.Galbraith, Cmdr. T. D. (Pollok)
    Boothby, R.Crouch, R. F.Galbraith, T. G. D. (Hillhead)
    Bossom, A. C.Crowder, Capt. John (Finchley)Garner-Evans, E. H. (Denbigh)
    Bowen, E. R. (Cardigan)Crowder, Petre (Ruislip—Northwood)Gates, Maj. E. E.
    Boyd-Carpenter, J. A.Cundiff, F. W.Glyn, Sir Ralph
    Boyle, Sir EdwardCuthbert, W. N.Gomme-Duncan, Col. A.
    Bracken, Rt. Hon. B.Darling, Sir William (Edinburgh, S.)Gridley, Sir Arnold
    Braine, B. R.Davidson, ViscountessGrimond, J.
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Davits, Nigel (Epping)Grimston, Hon. John (St. Albans)
    Bromley-Davenport, Lt.-Col. W.de Chair, SomersetGrimston, Robert (Westbury)

    what was the object of referring to it? The only effect of the dropping of these allowances will be that the cost of supplying water in rural areas will be increased. One of the great difficulties in supplying piped water in rural areas is the scattered nature of the houses.

    The Economic Secretary also said that this case was not marked by any peculiar circumstances which could not apply to other aspects of the matter. But here again he was wrong. There are no other statutory companies and, therefore, this case is unique in the fullest sense of the term.

    The Government, partly in response to the agitation of an association, of which I had the honour to be President, maintained that they were going to do a great deal in the way of piped water supplies in rural areas. But the first thing they did when they got the opportunity was to make piped water supplies in rural areas very much more expensive. The reply of the Economic Secretary was most disappointing, and shows a complete lack of understanding of the problem of supplying water in the rural areas.

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

    The Committee divided: Ayes, 280; Noes, 289.

    Harden, J. R. E.McCorquodale, Rt. Hon. M. S.Ropner, Col. L.
    Hare, Hon. J. H. (Woodbridge)Macdonald, Sir Peter (I. of Wight)Russell, R. S.
    Harris, Frederic (Croydon, N.)Mackeson, Brig. H. R.Ryder, Capt. R. E. D.
    Harris, Reader (Heston)McKibbin, A.Salter, Rt. Hon. Sir Arthur
    Harvey, Air Cdre. A. V. (Macclesfield)McKie, J. H. (Galloway)Scott, Donald
    Harvey, Ian (Harrow, E.)Maclay, Hon. JohnShepherd, William
    Harvie-Watt, Sir GeorgeMaclean, FitzroySmiles, Lt.-Col. Sir Walter
    Hay, JohnMacLeod, Iain (Enfield, W.)Smithers, Peter (Winchester)
    Head, Brig. A. H.MacLeod, John (Ross and Cromarty)Smyth, Brig. J. G. (Norwood)
    Headlam, Lieut.-Col. Rt. Hon. Sir C.Macmillan, Rt. Hon. Harold (Bromley)Snadden, W. McN.
    Heald, LionelMacPherson, Major Niad (Damfries)Soames, Capt. C.
    Heath, EdwardMaitland, Cmdr. J. W.Spearman, A. C. M.
    Henderson, John (Cathcart)Manningham-Buller, R. E.Spence, H. R. (Aberdeanshire, W.)
    Hicks-Beach, Maj. W. W.Marlowe, A. A. M.Spens, Sir Patrick (Kensington, S.)
    Higgs, J. M. C.Marples, A. E.Stanley, Capt. Hon. Richard (N. Fylde)
    Hill, Mrs. E. (Wythenshawe)Marshall, Douglas (Bodmin)Stevens, G. P.
    Hill, Dr. Charles (Luton)Marshall, Sidney (Sutton)Steward, W. A. (Woolwich, W.)
    Hinchingbrooke, ViscountMaude, Angus (Ealing, S.)Stewart, Henderson (Fife, E.)
    Hirst, GeoffreyMaude, John (Exeter)Stoddart-Scott, Col. M.
    Holmes, Sir Stanley (Harwich)Maudling, R.Storey, S.
    Hope, Lord JohnMedlicott, Brig. F.Strauss, Henry (Norwich, S.)
    Hopkinson, HenryMellor, Sir JohnStuart, Rt. Hon. James (Moray)
    Hornsby-Smith, Miss. P.Molson, A. H. E.Summers, G. S.
    Horsbrugh, Rt. Hon. FlorenceMonckton, Sir WalterSutcliffe, H.
    Howard, Gerald (Cambridgeshire)Moore, Lt.-Col, Sir ThomasTaylor, Charles (Eastbourne)
    Howard, Greville (St. Ives)Morrison, John (Salisbury)Taylor, William (Bradford, N.)
    Hudson, Sir Austin (Lewisham, N.)Morrison, Rt. Hon. W. S. (Cirencester)Teeling, W.
    Hudson, Rt. Hon. Robert (Southport)Mott-Radclyffe, C. E.Teevan, T. L.
    Hudson, W. R. A. (Hull, N.)Thomas, J. P. L. (Hereford)
    Hutchinson, Geoffrey (Ilford, N.)Nabarro, G.Thompson, Kenneth Pugh (Walton)
    Hutchison, Lt.-Com. Clark (E'b'rgh W.)Nicholls, HarmarThompson, R. H. M. (Croydon, W.)
    Hutchison, Colonel James (Glasgow)Nicholson, G.Thorneycroft, Peter (Monmouth)
    Hyde, Lt.-Col. H. M.Nield, Basil (Chester)Thornton-Kemsley, Col. C. N.
    Hylton-Foster, H. B.Noble, Cmdr. A. H. P.Thorp, Brig. R. A. F.
    Jennings, R.Nugent, G. R. H.Tilney, John
    Johnson, Howard (Kemptown)Nutting, AnthonyTurner, H. F. L.
    Jones, A. (Hall Green)Oakshott, H. D.Turton, R. H.
    Joynson-Hicks, Hon. L. W.Odey, G. W.Tweedsmuir, Lady
    Kaberry, D.O'Neill, Rt. Hon. Sir HughVane, W. M. F.
    Kerr, H. W. (Cambridge)Ormsby-Gore, Hon. W. D.Vaughan-Morgan, J. K.
    Kingsmill, Lt.-Col. W. H.Orr, Capt. L. P. S.Vosper, D. F.
    Orr-Ewing, Charles Ian (Hendon, N.)Wakefield, Edward (Derbyshire, W.)
    Lambert, Hon. G.Orr-Ewing, Ian L. (Weston-super-Mare)Wakefield, Sir Wavell (Marylebone)
    Lancaster, Col. C. G.Osborne, C. Peake, Rt. Hon. O.Walker-Smith, D. C.
    Langford-Holt, J.Perkins, W. R. D.Ward, Hon. George (Worcester)
    Law, Rt. Hon. R. K.Peto, Brig. C. H. M.Ward, Miss. I. (Tynemouth)
    Leather, E. H. C.Pickthorn, K.Waterhouse, Capt. Rt. Hon. C.
    Legge-Bourke, Maj. E. A. H.Pitman, I. J.Watkinson, H.
    Lennox-Boyd, A. T.Powell, J. EnochWebbe, Sir H. (London)
    Lindsay, MartinPrice, Henry (Lewisham, W.)Wheatley, Major M. J. (Poole)
    Linstead, H. N.Prior-Palmer, Brig. O.White, Baker (Canterbury)
    Llewellyn, D.Profumo, J. D.Williams, Charles (Torquay)
    Lloyd, Rt. Hn. Geoffrey (King's Norton)Raikes, H. V.Williams, Gerald (Tonbridge)
    Lloyd, Maj. Guy (Renfrew, E.)Rayner, Brig. R.Williams, Sir Herbert (Croydon, E.)
    Lloyd, Selwyn (Wirral)Redmayne, M.Wills, G.
    Lockwood, Lt.-Col. J. C.Remnant, Hon. P.Wilson, Geoffrey (Truro)
    Longden, Gilbert (Herts, S. W.)Renton, D. L. M.Winterton, Rt. Hon. Earl
    Low, A. R. W.Roberts, Major Peter (Heeley)Wood, Hon. R.
    Lucas, Sir Jocelyn Portsmouth, S.)Robertson, Sir David (Caithness)York, C.
    Lucas, P. B. (Brentford)Robinson, Roland (Blackpool, S.)
    Lucas-Tooth, Sir HughRobson-Brown, W.

    TELLERS FOR THE AYES.

    Lyttelton, Rt. Hon. O.Rodgers, John (Sevenoaks)Mr. Studholme and Major Conant.
    McAdden, S. J.Roper, Sir Harold

    NOES

    Acland, Sir RichardBlenkinsop, A.Chetwynd, G. R.
    Adams, RichardBlyton, W. R.Clunie, J.
    Albu, A. H.Boardman, H.Cocks, F. S.
    Allen, Arthur (Bosworth)Booth, A.Coldrick, W.
    Allen, Scholefield (Crewe)Bottomley, A. G.Collindridge, F.
    Anderson, Alexander (Motherwall)Bowden, H. W.Cook, T. F.
    Anderson, Frank (Whitehaven)Bowles, F. G. (Nuneaton)Cooper, Geoffrey (Middlesbrough, W.)
    Attlee, Rt. Hon. C. R.Braddock, Mrs. ElizabethCooper, John (Deptford)
    Awbery, S. S.Brook, Dryden (Halifax)Corbet, Mrs. Freda (Peckham)
    Ayles, W. H.Brooks, T. J. (Normanton)Cove, W. G.
    Baird, J.Broughton, Dr. A. D. D.Craddock, George (Bradford, S.)
    Balfour, A.Brown, Rt. Hon. George (Belper)Crawley, A.
    Barnes, Rt. Hon. A. J.Brown, Thomas (Ince)Crosland, C. A. R.
    Bartley, P.Burke, W. A.Crossman, R. H. S.
    Bellenger, Rt. Hon. F. J.Burton, Miss. E.Cullen, Mrs. A.
    Benn, WedgwoodButler, Herbert (Hackney, S.)Daines, P.
    Benson, G.Cattaghan, L. J.Dalton, Rt. Hon. H.
    Beswick, F.Carmichael, J.Darling, George (Hillsborough)
    Bevan, Rt. Hon. A. (Ebbw Vale)Castle, Mrs. B. A.Davies, A. Edward (Stoke, N.)
    Bing, G. H. C.Champion, A. J.Davies, Harold (Leek)

    Davies, Stephen (Merthyr)Jones, Frederick Elwyn (West Ham, S.)Reid, William (Camlachie)
    de Freitas, GeoffreyJones, Jack (Rotherham)Rhodes, H.
    Deer, G.Jones, William Elwyn (Conway)Richards, R.
    Dodds, N. N.Keenan, W.Robens, Rt. Hon. A.
    Donnelly, D.Kenyon, C.Roberts, Goronwy (Caernarvonshire)
    Driberg, T. E. N.Key, Rt. Hon. C. W.Robertson, J. J. (Berwick)
    Dugdale, Rt. Hon. John (W. Bromwich)King, Dr. H. M.Robinson, Kenneth (St. Pancras, N.)
    Dye, S.Kinghorn, Sqn. Ldr. E.Rogers, George (Kensington, N.)
    Ede, Rt. Hon. J. C.Kinley, J.Ross, William (Kilmarnock)
    Edelman, M.Lang, GordonShawcross, Rt. Hon. Sir Hartley
    Edwards, John (Brighouse)Lee, Frederick (Newton)Shinwell, Rt. Hon. E.
    Edwards, Rt. Hon. Ness (Caerphilly)Lee, Miss. Jennie (Cannock)Shurmer, P. L. E.
    Edwards, W. J. (Stepney)Lever, Leslie (Ardwick)Silverman, Julius (Erdington)
    Evans, Albert (Islington, S. W.)Lewis, Arthur (West Ham, N.)Silverman, Sydney (Nelson)
    Evans, Edward (Lowestoft)Lindgren, G. S.Simmons, C. J.
    Evans, Stanley (Wednesbury)Lipton, Lt.-Col. M.Slater, J.
    Ewart, R.Logan, D. G.Smith, Ellis (Stoke, S.)
    Fernyhough, E.Longden, Fred (Small Heath)Smith, Norman (Nottingham, S.)
    Field, Capt. W. J.McAllister, G.Sorensen, R. W.
    Finch, H. J.MacColl, J. E.Soskice, Rt. Hon. Sir Frank
    Fletcher, Eric (Islington, E.)McGhee, H. G.Sparks, J. A.
    Follick, M.McInnes, J.Steele, T.
    Fool, M. M.Mack, J. D.Stewart, Michael (Fulham, E.)
    Forman, J. C.McKay, John (Wallsend)Stokes, Rt. Hon. R. R.
    Fraser, Thomas (Hamilton)Mackay, R. W. G. (Reading, N.)Strachey, Rt. Hon. J.
    Freeman, John (Watford)McLeavy, F.Strauss, Rt. Hon. George (Vauxhall)
    Freeman, Peter (Newport)MacMillan, Malcolm (Western Isles)Stross, Dr. Barnett
    Gaitskell, Rt. Hon. H. T. N.McNeil, Rt. Hon. H.Summerskill, Rt. Hon. Edith
    Ganley, Mrs. C. S.MacPherson, Malcolm (Stirling)Sylvester, G. O.
    Gibson, C. W.Mainwaring, W. H.Taylor, Bernard (Mansfield)
    Gilzean, A.Mallalieu, E. L. (Brigg)Taylor, Robert (Morpeth)
    Glanville, James (Consett)Mallalieu, J. P. W. (Huddersfield, E.)Thomas, David (Aberdare)
    Gordon-Walker, Rt. Hon. P. C.Mann, Mrs. JeanThomas, George (Cardiff)
    Greenwood, Anthony (Rossendale)Manuel, A. C.Thomas, Iorwerth (Rhondda, W.)
    Greenwood, Rt. Hon. Arthur (Wakefield)Marquand, Rt. Hon. H. A.Thomas, Ivor Owen (Wrekin)
    Grenfell, D. R.Mathers, Rt. Hon. G.Thorneycroft, Harry (Clayton)
    Grey, C. F.Mellish, R. J.Thurtle, Ernest
    Griffiths, David (Rother Valley)Messer, F.Timmons, J.
    Griffiths, Rt. Hon. James (Llanelly)Middleton, Mrs. L.Tommy, F.
    Griffiths, William (Exchange)Mikardo, IanTurner-Samuels, M.
    Gunter, R. J.Mitchison, G. R.Ungoed-Thomas, Sir Lynn
    Hale, Joseph (Rochdale)Moeran, E. W.Usborne, H.
    Hall, John (Gateshead, W.)Monslow, W.Vernon, W. F.
    Hall, Rt. Hon. Glenvil (Colne Valley)Moody, A. S.Viant, S. P.
    Hamilton, W. W.Morgan, Dr. H. B.Wallace, H. W.
    Morley, R.Watkins, T. E.
    Hannan, W.Morris, Percy (Swansea, W.)Webb, Rt. Hon. M. (Bradford, C.)
    Hardman, D. R.Mort, D. L.Weitzman, D.
    Hardy, E. A.Moyle, A.Wells, Percy (Faversham)
    Hargreaves, A.Mulley, F. W.Wells, William (Walsall)
    Hastings, S.Murray, J. T.West, D. G.
    Hayman, F. H.Nally, W.Wheatley, Rt. Hn. John (Edinb'gh, E.)
    Henderson, Rt. Hon. A. (Rowley Regis)Neal, Harold (Bolsover)White, Mrs. Eirene (E. Flint)
    Herbison, Miss. M.Noel-Baker, Rt. Hon. P. J.White, Henry (Derbyshire, N. E.)
    Hewitson, Capt. M.O'Brien, T.Whiteley, Rt. Hon. W.
    Hobson, C. R.Oldfield, W. H.Wilcock, Group Capt. C. A. B.
    Holman, P.Oliver, G. H.Wilkes, L.
    Holmes, Horace (Hemsworth)Orbach, M.Wilkins, W. A.
    Houghton, D.Padley, W. E.Willey, Frederick (Sunderland)
    Hoy, J.Paget, R. T.Willey, Octavius (Cleveland)
    Hubbard, T.Paling, Rt. Hon. Wilfred (Dearne Vally)Williams, David (Neath)
    Hudson, James (Ealing, N.)Paling, Will T. (Dewsbury)Williams, Rev. Llywelyn (Abertillery)
    Hughes, Emrys (S. Ayrshire)Pannell, T. C.Williams, Ronald (Wigan)
    Hughes, Hector (Aberdeen, N.)Pargiter, G. A.Williams, Rt. Hon. Thomas (Don Valley)
    Hynd, H. (Accrington)Parker, J.Williams, W. T. (Hammersmith, S.)
    Hynd, J. B. (Attercliffe)Paton, J.Wilson, Rt. Hon. Harold (Huyton)
    Irvine, A. J. (Edge Hill)Pearson, A.Winterbottom, Ian (Nottingham, C.)
    Irving, W. J. (Wood Green)Peart, T. F.Winterbottom, Richard (Brightside)
    Isaacs, Rt. Hon. G. A.Popplewell, E.Wise, F. J.
    Janner, B.Porter, G.Woodburn, Rt. Hon. A.
    Jay, D. P. T.Price, Philips (Gloucestershire, W.)Wyatt, W. L.
    Jeger, George (Goole)Proctor, W. T.Yates, V. F.
    Jeger, Dr. Santo (St. Pancras, S.)Pursey, Cmdr. H.Younger, Hon. K.
    Jenkins, R. H.Rankin, J.
    Johnson, James (Rugby)Rees, Mrs. D.

    TELLERS FOR THE NOES:

    Johnston, Douglas (Paisley)Reeves, J.Mr. Royle and Mr. Delargy.
    Jones, David (Hartlepool)Reid, Thomas (Swindon)

    I beg to move, in page 10, line 20, at the end to insert:

    Provided that this section shall not apply in respect of any expenditure on the construction, extension or modernisation of dry docks contracted for prior to the tenth day of April, nineteen hundred and fifty-one.
    In moving this Amendment, I am slightly encouraged by the recent concession of the Economic Secretary to the Amendment on shipping, and also by the fact that in answer to a Question yesterday afternoon the President of the Board of Trade said how important it was to support our traditional export trade. I am very glad to have this opportunity of arguing the case for the dry docks, because the greatest concentration of dry dock capacity is to be found on the North-East coast. In fact, it is the greatest concentration of dry dock capacity in the world. In my constituency, Smith's ship repairing docks provide the greatest single unit capacity for ship repairing in the world, and the performance of management and men through the decades has made a valuable contribution to both national security and national prosperity. Therefore, I make no apology for arguing very strongly the case of this important industry.

    Now there is a unique feature in the claim of dry docks for the restoration of the initial allowance. I know that in their case the initial allowance is only 10 per cent. We do not regard that as satisfactory, but that is another story, which I cannot argue today. The unique feature is that, after the war it became apparent that in the rebuilding of the tanker fleet much larger tankers were the order of the day, and to keep pace with the new modern tankers it became essential to provide adequate dry dock facilities. It is, therefore, a unique feature in the case I am now arguing.

    As soon as dry docks owners became aware of the fact that dry dock capacity would have to be available for tankers of 26,000, 28,000 and up to 30,000 tonnage, the industry set about modernising the dry docks and fitting them to meet the new circumstances of the times. That being so, I think we have a right to ask for special consideration by the Chancellor of the Exchequer. There are certain features of my case to which I would like to direct the right hon. Gentleman's attention. The first is that dry dock capacity serves a dual purpose in the national economy. They are providing a valuable part of our invisible exports. We are a maritime nation and our prosperity has been built up on that fact. It is true that we have for decades provided invisible exports for this country. By repairing foreign ships that come to our shores we are also adding to our export trade.

    6.30 a.m.

    The second point to which I wish to direct the right hon. Gentleman's atten- tion is that we are fulfilling an important function in the re-armament and defence programme. I am quite certain that on this question the right hon. Gentleman cannot argue that the provision of appropriate dry dock facilities is in any way competing with the re-armament programme, because it is, in fact, part of it. If he is satisfied that, for defence purposes, we need a modern tanker programme, then we must have modern dry dock facilities. Modern dry docks are essential to our national security.

    Thirdly, it is of the greatest importance from the point of view of our great rivers and of their future employment that we should not run the risk of allowing our competitors to think we are not going to provide adequate dry dock facilities. They would step in and provide them to the detriment of those who look to this country for their employment and for their security.

    I would remind the right hon. Gentleman that the cause of some of our unemployment difficulties on our rivers in the past has been the fact that, although from the early days industrially we led the world, we also taught the world. Countries like Sweden and Japan became great shipbuilding nations and we were in competition with them. If we fail today to provide these dry dock facilities, our competitors are likely to step in. There must be somewhere to accommodate these modern ships. To accommodate tankers of 84 feet beam there are only 14 dry docks available, and those who have the national interest at heart realise that it is not an adequate capacity.

    I do not want to labour the point of maintaining employment, but in my part of the world we do look for the future to maintaining our skilled men and the labourers who work with them in good remunerative employment. We also want to ensure that management, which has served this nation so well, can also seek its livelihood in this country, and that it will not have possibly to seek its fortunes abroad.

    I cannot help feeling that all the points I have made must be in the minds of the Chancellor of the Exchequer and the Economic Secretary because I observed in the papers within the last fortnight that it has been decided that there shall be a modernisation programme of the naval dockyards. If this is true—as indeed I am sure it is—it is equally important that our private yards on the North-East coast, where we have the greatest concentration of capacity in the world, must also be modernised in the same way. The Economic Secretary is going to find it difficult to argue against me on this issue because there can be no question, if the naval dockyards are going to modernise their capacity, of our dry docks under private enterprise not being put on an equal footing.

    I have listened to the arguments which the Economic Secretary has used to answer one Amendment after another in this Sitting, and I have come to the conclusion that the sponsoring Departments have not done their jobs satisfactorily. In other words, I thought that the Economic Secretary—and I say this respectfully and not unpleasantly—did not know the case for industry. The point is that it is up to the sponsoring Departments to see that the Treasury is fully informed on their case. I think it was the hon. and gallant Gentleman the Member for Carshalton (Brigadier Head) who said that in matters of defence the Service Departments always find themselves in conflict with the Treasury. I very well remember writing an article for the "Spectator" on Treasury control.

    In this case the sponsoring Department, the Admiralty, have not fully briefed the Economic Secretary. The Ministry of Transport are also involved, but I do not see them taking much interest in this discussion on the vital question of transport in its wider sense which is of supreme interest to this country. In this matter I look to the Admiralty. I cannot believe they have put up a sufficiently strong case, otherwise the Economic Secretary could not have made some of the replies that he has made.

    I sent a letter to the new First Lord of the Admiralty covering the terms of my Amendment and asking for his intervention with the Treasury. I am sorry that I have not a copy of the letter here, but I can assure the Economic Secretary that I set out in great detail the case for the Amendment and asked Lord Pakenham if he would have a word with the Chancellor of the Exchequer if he supported the view I was expressing. The Dry Dock Owners and Repairers' Council wrote to the Chancellor pointing out their problems, and so far they have received only a postcard. That is not a fitting way for any Government Department to treat those who represent our national interests.

    I have received from Lord Pakenham a telephone message saying
    "Lord Pakenham has been very busy during the change-over but has brought the matter to the attention of the Chancellor of the Exchequer about your letter of 4th June."
    That is an indication to me that Lord Pakenham did not disagree with the letter I sent. If he had done—understanding as I do the-technique of Government Departments—I should have received no answer at all, and I would have been harrying the noble Lord for an answer before I moved this Amendment. Lord Pakenham has already taken some action in the interests of the North-East coast, and if he is as successful in his second attempt to help us as he was in his first I feel we shall have a friend in the First Lord of the Admiralty.

    The Committee may wonder why, having regard to the Clause it is necessary to move this Amendment in respect particularly of two important new extensions which have already been started on the North-East Coast—an extension of Smith's docks in my constituency, and to Greenwells' ship-repairing yard on the Wear. I am looking to hon. Gentlemen opposite who represent the great rivers of the North to support this Amendment. This is a non-party matter. It is a national matter in which we are all interested. Now is the chance of those who believe in a high level of employment in the shipbuilding and ship-repairing industry to support me.

    As the hon. Gentleman's Department has only sent a postcard to acknowledge the receipt of this letter I propose to read the pertinent paragraphs of a letter from the Dry Dock Owners and Repairers Central Council, dated 18th May, 1951, addressed to the right hon. H. T. N. Gaitskell, in reply to which the dry dock owners received only a postcard. This is the relevant part:
    "A number of projects for the construction of much-needed new dry docks in this country has already been put in hand, on the assumption that at least the ten per cent. initial allowance would be available. Unless the Financial Bill is appropriately amended, the ship repairers who have, with concern for the future of an industry vitally important to the national security and economy, embarked upon expenditure which because of the nature of dry dock construction must be spread over a considerable period of time, are in our view to be unfairly and unjustifiably penalised.
    The same considerations apply in cases where the extension and modernisation of existing dry docks is involved. The withdrawal of the initial allowances besides operating unfairly on those who have already committed themselves to expenditure in this direction, will undoubtedly discourage other ship repairers from putting in hand any projects they may have had under close review in recent months. The discouragement in any way of expenditure on the construction, extension or modernisation of dry docks in the U.K. is in our view contrary to the Government's declared policy in regard to defence and re-armament and contrary to the national interest."
    I am sure that I have made a case not only on behalf of my part of the world, on behalf of the Dry Dock Owners and Repairers' Council and on behalf of my party, but I feel that I have made a good enough case in the national interest and I am asking for the acceptance of my Amendment.

    6.45 a.m.

    I wish to say a few words in support of my hon. Friend the Member for Tynemouth (Miss. Ward), because we in the West are also interested in dry docks. There are no dry docks in my division, but there are in Falmouth, which is just over the border, and a great many workers in Falmouth Docks live in my division. I see that the hon. Member for Falmouth (Mr. Hayman) is not in his place at the moment and I have not spoken to him about this Amendment, but I should like to put two points on the general position in regard to dry docks that deal with the repair of oil tankers. First, there has been a good deal of unemployment recently at such dry docks and secondly, such docks deal to a certain extent with foreign tankers and to that extent are an invisible export.

    For these reasons I hope the members of the Committee and the Chancellor will look at this Clause carefully to see whether the argument put forward by the proposer of the Amendment can be sustained. If there is a reasonable case that the proposal made would help in getting further dock work to this country by making this apparently small concession, I hope it will be given serious consideration.

    I should like to support the Amendment so adequately and eloquently moved by my hon. Friend. She spoke of the new dry docks under construction to accommodate tankers of 28,000 tons, and of the tendency for merchant ships to become larger and faster. It is a good thing indeed that these big docks are being built. The industry took a big risk in building them at a very heavy cost, and the Chancellor of the Exchequer should realise that the danger is no more 40 per cent. no more docks. Where are we now? We are all engaged on a buying spree where one can get a concession for short term delivery of goods in a year. But here they get no concession and nothing from the Chancellor although they have done all they could for the industry and Britain.

    I find it hard to argue with the hon. Lady, but not because I have been convinced by her arguments. I was entranced by her description of the dry docks, and a speech at this hour of the morning in praise of dry docks is indeed worthy of a compliment. She referred to a letter she had sent to my noble Friend the First Lord of the Admiralty. I have a copy of that letter. It is a pity the hon. Lady did not have it herself so that the Committee could have had the benefit of hearing what she wrote.

    This is what she wrote to Lord Pakenham:

    "You were so very helpful over our civil aerodrome problems that I hasten to ask your support over our desire to protect our ship repairing yards from the suspension of the initial allowance. We regard it as essential to have modern dry docks to take ships and tankers not only from the point of view of employment, but from the angle of the needs of defence.
    I understand your predecessor was approached as the sponsoring Department to bring pressure to bear on the Chancellor. We have two huge projects on the North-East coast. I am moving an Amendment on Clause 16 in most conciliatory terms.
    Hoping that you will have a word with the Chancellor. It is urgent as it may come up on Wednesday. I do think the matter has only arisen because the Chancellor has not been properly informed."
    That gives the essence of her case, but what it does not do, and what the hon. Lady did not say in her speech in praise of dry docks, is to say, that the work was not going on.

    There is absolutely no reason to suppose at all that the modernisation or extension of the dry docks is in the slightest degree imperilled by the suspension of the 10 per cent. initial allowance, and unless she or some of her hon. Friends, can demonstrate that there is a danger of that happening their case falls. To talk as though the suspension of the 10 per cent. initial allowance is going to have so disastrous a consequence that the work is going to stop is so exaggerated that it is difficult to reply to it. I do not believe that there is any risk: I do not believe the case she has made out would justify all the consequences that would flow from such a precedent in this field of long-term construction.

    We have had so many Amendments that it is absolutely obvious that the Opposition would be much better occupied, as we on this side would be, if we were to get down to discuss the general principle because in certain of the cases they have put up to us they do not believe initial allowances ought to be suspended at all. I cannot, in the circumstances, agree to give what the hon. Lady has asked, although I would very much like if possible to have been pleasant at this hour of the morning.

    Might I make this point? May I put it this way? There was a 10 per cent. initial allowance, then there was a 20 per cent. initial allowance given by Sir John Anderson, then there was a 40 per cent. initial allowance given by Sir Stafford Cripps. Are we to understand that all that is held up and that we are never to take any initial allowances as being a stabilised offer? If that is the attitude of the Government, no industrialist will ever trust the Socialist Government again. May I also suggest to the hon. Gentleman that he comes up to the North-East coast, meets the dry dock owners, the management and the men, and learns something about how we believe in honesty in industry. I am not at all satisfied with the answer given by the hon. Gentleman.

    Those of us who have shared the long vigil of the hon. Gentleman, as some of us have done all night, had some sympathy with his closing remark that he thought it was time we got down to it. Certainly we are all looking forward to the some what lengthy discussion on the Question that the Clause should stand part of the Bill, which we shall be coming to shortly. In the meantime, I want to say in the friendliest manner to the hon. Gentleman that I thought he swept aside the Amendment of my hon. Friend the Member for Tynemouth (Miss. Ward) in a somewhat brusque fashion.

    That was the impression the right hon. Gentleman gave me and no shaking of his head will alter my impression.

    I want to submit to the right hon. Gentleman, now that he is back with us, that this matter is linked in every way with that of merchant shipping and shipbuilding. The dry dock facilities will form undoubtedly as important a part of our war-time organisation, if such a thing be necessary, as does the construction of merchant tonnage. That is a reasonable and, indeed, an unanswerable point to make, and when the hon. Lady was telling us about the necessity for taking these large tankers, it seemed to me that her remarks tied up completely with those made by my right hon. Friend the Member for Ormskirk (Sir A. Salter) earlier when we were discussing the shipbuilding Clauses. He explained how, despite the fact that 11½ million tons of shipping sunk during the war had been made good in terms of the global figure, it had got somewhat unbalanced and that there had been a considerable concentration upon tanker building.

    I want to make a suggestion to the right hon. Gentleman which will enable this Amendment to be disposed of and progress to be made. He has already given an undertaking, through the Economic Secretary, that certain questions raised by my hon and gallant Friend the Member for Scotstoun (Colonel J. R. H. Hutchison) will be sympathetically re-examined between now and the Report stage, with a view to the possibility of the Government putting down Amendments of their own at that stage to meet this difficulty over shipbuilding.

    While I have not had an opportunity to discuss it with my hon. Friend the Member for Tynemouth, it seems to me that if the Chancellor were to say that the review would include the subject of the dry dock question, for my part I should feel that the right hon. Gentleman had met what is an extremely important and relevant point.

    The machinery of a Division has been set in motion many times since we commenced our proceedings at 3.30 p.m. yesterday, and if he could say that, my hon. Friend might feel that she need not set it in motion again. If he can say that in this conciliatory atmosphere of daylight and we are feeling fresh now that a new day has started. I, for one, would be well content.

    7.0 a.m.

    I was hoping that, after the very timely and affable way in which a suggestion has been made to the Chancellor, he might conceivably have risen at once to save the time of the Committee—which many of us are using in the best possible way—by offering to go into this matter between now and the Report stage. We all know that, at any rate, would have brought fresh light to the subject. I listened to the Economic Secretary, and I heard him assure the Committee that, of course, there was no danger whatever to any of these dockyards, but I hope that too much store will not be set by that.

    Those of us who have sat for the past six years with this Government have come to know that sometimes there has been a short reply and things have gone quite differently. Over and over again, we have had terrific assurances from the Front Bench, and then, in a short time, matters have been settled. Now this matter before us this morning is of importance, not only to the North-East coast, or some of the other great docking centres; there is the question of developing dockyards and dry docks in many places right throughout the country. It may well be that in Falmouth, or Plymouth, these developments are going on. Although, of course, Plymouth has a Royal dockyard which will go on, one supposes. I do not represent either of those places, and we rarely see the hon. Member for Falmouth and Camborne (Mr. Hayman) in the House. [HON. MEMPERS: "Yes."] Oh, yes, I know he is a good voter; he is good Lobby-fodder.

    I am in the same mood as the hon. Lady who spoke to this Amendment; I am trying to get a concession from the Government. This goes far wider than those important places of the North-East coast, and I do hope that the Chancellor, for the general expediency of this Amendment, which he cannot just turn down by saying everything is all right, and because of the most courteous and kindly speech of the hon. Lady, will now get up and say we have helped him.

    All the right hon. Gentleman has to do is to get up and give us some assurance, and then to get the assistance of the Admiralty; because they know far more about dockyards than the whole, terrifically swollen, staff at the Treasury. If he would do that, and get on, instead of looking like his predecessor, bar one, and rolling his eyes in much the same manner, we should have done something for one of the most important of the industries of this country.

    I make an appeal to the Chancellor, especially in relation to the Smith dock scheme. The argument in regard to ships has been accepted in principle; and ships are so closely associated with our defence that it is right to give them such concession under this Clause. Dry docks, it follows, especially with all these new types to accommodate very large tankers, must be put into the same category. I can understand that it might be rather difficult to select the whole of the dry dock programme of all sorts and kinds, but when one considers a proposition like the Smith docks, hon. Members will appreciate that the amount of capital involved is large, and I happen to know that a large proportion of the company's capital is involved. They will go on with this scheme, because they know very well that it is very much in the interests of the country. The withdrawal of the 40 per cent. allowance means that they have to find this short-term money. As the project is decided upon, as the company are going to carry it out, and as the allowance is withdrawn, it simply means that 40 per cent.—

    All right, it is only 10 per cent. I think I am right in saying that the company were very much relying on that to help them with their short-term finances.

    The Chancellor, in his Budget speech, said that when the allowances were withdrawn the production Departments would take whatever measures might be necessary to ensure that the suspension of the allowances did not result in difficulties for undertakings engaged in re-armament. If these special dry docks are classified as coming into the same category as ships in relation to defence, and if there is a short-term financing problem, can we have an assurance that the undertaking given in the Budget speech will be implemented? That is the very least that the Government ought to do this morning if we are not divide on this Amendment.

    It seems to me quite impossible without all kinds of trouble for anything to be drawn from initial allowances, but the statement of my right hon. Friend stands. Therefore, I would

    Division No. 98.]

    AYES

    [7.5 a.m.

    Aitken, W. T.Cranborne, ViscountHay, John
    Alport, C. J. M.Crookshank, Capt. Rt. Hon. H. F. C.Head, Brig. A. H.
    Amery, Julian (Preston, N.)Crosthwaite-Eyre, Col. O. E.Headlam, Lieut.-Col. Rt. Hon. Sir C.
    Amory, Heathcoat (Tiverton)Crouch, R. F.Heald, Lionel
    Arbuthnot, JohnCrowder, Capt. John (Finchley)Heath, Edward
    Ashton, H. (Chelmsford)Crowder, Petre (Ruislip—Northwood)Henderson, John (Cathcart)
    Assheton, Rt. Hon. R. (Blackburn, W.)Cundiff, F. W.Hicks-Beach, Maj. W. W.
    Astor, Hon. M. L.Cuthbert, W. N.Higgs, J. M. C.
    Baker, P. A. D.Darling, Sir William (Edinburgh, S.)Hill, Mrs. E. (Wythenshawe)
    Baldock, Lt.-Cmdr. J. M.Davidson, ViscountessHill, Dr. Charles (Luton)
    Baldwin, A. E.Davies, Nigel (Epping)Hinchingbrooke, Viscount
    Banks, Col. C.de Chair, SomersetHirst, Geoffrey
    Baxter, A. B.De la Bère, R.Holmes, Sir Stanley (Harwich)
    Beamish, Major TuftonDeedes, W. F.Hope, Lord John
    Bell, R. M.Digby, S. W.Hopkinson, Henry
    Bennett, Dr. Reginald (Gosport)Dodds-Parker, A. D.Hornsby-Smith, Miss. P.
    Bennett, William (Woodside)Donner, P. W.Horsbrugh, Rt. Hon. Florence
    Bevins, J. R. (Liverpool, Toxteth)Douglas-Hamilton, Lord MalcolmHoward, Gerald (Cambridgeshire)
    Birch, NigelDrayson, G. B.Howard, Greville (St. Ives)
    Bishop, F. P.Dugdale, Maj. Sir Thomas (Richmond)Hudson, Sir Austin (Lewisham, N.)
    Black, C. W.Duncan, Capt. J. A. L.Hudson, Rt. Hon. Robert (Southport)
    Boles, Lt.-Col. D. C. (Wells)Dunglass, LordHudson, W. R. A. (Hull, N.)
    Boothby, R.Duthie, W. S.Hutchinson, Geoffrey (Ilford, N.)
    Bossom, A. C.Eccles, D. M.Hutchison, Lt.-Com. Clark (E'b'rgh W.)
    Bowen, E. R. (Cardigan)Eden, Rt. Hon. A.Hutchison, Colonel James (Glasgow)
    Boyd-Carpenter, J. A.Elliot, Rt. Hon. W. E.Hyde, Lt.-Col. H. M.
    Boyle, Sir EdwardErroll, F. J.Hylton-Foster, H. B.
    Bracken, Rt. Hon. B.Fisher, NigelJennings, R.
    Braine, B. R.Fort, R.Johnson, Howard (Kemptown)
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Foster, JohnJones, A. (Hall Green)
    Bromley-Davenport, Lt.-Col. W.Fraser, Hon. Hugh (Stone)Joynson-Hicks, Hon. L. W.
    Brooke, Henry (Hampstead)Fraser, Sir Ian (Morecambe & Lonsdale)Kaberry, D.
    Browne, Jack (Govan)Fyfe, Rt. Hon. Sir David MaxwellKerr, H. W. (Cambridge)
    Buchan-Hepburn, P. G. T.Gage, C. H.Kingsmill, Lt.-Col. W. H.
    Bullus, Wing Commander E. E.Galbraith, Cmdr. T. D. (Pollok)Lambert, Hon. G.
    Burden, F. A.Garner-Evans, E. H. (Denbigh)Lancaster, Col. C. G.
    Butcher, H. W.Gates, Maj. E. E.Langford-Holt, J.
    Butler, Rt. Hon. R. A. (Saffron Walden)Glyn, Sir RalphLaw, Rt. Hon. R. K.
    Carr, Robert (Mitcham)Gomme-Duncan, Col. A.Leather, E. H. C.
    Carson, Hon. E.Gridley, Sir ArnoldLegge-Bourke, Maj. E. A. H.
    Channon, H.Grimond, J.Lennox-Boyd, A. T.
    Churchill, Rt. Hon. W. S.Grimston, Hon. John (St. Albans)Lindsay, Martin
    Clarke, Col. Ralph (East Grinstead)Grimston, Robert (Westbury)Linstead, H. N.
    Clarke, Brig. Terence (Portsmouth, W.)Harden, J. R. E.Llewellyn, D.
    Colegate, A.Hare, Hon. J. H. (Woodbridge)Lloyd, Rt. Hn. Geoffrey (King's Norton)
    Conant, Maj. R. J. E.Harris, Frederic (Croydon, N.)Lloyd, Maj. Guy (Renfrew, E.)
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Harris, Reader (Heston)Lloyd, Selwyn (Wirral)
    Cooper-Key, E. M.Harvey, Air. Cdre. A. V. (Macclesfield)Lockwood, Lt.-Col. J. C.
    Corbett, Lt.-Col. Uvedale (Ludlow)Harvey, Ian (Harrow, E.)Longden, Gilbert (Herts, S. W.)
    Craddock, Beresford (Spelthorne)Harvie-Watt, Sir G. S.Low, A. R. W.

    suggest if there is a real difficulty arising from the suspension of the 10 per cent. initial allowance in respect of the capital needed, the matter should be raised with us, and I am sure that we will give the matter our very greatest attention.

    I think the whole Committee enjoyed very much the speech of my hon. Friend the Member for Tyne-mouth (Miss. Irene Ward). We listened to the reply of the Economic Secretary and did not believe that he met her points at all. Even hon. Members from the North-East coast in his own party did not feel that he met her arguments. For that reason we have no hesitation in taking the Amendment to a Division.

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

    The Committee divided: Ayes, 277; Noes, 287.

    Lucas, Sir Jocelyn (Portsmouth, S.)Orr, Capt. L. P. S.Strauss, Henry (Norwich, S.)
    Lucas, P. B. (Brentford)Orr-Ewing, Charles Ian (Hendon, N.)Stuart, Rt. Hon. James (Moray)
    Lucas-Tooth, Sir HughOrr-Ewing, Ian L. (Weston-super-Mare)Studholme, H. G.
    Lyttelton, Rt. Hon. O.Osborne, C.Summers, G. S.
    McAdden, S. J.Peake, Rt. Hon. O.Sutcliffe, H.
    McCorquodale, Rt. Hon. M. S.Perkins, W. R. D.Taylor, Charles (Eastbourne)
    Macdonald, Sir Peter (I. of Wight)Peto, Brig. C. H. M.Taylor, William (Bradford, N.)
    Mackeson, Brig. H. R.Pickthorn, K.Teeling, W.
    McKibbin, A.Pitman, I. J.Teevan, T. L.
    McKie, J. H. (Galloway)Powell, J. EnochThomas, J. P. L. (Hereford)
    Maclay, Hon. JohnPrice, Henry (Lewisham. W.)Thompson, Kenneth Pugh (Walton)
    Maclean, FitzroyPrior-Palmer, Brig. O.Thompson, R. H. M. (Croydon, W.)
    MacLeod, Iain (Enfield, W.)Profumo, J. D.Thorneycroft, Peter (Monmouth)
    MacLeod, John (Ross and Cromarty)Raikes, H. V.Thornton-Kemsley, Col. C. N.
    Macmillan, Rt. Hon. Harold (Bromley)Rayner, Brig. R.Thorp, Brig. R. A. F.
    Macpherson, Major Niall (Dumfries)Redmayne, M.Tilney, John
    Maitland, Comdr. J. W.Remnant, Hon. P.Turner, H. F. L.
    Manningham-Buller, R. E.Renton, D. L. M.Turton, R. H.
    Marlowe, A. A. H.Roberts, Major Peter (Heeley)Tweedsmuir, Lady
    Marples, A. E.Robertson, Sir David (Caithness)Vane, W. M. F.
    Marshall, Douglas (Bodmin)Robinson, Roland (Blackpool, S.)Vaughan-Morgan, J. K.
    Marshall, Sidney (Sutton)Robson-Brawn, W.Wakefield, Edward (Derbyshire, W.)
    Maude, Angus (Ealing, S.)Rodgers, John (Sevenoaks)Wakefield, Sir Wavell (Marylebone)
    Maude, John (Exeter)Roper, Sir HaroldWalker-Smith, D. C.
    Maudling, R.Ropner, Col. L.Ward, Hon. George (Worcester)
    Medlicott, Brig. F.Russell, R. S.Ward, Miss. I. (Tynemouth)
    Mellor, Sir JohnRyder, Capt. R. E. D.Waterhouse, Capt. Rt. Hon. C.
    Molson, A. H. E.Salter, Rt. Hon. Sir ArthurWatkinson, H.
    Monckton, Sir WalterScott, DonaldWebbe, Sir Harold
    Moore, Lt.-Col. Sir. Thomas.Shepherd, WilliamWheatley, Major M. J. (Poole)
    Morrison, John (Salisbury)Smiles, Lt.-Col. Sir WalterWhite, Baker (Canterbury)
    Morrison, Rt. Hon. W. S. (Cirencester)Smithers, Peter (Winchester)Williams, Charles (Torquay)
    Mott-Radclyffe, C. E.Smyth, Brig. J. G. (Norwood)Williams, Gerald (Tonbridge)
    Nabarro, G.Snadden, W. McN.Williams, Sir Herbert (Croydon, E.)
    Nicholls, HarmarSoames, Capt. C.Wills, G.
    Nicholson, G.Spearman, A. C. M.Wilson, Geoffrey (Truro)
    Nield, Basil (Chester)Spence, H. R. (Aberdeenshire, W.)Winterton, Rt. Hon. Earl
    Noble, Comdr. A. H. P.Spens, Sir Patrick (Kensington, S.)Wood, Hon. R.
    Nugent, G. R. H.Stanley, Capt. Hn. Richard (N. Fylde)York, C.
    Nutting, AnthonyStevens, G. P.
    Oakshott, H. D.Steward, W. A. (Woolwich, W.)

    TELLERS FOR THE AYES:

    Odey, G. W.Stewart, Henderson (Fife, E.)Mr. T. G. D. Galbraith and
    O'Neill, Rt. Hon. Sir HughStoddart-Scott, Col. M.Mr. Vosper.
    Ormsby-Gore, Hon. W. D.Storey, S.

    NOES

    Acland, Sir RichardCastle, Mrs. B. A.Ewart, R.
    Adams, RichardChampion, A. J.Fernyhough, E.
    Albu, A. H.Chetwynd, G. R.Field, Capt. W.
    Allen, Arthur (Bosworth)Clunie, J.Finch, H. J.
    Allen, Scholefield (Crewe)Cooks, F. S.Fletcher, Eric (Islington, E.)
    Anderson, Alexander (Motherwell)Coldrick, W.Follick, M.
    Anderson, Frank (Whitehaven)Collindridge, F.Foot, M. M.
    Attlee, Rt. Hon. C. R.Cook, T. F.Forman, J. C.
    Awbery, S. S.Cooper, Geoffrey (Middlesbrough W.)Fraser, Thomas (Hamilton)
    Ayles, W. H.Cooper, John (Deptford)Freeman, John (Watford)
    Bacon, Miss. AliceCorbet, Mrs. Freda (Peckham)Freeman, Peter (Newport)
    Baird, J.Cove, W. C.Gaitskell, Rt. Hon. H. T. N.
    Balfour, A.Craddock, George (Bradford, S.)Ganley, Mrs. C. S.
    Barnes, Rt. Hon. A. J.Crawley, A.Gibson, C. W.
    Bartley, P.Crosland, C. A. R.Gilzean, A.
    Bellenger, Rt. Hon. F. J.Crossman, R. H. S.Glanville, James (Consett)
    Bern, WedgwoodCullen, Mrs. A.Gooch, E. G.
    Benson, G.Daines, P.Gordon-Walker, Rt. Hon. P. C.
    Beswick, F.Dalton, Rt. Hon. H.Greenwood, Anthony (Rossendale)
    Bevan, Rt. Hon. A. (Ebbw Vale)Darting, George (Hillsborough)Greenwood, Rt. Hon. Arthur (Wakefield)
    Bing, G. H. C.Davies, A. Edward (Stoke, N.)Grenfell, D. R.
    Blenkinsop, A.Davies, Harold (Leek)Grey, C. F.
    Blyton, W. R.Davies, Stephen (Merthyr)Griffiths, David (Rother Valley)
    Board man, H.de Freitas, GeoffreyGriffiths, Rt. Hon. James (Llanelly)
    Booth, A.Deer, G.Griffiths, William (Exchange)
    Bottomley, A. G.Delargy, H. J.Gunter, R. J.
    Bowden, H. W.Dodds, N. N.Hale, Joseph (Rochdale)
    Bowles, F. G. (Nuneaton)Donnelly, D.Hall, John (Gateshead, W.)
    Braddock, Mrs. ElizabethDriberg, T. E. N.Hall, Rt. Hon. Glenvil (Colne Valley)
    Brook, Dryden (Halifax)Dugdale, Rt. Hon. John (W. Bromwich)Hamilton, W. W.
    Brooks, T. J. (Normanton)Dye. S.Hannan, W.
    Broughton, Dr. A. D. D.Ede, Rt. Hon. J. C.Hardy, E. A.
    Brown, George (Belper)Edelman, M.Hargreaves, A.
    Brown, Thomas (Ince)Edwards, John (Brighouse)Hastings, S.
    Burke, W. A.Edwards, Rt. Hon. Ness (Caerphilly)Hayman, F. H.
    Burton, Miss. E.Edwards, W. J. (Stepney)Henderson, Rt. Hon. A. (Rowley Regis)
    Butler, Herbert (Hackney, S.)Evans, Albert (Islington, S. W.)Herbison, Miss. M.
    Callaghan, L. J.Evans, Edward (Lowestoft)Hewitson, Capt. M.
    Carmichael, J.Evans, Stanley (Wednesbury)Hobson, C. R.

    Holman, P.Messer, F.Smith, Norman (Nottingham, S.)
    Holmes, Horace (Hemsworth)Middleton, Mrs. L.Sorensen, R. W.
    Houghton, D.Mikardo, IanSoskice, Rt. Hon. Sir Frank
    Hoy, J.Mitchison, G. R.Steele, T.
    Hubbard, T.Monslow, W.Stewart, Michael (Fulham, E.)
    Hudson, James (Ealing, N.)Moody, A. S.Stokes, Rt. Hon. R. R.
    Hughes, Emrys (S. Ayrshire)Morgan, Dr. H. B.Strachey, Rt. Hon. J.
    Hughes, Hector (Aberdeen, N.)Morley, R.Strauss, Rt. Hon. George (Vauxhall)
    Hynd, H. (Accrington)Morris, Percy (Swansea, W.)Stross, Dr. Barnett
    Hynd, J. B. (Attercliffe)Mort, D. L.Summerskill, Rt. Hon. Edith
    Irvine, A. J. (Edge Hill)Moyle, A.Sylvester, G. O.
    Irving, W. J. (Wood Green)Mulley, F. W.Taylor, Bernard (Mansfield)
    Isaacs, Rt. Hon. G. A.Murray, J. D.Taylor, Robert (Morpeth)
    Janner, B.Nally, W.Thomas, David (Aberdare)
    Jay, D. P. T.Neal, Harold (Bolsover)Thomas, George (Cardiff)
    Jeger, George (Goole)Noel-Baker, Rt. Hon. P. J.Thomas, Iorwerth (Rhondda, W.)
    Jeger, Dr. Santo (St. Pancras, S.)O'Brien, T.Thomas, Ivor Owen (Wrekin)
    Jenkins, R. H.Oldfield, W. H.Thorneycroft, Harry (Clayton)
    Johnson, James (Rugby)Oliver, G. H.Thurtle, Ernest
    Johnston, Douglas (Paisley)Orbach, M.Timmons, J.
    Jones, David (Hartlepool)Padley, W. E.Tomney, F.
    Jones, Frederick Elwyn (West Ham, S.)Paget, R. T.Turner-Samuels, M.
    Jones, Jack (Rotherham)Paling, Rt. Hon. Wilfred (Dearne V'lly)Ungoed-Thomas, Sir Lynn.
    Jones, William Elwyn (Conway)Paling, Will T. (Dewsbury)Usborne, H.
    Keenan, W.Panned, T. C.Vernon, W. F.
    Kenyon, C.Pargiter, G. A.Viant, S. P.
    Key, Rt. Hon. C. W.Parker, J.Wallace, H. W.
    King, Dr. H. M.Paton, J.Watkins, T. E.
    Kinghorn, Sqn. Ldr. E.Pearson, A.Webb, Rt. Hon. M. (Bradford, C.)
    Kinley, J.Peart, T. F.Weitzman, D.
    Lang, GordonPopplewell, E.Wells, Percy (Faversham)
    Lee, Frederick (Newton)Porter, G.Wells, William (Walsall)
    Lee, Miss. Jennie (Cannock)Price, Philips (Gloucestershire, W.)West, D. G.
    Lever, Leslie (Ardwick)Proctor, W. T.Wheatley, Rt. Hon. John (Edinb'gh, E.)
    Lewis, Arthur (West Ham, N.)Pryde, D. J.White, Mrs. Eirene (E. Flint)
    Lewis, John (Bolton, W.)Pursey, Cmdr. H.White, Henry (Derbyshire, N. E.)
    Lindgren, G. S.Rankin, J.Whiteley, Rt. Hon. W.
    Lipton, Lt.-Col. M.Rees, Mrs. D.Wilcock, Group Capt. C. A. B.
    Logan, D. G.Reeves, J.Wilkes, L.
    Longden, Fred (Small Heath)Reid, Thomas (Swindon)Willey, Frederick (Sunderland)
    McAllister, G.Reid, William (Camlachie)Willey, Octavius (Cleveland)
    MacColl, J. E.Rhodes, H.Williams, David (Neath)
    McGhee, H. G.Richards, R.Williams, Rev. Llywelyn (Abertillery)
    McInnes, J.Robens, Rt. Hon. A.Williams, Ronald (Wigan)
    Mack, J. D.Roberts, Goronwy (Caernarvonshire)Williams, Rt. Hon. Thomas (Don V'lly)
    McKay, John (Wallsend)Robertson, J. J. (Berwick)Williams, W. T. (Hammersmith, S.)
    Mackay, R. W. G. (Reading, N.)Robinson, Kenneth (St. Pancras, N.)Wilson, Rt. Hon. Harold (Huyton)
    McLeavy, F.Rogers, George (Kensington, N.)Winterbottom, Ian (Nottingham, C.)
    MacMillan, Malcolm (Western Isles)Ross, William (Kilmarnock)Winterbottom, Richard (Brightside)
    McNeil, Rt. Hon. H.Royle, C.Wise, F. J.
    MacPherson, Malcolm (Stirling)Shawcross, Rt. Hon. Sir HartleyWoodburn, Rt. Hon. A.
    Mallalieu, E. L. (Brigg)Shinwell, Rt. Hon. E.Wyatt, W. L.
    Mallalieu, J. P. W. (Huddersfield, E.)Shurmer, P. L. E.Yates, V. F.
    Mann, Mrs. JeanSilverman, Julius (Erdington)Younger, Hon. K.
    Manuel, A. C.Silverman, Sydney (Nelson)
    Marquand, Rt. Hon. H. A.Simmons, C. J.

    TELLERS FOR THE NOES:

    Mathers, Rt. Hon. G.Slater, J.Mr. Wilkins and Mr. Sparks.
    Mellish, R. J.Smith, Ellis (Stoke, S.)

    I beg to move, "That the Chairman do report Progress and ask leave to sit again."

    I do so in order that we may elicit from the Government a further statement of their intentions or desires. It is for them to say what they wish to do; the Committee must make up its mind accordingly. We have had, I think, a remarkable all-night sitting, unblemished by any ill-temper. Nobody has been assaulted in the Lobby. The debating level has been very high. The Government have made certainly one concession, in regard to the shipbuilding industry, which is substantial and rewards the labours of those who felt that the previous proposal was unduly severe. Generally speaking, we greet the morning light with good spirits and resolve to do our duty as well as we can in whatever circumstances are placed upon us. I therefore invite from the Leader of the House a statement of what he intends to do and what course he intends to take. We shall consider very carefully what he says and then be able to reach a conclusion, which I hope will match his own for clarity and decision.

    I confirm what the right hon. Gentleman has said about the spirit in which the night's debates have been conducted. I was once rather pushed about by some Members of his party who were trying to get into the Lobby, passing in front of me instead of proceeding by the more normal route, but I do not hold that against anyone.

    The right hon. Gentleman asks for my intentions and desires. Upon how my desires are met depends what my intentions will be. I think it is generally agreed that it is desirable that, when one gets to an important Clause of the Bill it should be discussed by the Committee when it is reasonably fresh. I do not see many signs of jaded looks yet, and I know the high spirits that are kept alive by songs in the tea-room. I would myself think that it would be a good thing if we started on Monday afternoon at Clause 24, which is, I think, after we have disposed of this Clause, which we have been debating since about 10.15 last night, the next really important Clause in the Bill. [HON. MEMBERS: "No."] Well, I know that one star may outshine another star in glory, and that Clauses are apt to vary in importance according to the side of the Committee upon which one sits.

    I have tried to make a reasonable analysis of these Clauses, and if we could get to the end of Clause 23 by a reasonable hour today I would hope that we should then be able to report Progress and start on Monday afternoon at the commencement of Clause 24. I make that suggestion to the Committee. To use the phrase of the right hon. Gentleman, that is the desire that I would express to the Committee.

    Might I ask the right hon. Gentleman what he means by "a reasonable hour today"? Human judgment varies so much as to what is reasonable.

    Anti-meridian, let us say. In view of the spirit that has prevailed all night, I do not think that that is asking an impossible task of the Committee.

    If we go on beyond 10 o'clock, the debate set down for Friday will never arrive. Thursday will have overlapped Friday.

    No, it is 11 o'clock. I did allow some time for the kind of unpredictable incident that generally occurs when one fixes an hour, and there is an hon. Member who feels he has a message he must deliver.

    I feel quite sure that I shall be allowed to express my obligation to the right hon. Gentleman for having made a plain and clear statement of his desires and intentions. For out part, we have listened with great interest to them, and we see no season why the Government should not pursue that course. We cannot enter into an agreement as to when the debate should be brought to a conclusion. [HON. MEMBERS: "Why?"] Clause 23 is a very important Clause and raises large principles. Moreover, we are now in the light of day. The reports will be available to the public of what takes place in the Committee. That leaves Clause 24 for next week. Naturally, we have that before us. I cannot give the right hon. Gentleman any assurance, but we shall watch with interest how Government business proceeds.

    I never expect prophecies. I have been with the right hon. Gentleman at Epsom Downs too often to place any reliance on prophecies by anyone, and I only hope that the suggestion I have made may yet find favour with the Committee in the practical working out of the business of the morning.

    I find difficulty in withdrawing. I feel bound to say that after the excellent and admirable night we have passed, I think the right thing would be to report Progress at the point now reached. We have done a good hard span of work. Therefore, I think I shall press my Motion to a Division. Otherwise, we shall not in any way alter the procedure we have indicated.

    Question put, "That the Chairman do report Progress and ask leave to sit again."

    The Committee divided: Ayes, 279; Noes, 287.

    Division No. 99.]

    AYES

    [7.29 a.m.

    Aitken, W. T.Fraser, Hon. Hugh (Stone)MacLeod, Iain (Enfield, W.)
    Alport, C. J. M.Fraser, Sir Ian (Morecambe & Lonsdale)MacLeod, John (Ross and Cromarty)
    Amery, Julian (Preston, N.)Fyfe, Rt. Hon. Sir David MaxwellMacmillan, Rt. Hon. Harold (Bromley)
    Amory, Heathcoat (Tiverton)Gage, C. H.Macpherson, Major Niall (Dumfries)
    Arbuthnot, JohnGalbraith, Cmdr. T. D. (Pollok)Maitland, Comdr. J. W.
    Ashton, H. (Chelmsford)Garner-Evans, E. H. (Denbigh)Manningham-Buller, R. E.
    Assheton, Rt. Hon. R. (Blackburn, W.)Gates, Maj. E. E.Marlowe, A. A. H.
    Astor, Hon. M. L.Glyn, Sir RalphMarples, A. E.
    Baker, P. A. D.Gomme-Duncan, Col. A.Marshall, Douglas (Bodmin)
    Baldock, Lt.-Cmdr. J. M.Gridley, Sir ArnoldMarshall, Sidney (Sutton)
    Baldwin, A. E.Grimond, J.Maude, Angus (Eating, S.)
    Banks, Col. C.Grimston, Hon. John (St. Albans)Maude, John (Exeter)
    Baxter, A. B.Grimston, Robert (Westbury)Maudling, R.
    Beamish, Major TuftonHarden, J. R. E.Medlicott, Brig. F.
    Bell, R. M.Hare, Hon. J. H. (Woodbridge)Mellor, Sir John
    Bennett, Sir Peter (Edgbaston)Harris, Frederic (Croydon, N.)Molson, A. H. E.
    Bennett, Dr. Reginald (Gosport)Harris, Reader (Heston)Monckton, Sir Walter
    Bennett, William (Woodside)Harvey, Air Cdre. A. V. (Macclesfield)Moore, Lt.-Col. Sir Thomas
    Bevins, J. R. (Liverpool, Toxteth)Harvey, Ian (Harrow, E.)Morrison, John (Salisbury)
    Birch, NigelHarvie-Watt, Sir G. S.Morrison, Rt. Hon. W. S. (Cirencester)
    Bishop, F. P.Hay, JohnMott-Radclyffe, C. E.
    Black, C. W.Head, Brig. A. H.Nabarro, G.
    Boles, Lt.-Col. D. C. (Wells)Headlam, Lieut.-Col. Rt. Hon. Sir C.Nicholls, Harmar
    Boothby, R.Heald, LionelNicholson, G.
    Bossom, A. C.Heath, EdwardNield, Basil (Chester)
    Bowen, E. R. (Cardigan)Henderson, John (Cathcart)Noble, Comdr. A. H. P.
    Boyd-Carpenter, J. A.Hicks-Beach, Maj. W. W.Nugent, G. R. H.
    Boyle, Sir EdwardHiggs, J. M. C.Nutting, Anthony
    Bracken, Rt. Hon. B.Hill, Mrs. E. (Wythenshawe)Oakshott, H. D.
    Braine, B. R.Hill, Dr. Charles (Luton)Odey, G. W.
    Braithwaite, Sir Albert (Harrow, W.)Hinchingbrooke, ViscountO'Neill, Rt. Hon. Sir Hugh
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Hirst, GeoffreyOrmsby-Gore, Hon. W. D.
    Bromley-Davenport, Lt.-Col. W.Holmes, Sir Stanley (Harwich)Orr, Capt. L. P. S.
    Brooke, Henry (Hampstead)Hope, Lord JohnOrr-Ewing, Charles Ian (Hendon, N.)
    Browne, Jack (Govan)Hopkinson, HenryOrr-Ewing, Ian L. (Weston-super-Mare)
    Buchan-Hepburn, P. G. T.Hornsby-Smith, Miss. P.Osborne, C.
    Bullus, Wing Commander E. E.Horsbrugh, Rt. Hon. FlorencePeake, Rt. Hon. O.
    Burden, F. A.Howard, Gerald (Cambridgeshire)Perkins, W. R. D.
    Butcher, H. W.Howard, Greville (St. Ives)Peto, Brig. C. H. M.
    Butler, Rt. Hon. R. A. (Saffron Walden)Hudson, Sir Austin (Lewisham, N.)Pickthorn, K.
    Carr, Robert (Mitcham)Hudson, Rt. Hon. Robert (Southport)Pitman, I. J.
    Carson, Hon. E.Hudson, W. R. A. (Hull, N.)Powell, J. Enoch
    Channon, H.Hutchinson, Geoffrey (Ilford, N.)Price, Henry (Lewisham, W.)
    Churchill, Rt. Hon. W. S.Hutchison, Lt.-Com. Clark (E'b'rgh W.)Prior-Palmer, Brig. O.
    Clarke, Col. Ralph (East Grinstead)Hutchison, Colonel James (Glasgow)Profumo, J. D.
    Clarke, Brig. Terence (Portsmouth, W.)Hyde, Lt.-Col. H. M.Raikes, H. V.
    Colegate, A.Hylton-Foster, H. B.Rayner, Brig. R.
    Conant, Maj. R. J. E.Jennings, R.Redmayne, M.
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Johnson, Howard (Kemptown)Remnant, Hon. P.
    Cooper-Key, E. M.Jones, A. (Hall Green)Renton, D. L. M.
    Corbett, Lt.-Col. Uvedale (Ludlow)Joynson-Hicks, Hon. L. W.Roberts, Major Peter (Heeley)
    Craddock, Beresford (Spelthorne)Kaberry, D.Robertson, Sir David (Caithness)
    Cranborne, ViscountKerr, H. W. (Cambridge)Robinson, Roland (Blackpool, S.)
    Crookshank, Capt. Rt. Hon. H. F. C.Kingsmill, Lt.-Col. W. H.Robson-Brown, W.
    Crosthwaite-Eyre, Col. O. E.Lambert, Hon. G.Rodgers, John (Sevenoaks)
    Crouch, R. F.Lancaster, Col. C. G.Roper, Sir Harold
    Crowder, Capt. John (Finchley)Langford-Holt, J.Ropner, Col. L.
    Crowder, Petre (Ruislip—Northwood)Law, Rt. Hon. R. K.Russell, R. S.
    Cundiff, F. W.Leather, E. H. C.Ryder, Capt. R. E. D.
    Cuthbert, W. N.Legge-Bourke, Maj. E. A. H.Salter, Rt. Hon. Sir Arthur
    Darling, Sir William (Edinburgh, S.)Lennox-Boyd, A. T.Scott, Donald
    Davidson, ViscountessLindsay, MartinShepherd, William
    Davies, Nigel (Epping)Linstead, H. N.Smiles, Lt.-Col. Sir Walter
    de Chair, SomersetLlewellyn, D.Smithers, Peter (Winchester)
    De la Bère, R.Lloyd, Rt. Hn. Geoffrey (King's Norton)Smyth, Brig. J. G. (Norwood)
    Deedes, W. F.Lloyd, Maj. Guy (Renfrew, E.)Snadden, W. McN.
    Digby, S. W.Lloyd, Selwyn (Wirral)Soames, Capt. C.
    Dodds-Parker, A. D.Lockwood, Lt.-Col. J. C.Spearman, A. C. M.
    Donner, P. W.Longden, Gilbert (Herts, S. W.)Spence, H. R. (Aberdeenshire, W.)
    Douglas-Hamilton, Lord MalcolmLow, A. R. W.Spens, Sir Patrick (Kensington, S.)
    Drayson, G. B.Lucas, Sir Jocelyn (Portsmouth, S.)Stanley, Capt. Hon. Richard (N. Fylde)
    Dugdale, Maj. Sir Thomas (Richmond)Lucas, P. B. (Brentford)Stevens, G. P.
    Duncan, Capt. J. A. L.Lucas-Tooth, Sir HughSteward, W. A. (Woolwich, W.)
    Dunglass, LordLyttelton, Rt. Hon. O.Stewart, Henderson (Fife, E.)
    Duthie, W. S.McAdden, S. J.Stoddart-Scott, Col. M.
    Eccles, D. M.McCorquodaie, Rt. Hon. M. S.Storey, S.
    Eden, Rt. Hon. A.Macdonald, Sir Peter (I. of Wight)Strauss, Henry (Norwich, S.)
    Elliot, Rt. Hon. W. E.Mackeson, Brig. H. R.Stuart, Rt. Hon. James (Moray)
    Erroll, F. J.McKibbin, A.Studholme, H. G.
    Fisher, NigelMcKie, J. H. (Galloway)Summers, G. S.
    Fort, R.Maclay, Hon. JohnSutcliffe, H.
    Foster, JohnMaclean, FitzroyTaylor, Charles (Eastbourne)

    Taylor, William (Bradford, N.)Tweedsmuir, LadyWhile, Baker (Canterbury)
    Teeling, W.Vane, W. M. F.Williams, Charles (Torquay)
    Teevan, T. L.Vaughan-Morgan, J. K.Williams, Gerald (Tonbridge)
    Thomas, J. P. L. (Hereford)Wakefield, Edward (Derbyshire, W.)Williams, Sir Herbert (Croydon
    Thompson, Kenneth Pugh (Walton)Wakefield, Sir Wavell (Marylebone)Wills, G.
    Thompson, R. H. M. (Croydon, W.)Walker-Smith, D. C.Wilson, Geoffrey (Truro)
    Thorneycroft, Peter (Monmouth)Ward, Hon. George (Worcester)Winterton, Rt. Hon. Earl
    Thornton-Kemsley, Col. C. N.Ward, Miss. I. (Tynemouth)Wood, Hon. R.
    Thorp, Brig. B. A. F.Waterhouse, Capt. Rt. Hon. C.York, C.
    Tilney, JohnWatkinson, H.
    Turner, H. F. L.Webbe, Sir Harold

    TELLERS FOR THE AYES:

    Cmdr. T. G. D. Galbraith and
    Turton, R. H.Wheatley, Major M. J. (Poole)Mr. Vosper.

    NOES

    Acland, Sir RichardEdalman, M.Keenan, W.
    Adams, RichardEdwards, John (Brighouse)Kenyan, C.
    Albu, A. H.Edwards, Rt. Hon. Ness (Caerphilly)Key, Rt. Hon. C. W.
    Allen, Arthur (Bosworth)Edwards, W. J. (Stepney)King Dr. H. M.
    Allen, Scholefield (Crewe)Evans, Albert (Islington, S. W.)Kinghorn, Son. Ldr
    Anderson, Alexander (Motherwell)Evans, Edward (Lowtstoft)Kinley, J.
    Anderson, Frank (Whitehaven)Evans, Stanley (Wednesbury)Lang, Gordon
    Attlee, Rt. Hon. C. R.Ewart, R.Lee, Frederick (Newton)
    Awbery, S. S.Fernyhough, F.Lee, Miss. Jennie (Cannock)
    Ayles, W. H.Field, Capt. W. J.Lever, Leslie (Ardwick)
    Bacon, Miss. AliceFinch, H. J.Lewis, Arthur (West Ham, N.)
    Baird, J.Fletcher, Erie (Islington, E.)Lewis, John (Bolton, W.)
    Balfour, A.Follick, M.Lindgren, G. S.
    Barnes, Rt. Hon. A. J.Foot, M. M.Lipton, Lt.-Col. M.
    Bartley, P.Forman, J. C.Logan, D. G.
    Bellenger, Rt. Hon. F. J.Fraser, Thomas (Hamilton)Longden, Fred (Smart Heath)
    Bonn, WedgwoodFreeman, John (Watford)McAllister, G.
    Benson, G.Freeman, Peter (Newport)MacColl, J. E.
    Beswick, F.Gaitskell, Rt. Hon. H. T. N.McGhee, H. G.
    Bevan, Rt. Hon. A. (Ebbw Vale)Ganley, Mrs. C. S.McInnes, J.
    Bing, G. H. C.Gibson, C. W.Mack, J. D.
    Blenkinsop, A.Gilzean, A.McKay, John (Wallsend)
    Blyton, W. R.Glanville, James (Consett)Mackay, R. W. G. Reading, N.)
    Boardman, H.Gooch, E. G.McLeavy, F.
    Booth, A.Gordon-Walker, Rt. Hon. P. C.MacMillan, Malcolm (Western Isles)
    Bottomley, A. G.Greenwood, Anthony (Rossendale)McNeil, Rt. Hon. H.
    Bowden, H. W.Greenwood, Rt. Hon. Arthur (Wakefield)MacPherson, Malcolm (Stirling)
    Bowles, F. G. (Nuneaton)Grenfell, D. R.Mallalieu, E. L. (Begg)
    Braddock, Mrs. ElizabethGrey, C. F.Mallalieu, J. P. W. (Huddersfield, E.)
    Brook, Dryden (Halifax)Griffiths, David (Rother Valley)Mann, Mrs. Jean
    Brooks, T. J. (Normanton)Griffiths, Rt. Hon. James (Llanelly)Manuel, A. C.
    Broughton, Dr. A. D. D.Griffiths, William (Exchange)Marquand, Rt. Hon. H. A.
    Brown, Rt. Hon. George (Belper)Gunter, R. J.Mathers, Rt. Hon. G.
    Brown, Thomas (Ince)Hale, Joseph (Rochdale)Mellish, R. J.
    Burke, W. A.Hall, John (Gateshead, W.)Messer, F.
    Burton, Miss. E.Hall, Rt. Hon. Glenvil (Colne Valley)Middleton, Mrs. E.
    Butler, Herbert (Hackney, S.)Hamilton, W. W.Mikardo, Ian
    Callaghan, L. J.Hannan, W.Mitchison, G. R.
    Carmichael, J.Hardy, E. A.Moeran, E. W.
    Castle, Mrs. B. A.Hargreaves, A.Monslow, W.
    Champion, A. J.Hastings, S.Moody, A. S.
    Chetwynd, G. R.Hayman, F. H.Morgan, Dr. H. B.
    Clunie, J.Henderson, Rt. Hon. A. (Rowley Regis)Morley, R.
    Cocks, F. S.Herbison, Miss. M.Morris, Percy (Swansea, W.)
    Coldrick, W.Hewitson, Capt. M.Mort, D. L.
    Collindridge, F.Hobson, C. R.Moyle, A.
    Cook, T. F.Holman, P.Mulley, F. W.
    Cooper, Geoffrey (Middlesbrough, W.)Holmes, Horace (Hemsworth)Murray, J. T.
    Cooper, John (Deptford)Houghton, D.Nally, W.
    Corbel, Mrs. Freda (Peckham)Hoy, J.Neal, Harold (Bolsover)
    Cove, W. G.Hubbard, T.Noel-Baker, Rt. Hon. P. J.
    Craddock, George (Bradford, S.)Hudson, James (Ealing, N.)O'Brien, T.
    Crawley, A.Hughes, Emrys (S. Ayrshire)Oldfield, W. H.
    Crosland, C. A. R.Hughes, Hector (Aberdeen, N.)Oliver, G. H.
    Crossman, R. H. S.Hynd, H. (Accrington)Orbach, M.
    Cullen, Mrs. A.Hynd, J. B. (Attercliffe)Padley, W. E.
    Daines, P.Irvine, A. J. (Edge Hill)Paget, R. T.
    Dalton, Rt. Hon. H.Irving, W. J. (Wood Green)Paling, Rt. Hon. Wilfred (Dearne V'lly)
    Darling, George (Hillsborough)Isaacs, Rt. Hon. G. A.Paling, Will T. (Dewsbury)
    Davies, A. Edward (Stoke, N.)Janner, B.Pannell, T. C.
    Davies, Harold (Leek)Jay, D. P. T.Pargiter, G. A.
    Davies, Stephen (Merthyr)Jeger, George (Goole)Parker, J.
    de Freitas, GeoffreyJeger, Dr. Santo (St. Pancras, S.)Paton, J.
    Deer, G.Jenkins, R. H.Pearson, A.
    Dodds, N. N.Johnson, James (Rugby)Peart, T. F.
    Donnelly D.Johnston, Douglas (Paisley)Porter, G.
    Driberg, T. E. N.Jones, David (Hartlepool)Price, Philips (Gloucestershire, W.)
    Dugdale, Rt. Hon. John (W. Bromwich)Jones, Frederick Elwyn (West Ham, S.)Proctor, W. T.
    Dye, S.Jones, Jack (Rotherham)Pryde, D. J.
    Ede Rt. Hon. J. C.Jones, William Elwyn (Conway)Pursey, Cmdr. H.

    Rankin, J.Stokes, Rt. Hon. R. R.West, D. G.
    Rees, Mrs. D.Strachey, Rt. Hon. J.Wheatley, Rt. Hon. John (Edmb'gh, E.)
    Reeves, J.Strauss, Rt. Hon. George (Vauxhall)White, Mrs. Eirene (E. Flint)
    Reid, Thomas (Swindon)Stress, Dr. BarnettWhite, Henry (Derbyshire, N. E.)
    Reid, William (Camlachie)Summerskill, Rt. Hon. EdithWhiteley, Rt. Hon. W.
    Rhodes, H.Sylvester, G. O.Wilcock, Group Capt. C. A. B.
    Richards, R.Taylor, Bernard (Mansfield)Wilkes, L.
    Robens, Rt. Hon. A.Taylor, Robert (Morpeth)Wilkins, W. A.
    Roberts, Goronwy (Caernarvonshire)Thomas, David (Aberdare)Willey, Frederick (Sutherland)
    Robertson, J. J. (Berwick)Thomas, George (Cardiff)Willey, Octavius (Cleveland)
    Robinson, Kenneth (St. Pancras, N.)Thomas, Iorwerth (Rhondda, W.)Williams, David (Neath)
    Rogers, George (Kensington, N.)Thomas, Ivor Owen (Wrekin)Williams, Rev. Llywelyn (Abertillery)
    Ross, William (Kilmarnock)Thorneycroft, Harry (Clayton)Williams, Ronald (Wigan)
    Royle, C.Thurtle, ErnestWilliams, Rt. Hon. Thomas (Don V'lly)
    Shawcross, Rt. Hon. Sir HartleyTimmons, J.Williams, W. T. (Hammersmith, S.)
    Shinwell, Rt. Hon. E.Tomney, F.Wilson, Rt. Hon. Harold (Huyton)
    Shurmer, P. L. E.Turner-Samuels, M.Winterbottom, Ian (Nottingham, C.)
    Silverman, Julius (Erdington)Ungoed-Thomas, Sir LynnWinterbottom, Richard (Brightside)
    Silverman, Sydney (Nelson)Usborne, H.Wise, F. J.
    Simmons, C. J.Vernon, W. F.Woodburn, Rt. Hon. A.
    Slater, J.Viant, S. P.Wyatt, W. L.
    Smith, Ellis (Stoke, S.)Wallace, H. W.Yates, V. F.
    Smith, Norman (Nottingham, S.)Watkins, T. E.Younger, Hon. K.
    Sorensen, R. W.Webb, Rt. Hon. M. (Bradford, C.)
    Soskice, Rt. Hon. Sir FrankWeitzman, D.

    TELLERS FOR THE NOES:

    Sparks, J. A.Wells, Percy (Faversham)Mr. Popplewell and Mr. Delargy.
    Steele, T.Wells, William (Walsall)

    I beg to move, in page 10, line 24, at the end, to add:

    Provided that a trade shall not be deemed for the purposes of that subsection to be discontinued by reason only of the happening of any event which, by virtue of any of the provisions of Rule 11 of the Rules applicable to Cases I and II of Schedule D, is to be treated as equivalent to the discontinuance of the trade.

    I hope we may have some explanation of this Amendment, which was moved by the Economic Secretary with commendable brevity but a certain lack of display of his powers of exposition.

    I referred to this Amendment when I moved the original Amendment and said we would take them together.

    I did not understand the Economic Secretary to explain the effect of this Amendment. It may be that the fault was in my comprehension or may be it was in his exposition, but the fact remains that it has not been explained. On the face of it, it is a somewhat obscurely drafted provision. Subsection (2) applies to subsection (1), Part VIII of the Income Tax Act of 1945, which applies a number of rules which, of course, are not set out in this Bill. Therefore, it seems proper that before the Committee accepts this Amendment, put down by the Government, we should be given some explanation of its effect and its purpose. I hope that that explanation may be sufficiently clear to enable us to part with what is no doubt a technical provision.

    If there is a change of owners of a ship undertaking and ship between the date of the Budget and the date in April, 1952, when the expenditure is incurred, without this Amendment the shipbuilder or repairer would not have the advantage of the initial allowance which the earlier Government Amendment to this Clause would otherwise give him. This is to prevent the initial allowance not being given in the event of there being a change of owners between the Budget and the date of incurring the expenditure.

    Amendment agreed to.

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

    We now come quite fresh to consider initial allowances, a subject to which we have devoted our attention since 10.15 p.m. In the extraordinary manner in which our business is conducted, we have had no general discussion on this subject at all. Every debate has been on individual instances, the major one being shipping. I attempted to put an Amendment down in order that we should have a general discussion at the opening of our debate, a procedure hitherto followed in our debates with great benefit. We have debated on details without considering the general subject, putting the cart before the horse. If such a procedure is carried out, that is quite agreeable to us, but it is not calculated to expedite business. In spite of that procedure, we have had constructive debates and have wrung from the Government a valuable concession on the question of shipping.

    7.45 a.m.

    I shall not be unreasonable and enter into a detailed argument on the subject of the individual trades described during the night, but it is essential to show up the tergiversations, the total lack of economic planning and the muddle with which this whole question of initial allowances has been handled by the Government during the last few months. In their Report the E.C.E. describe the procedure relating to initial allowances as "curious." When I remind the Committee that this procedure on initial allowances was originally brought in in 1945, and was doubled by Sir Stafford Cripps in 1949 on the understanding that it would be an assistance in advancing plant replacement—I am using the former Chancellor's words—it is surprising that, despite that history, his disciple the present Chancellor of the Exchequer should, at the stroke of a pen and at a moment when plant replacement is as critical as it has ever been in industry, remove the allowance altogether. That is why the E.C.E. report describes it as "curious," and we could describe it in rather more impolite language.

    Sir Stafford Cripps had a definite policy in doubling this initial allowance. The Chancellor of the Exchequer, on the other hand, has now imported a new argument to his procedure, namely that he wishes to control investments on the home front and in industry. When the allowances were doubled by his predecessor, we had a very important argument brought to our discussion, that the present system of depreciation and other allowances for plant replacement took no account of the fall in the value of money, and nobody who has looked into the question, as indeed it will be examined during our later debates on the Profits Tax, with any knowledge of the present situation in industry, knows that what industry is suffering from is a grave uncertainty in the value of money and, also, a certainty, not uncertainty, that money is rapidly losing its value and it is taking three to four times the amount of money to replace plants than it did three years ago.

    These initial allowances were no doubt introduced and backed by Sir Stafford Cripps for the purpose of being some complement to the general system of depreciation which exists in other ways in our fiscal system. I do not claim, and I am not going to make any claim, that the system of initial allowances is ideal. It is one to which a good deal of careful consideration can be given by the Committee and there is no doubt that these allowances are a form of loan to industry, and that they are not so valuable to large businesses with capital as they are to small firms. They are more important to certain types of industry such as shipping than they are to others. In general they have formed a valuable aid, particularly to small businesses, and their removal by the Bill, unless we can wring a further concession from the Chancellor, will come as a shock to a variety of industry.

    What we object to in the Chancellor's move is that the Government over the last few years have not looked ahead; they doubled the allowances as late as 1949 for one purpose and now are taking them away for another. We regard it as a highly dangerous procedure to introduce legislation for one purpose, and to retain it for another. That is what has happened in the case of Purchase Tax, which was introduced as a physical control, and is now a magnificent producer of revenue. This destroys our confidence in the management of our affairs by the right hon. Gentleman and his predecessors.

    I come now to one or two features of the arguments which have been brought in to justify the virtual cancellation of these allowances, before I give some sort of picture of the part these allowances play in the general financing of industry. In his Budget speech the Chancellor alluded to the fact that the Defence Departments would be asked to temper the wind to industries which were engaged in the defence programme. This phrase of his has been referred to in the course of our debates during the night, but we have had no explanation from the right hon. Gentleman at all has to how the Defence Departments will set to work, what procedure they will undertake in order to temper the wind or to mitigate the blow to industries which are engaged in defence or on the edge of defence. I hope the right hon. Gentleman will give us some further answer and substantiate what he said in his Budget speech.

    The second point I want to make about the defence programme is that many of these industries, in particular shipping, which we have discussed, are a practical part of that programme. And not only shipping. We have not had time during the night to consider many other industries. I have before me the memorandum addressed to the Chancellor of the Exchequer by the Federation of Master Cotton Spinners' Association Ltd., and I want to ask the Chancellor where, in the case of cotton, he considers that defence needs begin and where they end. Because there is no doubt, as this memorandum—which I will not read in toto to the Committee and which the right hon. Gentleman himself must have had—indicates, that in the whole range and realm of the cotton and textile industry there are processes which are vital to the defence programme and processes which impinge upon it.

    How can he then, differentiate between industries totally engaged in defence and those on the edge of defence and mixed up in the defence programme? I hope he will give us some explanation about that. Further, I hope he will indicate to us how, in the case of an industry like cotton, he can introduce some apparatus which will enable them to have those grants and assistance which they need so much. Anyone who has any knowledge at all of Lancashire, whether he be a Lancashire Member or not, remembers its fate during the years when the cotton industry went through difficult times, knows of the difficulties of plant replacement, and that the initial allowances have played a part, especially in the smaller sections of the cotton industry, in providing, as I described it earlier, a form of loan or assistance in the early stages for the replacement of plant. In the case of plant which is going to be used for quasi-defence purposes, why does the right hon. Gentleman withdraw the initial allowance and therefore aim a further crippling blow to the cotton industry of Lancashire? We trust that the right hon. Gentleman will give us explanations on these points, and thus clear up matters to which he has made reference in his speech but which have not been cleared up.

    Now I come to the nature of the allowances and their relation to the needs of industry. The Committee should know—and I see no reason why, just because we have been sitting here this long time, to limit the serious character of the arguments I want to bring forward—that by abolishing initial allowances and increasing the Distributed Profits Tax from 6s. to 10s. the Chancellor takes another £236 million from the earnings of businesses in a full year. The effect is not absolutely immediate and the total effect may later tend to diminish but, nevertheless, this is a very large sum which is being taken away from the nest egg from which the whole of our future productivity in this country will be financed.

    The importance of the reserves of industry are well known, but I do not think that the Committee can give enough attention to this vital aspect of the background of our production programme. The Economic Survey for 1951 mentions that provisions for stock appreciation by companies and public authorities is estimated at £700 million. The figure for companies alone, leaving aside public authorities, is about £600 million, but this figure almost entirely swallows up the £780 million which is calculated in the same document for the undistributed company profits from which sums must be found for the amounts necessary to replace fixed assets at the enhanced prices which I referred to earlier.

    This leaves industry only some £180 million over, as compared with the figure of £171 million in 1938–39, with which to finance plant at a critical moment of our production at prices almost treble and at a figure only the same as was thought necessary in 1938. This is an indication of the seriousness of the financial position in regard to the reserves of industry, and the Chancellor should think again before indulging in speeches, as he did the other night, of a purely political character, no doubt in an effort to rejuvenate from their rather jaded condition his hon. Friends behind him. He should turn to the serious economic arguments which we are trying to put before him, and study the figures which can be tested by some of the finest industries in this country. I hope, therefore, that in a more serious vein, he will reply with economic arguments, trying to relieve the anxiety which many of us must feel about the resources of industry for the replacement of plant.

    During our debates, some reference has been made to the Millard Tucker Report, and on each occasion that it has been mentioned, the Economic Secretary has rather pooh-poohed the value of this Committee and the reference in its Report to the initial allowances. But the summary of the findings of the Committee is:
    "Our suggestion for a system of flexible initial allowances is the only solution which meets the objections we have enumerated,"
    and those objections are schemes of revalorisation or of reserves for replacement. If that be one of the findings—and I do not agree with parts of that Committee's Report—the Chancellor should remedy the deficiency, which he made plain in his Budget speech, of not having studied the Report. Perhaps that is why he went against one of the main findings of the Committee. If the right hon. Gentleman thinks that I have not properly represented what I have read out—and he can find it on page 46 of the Report—perhaps he will say more than the Economic Secretary had to say about it. It does seem remarkable that this Committee should have a whole chapter on the problem of inflation, and should definitely recommend an elastic use of the system of initial allowances, when the Chancellor, at the same time that he receives the Report, should abandon the system of these allowances. I do not want to detain the Committee any longer, but I should like an answer to what I have asked.

    I conclude by asking the right hon. Gentleman if he has any alternative steps for dealing with plant replacement and depreciation, other than by initial allowances. Although the hour is so advanced, I make one constructive suggestion. First, the initial allowances should not be abandoned in this hurry, but should continue until such time as a better method than this loan system has been found; and, secondly, the Chancellor, in that period, with his advisers, aided by an accelerated Report of the Committee on Taxation, should consider whether there is not some method of creating a fund dedicated to replacement into which would go bona fide means for depreciation, used for no other purpose. Any wrong use of money set aside for depreciation is not only a wrong method of accounting, but a wrong method of using the money set aside for reserves. I appeal to the Chancellor to revise his attitude, and, if possible, allow this system to continue, particularly for industries on the edge of defence work, and small industries.

    8.0 a.m.

    I should like to make a personal statement. During one of the debates on an earlier Amendment the hon. Member for Torquay (Mr. C. Williams) made a reference to my absence when he was addressing the Committee. I think he is absent now while I am speaking. He also referred to my work here in this place. I should like to point out that I have only missed seven out of 160 Divisions—

    I thought the hon. Gentleman was going to relate his remarks to this Clause.

    The hon. Member has reminded me that it is a personal statement, and I have to tell him that that is not in order at present.

    I want to add one or two remarks to those made by my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler). My right hon. Friend started by saying that the Economic Commission for Europe had described the Government's behaviour in this matter as curious. I should like to quote what was said, because it is a good summary of what has happened. Here is the quotation from that report:

    "The history of these initial allowances is curious. They were raised from 20 to 40 per cent. of the cost of new investment in plant and machinery in 1949, where there was no apparent need to stimulate investment demand. Now that they are to be lowered, business men have been given a year's notice. It would seem possible that, unless there is some restriction of credit, this may encourage entrepreneurs to do all they can to bring forward their investment plans in the current year and so increase inflationary pressure in the current year. Unless there is a further worsening of the terms of trade, which does not seem to be contemplated, the need to cut investment may actually be less in 1952 than in 1951."
    That was a very comprehensive criticism of the past, the present and the future of the Government's policy, and I think it ought to go on record because it is a damning one.

    This whole business has been a very good example of planning. The trouble about planning with this Government is that instead of changing from red to amber and then to green, they always change from red to amber and back again to red. This abnormal process lands them in a mess. They have their own plans upset and they lose money to the general detriment of the whole country. As my right hon. Friend said, this problem of the initial allowances is the difference between paper profits subject to tax and true profits in real terms.

    The Chancellor was very violent on this subject when winding up the other night. I know he will take this as a compliment when I say that he reminds me very much now of his right hon. Friend the Minister of Local Government and Planning, whom he is increasingly coming to resemble. I did say that night that I thought it would be a good thing if accounts were true, but he seemed to think that that was an old-fashioned idea and one which was positively immoral. Indeed, he could not bring himself to agree that there was this difference between real profits and paper profits subject to tax. That is the whole trouble we are in at the moment, and one of the reasons why the initial allowances were increased in 1949. I will quote what the Millard Tucker Committee said:
    "This relief "—
    meaning the raising of the allowance from 20 per cent. to 40 per cent.—
    "was a recognition of the difficulties which industry experienced in replacing its fixed assets as a result of the fall in the value of money, and was intended as at any rate a temporary palliative pending further examination of the problem."
    As far as I can make out, the temporary palliative had been taken away and the Chancellor has resorted to the Royal Commission, which is one of the most time-honoured Ministerial devices for evading an awkward issue and shelved from his point of view until he has no further concern with it.

    What is happening now is dangerous. My right hon. Friend pointed out that the solution of the Tucker Committee—I do not say it is a particularly good one —that there should be a selective raising of the initial allowance. They recognised that paper profits are not true profits, and that was their solution. I am not prepared to offer a solution today, but all I can say about the conduct of the Government is that they have knocked down the only solution put up by then-own Committee and have put nothing in its place. And it is difficult to see how the present situation can long endure.

    The argument for this clause is that owing to the need for rearmament we have to divert a certain amount of our resources from industry making for civilian uses to industries which are engaged in the re-armament programme. On the whole I think that argument has to be accepted. But I think the question we have to ask ourselves about the Clause is, is it adequate for that task?

    We were also asked last night whether we were in favour of a reduction of investments. I think the answer to that is that the primary need is for a better selection in investment so that we use our resources better and so that that portion of our resources which we can afford for capital investment is used to the best possible purpose for the armament programme, and to a lesser extent for the export drive and the general welfare of the country.

    So again we have to ask ourselves whether this Clause will attain that end. I must say that the abolition of the initial allowance in this Clause seems to me a very blunt instrument. If it is to be used at all it would seem to me that the Government should have agreed that there were a great many reasonable amendments to the general principle, but it is quite obvious that they rejected that line entirely and their argument has been that one must take the principle as it stands, and, except for one very small concession, they gave nothing away whatsoever. Yet in their own arguments contradictions did appear. In the debate on the shipping Amendment, as I understand it, they said, on the one hand that they did not want to reduce the amount of new tonnage and, on the other hand, the only purpose in removing the initial allowance was to achieve just that object, that is to reduce tonnage ordered. The Chancellor will no doubt say that there is a happy medium to be struck, but the hon. Gentleman has not told the Committee whether he really thinks that by wiping out this initial allowance, he is going to strike the right balance.

    Re-armament percolates throughout the whole economic system, and one cannot take certain industries and say these are the re-armament industries. The right hon. Member for Saffron Walden (Mr. R. A. Butler) was right when he spoke of the cotton industry. It is a diverse and complicated industry which must take part in the re-armament drive. Is the Chancellor satisfied that this Clause is going to gain the desired end in that and similar situations?

    I should like also to ask how the Chancellor proposes to deal with the question of interest rates? If he is going to reduce the amount of investment, the interest rate has relevance to that problem. It seems to me that it may offer a more flexible way of dealing with the general question of the amount of investment, than this planning which, as has been pointed out, has led to these rather curious contortions over the last four or five years.

    The truth is that the economic situation is never normal. It may be exceptionally abnormal just now, but we shall never have it in a state of equilibrium. It will always be rapidly changing and it seems to me that the present system of planning does not respond quickly enough to the various changes in direction which we have to make. We are faced then with sudden reversals such as this sudden change in initial allowances which probably does not entirely meet the real need of the moment, which upsets industry, and which I feel may well not achieve the object which the Chancellor has in mind.

    Take the case of agriculture. It is a vital industry for this country in peace and doubly and trebly so in time of war. I do not pretend that the Clause will have a very great effect on agriculture; I do not think it will, but it will have some effect—an incalculable effect; and I think we are entitled at least to ask for some indication of what the Chancellor has in mind for this industry. For instance, in the price review; is this factor to be taken into account and, if there is a rise in costs, is it to be passed on to the consumer? There will be all sorts of repercussions from this rather blunt removal of the initial allowances and I should be much happier if, before we leave the Clause, we were given a good deal more information from the Chancellor as to whether he has decided that he really can distinguish between the armaments and other industries and whether he thinks this method meets the task which he has set himself.

    I have not been a Member of the House very long, but I have taken part in a good many long and late debates, and I think this has been outstanding among them for the standard of the debate throughout. I think that is a measure of the importance which we on this side of the Committee attach to the principle involved in this Clause.

    I wish to follow my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler), who opened the debate, on two points. My right hon. Friend that during the night said the Chancellor had given us a valuable concession on shipping. I do not agree that it was a very valuable concession and I think we shall have to go a good deal further. I hope it may be possible even now, at this late stage of the Bill, for the Chancellor to reconsider his decision on this issue.

    May I also follow the comments of my right hon. Friend on the attitude of the Economic Secretary to the Millard Tucker Report? Obviously it is very annoying, when the Government calls for a Report, for that Report to be entirely contrary to the lines the Government are following, but it seems to me that on the issue of initial allowances the Report is quite clear. I was interested to see that it uses shipping as an example of why it advocates the retention of initial allowances. Since shipping is directly related to defence, I do not think it can be said that the Report should be ignored because in general it did not take our re-armament problems into account. I think the Tucker Committee are correct in their diagnosis.

    There is another point about initial allowances which has not been dealt with so far. It has been touched on but not really pressed home. It affects certain industries considerably. With initial allowances the value of a ship can be written down in a shorter period than would otherwise be the case. For example, with a 40 per cent. initial allowance a ship can be written down in 12 years, with a 20 per cent. allowance in 16 years, and if there is no allowance at all, as is now proposed, it takes 20 years.

    8.15 a.m.

    In certain industries, of which shipping is one, it is very important to have a quick turnover of the capital represented by the ships involved if there is to be economic efficiency in both peace and war. The initial allowance has been extremely useful to the ship industry in that regard, and I know that it is regarded as a most important factor in enabling the industry to maintain fleets of modern ships. That point has not really been sufficiently stressed during the night. Throughout the debate we have tried to relate specific items on which we have sought amendment directly to defence. I cannot see that the Chancellor can maintain his position when he says that to abandon the initial allowance is to help the defence programme. Surely the action he proposes can be selective and not as sweeping as the Chancellor seems to be prepared to make it.

    I should like to start by quoting a document which I think shows that the Chancellor is perhaps a little deviationist in his sudden sweeping away of all the initial allowances. I have listened to nearly all our discussions during the night and, necessarily, because they have been on rather narrow points, it has not been possible to bring in what I believe to be the most important matter that rests on this question of the initial allowance. I venture to say that it is the most important matter in front of us in the country today on any plane or in any circumstances. I refer to the level of productivity which we can achieve this year and in the years to come.

    I cannot see how we can achieve a higher level of productivity than has been promised us this year—which, of course, is no increase at all—without a continual inflow of new plant and equipment into industry. Yet the Chancellor, by suddenly cutting away the initial allowances without any offset or any consideration, without even considering the Millard Tucker Report on the Taxation of Trading Profits, which has already been mentioned by several of my hon. Friends—one of the strongest and, I think, most original recommendations of which was the continuation of initial allowances—has struck a blow at the future productivity of this country at the very time when, as never before, we need a steadily increasing level of productivity.

    If I might, I should like to quote one remark from a Trades Union Congress publication entitled "The Trade Unions and Productivity." Dealing with the problem of the trade unions, this publication—a very able and valuable one, if I may say so—says on page 59:
    "A rising standard of living can only be achieved by increasing productivity obtained from labour saving machinery."
    That is what is before us when we consider this Clause. Will the removal of the initial allowances assist in increasing productivity, or will it be a blow at productivity, as I believe it will be?

    I suggest that the right course to have adopted would have been that already suggested by my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) that further consideration should have been given to this matter before the entire initial allowances were swept away; and that the recommendations of the Millard Tucker Committee should, if they could not have been accepted, at least have been a guide to the Chancellor. It might have been better to have waited and taken further counsel before sweeping these allowances away. From my personal knowledge, I know the work and expert advice that went into the Millard Tucker Report, and it is very small thanks to all the experts in many walks of life who gave their advice and their time for the right hon. Gentleman to have swept the whole thing away in what I think was almost an insulting manner.

    As we continue our examination of this Budget through the Finance Bill, I think it becomes more and more evident to us all what a very bad Budget this is for business as a whole. If it is a bad Budget for business, I would point out, because of what has been said from the back benches on the other side of the Committee, that it is a bad Budget not only for the managerial side and the directors in business but for everyone who works in industry. Unless we maintain an increasing level of production, we cannot meet our export commitments, and we certainly could not justify any increase in our standard of living. I think we are entitled to some explanation from the Government as to whether this question of initial allowances was considered in relation to the general desirability of increasing productivity, and whether it was considered that the sudden removal of the 40 per cent. allowance was going to assist firms to modernise and improve their plant by installing new machinery.

    I know the right hon. Gentleman would answer by saying that it is not desirable that many firms should modernise and improve their machinery at the present time, and that in the case of the re-armament industry special help is being given. I know, for example, that a firm now turning over to jet engine production will not have to pay for their tools. The tools will be furnished to them on loan. That is one method of getting round the allowance, and I concede that it is a proper point.

    It is my estimate that we may have to find in the next 12 months at least £500 million worth of extra exports to pay for the extra materials we have to bring in. This sets a terriffic task for British industry, quite apart from the re-armament programme. My objection to this sudden blow is that I should have thought we had to consider the re-armament programme from two aspects. The first is to get the maximum increase in productivity in the armament industry. But what about the long view as well as the short one? What about having to go on for four or five years of armed peace, having to build up our armaments and holding them at the highest level, and at the same time increasing enormously our export industry in order that our export targets can be met? I cannot see how we can do that unless we accept as our first priority an annual increase in productivity in the whole range of industry of something not less than seven per cent. a year.

    I believe that the Chancellor's promise for four per cent. is entirely inadequate. Yet I do not think we shall be able to achieve the four per cent. this year. I hope I am proved wrong. I think the Chancellor has done a great disservice to the drive, efficiency, and constant renewal of British industry which would enable us to hit a productivity target increase of at least 7 per cent. this year. If that could have been increased to 10 or 12 per cent., a target not in any way technically impossible if the tools were available, the re-armament programme could surely have been reached without additional taxation and a reduction in the standard of living.

    That is the problem I should have thought the Budget would have been designed entirely to try to solve, but to me it appears to be a Budget designed to make life as difficult as possible for those in engineering and other productive industries which are trying to solve this difficult problem of achieving the rearmament programme while maintaining the standard of living.

    I think my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) was quite right when he said that one of the worst features of Government policy has been the swift changes we have had in allowances. The Government seem to think capital programmes can be turned on and off like a tap. They cannot. They take a long time to mature, and when the programmes are large they always take a long time to be carried out. Nothing is more unsettling to business than very large changes in the financial conditions under which they must carry on. That is the first thing I feel that is bad about the attempt to damp down the investment programme by abolishing the allowances at one stroke.

    One has to answer the Chancellor's question of last night whether it was really necessary to cut the capital programme and, if so, if this is the right way to do it. It has always been my view that while we have been in these difficulties of under-investment, first because the war was so destructive, and secondly because we have to prepare against another war, the Government have never represented to the public the enormous importance of keeping up the rate of investment and, if necessary, of cutting consumption for a period.

    That is why my hon. Friend the Member for Woking (Mr. Watkinson), who knows so much about the machine tool industry, is right. Our standard of living does depend on 10 years' con- centrated investment, and I think the public would have responded if they had been clearly told of the advantages of going short now in order to provide more investment, better tools and equipment, in order to benefit in the years to come. That has not been the Government's view. They have given too high priority to expenditure on consumption.

    If one then looks at the present situation, it is true to say that one could not squeeze out of consumption the right kind of resources to maintain the full rate of investment we had before the defence programme, and add the defence programme on top. The reason for that is that the products of the heavy engineering industry are wanted for defence, and if they are taken for defence we cannot maintain the civil investment programme at its height. We can do more than we are doing, but we have to give up some-thins somewhere.

    8.30 a.m.

    If part of the investment programme is to be cut, and if we start by saying that the whole country must do its best to see that it is by the smallest fraction, we must first get the priorities right. We on this side feel that the first contribution should have been made by the Government in their own non-defence capital programme, putting industrial investment for high-priority defence or for high-priority exports—it is impossible to separate the two—and dwelling-houses in the top bracket. The rest of the investment programme should be pruned by selective and monetary methods. That is what this proposal does not do. I would have preferred to see a pruning of Government offices, all those things which take steel—which is a fairly good measure of investment—which did not fall into the two highest priorities. Among them is the sale of motor cars. The initial allowances have been taken off business motor cars and commercial vehicles. I do not think that will do much harm. I would not mind taking away the initial allowance that a professional man changing his car every two years can get on the purchase if that were the instrument which stopped him getting a new car. But it is not. The Government manage that control through a strict limit on the number of new motor cars coming into the home market, so that what one would have said would have been a useful measure has no effect.

    If the cut has been adequately done by these physical controls, we are still left with a range of investment which cannot be dealt with in that way. The method proposed in this Clause is really a selective use of the interest rate, by the back door and in a very clumsy and unsatisfactory way. The effect of withdrawing the allowance is to take away from industry some very cheap money, in fact money which it gets for nothing from the Treasury as an advance payment towards capital costs. Incidentally this comes very hard on agriculture. When industry no longer gets these interest-free advances, as they have been called, it will have to borrow. It will not by a long margin have the cash in its own resources, and therefore will go to the capital market. That will influence the interest rate, and that is a means of making money scarcer for the industrial borrower. It is not a very efficient means. In the first place there is this year of grace before the allowance disappears. We want to do something about cutting the investment programme as soon as we can, because it is one of the influences making for inflation. If any of it can safely be pruned it ought to be.

    I agree that you cannot get delivery of heavy plant within 12 months, but you can still get delivery of things like tractors. You can get machinery in Europe which comes in here and is paid for through the European Payments Union. It takes three years to get delivery of a good printing machine made by British manufacturers, but you can go to the Continent and get one in six months, and you can get your initial allowance on it. That seems to me to prove that this selection is too long delayed; the capital programme should be dealt with more quickly and more skilfully.

    What is going to happen under this Clause? According to the Chancellor, over the whole of industry £170 million will be taken away, in the sense that they will have to borrow that money or find it from their own cash resources. Their cash is going to be seriously depleted, and this may have very serious consequences. I have seen a sample of a large number of industrial firms showing the relation between their cash resources and their turnover in 1938 and 1949. In 1938 they had 13 per cent. of their annual turnover in cash. From pre-war experience that may well be considered as none too high. Nobody would have said that industry in 1938 had too much cash. In 1945, for which I have no figures, I know that the cash ratio was much higher. The figure for 1949 is 7½ per cent. It has dropped already to nearly half of what it was before the war. This is one of the most serious figures in industry today.

    There are four reasons why cash relative to turnover is becoming so dangerously short in industry. The first is that war-time reserves have been spent—E.P.T. refunds and so on. The second is the rise in prices. As the cost of raw materials rise, the reserves of industry fall in value. When raw material prices rise by 20 per cent., as they have done in the last few months, the effect on the real value of industry's reserves is catastrophic. That is seen by the fact that they have to put more and more cash into stocks in order to carry on. May I say, in parentheses, that the fact that industry did not stock up as it might have done with more raw materials in the first half of last year is not unconnected with the fact that its cash reserves were going down all the time.

    The third reason is that the effect of Income Tax. Profits Tax and the removal of initial allowances, taken together, has been a tremendous drain on the cash they have left. My right hon. Friend mentioned the figure of over £200 million which was going to fall on industry from the increase in Profits Tax and the abolition of these allowances. There is also the extra 6d. on the standard rate of Income Tax.

    If we put together these three drains on industry's cash, we see that the position is serious indeed. None the less, something has to be done to try to weed out some of the less essential projects, but it is a difficult and delicate matter because of the cash situation. The defect of taking the allowances away is precisely that the whole effect will fall indiscriminately on developing firms who really are trying to do something to improve their productivity. I wonder if that is the right thing to do. Would it not have been possible, and perhaps better, to have raised interest rates, because it would have brought in more borrowers besides those in industry, such as local authorities, and it would have been easier in that way to restrict the investment programme? I am afraid that the removal of these initial allowances is not going to do the weeding out in the way it should be done, and all I have said about industry is true about agriculture. In agriculture, I should doubt very much if the relation between cash and turnover is visible. This Clause will be serious for many farmers.

    I am sorry to keep the Committee at this time of the morning, but this is a very important subject. There is very little politics in this between myself and the Chancellor of the Exchequer, because both of us agree that the investment programme has to be got into proper shape. But one cannot by his method distinguish between what is a vital industry and what is not. If that can be done it must be by some other and more selective means.

    I think that this proposal will seriously embarrass companies whose cash has been depleted for the reasons I have given, and if I were Chancellor I would conduct an inquiry to find out whether it is necessary to do this in order to curb investment. Is not the growing dear-ness and scarcity of money doing this for him? I should have thought that a careful inquiry into the cash position of industry and the borrowing it is expected to do this year and next—and the right hon. Gentleman himself will be in the market borrowing money for rearmament, because he is not going to get it all by taxation—would be useful. I suggest that the Government take the Clause away and see whether its operation cannot be achieved without it or in a better way.

    I think it may be for the convenience of the Committee if I make a simple reply to the three or four excellent speeches we have heard. The right hon. Gentleman the Member for Saffron Walden (Mr. Butler) objected to what he described as a political speech by me the other night. My difficulty is that sometimes I have to reply to political speeches, and though perhaps he regarded the speech of his right hon. Friend the Member for Aldershot (Mr. Lyttelton) as being completely inoffensive, from my point of view it did not look like that. We are, after all, politicians, and there is no harm in having a little hard hitting, but this morning I will, in response to the speeches which have been made, try to keep the temperature a little lower.

    I should like to begin with some remarks about the background of our problem today. The Government have to achieve three major objectives—to carry out the defence programme as safely and smoothly as possible; to maintain as far as they can our exports at a level which they have described as sufficient to pay for current imports, excluding stockpiling, and to restrict inflation internally as far as lies within our power to do.

    8.45 a.m.

    In considering these three objectives, which I do not think are in dispute, one must have special regard to the position of what is described in the jargon as the "investment cuts industries"—the heavy industries, the engineering group, those on which the demands for capital equipment are concentrated. Because, undoubtedly, it is in this sphere that our major difficulties in trying to reach all three of those objectives—certainly the first two—arise.

    The first point I want to make clear is that the capacity there is limited. It is undoubtedly very heavily loaded at the moment. Most of the firms concerned are in the position where they have long order books, and I do not think it is appropriate to say that, with that situation, productivity will be greatly affected by the change we are proposing. Perhaps I can explain that a little more fully. We have from this group of industries to try to extort, as it were—to extract—sufficient, first, for the defence programme, secondly for the maintenance, at least, if we possibly can of the same volume of exports, contributing as this group does something like half our total exports, and, thirdly, the equipment that British industry needs.

    The hon. Member for Chippenham (Mr. Eccles) is quite right. He and I both agree that this group of industries cannot do all these things with their limited capacity. At the same time, we cannot afford to increase the activity and, at the same time, even if we tried to do that in present circumstances, as I have explained and as my right hon. Friends have explained to the House on many occasions, there would not be sufficient raw materials. Therefore something has to go. Some pruning has to be done. The question is where is the pruning to be made? [An HON. MEMBER: "Government expenditure."] Obviously we would prefer not to have to do it at all. We would like to have the exports at the maximum level, we would like to carry out the defence programme, and to have as much as possible for British industry.

    Then where is it to come from? I think we have here to accept some reduction below what we would like in home investment. Again the hon. Member for Chippenham agrees with that. If we take no action about this one of the consequences will be that we shall not maintain our exports. I must emphasise in present circumstances how absolutely vital it is to do that. I think it was the hon. Member for Woking (Mr. Watkinson) who asked how serious was the recent deterioration in our terms of trade. I would not like, without looking up the figures, to say anything very precise, but I will tell the Committee that the position is, if anything, rather worse than it was when the Economic Survey was written, and certainly we shall need to strain every nerve, particularly in the field of engineering, if we are to hold our ground there in the balance of payments.

    That leads one on to the necessity of doing something to restrict home investment further. If we do not do that, either we lose exports or—and this is perhaps even more serious—we do not get the defence output we need. And, on top of that, undoubtedly we shall have a very substantial inflationary process being generated.

    Perhaps I may divert to that for a moment because I do not think much has been said about it. It is, after all, a fairly obvious feature of the situation that if more and more orders are placed on to an already overloaded industry, it has a distinct tendency to induce purchasers to push prices up still further. That has nothing to do with the general inflationary tendencies which, unfortunately, exist at the moment.

    How, then, should we deal with it? The hon. Member for Orkney and Shetland (Mr. Grimond) suggested that the instrument we had chosen here was too blunt. Perhaps I may remind him of what I said on this general subject in the defence debate last February. I suggested that, in trying to exercise control over our economic affairs generally, we could use physical controls, and we could use the monetary policies. I do not think that it would be disputed that, as between the two, initial allowances fall into the latter rather than the former category. They are rather similar, as the hon. Member for Chippenham has said, to credit restriction; but, just as I said at that time, that money policy is the blunt instrument—physical controls are finer and more precise in nature—I emphasised that it is not possible to control the situation by these abnormal needs if one has an adverse climate on the monetary side. I do not think I say anything with which hon. Members would disagree. Therefore, even though we desire to use physical controls, they must be supported on the other side as well.

    Now let me say something about the investment programme. It has got to be reduced and so far as the various programmes of the different departments are concerned, that is being done. They are being limited in the same way as in recent years, but we have a special problem in private industry. In that, at any rate, unless one gets back to a far more elaborate system of controls than we have contemplated so far, one has to rely more on the monetary side.

    We shall, of course, use the investment programme to play its part; that is also, in my view, quite essential. I am, therefore, a little surprised that hon. Members opposite should criticise this particular move because it is within the category of action which they generally recommend to us—[HON. MEMBERS: "No."] Yes it is; but if hon. Members disagree, then let me develop my argument.

    We are often told by hon. Members opposite that we should have a more strict credit policy and that by leaving the ordinary maximum of interest rates we should induce a reduction in investment. But I am sure the Committee will appreciate that the Chancellor of the Exchequer has to be very careful what he says about interest rates, for half a sentence may give all sorts of wrong impressions. Therefore, I am not going to say anything very precise on this subject, but if hon. Members opposite say we believe that credit should be more restricted that is not a very different instrument from that which they use when they say the first thing they would do by this Clause would be to say, "No more interest-free loans". That is the way the initial allowances could be described, and I have no great objection to that terminology. But as the hon. Member for Chippenham (Mr. Eccles) suggested, this is not a necessary alternative. I do not agree that interest rates, in fact, have gone up, and I will leave the matter at that. In so far as there would be difficulties for firms in a shortage of credit as a result, well, one is doing very much the same thing as is done in suspending the initial allowances.

    Perhaps I should say a word about productivity, to which the hon. Member for Woking referred to earlier. I hope he will agree with me when we say that we have got to limit the orders placed on the engineering group of industries for home industrial purposes, because that is all we can afford, and that it is not then much good seeking for higher productivity for that purpose. All we can do is to get the best level of productivity—

    Would the right hon. Gentleman accept that if we get increased productivity of another 7 or 8 per cent., as we have in recent years, we have gone a great way to solving our problems?

    The hon. Member knows that I have repeatedly impressed on the country as far as I can the great importance of higher productivity, but we have to consider the problem in the light of that demand on industry and on the raw materials situation. It is no good hoping to find a solution by saying, "All right, we will not restrict investment at all, but we will let people go ahead as fast as they can, despite the effect on raw materials, which is going to hold things up, and despite the fact that we know if that happens the defence programme would not be carried out and exports would fall." It is not lack of enthusiasm on our part but the framework in which the problem has to be considered.

    I should like to say one thing at any rate about the other major criticism that has been made—that the result of this will be to make industry short of cash. The hon. Member for Chippenham made the point that if we do this we will carry things so far as to create a kind of deflationary situation. If I thought that the Government were going to create unemployment in the industries concerned by this policy, I would not be standing here recommending it to the Committee. I am quite certain that there is not the slightest danger of that.

    I have tried to follow the arguments of hon. Members opposite on this point, and I know that they sincerely believe that we are creating a shortage of cash in industry, but how can they reconcile that with the fact that at the same time there is still tremendous pressure on demand in the engineering industry, with which we are trying to deal? That seems to me to be the answer to the situation.

    The Chancellor of the Exchequer overlooks the fact that a company uses its cash for several purposes. I am thinking, for example, of Imperial Chemical Industries. They might get an allowance of £3 million for a new sulphur plant. That will be a drain on their reserves if the right hon. Gentleman will not lend it, for with cash reserves they have to buy raw materials and invest in other forms of working capital. I think he will agree that the net result of his proposal will be a larger queue of business men at the bankers' parlours or at the insurance companies asking for money.

    I do not deny that, but it largely depends on what is meant by shortage of cash. Some firms may, as a result of this, find themselves obliged to borrow from the banks, but I do not think it will be on anything like the scale, which hon. Members would have us believe. Further, the hon. Member for Chippenham has overlooked the very substantial reserves that, in fact, are held by most firms.

    Reserves are available in a form which can easily be converted into purchasing power.

    Everybody knows that reserves can be held in purely physical form, and they can certainly be used for that purpose.

    I quite agree, but I do not think that that proves anything at all. I am not denying in any case the possibility that there might be some firms going to the banks for money.

    9.0 a.m.

    I repeat that it is a matter of opinion, and hon. Members are entitled to their opinions. My view, in the light of the advice I have received, is that I do not think it would be on the scale hon. Members opposite anticipate. But that there would be some tendency that way is true. Is that an argument for doing nothing about this? If we want to create a rather divided situation and to create less inflationary pressure and reduce the tendency for firms to place quite so many orders as they are at the moment, is it not necessary, if one is to use these monetary controls, to try and create a situation in which they will not find it so easy to do as before. That is all that is being proposed in this.

    Hon. Members opposite have always argued that one cannot do these things by physical controls. I suggest that one is driven back on this in the present circumstances as an essential measure. That brings me to my last point. I do not think the effect of this should be exaggerated, and there is awfully little evidence to suggest serious problems would be faced. If one is to try and reduce inflationary pressure by these methods, one must face the fact that some firms would find it more difficult than before to realise and spend all the money they would like to spend.

    In the present circumstances, I am convinced that this policy is necessary. It is our hope, and we have every reason to believe, that it will be temporary only, and I find it difficult to reconcile some different points of view. We are told by some hon. Members than one cannot keep on changing these initial allowances because firms must know exactly where they are a long time ahead, and other hon. Members say that we do not adapt our- selves sufficiently rapidly to the changed situation.

    When these initial allowances were introduced, everybody agreed—there was no great enthusiasm for them on the benches opposite—that it was a good idea to try and stimulate and encourage firms to spend more on capital equipment and make it easier for them to place orders and buy more capital equipment. That was true then, but we have a new situation now, and in that new situation, from the start, I have said we have to use every possible measure that is at our disposal for carrying out the rearmament programme, maintaining the export trade, and controlling inflation.

    When the defence programme is completed and when we are in a position to allow greater pressure from the home market on this group of industries, I should have thought there would be everything to be said for replacing the initial allowances. I am certain that in the present circumstances any Government that failed to do this, and it has no political advantage which is obvious enough although I knew there would be some reaction from industry, both from those who want the allowances and from those who like as long order books as possible—

    Please, let me conclude. Nevertheless, in the circumstances of today, any Government who refused to do this would be failing in its duty to the country.

    Division No. 100.]

    AYES

    [9.6 a.m.

    Acland, Sir RichardBellenger, Rt. Hon. F. J.Broughton, Dr. A. D. D.
    Adams, RichardBenn, WedgwoodBrown, Rt. Hon. George (Belper)
    Albu, A. H.Benson, G.Brown, Thomas (Ince)
    Allen, Arthur (Bosworth)Beswick, F.Burke, W. A.
    Allen, Scholefield (Cram)Bevan, Rt. Hon. A. (Ebbw Vale)Burton, Miss. E.
    Anderson, Alexander (Motherwell)Bing, G. H. C.Butler, Herbert (Hackney, S.)
    Anderson, Frank (Whitehaven)Blenkinsop, A.Callaghan, L. J.
    Attlee, Rt. Hon. C. R.Boardman, H.Carmichael, J.
    Awbery, S. S.Booth, A.Castle, Mrs. B. A.
    Ayles, W. H.BoMomley, A. G.Champion. A. J.
    Bacon, Miss. AliceBowdon, H. W.Chetwynd, G. R.
    Baird, J.Bowles, F. G. (Nuneaton)Clunie, J.
    Balfour, A.Braddock, Mrs. ElizabethCocks, F. S.
    Barnes, Rt. Hon. A. J.Brook, Dryden (Halifax)Coldrick, W.
    Bartley, P.Brooks, T. J. (Normanton)Collindridge, F.

    I think I should inform the Committee that, whilst I have a very wide discretion if there is no abuse of the Rules, or the rights of the minority are not being infringed, and if there has been a fair opportunity for debate, I have no other alternative but to accept the Closure. May I say that the debate on this very Clause and on all the Amendments I have selected has continued for some nine hours. If any right hon. Gentleman had desired to intervene, I would have called upon him, but, in the circumstances, I think I am fully justified in accepting the Motion proposed from the Government Front Bench.

    When you were not in the Chair, Major Milner, the Chancellor said—and he will contradict me if I am wrong—that he rose to speak at that point in order to deal with the first four speeches. There are a number of hon. Members who have wished to put points in detail on the agricultural industry. Two points in that connection were addressed to the Chancellor and he made no answer. When I rose to ask him a question he told me that he wished to finish his speech, presumably to allow the debate on agriculture to follow.

    The question of whether the Closure is accepted or not is not debatable. Having regard to the circumstances. I thought I might perhaps explain the grounds on which I thought it proper to accept that Motion.

    Question put, "That the Question be now put."

    The Committee divided: Ayes, 282; Noes, 271.

    Cook, T. F.Irving, W. J. (Wood Green)Pursey, Cmdr. H.
    Cooper, Geoffrey (Middlesbrough, W.)Isaacs, Rt. Hon. G. A.Rankin, J.
    Cooper, John (Deptford)Janner, B.Rees, Mrs. D.
    Corbel, Mrs. Freda (Peckham)Jay, D. P. T.Reeves, J.
    Cove, W. G.Jeger, George (Goole)Reid, Thomas (Swindon)
    Craddock, George (Bradford, S.)Jeger, Dr. Santo (St. Pancras, S.)Reid, William (Camlachie)
    Crawley, A.Jenkins, R. H.Rhodes, H.
    Crosland, C. A. R.Johnson, James (Rugby)Richards, R.
    Crossman, R. H. S.Johnston, Douglas (Paisley)Robens, Rt. Hon. A.
    Cullen, Mrs. A.Jones, David (Hartlepool)Roberts, Goronwy (Caernarvonshire)
    Daines, P.Jones, Frederick Elwyn (West Ham, S.)Robertson, J. J. (Berwick)
    Dalton, Rt. Hon. H.Jones, Jack (Rotherham)Robinson, Kenneth (St. Pancras, N.)
    Darling, George (Hillsborough)Jones, William Elwyn (Conway)Rogers, George (Kensington, N.)
    Davies, A. Edward (Stoke, N.)Keenan, W.Ross, William (Kilmarnock)
    Davies, Harold (Leek)Kenyon, C.Shawcross, Rt. Hon. Sir Hartley
    de Freitas, GeoffreyKey, Rt. Hon. C. W.Shinwell, Rt. Hon. E.
    Deer, G.King, Dr. H. M.Shurmer, P. L. E.
    Delargy, H. J.Kinghorn, Sqn. Ldr. E.Silverman, Julius (Erdington)
    Dodds, N. N.Kinley, J.Silverman, Sydney (Nelson)
    Donnelly, D.Lang, GordonSimmons, C. J.
    Driberg, T. E. N.Lee, Frederick (Newton)Slater, J.
    Dugdale, Rt. Hon. John (W. Bromwich)Lee, Miss. Jennie (Cannock)Smith, Ellis (Stoke, S.)
    Dye, S.Lever, Harold (Cheetham)Smith, Norman (Nottingham, S.)
    Ede, Rt. Hon. J. C.Lever, Leslie (Ardwick)Sorensen, R. W.
    Edelman, M.Lewis, Arthur (West Ham, N.)Soskice, Rt. Hon. Sir. Frank
    Edwards, John (Brighouse)Lewis, John (Bolton, W.)Sparks, J. A.
    Edwards, Rt. Hon. Ness (Caerphilly)Lindgren, G. S.Steele, T.
    Edwards, W. J. (Stepney)Lipton, Lt.-Col. M.Stewart, Michael (Fulham, E.)
    Evans, Albert (Islington, S. W.)Longden, Fred (Small Heath)Stokes, Rt. Hon. R. R.
    Evans, Edward (Lowestoft)McAllister, G.Strachey, Rt. Hon. J.
    Evans, Stanley (Wednesbury)MacColl, J. E.Strauss, Rt. Hon. George (Vauxhall)
    Ewart, R.McGhee, H. G.Stross, Dr. Barnett
    Fernyhough, E.McInnes, J.Summerskill, Rt. Hon. Edith
    Field, Cap. W. J.Mack, J. D.Sylvester, G. O.
    Finch, H. J.McKay, John (Wallsend)Taylor, Bernard (Mansfield)
    Fletcher, Eric (Islington, E.)Mackay, R. W. G. (Reading, N.)Taylor, Robert (Morpeth)
    Follick, M.McLeavy, F.Thomas, David (Aberdare)
    Foot, M. M.MacMillan, Malcolm (Western Isles)Thomas, George (Cardiff)
    Forman, J. C.McNeil, Rt. Hon. H.Thomas, Iorwerth (Rhondda, W.)
    Fraser, Thomas (Hamilton)MacPherson, Malcolm (Stirling)Thomas, Ivor Owen (Wrekin)
    Freeman, John (Watford)Mallalieu, E. L. (Brigg)Thorneycroft, Harry (Clayton)
    Freeman, Peter (Newport)Mallalieu, J. P. W. (Huddersfield, E.)Thurtle, Ernest
    Gaitskell, Rt. Hon. H. T. N.Mann, Mrs. JeanTimmons, J.
    Ganley, Mrs. C. S.Manuel, A. C.Tomney, F.
    Gibson, C. W.Marquand, Rt. Hon. H. A.Turner-Samuels, M.
    Gilzean, A.Mathers, Rt. Hon. G.Ungoed-Thomas, Sir Lynn
    Glanville, James (Consett)Mellish, R. J.Usborne, H.
    Gooch, E. G.Messer, F.Vernon, W. F.
    Gordon-Walker, Rt. Hon. P. C.Middleton, Mrs. L.Viant, S. P.
    Greenwood, Anthony (Rossendale)Mikardo, IanWallace, H. W.
    Greenwood, Rt. Hon. Arthur (Wakefield)Mitchison, G. R.Watkins, T. E.
    Grenfell, D. R.Moeran, E. W.Webb, Rt. Hon. M. (Bradford, C.)
    Grey, C. F.Monslow, W.Weitzman, D.
    Griffiths, David (Rother Valley)Moody, A. S.
    Griffiths, Rt. Hon. James (Llanelly)Morgan Dr. H. B.Wells, Percy (Faversham)
    Griffiths, William (Exchange)Morlay, R.Wells, William (Walsall)
    Gunter, R. J.Morris, Percy (Swansea, W.)West, D. G.
    Hale, Joseph (Rochdale)Mort, D. L.Wheatley, Rt. Hon. John (Edinb'gh, E.)
    Hall, John (Gateshead, W.)Moyle, A.White, Mrs. Eirene (E. Flint)
    Hall, Rt. Hon. Glenvil (Colne Valley)Mulley, F. W.White, Henry (Derbyshire, N. E.)
    Hamilton, W. W.Murray, D.Whiteley, Rt. Hon. W.
    Hannan, W.Nally, W.Wilcock, Group Capt. C. A. B.
    Hardy, E. A.Neal, Harold (Bolsover)Wilkins, W. A.
    Noel-Baker, Rt. Hon. P.Willey, Frederick (Sunderland)
    Hargreaves, A.O'Brien, T.Willey, Octavius (Cleveland)
    Hastings, S.Oldfield, W. H.Williams, David (Neath)
    Hayman, F. H.Oliver, G. H.Williams, Rev. Llywelyn (Abertillery)
    Henderson, Rt. Hon. A. (Rowley Regis)Orbach, M.Williams, Ronald (Wigan)
    Herbison, Miss. M.Padley, W. E.Williams, Rt. Hon. Thomas (Don V'lly)
    Hewitson, Capt. M.Paling, Rt. Hon. Wilfred (Dearne V'lly)Wilson, Rt. Hon. Harold (Huyton)
    Hobson, C. R.Paling, Will T. (Dewsbury)Winterbottom, Ian (Nottingham, C.)
    Holman, P.Pannell, T. C.Winterbottom, Richard (Brightside)
    Holmes, Horace (Hemsworth)Pargiter, G. A.Wise, F. J.
    Hoy, J.Parker, J.Woodburn, Rt. Hon. A.
    Hubbard, T.Paton, J.Wyatt, W. L.
    Hudson, James (Eating, N.)Peart, T. F.Yates, V. F.
    Hughes, Emrys (S. Ayrshire)Popplewell, E.Younger, Hon. K.
    Hughes, Hector (Aberdeen, N.)Porter, G.
    Hynd, H. (Accrington)Price, Philips (Gloucestershire, W.)

    TELLERS FOR THE AYES:

    Hynd, J. B. (Attercliffe)Proctor, W. T.Mr. Pearson and Mr. Royle.
    Irvine, A. J. (Edge Hill)Pryde, D. J.

    NOES

    Aitken, W. T.Galbraith, T. G. D. (Hillhead)Marshall, Douglas (Bodmin)
    Alport, C. J. M.Garner-Evans, E. H. (Denbigh)Marshall, Sidney (Sutton)
    Amery, Julian (Preston, N.)Gates, Maj. E. E.Maude, Angus (Ealing, S.)
    Amory, Heathcoat (Tiverton)Gomme-Duncan, Col. A.Maudling, R.
    Arbuthnot, JohnGridley, Sir ArnoldMedlicott, Brig. F.
    Ashton, H. (Chelmsford)Grimond, J.Mellor, Sir John
    Assheton, Rt. Hon. R. (Blackburn, W.)Grimston, Hon. John (St. Albans)Molson, A. H. E.
    Astor, Hon. M. L.Grimston, Robert (Westbury)Monckton, Sir Walter
    Baker, P. A. D.Harden, J. R. E.Moore, Lt.-Col. Sir Thomas
    Baldock, Lt.-Cmdr. J. M.Hare, Hon. J. H. (Woodbridge)Morrison, John (Salisbury)
    Baldwin, A. E.Harris, Frederic (Croydon, N.)Morrison, Rt. Hon. W. S. (Chencester)
    Banks, Col. C.Harris, Reader (Heston)Mott-Radclyffe, C. E.
    Baxter, A. B.Harvey, Air Cdre. A. V. (Macclesfield)Nabarro, G.
    Beamish, Major TuftonHarvey, Ian (Harrow, E.)Nicholls, Harmar
    Bell, R. M.Harvie-Watt, Sir G. S.Nicholson, G.
    Bennett, Sir Peter (Edgbaston)Hay, JohnNield, Basil (Chester)
    Bennett, Dr. Reginald (Gosport)Head, Brig. A. H.Noble, Comdr. A. H. P.
    Bennett, William (Woodside)Headlam, Lieut.-Col. Rt. Hon. Sir C.Nugent, G. R. H.
    Bevins, J. R. (Liverpool, Toxteth)Heald, LionelNutting, Anthony
    Bishop, F. P.Heath, EdwardOakshott, H. D.
    Black, C. W.Henderson, John (Cathcart)Odey, G. W.
    Boles, Lt.-Col. D. C. (Wells)Hicks-Beach. Maj. W. W.O'Neill, Rt. Hon. Sir Hugh
    Boothby, R.Higgs, J. M. C.Ormsby-Gore, Hon. W. D.
    Bossom, A. C.Hill, Mrs. E. (Wythenshawe)Orr, Capt. L. P. S.
    Bowen, E. R. (Cardigan)Hill, Dr. Charles (Luton)Orr-Ewing, Charles Ian (Hendon, N.)
    Boyd-Carpenter, J. A.Hinchingbrooke, ViscountOrr-Ewing, Ian L. (Weston-super-Mare)
    Boyle, Sir EdwardHirst, GeoffreyOsborne, C.
    Bracken, Rt. Hon. B.Holmes, Sir Stanley (Harwich)Peake, Rt. Hon. O.
    Braine, B. R.Hope, Lord JohnPerkins, W. R. D.
    Braithwaite, Sir Albert (Harrow, W.)Hopkinson, HenryPeto, Brig. C. H. M.
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Hornsby-Smith, Miss. P.Pickthorn, K.
    Bromley-Davenport, Lt.-Col. W.)Horsbrugh, Rt. Hon. FlorencePitman, I. J.
    Brooke, Henry (Hampstead)Howard, Gerald (Cambridgeshire)Powell, J. Enoch
    Browne, Jack (Govan)Howard, Greville (St. Ives)Price, Henry (Lewisham, W.)
    Buchan-Hepburn, P. G. T.Hudson, Sir Austin (Lewisham, N.)Prior-Palmer, Brig. O.
    Bullus, Wing Commander E. E.Hudson, Rt. Hon. Robert (Southport)Profumo, J. D.
    Burden, F. A.Hudson, W. R. A. (Hull, N.)Raikes, H. V.
    Butcher, H. W.Hutchinson, Geoffrey (Ilford, N.)Rayner, Brig. R.
    Butler, Rt. Hon. R. A. (Saffron Walden)Hutchison, Lt.-Com. Clark (E'b'rgh W.)Redmayne, M.
    Carr, Robert (Mitcham)Hutchison, Colonel James (Glasgow)Remnant, Hon. P.
    Carson, Hon. E.Jennings, R.Renton, D. L. M.
    Channon, H.Johnson, Howard (Kemptown)Roberts, Major Peter (Heeley)
    Churchill, Rt. Hon. W. S.Jones, A. (Hall Green)Robertson, Sir David (Caithness)
    Clarke, Col. Ralph (East Grinstead)Joynson-Hicks, Hon. L. W.Robinson, Roland (Blackpool, S.)
    Clarke, Brig. Terence (Portsmouth, W.)Kaberry, D.Robson-Brown, W.
    Colegate, A.Kerr, H. W. (Cambridge)Rodgers, John (Sevenoaks)
    Conant, Maj. R. J. E.Kingsmill, Lt.-Col. W. H.Roper, Sir Harold
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Lambert, Hon. G.Ropner, Col. L.
    Cooper-Key, E. M.Lancaster, Col. C. G.Russell, R. S.
    Corbett, Lt.-Col. Uvedale (Ludlow)Langford-Holt, J.Ryder, Capt. R. E. D.
    Craddock, Beresford (Spelthorne)Law, Rt. Hon. R. K.Salter, Rt. Hon. Sir Arthur
    Cranborne, ViscountLeather, E. H. C.Scott, Donald
    Crookshank, Capt. Rt. Hon. H. F. C.Legge-Bourke, Maj. E. A. H.Shepherd, William
    Crosthwaite-Eyre, Col. O. E.Lennox-Boyd, A. T.Smithers, Peter (Winchester)
    Crouch, R. F.Lindsay, MartinSmyth, Brig. J. G. (Norwood)
    Crowder, Capt. John (Finchley)Linstead, H. N.Snadden, W. McN.
    Cundiff, F. W.Llewellyn, D.Soames, Capt. C.
    Cuthbert, W. N.Lloyd, Rt. Hn. Geoffrey (King's Norton)Spearman, A. C. M.
    Darling, Sir William (Edinburgh, S.)Lloyd, Maj. Guy (Renfrew, E.)Spence, H. R. (Aberdeenshire, W.)
    Davidson, ViscountessLloyd, Selwyn (Wirral)Spens, Sir Patrick (Kensington, S.)
    Davies, Nigel (Epping)Lockwood, Lt.-Col. J. C.Stanley, Capt. Hon. Richard (N. Fylde)
    de Chair, SomersetLongden, Gilbert (Herts, S. W.)Stevens, G. P.
    De la Bère, R.Low, A. R. W.Steward, W. A. (Woolwich, W.)
    Deedes, W. F.Lucas, Sir Jocelyn (Portsmouth, S.)Stewart, Henderson (Fife, E.)
    Dodds-Parker, A. J.Lucas, P. B. (Brentford)Stoddart-Scott, Col. M.
    Donner, P. W.Lucas-Tooth, Sir HughStorey, S.
    Douglas-Hamilton, Lord MalcolmLyttelton, Rt. Hon. O.Strauss, Henry (Norwich, S.)
    Drayson, G. B.McAdden, S. J.Stuart, Rt. Hon. James (Moray)
    Dugdale, Maj. Sir Thomas (Richmond)McCorquodale, Rt. Hon. M. S.Summers, G. S.
    Duncan, Capt. J. A. L.Macdonald, Sir Peter (I. of Wight)Sutcliffe, H.
    Dunglass, LordMackeson, Brig. H. R.Taylor, Charles (Eastbourne)
    Duthie, W. S.McKibbin, A.Taylor, William (Bradford, N.)
    Eccles, D. M.McKie, J. H. (Galloway)Teeling, W.
    Eden, Rt. Hon. A.Maclay, Hon. JohnTeevan, T. L.
    Elliot, Rt. Hon. W. E.Maclean, FitzroyThomas, J. P. L. (Hereford)
    Erroll, F. J.MacLeod, Iain (Enfield, W.)Thompson, Kenneth Pugh (Walton)
    Fisher, NigelMacLeod, John (Ross and Cromarty)Thompson, R. H. M. (Croydon, W.)
    Fort, R.Macmillan, Rt. Hon. Harold (Bromley)Thorneycroft, Peter (Monmouth)
    Fraser, Hon. Hugh (Stone)Macpherson, Major Niall (Dumfries)Thornton-Kemsley, Col. C. N.
    Fraser, Sir Ian (Morecambe & Lonsdale)Maitland, Comdr. J. W.Thorp, Brig. R. A. F.
    Fyfe, Rt. Hon. Sir David MaxwellManningham-Buller, R. E.Tilney, John
    Gage, C. H.Marlowe, A. A. H.Turner, H. F. L.
    Galbraith, Cmdr. T. D. (Pollok)Marples, A. E.Turton, R. H.

    Tweedsmuir, LadyWard, Miss. I. (Tynemouth)Williams, Sir Herbert (Croydon, E.)
    Vane, W. M. F.Waterhouse, Capt. Rt. Hon. C.Wills, G.
    Vaughan-Morgan, J. K.Watkinson, H.Wilson, Geoffrey (Truro)
    Vosper, D. F.Webbe, Sir HaroldWinterton, Rt. Hon. Earl
    Wakefield, Edward (Derbyshire, W.)Wheatley, Major M. J. (Poole)Wood, Hon. R.
    Wakefield, Sir Wavell (Marylebone)White, Baker (Canterbury)York, C.
    Walker-Smith, D. C.Williams, Charles (Torquay)

    TELLERS FOR THE NOES:

    Ward, Hon. George (Worcester)Williams, Gerald (Tonbridge)Mr. Studholme and Mr. Digby.

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

    Division No. 101.]

    AYES

    [9.20 a.m.

    Acland, Sir RichardEdelman, M.Jones, William Elwyn (Conway)
    Adams, RichardEdwards, John (Brighouse)Keenan, W.
    Albu, A. H.Edwards, Rt. Hon. Nets (Caerphilly)Kenyon, C.
    Allen, Arthur (Bosworth)Edwards, W. J. (Stepney)Key, Rt. Hon. C. W.
    Allen, Scholefield (Crewe)Evans, Albert (Islington, S. W.)King, Dr. H. M.
    Anderson, Alexander (Motherwell)Evans, Edward (Lowestoft)Kinghorn, Sqn. Ldr. E.
    Anderson, Frank (Whitehaven)Evans, Stanley (Wednesbury)Kinley, J.
    Attlee, Rt. Hon. C. R.Ewart, R.Lang, Gordon
    Awbery, S. S.Fernyhough, E.Lee, Frederick (Newton)
    Ayles, W. H.Field. Capt. W. J.Lee, Miss. Jennie (Cannock)
    Bacon, Miss. AliceFinch, H. J.Lever, Harold (Cheetham)
    Baird, J.Fletcher, Eric (Islington, E.)Lever, Leslie (Ardwick)
    Balfour, A.Follick, M.Lewis, Arthur (West Ham, N.)
    Barnes, Rt. Hon. A. J.Foot, M. M.Lewis, John (Bolton, W.)
    Bartley, P.Forman, J. C.Lindgren, G. S.
    Bellenger, Rt. Hon. F. J.Fraser, Thomas (Hamilton)Lipton, Lt.-Col. M.
    Benn, WedgwoodFreeman, John (Watford)Longden, Fred (Small Heath)
    Benson, G.Freeman, Peter (Newport)McAllister, G.
    Beswick, F.Gaitskell, Rt. Hon. H. T. N.MacColl, J. E.
    Bevan, Rt. Hon. A. (Ebbw Vale)Ganley, Mrs. C. S.McGhee, H. G.
    Bing, G. H. C.Gibson, C. W.McInnes, J.
    Blenkinsop, A.Gilzean, A.Mack, J. D.
    Boardman, H.Glanville, James (Consett)McKay, John (Wallsend)
    Booth, A.Gooch, E. G.Mackay, R. W. G. (Reading, N.)
    Bottomley, A. G.Gordon-Walker, Rt. Hon. P. C.McLeavy, F.
    Bowden, H. W.Greenwood, Anthony (Rossendale)MacMillan, Malcolm (Western Isles)
    Bowen, E. R.Greenwood, Rt. Hon. Arthur (Wakefield)McNeil, Rt. Hon. H.
    Bowles, F. G. (Nuneaton)Grenfell, D. R.MacPherson, Malcolm (Stirling)
    Braddock, Mrs. ElizabethGrey, C. F.Mallalieu, E. L. (Brigg)
    Brook, Dryden (Halifax)Griffiths, David (Rother Valley)Mallalieu, J. P. W. (Huddersfield, E.)
    Brooks, T. J. (Normanton)Griffiths, Rt. Hon. James (Llanelly)Mann, Mrs. Jean
    Broughton, Dr. A. D. D.Griffiths, W. D. (Exchange)Manuel, A. C.
    Brown, Rt. Hon. George (Belper)Grimond, J.Marquand, Rt. Hon. H. A.
    Brown, Thomas (Ince)Gunter, R. J.Mathers, Rt. Hon. G.
    Burke, W. A.Hale, Joseph (Rochdale)Mellish, R. J.
    Burton, Miss. E.Hall, John (Galeshead, W.)Messer, F.
    Butler, Herbert (Hackney, S.)Hall, Rt. Hon. Glenvil (Colne Valley)Middleton, Mrs. L.
    Callaghan, L. J.Hamilton, W. W.Mikardo, Ian
    Carmichael, J.Hannan, W.Mitchison, G. R.
    Castle, Mrs. B. A.Hardy, E. A.Moeran, E. W.
    Champion, A. J.Hargreaves, A.Monslow, W.
    Chetwynd, G. R.Hastings, S.Moody, A. S.
    Clunie, J.Hayman, F. H.Morgan, Dr. H. B.
    Cocks, F. S.Henderson, Rt. Hon. Arthur (Tipton)Morley, R.
    Coldrick, W.Herbison, Miss. M.Morris, Percy (Swansea, W.)
    Collindridge, F.Hewitson, Capt. M.Mort, D. L.
    Cook, T. F.Hobson, C. R.Moyle, A.
    Cooper, Geoffrey (Middlesbrough, W.)Holman, P.Mulley, F. W.
    Cooper, John (Deptford)Holmes, Horace (Hemsworth)Murray, J. D.
    Corbet, Mrs. Freda (Peckham)Houghton, D.Nally, W.
    Cove, W. G.Hoy, J.Neal, Harold (Bolsover)
    Craddock, George (Bradford, S.)Hubbard, T.Noel-Baker, Rt. Hon. P. J.
    Crawley, A.Hudson, James (Ealing, N.)O'Brien, T.
    Crosland, C. A. R.Hughes, Emrys (S. Ayrshire)Oldfield, W. H.
    Crossman, R. H. S.Hughes, Hector (Aberdeen, N.)Oliver, G. H.
    Cullen, Mrs. A.Hynd, H. (Accrington)Orbach, M.
    Daines, P.Hynd, J. B. (Attercliffe)Padley, W. E.
    Dalton, Rt. Hon. H.Irvine, A. J. (Edge Hill)Paling, Rt. Hon. Wilfred (Dearne V'lly)
    Darling, George (Hillsborough)Irving, W. J. (Wood Green)Paling, Will T. (Dewsbury)
    Davies, A. Edward (Stoke, N.)Isaacs, Rt. Hon. G. A.Pannell, T. C.
    Davies, Harold (Leek)Janner, B.Pargiter, G. A.
    de Freitas, GeoffreyJay, D. P. T.Parker, J.
    Deer, G.Jeger, George (Goole)Paton, J.
    Delargy, H. J.Jeger, Dr. Santo (St. Pancras, S.)Peart, T. F.
    Dodds, N. N.Jenkins, R. H.Popplewell, E.
    Donnelly, D.Johnson, James (Rugby)Porter, G.
    Driberg, T. E. N.Johnston, Douglas (Paisley)Price, Philips (Gloucestershire, W.)
    Dugdale, Rt. Hon. John (W. Bromwich)Jones, David (Hartlepool)Proctor, W. T.
    Dye, S.Jones, Frederick Elwyn (West Ham, S.)Pryde, D. J.
    Ede, Rt. Hon. J. C.Jones, Jack (Rotherham)Pursey, Cmdr. H.

    The Committee divided: Ayes, 285; Noes, 270.

    Rankin, J.Stewart, Michael (Fulham, E.)Wells, Percy (Faversham)
    Rees, Mrs. D.Stokes, Rt. Hon. R. R.Wells, William (Walsall)
    Reeves, J.Strachey, Rt. Hon. J.West, D. G.
    Reid, Thomas (Swindon)Strauss, Rt. Hon. George (Vauxhall)Wheatley, Rt. Hon. J. (Edinb'gh, E.)
    Reid, William (Camlachie)Stross, Dr. BarnettWhile, Mrs. Eirene (E. Flint)
    Rhodes, H.Summerskill, Rt. Hon. EdithWhite, Henry (Derbyshire, N. E.)
    Richards, R.Sylvester, G. D.Whiteley, Rt. Hon. W.
    Robens, Rt. Hon. A.Taylor, Bernard (Mansfield)Wilcock, Group Capt. C. A. B.
    Roberts, Goronwy (Caernarvonshire)Taylor, Robert (Morpeth)Wilkins, W. A.
    Robertson, J. J. (Berwick)Thomas, David (Aberdare)Willey, Frederick (Sunderland)
    Robinson, Kenneth (St. Pancras, N.)Thomas, George (Cardiff)Willey, Octavius (Cleveland)
    Rogers, George (Kensington, N.)Thomas, Iorwerth (Rhondda, W.)Williams, David (Neath)
    Ross, William (Kilmarnock)Thomas, Ivor Owen (Wrekin)Williams, Rev. Llywelyn (Abertillery)
    Shawcross, Rt. Hon. Sir HartleyThorneycroft, Harry (Clayton)Williams, Ronald (Wigan)
    Shinwell, Rt. Hon. E.Thurtle, ErnestWilliams, Rt. Hon. Thomas (Don V'lly)
    Shurmer, P. L. E.Timmons, J.Wilson, Rt. Hon. Harold (Huyton)
    Silverman, Julius (Erdington)Tomney, F.Winterbottom, Ian (Nottingham, C.)
    Silverman, Sydney (Nelson)Turner-Samuels, M.Winterbottom, Richard (Brightside)
    Simmons, C. J.Ungoed-Thomas, Sir LynnWise, F. J.
    Slater, J.Usborne, H.Woodburn, Rt. Hon. A.
    Smith, Ellis (Stoke, S.)Vernon, W. F.Wyatt, W. L.
    Smith, Norman (Nottingham, S.)Viant, S. P.Yates, V. F.
    Sorensen, R. W.Wallace, H. W.Younger, Hon. K.
    Soskice, Rt. Hon. Sir FrankWatkins, T. E.

    TELLERS FOR THE AYES:

    Sparks, J. A.Webb, Rt. Hon. M. (Bradford, C.)Mr. Pearson and Mr. Royle.
    Steele, T.Weitzman, D.

    NOES

    Aitken, W. T.Cundiff, F. W.Hornsby-Smith, Miss. P.
    Alport, C. J. M.Cuthbert, W. N.Horsbrugh, Rt. Hon. Florence
    Amery, Julian (Preston, N.)Darling, Sir William (Edinburgh, S.)Howard, Gerald (Cambridgeshire)
    Amory, Heathcoat (Tiverton)Davidson, ViscountessHoward, Greville (St. Iver)
    Arbuthnot, JohnDavies, Nigel (Epping)Hudson, Sir Austin (Lewisham, N.)
    Ashton, H. (Chelmsford)de Chair, SomersetHudson, Rt. Hon. Robert (Southport)
    Assheton, Rt. Hon. R. (Blackburn, W.)De la Bère, R.Hudson, W. R. A. (Hull, N.)
    Astor, Hon. M. L.Deedes, W. F.Hutchinson, Geoffrey (Ilford, N.)
    Baker, P. A. D.Digby, S. W.Hutchison, Lt.-Com. Clark (E'b'rgh W.)
    Baldock, Lt.-Cmdr. J. M.Dodds-Parker, A. D.Hutchison, Colonel James
    Baldwin, A. E.Donner, P. W.Hylton-Foster, H. B.
    Banks, Col. C.Douglas-Hamilton, Lord MalcolmJennings, R.
    Baxter, A. B.Drayson, G. B.Johnson, Major Howard (Kemptown)
    Beamish, Major TuftonDugdale, Maj. Sir Thomas (Richmond)Jones, A. (Hall Green)
    Bell, R. M.Duncan, Capt. J. A. L.Joynson-Hicks, Hon. L. W.
    Bennett, Sir Peter (Edgbaston)Dunglass, LordKaberry, D.
    Bennett, Dr. Reginald (Gosport)Duthie, W. S.Kerr, H. W. (Cambridge)
    Bennett, William (Woodside)Eccles, D. M.Kingsmill, Lt.-Col. W. H.
    Bevins, J. R. (Liverpool, Toxteth)Eden, Rt. Hon. A.Lambert, Hon. G.
    Birch, NigelElliot, Rt. Hon. W. E.Lancaster, Col. C. G.
    Bishop, F. P.Erroll, F. J.Langford-Holt, J.
    Black, C. W.Fisher, NigelLaw, Rt. Hon. R. K.
    Boles, Lt.-Col. D. C. (Wells)Fort, R.Leather, E. H. C.
    Boothby, R.Fraser, Hon. Hugh (Stone)Legge-Bourke, Maj. E. A. R.
    Bossom, A. C.Fraser, Sir I. (Morecambe & Lonsdale)Lennox-Boyd, A. T.
    Boyd-Carpenter, J. A.Fyfe, Rt. Hon. Sir David MaxwellLindsay, Martin
    Boyle, Sir EdwardGage, C. H.Linstead, H. N.
    Bracken, Rt. Hon. B.Galbraith, Cmdr. T. D. (Pollok)Llewellyn, D.
    Braine, B. R.Garner-Evans, E. H. (Denbigh)Lloyd, Rt. Hn. Geoffrey (King's Norton)
    Braithwaite, Sir Albert (Harrow, W.)Gates, Maj. E. E.Lloyd, Maj. Guy (Renfrew, E.)
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Gomme-Duncan, Col. A.Lloyd, Selwyn (Wirral)
    Bromley-Davenport, Lt.-Col. W.Gridley, Sir ArnoldLockwood, Lt.-Col. J. C.
    Brooke, Henry (Hampstead)Grimston, Hon. John (St. Albans)Longden, Gilbert (Herts, S. W.)
    Browne, Jack (Govan)Grimston, Robert (Westbury)Low, A. R. W.
    Buchan-Hepburn, P. G. T.Harden, J. R. E.Lucas, Sir Jocelyn (Portsmouth, S.)
    Bullus, Wing Commander E. E.Hare, Hon. J. H. (Woodbridge)
    Burden, F. A.Harris, Frederic (Croydon, N.)Lucas, P. B. (Brentford)
    Butcher, H. W.Harris, Reader (Heston)Lucas-Tooth, Sir Hugh
    Butter, Rt. Hn. R. A. (Saffron Walden)Harvey, Air-Codre. A. V. (Macclesfield)Lyttelton, Rt. Hon. O.
    Carr, Robert (Mitcham)Harvey, Ian (Harrow, E.)McAdden, S. J.
    Carson, Hon. E.Harvie-Watt, Sir GeorgeMcCorquodale, Rt. Hon. M. S.
    Channon, H.Hay, JohnMacdonald, Sir Peter (I. of Wight)
    Churchill, Rt. Hon. W. S.Head, Brig. A. H.Mackeson, Brig. H. R.
    Clarke, Col. Ralph (East Grinstead)Headlam, Lt.-Col. Rt. Hon. Sir C.McKibbin, A.
    Clarke, Brig. Terence (Portsmouth, W.)Heald, LionelMcKie, J. H. (Galloway)
    Colegate, A.Heath, EdwardMaclay, Hon. John
    Conant, Maj. R. J. E.Henderson, John (Cathcart)Maclean, Fitzroy
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Hicks-Beach, Maj. W. W.MacLeod, Iain (Enfield, W.)
    Cooper-Key, E. M.Higgs, J. M. C.MacLeod, John (Ross and Cromarty)
    Corbett, Lt.-Col. Uvedale (Ludlow)Hill, Mrs. E. (Wythenshawe)Macmillan, Rt. Hon. Harold (Bromley)
    Craddock, Beresford (Spelthorne)Hill, Dr. Charles (Luton)Macpherson, Major Niall (Dumfries)
    Cranborne, ViscountHinchingbrooke, ViscountMaitland, Cmdr. J. W.
    Crookshank, Capt. Rt. Hon. H. F. C.Hirst, GeoffreyManningham-Buller, R. E.
    Crosthwaite-Eyre, Col. O. E.Holmes, Sir Stanley (Harwich)Marlowe, A. A. H.
    Crouch, R. F.Hope, Lord JohnMarples, A. E.
    Crowder, Capt. John (Finchley)Hopkinson, HenryMarshall, Douglas (Bodmin)

    Marshall, Sidney (Sutton)Rayner, Brig. R.Teevan, T. L.
    Maude, Angus (Ealing, S.)Redmayne, M.Thomas, J. P. L. (Hereford)
    Maudling R.Remnant, Hon. P.Thompson, Kenneth Pugh (Walton)
    Medlicott, Brig. F.Renton, D. L. M.Thompson, Lt.-Cmdr. R. (Croyden, W.)
    Mellor, Sir JohnRoberts, Major Peter (Heeley)Thorneycroft, Peter (Monmouth)
    Molson, A. H. E.Robertson, Sir David (Caithness)Thornton-Kemsley, Col. C. N.
    Monckton, Sir WalterRobinson, Roland (Blackpool, S.)Thorp, Brig. R. A. F.
    Moore, Lt.-Col., Sir ThomasRobson-Brown, W.Tilney, John
    Morrison, John (Salisbury)Rodgers, John (Sevenoaks)Turner, H. F. L.
    Morrison, Rt. Hon. W. S. (Cirencester)Roper, Sir HaroldTurton, R. H.
    Mott-Radclyffe, C. E.Ropner, Col. L.Tweedsmuir, Lady
    Nabarro, G.Russell, R. S.Vane, W. M. F.
    Nicholls, HarmarRyder, Capt. R. E. D.Vaughan-Morgan, J. K.
    Nicholson, G.Salter, Rt. Hon. Sir ArthurVosper, D. F.
    Nield, Basil (Chester)Scott, DonaldWakefield, Edward (Derbyshire, W.)
    Noble, Cmdr. A. H. R.Shepherd, WilliamWakefield, Sir Wavell (Marylebone)
    Nugent, G. R. H.Smithers, Peter (Winchester)Walker-Smith, D. C.
    Nutting, AnthonySmyth, Brig. J. G. (Norwood)Ward, Hon. George (Worcester)
    Oakshott, H. D.Snadden, W. McN.Ward, Miss. I. (Tynemouth)
    Odey, G. W.Soames, Capt. C.Waterhouse, Capt. Rt. Hon. C.
    O'Neill, Rt. Hon. Sir HughSpearman, A. C. M.Watkinson, H.
    Ormsby-Gore, Hon. W. D.Spence, H. R. (Aberdeenshire, W.)Webbe, Sir Harold
    Orr, Capt. L. P. S.Spens, Sir Patrick (Kensington, S.)Wheatley, Major M. J. (Poole)
    Orr-Ewing, Charles Ian (Hendon, N.)Stanley, Capt. Hon. Richard (N. Fylde)White, Baker (Canterbury)
    Orr-Ewing, Ian L. (Weston-super-Mare)Stevens, G. P.Williams, Charles (Torquay)
    Osborne, C.Steward, W. A. (Woolwich, W.)Williams, Gerald (Tonbridge)
    Peake, Rt. Hon. O.Stewart, Henderson (Fife, E.)Williams, Sir Herbert (Croydon, E.)
    Perkins, W. R. D.Stoddart-Scott, Col. M.Wills, G.
    Peto, Brig. C. H. M.Storey, S.Wilson, Geoffrey (Truro)
    Pickthorn, K.Strauss, Henry (Norwich, S.)Winterton, Rt. Hon. Earl
    Pitman, I. J.Stuart, Rt. Hon. James (Moray)Wood, Hon. R.
    Powell, J. EnochSummers, G. S.York, C.
    Price, Henry (Lewisham, W.)Sutcliffe, H.
    Prior-Palmer, Brig. O.Taylor, Charles (Eastbourne)

    TELLERS FOR THE NOES:

    Profumo, J. D.Taylor, William (Bradford, N.)Mr. Studholme and
    Raikes, H. V.Teeling, W.Mr. T. G. D. Galbraith.

    Clause 17—(Acquisition Of New Sources Of Income Under Case Iii Iv Or V Of Schedule D)

    9.30 a.m.

    I beg to move, in page 10, line 42, at the end, to insert:

    Provided that if in any year no income arises from a particular source then that source may at the option of the person assessed exercised within six years be treated as having ceased, and when such option has been exercised and income from that source subsequently accrues such income shall be deemed to arise from a new source.
    This Amendment is concerned with a narrow point and rather a technical one for this hour of the morning, but I hope the Committee will bear with me while I try to explain the point underlying it. The Clause deals with income arising in Case III, IV and V of Schedule D from annuities, interest, income from overseas possessions and securities and from carrying on trade or professional vocation overseas. The purpose of the Clause is to reverse the judgment recently given in the Goodlass Wall case and to restore previous practice.

    Under the Clause a taxpayer may, in certain circumstances, pay tax for four years on income he receives for only three years. When income arises from a new source under Case III, IV and V, a taxpayer is assessed in the year in which the new source of income arises and thereafter is taxed year after year on the income of the preceding year. It follows that if a taxpayer had an income of £100 a year for three years from a source of this kind he would be taxed in the first year on the actual receipt of £100, in the second year and third year on the receipts of the preceding year, again £100, and in the fourth year, though he received no income from that source, he would still have tax levied because he would be paying on the basis of the preceding year's income.

    The purpose of the Amendment is to give the taxpayer, if the income from such a source has fallen off or ceased altogether, the power to elect, within the period of six years, to be taxed for the last year on his actual receipts. In that way the difficulty under the present Clause of tax having to be paid for four years on three years' income would be obviated. I think that there is a strong case in justice for this Amendment. Although I can well understand that the drafting may not be perfect, I hope that the Attorney-General will look upon the Amendment with favour.

    The hon. Member for Barnet (Mr. Maudling) has explained its object and the object of the Clause. The object of the Amendment, to put it shortly, is to prevent a person being taxed in respect of four years when he had received only three years' income. The object of the Clause is to prevent a person being taxed for only two years when he had received three years' income. In a sense, both Clause and Amendment are complementary. May I say at once we think there is force in the arguments of the hon. Gentleman. Just as the Clause is necessary, so we think the Amendment is necessary. However, there are certain criticisms of drafting and of the scope and form of the Amendment, which I would desire to amend. The Amendment deals only with cases within the Clause, which applies only in cases where individuals already have sources of income under Case III, IV and V and have acquired an additional source. The Amendment ought not to be limited only to those cases. It should be of general application.

    The result of that, if I am right so far, is that the Amendment raises rather wider issues. As I have already intimated, I accept its purpose and the principle upon which it is drafted, and I suggest that it should be much wider in scope. I also suggest that it is a matter for consideration whether the option should be exercisable if only one year's income is missed, and that it would probably be right that it should be exercisable only if a series of years' income is missed.

    In those circumstances I hope the hon. Gentleman will be so good as to ask leave to withdraw his Amendment upon the assurance that we will study the problem and work out an Amendment which will meet the points of criticism which I have ventured to make, and which I hope the Committee will think are well founded. I cannot promise that we shall be able to put down that Amendment on the Report stage because it involves wider issues and will need a certain amount of prolonged study, but we will undertake that an Amendment will be put down, if not then, which I hope and believe will meet the point which the hon. Gentleman has in mind.

    The right hon. and learned Gentleman has been most generous in offering to go even beyond the small suggestion I made, and in those circumstances I beg to ask leave to withdraw the Amendment.

    Amendment, by leave, withdrawn.

    Clause ordered to stand part of the Bill.

    Clauses 18 and 19 ordered to stand part of the Bill.

    Clause 20—(Armed Forces, Etc)

    I beg to move, in page 15, line 1, to leave out "not exceeding fifteen days."

    This Amendment is designed to give effect to a decision reached that the provisions of Clause 20, which confer exemption from Income Tax on certain bounties paid to members of the Armed Forces, should be extended so as to exempt the bounties recently announced which will be paid to members of the R.A.F.V.R. and the Royal Auxiliary Air Force who are called up for three weeks' training under the Reserve and Auxiliary Forces Training Act, 1951. The elimination of the words which I seek to leave out has the effect of widening the scope of the Clause and making it applicable in its terms to include the other categories of case which we feel should be brought within the scope of the Clause.

    Amendment agreed to.

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

    Clauses 21 and 22 ordered to stand part of the Bill.

    Clause 23—(Power To Obtain Information As To Interest Paid Or Credited Without Deduction Of Tax)

    I beg to move, in page 16, line 16, at the end, to add:

    (6) Nothing in this section shall impose on any bank the obligation to disclose any particulars relating to payments of interest without deduction of tax in cases where the person beneficially entitled to the income is not resident in the United Kingdom.
    It may be that this is the last Clause we shall discuss today, and I am not at all anxious to detain the Committee unnecessarily. The Amendment is an important one. It is also an Amendment to a dangerous Clause which we on this side of the Committee fear will do more harm than good. But I do not propose to deal with the merits of the Clause itself because we shall be discussing that shortly when we come to the Question, "That the Clause stand part of the Bill."

    The banks have, as hon. Members know, very large sums of money deposited with them by foreigners and by non-residents in the United Kingdom, and these depositors have often been given assurances by the bankers in all good faith that their accounts will not be likely to be submitted to any investigation. Depositors have relied upon the traditional secrecy of our banking system and, in consequence, a great international business has been built up in the City of London.

    Although this Amendment may, it might be suggested, introduce an illogicality into the structure of the Clause, it is justifiable for the reason I have just given, and in order to encourage foreigners and other non-residents to continue their practice of using the banking facilities of this country. That is a matter of first importance not only to the City of London but also to the country.

    Happily, there is a precedent in Section 18 of the 1939 Finance Act, which deals with the disclosure of securities. Subsection (5) concedes an exception to foreign depositors and non-resident depositors. Therefore, I hope that the right hon. Gentleman will be able to follow that precedent and to accept this Amendment which would limit considerably the damage which this Clause might do.

    9.45 a.m.

    I apologise for intervening from these benches even if only for a few minutes, although it is a long time since anybody on this side of the Committee has taken part in the debate. I gather from what the right hon. Gentleman has said that hon. Members opposite will take a different view from this side of the Committee on the general principle embodied in this Clause. I want to make it clear that we on these benches think it is not only a good Clause but a necessary and useful one.

    Having said that, I support the spirit, if not the actual language, of the Amendment. I hope my right hon. and learned Friend will agree that there is something in this point and that the Amendment is desirable in itself. It does not seem to me that it is necessary to impose the obligations on bankers to disclose this information where the information relates to someone not resident in this country. In those circumstances there cannot be any loss to the Revenue, and I should have thought it would be an advantage to the country, rather than a disadvantage, if the limitation suggested by the right hon. Gentleman could be accepted by the Government.

    The right hon. Gentleman has brought to the notice of the Committee matters which we feel require careful consideration. In framing the Amendment he has followed the precedent of Section 18 (5) of the Finance Act, 1939 and, basing himself upon that precedent, he has sought to make a change in the provisions of this Clause.

    It is apparent from what the right hon. Gentleman said that we shall not be able to agree, at any rate without discussion, about the Clause itself, but we feel able to regard this issue as to whether the obligations imposed by the Clause should extend to non-residents as one which could be dealt with in isolation from the general Clause. Both the right hon. Gentleman and my hon. Friend the Member for Islington, East (Mr. E. Fletcher), have voiced a desire that this exception should be made from the provisions of the Clause, and having carefully considered it we think that the general purpose of the Clause would be achieved even if this exception were embodied in it. Therefore, we are prepared to accept the general purport of this Amendment.

    We feel there are difficulties about the drafting of it. If I may I will just intimate one. Supposing a bank did mistakenly treat as a resident a person who was really a non-resident, it might render itself liable to some proceedings for breach of confidence. In the drafting which is ultimately adopted we think provision should be made for that kind of contingency. There are other criticisms of drafting which we think require careful consideration. If the right hon. Gentleman will withdraw his Clause, I give an undertaking that by the Report stage we will have drafted words which will embody the terms of the Amendment which both he and my hon. Friend had in mind.

    I am much obliged to the right hon. and learned Gentleman for what he said, and in the light of his undertaking, 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."

    Despite the concession which the Attorney-General has just announced we still regard this Clause as highly objectionable in principle and likely to be futile in practice. In saying a few words about it I must refer to what the Chancellor of the Exchequer said on the Second Reading of the Finance Bill. He said that he was advised that evasion of tax

    "… is by no means unsubstantial in this field."
    That is to say there is a substantial amount of tax evasion by means of deposited money in banks or apparently with other concerns also, on which the interest is paid without any deduction of tax.

    The Financial Secretary to the Treasury, in the Second Reading debate, was very shy about the persons who are attacked by this Clause, because he said:
    "Also with the purpose of checking evasion, we have provided in Clause 23 that any bank or other relevant trader should make returns to the Inland Revenue of certain interest paid or credited without deduction of tax."—[OFFICIAL REPORT, 8th May, 1951: Vol. 487, c. 1778 and 1917.]
    The Clause begins with a long rigmarole about persons carrying on a trade or business, stating:
    "Every person carrying on a trade or business who, in the ordinary course of the operations thereof, receives or retains money in such circumstances that interest becomes payable thereon which is paid or credited without deduction of income tax, and, in particular, every person carrying on the trade or business of banking. …"
    It would appear that this Clause is aimed at a much wider class than merely the banking community.

    I would ask the Attorney-General to tell us, first of all, to whom in addition to the banking community is this Clause intended to apply? I presume it is not intended, for example, to apply to the Co-operative societies, as was Clause 11, which we debated at some length the day before yesterday. Is it intended to apply to the building societies, some of whom I believe pay interest without deduction of tax, and who have, of course, been repeatedly attacked by the right hon. Member for Ebbw Vale (Mr. A. Bevan)?

    Is it intended to apply to the housing associations formed under the Housing Acts for the provision of working class houses, which is another class of incorporated society which pays interest without deduction of tax? It is essential that we should know who are these relevant traders to whom the Financial Secretary referred in his speech on the Second Reading. It is also necessary to have a few words of explanation about Subsection (2), which enables an inspector of taxes not only to ask for the incorporated person, bank or undertaking to make a return, but to ask any branch of the undertaking to make a return. There are some very strange words in subsection (2) which says:
    "… separate notices may be served under that sub-section as respects the transactions carried on at any branch."
    I think we ought to be told what are the transactions referred to in subsection (2) of the Clause.

    I think it is probably true, as the Chancellor said in his Second Reading speech, that this Clause is principally aimed at bank deposits. Bank deposits carry at the present time a rate of interest of one-half of 1 per cent., and the Clause excepts from the necessity of making a return of any interest in the course of one year unless it exceeds a sum of £15. If my arithmetic is right, one has to have at least £3,000 deposited at one branch or one bank, carrying interest of one-half of 1 per cent. in order to come within the mischief of the Clause.

    I say that if there is tax evasion by persons depositing large sums at banks with a view to earning one-half of one per cent., it seems a very strange thing indeed to me. Who are these wicked people, these greedy capitalists, these champion tax-evaders, these public enemies No. 1, who are content with getting one-half of one per cent. upon a very substantial sum of money? I think the Attorney-General ought to explain to us why it is suspected that people deposit very large sums in order to earn a meagre one-half of one per cent., even if that one-half of one per cent. does in some cases escape aggregation for Income Tax purposes.

    But, of course, the Clause is utterly futile because one can deposit £2,999 at any bank or at any branch of a bank and in that case no return will be made. As there are at least fifteen quite separate and independent big banks in this country alone, one can clearly have up to £45,000 on deposit spread over the different banks without any return whatever being made to the tax inspectors about it.

    Do I understand from what the right hon. Gentleman says that he would be in favour of eliminating this proviso so that if, in the case he is supposing, there is tax evasion, it could be dealt with?

    What I am saying about this Clause is that it will be utterly futile because of the exception regarding the limit of £15. Anybody, as I have pointed out, can spread £45,000 if they are so minded, between the 15 large independent banks operating in the British Isles at the present time and, by earning interest at one-half of one per cent., will not have a return made to any inspector of taxes about the interest.

    I would go further and say it would be quite impossible if one of the big banks, each of which has many hundreds of branches, was asked for a return of all the interest credited to a single individual, for the head office of this large bank to collect from all its hundreds of branches all over the country, particulars of all the different accounts which might have been opened by that individual. That, of course, is the reason for the provision in subsection (2) of the Clause, which enables the inspector to call for separate returns from separate branches of the bank.

    To sum up the arguments, I say the Clause is utterly futile in practice. There is no evidence whatever that it is aimed at any particular mischief which is occurring at the present time and, lastly, of course, it is highly objectionable because it strikes at the very roots of the confidential relationship between banker and client which has hitherto been absolutely respected in this country. May I remind the Committee that in the course of the debate upon the Bill which nationalised the Bank of England, we had an unqualified assurance from the present Minister of Local Government and Planning that in no circumstances would the power taken by nationalising the Bank of England be used to compel the disclosure of any particulars regarding any individual account to any Government agency whatever?

    10.0 a.m.

    In the course of his Second Reading speech the Chancellor said that as, under regulations about pay-as-you-earn, the banks have to disclose particulars of what their employees earn, there is nothing objectionable in compelling them to disclose what their depositors have on deposit. I should have thought there was a very wide difference in principle between the two things. This power will enable the inspectorate of taxes to obtain perfectly clear statements from the bank managers that Mr. A. or Mr. B. or Mrs. C. has so much money, whatever it may be, placed on deposit at a branch of the bank. To my mind, to compel that disclosure will not only be futile but will do a great deal of harm to the confidential relationship which has existed hitherto and which has Iain at the very foundations of the confidence of the British public in the British banking system.

    The case of the right hon. Member for Leeds, North (Mr. Peake) that this Clause will be ineffective in practice in preventing tax evasion seems to me to rest upon assumptions which appear to him to be certain—first, that there does not exist a class of tax evaders who spread their money or may spread their money over the 15 banks. He may be right on this, but he may be wrong. In fact, one of the difficulties of dealing with the whole problem of tax evasion is that so little is known about the methods of evasion used by tax evaders. A great problem which faces any attempt to deal with tax evasion is that there is little certainty as to the precise methods of evasion used.

    I feel, therefore, that it is impossible to know whether the right hon. Gentleman's comments on the point are right—whether he is right in assuming that this class does not exist. In my opinion, the problem of tax evasion in this country has now reached such a point that even if one cannot be certain of the precise manner in which the tax evaders operate, it is certainly worth while taking the powers which this Clause confers on the Government in the hope of dealing with at any rate some part of the problem.

    Hon. Members on all sides of the Committee will agree that tax evasion is a principal method by which the intentions of the Government, in considering the taxes they impose on the country, are being frustrated. It is quite clear from ordinary observation in London or, indeed, any other great city, that a certain class of people living are at a standard of life which cannot conceivably be sustained on the income, after tax, which is the maximum that any one person can earn. The figures have been given frequently; there are only some 50 or 60 people in the country who, after tax, have a spendable income of £6,000 a year. I think there will be general agreement that there is a class of people who are clearly spending in excess of that sum, and there are only two ways in which they can do it; one is by living on capital and the other is by tax evasion. I see no point in refusing to face the fact that a considerable number of these people who are spending in the luxury class are doing it by various methods of tax evasion, to which problem we have not yet found the solution.

    The problem has become so serious that it is the frequent answer of the Inland Revenue when new proposals for taxation are put to them that the staff needed could be better employed in dealing with tax evasion. To take a hypothetical example, if a proposal were made for a capital gains tax the answer of the Inland Revenue would be—and it is a very reasonable answer—that the staff required in order to operate the capital gains tax—that is, the number to be added to the staff—would achieve very much better results if they were to deal with tax evasion. I think that is a measure of how complicated and serious this problem of tax evasion has become.

    I do not think this Clause does all that is required by any manner of means to solve the problem. We may have to do a great deal more in the next few years than is proposed in the Clause. We shall certainly need a large increase in the staff of the Inland Revenue if we are to deal with the problem. The staff of the Inland Revenue at the moment, quite frankly, is not large enough to deal with tax evasion on the scale on which it exists in this country. My hon. Friend the Member for Sowerby (Mr. Houghton), who is in his place, has had a great deal of experience of Inland Revenue problems, and I am sure he would confirm what I am saying—that a very large increase in the staff of the Inland Revenue would be needed if we were to make any headway with the problem of tax evasion.

    It seems to me that we are in an intolerable situation when the Government's intentions concerning the distribution of income are being frustrated because it is so comparatively easy, with the depleted staff of the Inland Revenue, for a substantial number of people to evade a very high tax on their incomes. Our efforts to achieve a certain level of equality of spending are to that extent nullified, and I believe that is a serious social problem.

    It is not merely that our efforts to achieve a certain degree of equality are nullified, but there are also serious and damaging social effects through the fact that this degree of luxury spending is going on and is observed. Perhaps I may give one very simple example. In the last two or three years we needed a policy of wage restraint on the part of the trade unions. We may need it today and we shall need it again. One of the things which make it very difficult to persuade the trade unions to accept a policy of wage restraint is that—

    I certainly had no intention of going beyond this Clause. My general argument is that this Clause is one possible method of dealing with tax evasion, and the argument I am trying to pursue is that, even though this Clause may not achieve sensational results, and even though what the right hon. Member for Leeds, North, said about it is true, so serious is the problem of tax evasion in terms of its social effects that we should very strongly support this Clause. That was the argument I intended to address to the Committee, and I had no intention of going beyond the Clause.

    With your permission, Sir Charles, I should like to conclude that argument. I feel that the efforts we may now have to make to persuade certain sections of the population to accept some restraint in connection with their personal incomes are frustrated because when we go to them and say, "We have now achieved so much equality in this country that you need have no concern for your standard of life," they reply "Nonsense. The evidence of our own eyes shows something completely different." I therefore maintain that we must look at the long-run social effects of this problem of tax evasion.

    The right hon. Gentleman may be right—[Interruption.]—hon. Members opposite can hardly complain of not having had their fair share of the time of the Committee. Many of us have listened with considerable patience to speech after speech from the benches opposite, and I think a little patience on their side is desirable now. The right hon. Gentleman may be right in saying that quantitatively the effect of this Clause will not be large, but I do not think he can be certain. I do not think that the Chancellor can be certain, and I do not think any of us can be certain. But even if these results are not sensational, I think that the Clause is well worth supporting, because any effort which will have any effect at all on this extremely serious problem ought to have the support of hon. Members on all sides of the Committee.

    As the hon. Member for Gloucestershire, South (Mr. Crosland) said, the ostensible object of this Clause is to prevent tax evasion by those who gain interest upon money deposited in banks. I do not think anybody would object to that as a general aim. After all, the law of this country is that interest upon money invested is taxable, and anybody who does not make a return of that interest is breaking the law and evading his duties as a citizen, and I think that we would all want to condemn him. Therefore, I do not think there can be any objection to the general principle underlying this Clause.

    But to admit the principle is not, necessarily, to accept any suggested means of putting the principle into practice. In this case, I believe that the means proposed are likely to defeat perhaps the main aims of the Budget, and, therefore, do infinitely more harm than good to the national interest. How many people are likely to be involved? Obviously, we are concerned here with small savings.

    The Post Office Savings Bank, which is included in this Clause, has 16 million depositors. The trustee savings banks have 5½ million depositors. Between them they have something like 21 million depositors with about £3,000 million deposited. Add to that the small savings in the joint stock banks, the Co-operative Society and other banks, and we reach a figure exceeding 22 million or 23 million depositors with substantially more than £3,000 million.

    No, I am sorry. I am putting a serious argument to the Committee and trying to put it in a very short time, because there is very little time available. [Interruption.] As far as we are concerned, we shall be happy to stay all day, and if hon. Members make it difficult for us, we shall stay here all day. I thought it was the desire of the Government and their supporters that we should end about 11 o'clock, and I am endeavouring to meet that desire, but hon. Members must really behave themselves if they want to get away.

    It is essential to try and understand what this proposal means in terms of people and money and so on. This Clause strikes at the depositor drawing more than £15 in annual interest. In the case of the trustee savings banks and the Post Office Savings Bank that means people with deposits of £600 or over. I do not know the correct figures, but the best estimates I can make is that the people in the Post Office Savings Bank with sums invested greater than £600, is probably in the region of 800,000 persons. In trustee savings banks it might be 300,000 or 400,000. In the joint stock banks and others there might be 200,000, making in all about 1,500,000 persons involved. If you say that as many as half are dodging the column and not paying their tax—and this is a very high estimate—there will be something like 700,0000 people who might be caught by the net of this new Clause.

    If these 700,000 people are each earning £15 per annum interest, there would be £10 million per annum of interest which, on the argument of the Government, is not being taxed.

    The tax on these smaller incomes would probably not exceed 5s. in the pound. I assume, therefore, that the Chancellor, if this Clause goes through, is not likely to get much more than £1 million or £2 million of extra revenue. That is a guess. The Committee has been given no figures by the Government. I invite the Chancellor, if he replies, to give us some figures. At the moment it does appear to me that, out of a Budget of £4,000 million, this sum is a very paltry addition to the revenue.

    Let us say the Chancellor will get this £1 million, £2 million, or perhaps £3 million; what is the price he will have to pay for it? [HON. MEMBERS: "Peanuts."] I have tried to show, as far as I am able to estimate it, what might be the maximum increase in revenue the Chancellor will obtain. The price may well be a serious reduction in national savings. I admit that here again we are in the realms of speculation. No one can say for certain how a peremptory demand by the State for particulars about the business a bank does with its customer—hitherto sacrosanct—will affect its customers.

    10.15 a.m.

    But it will clearly have some effect. That is plain. We have taken advice on this matter, even although the Government may not have done so. It will be interesting to know from the Government what views have been tendered to them by the leaders of the Post Office Savings Bank. Have they been consulted, and what are their views? All I can say is that another great savings organisation—the trustee savings banks—have told us and the Government in the plainest language that they have very grave fears that the effect of this Clause will be dis-saving rather than an encouragement to saving.

    Had there been time I would have wished to read extracts from a letter addressed to the Chancellor by the Chairman of the Trustee Savings Banks Association. There is not time, and I can only tell the Committee that it is the considered view—and many hon. Gentlemen in all parts of the Committee know I speak the truth—of the trustee banks that we are here entering very dangerous waters and may well be playing with fire. [Interruption.] I have only been speaking for about seven minutes.

    I have deliberately not quoted essential facts and figures, but I am sure the Committee would be impressed, as the Members of the all-party committee upstairs were, with the evidence. The conclusion we reached, in the light of all that evidence of men deeply experienced in this matter, was that we are entitled to ask the Chancellor very seriously to reconsider this whole Clause between now and a later stage. I tell him—as indeed he knows—that those who understand this matter have issued the gravest warning against proceeding with the Clause in its present form.

    After making all initial allowances for the speeches from the other side of the Committee I must say that I was profoundly shocked to discover their attitude to this Clause on tax evasion. It is hard for those who have sat, as I have done, for about nine hours on this side of the Committee, without intervening in any way, to have to listen to hon. Gentlemen proposing that there should be reliefs in the Budget at the same time as they propose increased expenditure of one kind or another.

    On a question like tax evasion is surely a matter on which we should have national unity. Yet we have Members in this Committee not only opposing a very modest measure against tax evasion, but we had the example of the right hon. Gentleman the Member for Leeds, North (Mr. Peake) showing how it was possible to evade even this Clause, thereby strengthening the case from this side of the Committee. I am a comparatively new Member, and one not practised in tax evasion. I thought when I first saw this Clause that it might do the job, but when I heard the right hon. Gentleman I realised that although it is very necessary it will be but the start of many other evasions.

    I ask the Chancellor of the Exchequer to give more attention to this question of tightening up the tax evasion Clause before we resume consideration of the Bill at a later stage. I would also like to underline what my hon. Friend the Member for Gloucester, South (Mr. Crosland), who raised the general question of deploying Treasury resources to get the maximum revenue, that there are many hon. Members who have been, and are, in favour of some form of capital levy. The reply one very often gets is that "We in the Treasury can use the men and resources we have more effectively in connection with tax evasion." That is why we welcomed this Clause, because it indicated that the Treasury were really alive to their responsibilities in this respect, and were making a start.

    Perhaps I might say a word of warning to the Chancellor on this. I believe it is necessary that when this Clause is enacted it should be accompanied by a serious effort of education and propaganda in the country. I have had one letter already from someone very active in the National Savings movement in my constituency who was concerned about the possible effect of this Clause on people who had been supporters of his savings group. [Interruption.] I am glad hon. Members opposite are in agreement, because if there is a propaganda campaign to explain this Clause that in itself implies approval of the Clause. I would warn the Chancellor that there is a danger that if this Clause is enacted, and there is not a serious attempt to inform people about the significance of it, it may have a harmful effect on the National Savings movement.

    This letter which I received referred to an old couple who, to avoid the effect of this Clause, had withdrawn their money from the Post Office Savings Bank. I was able to persuade them to put it back, and of that I am very proud. Members of Parliament have opportunities at times to bring pressure on Ministers on behalf of constituents. I had an opportunity to bring pressure on constituents on behalf of the Chancellor. I persuaded my constituents to do this, but, at the same time, I was made very aware of the dangers in this Clause, and I very much hope that something will be done by the National Savings movement, in co-operation with the Chancellor, to deal with this point.

    But it is really on the general principle that I would like to detain the Committee for a moment—the question of secrecy in relation to the depositor and the bank. This House is characteristic of all our people in that it is very ready to see an issue of principle. But we should be making a great mistake if we believed that the relationship between the depositor and the bank, which is nothing more than a normal commercial transaction, was somehow hallowed by a special relationship of the kind we associate with the parishioner and his clergyman or the patient and his doctor.

    I do not believe that there is a comparison in this case. It is unlikely that the relation between a parishioner and his vicar would be used in any way which might be detrimental to the interests of the State, and I doubt whether the relation between a doctor and his patient could be used for purposes of tax evasion, although I can think of one possibility, of the possibility of whisky being given in exchange for services. There are many other relations which show that this normal commercial and social relation is not hallowed by tradition. I hope that hon. Members opposite will find themselves not only able to support this Clause, but also to support the Chancellor if, as I hope he will, he sees his way to strengthen it on the Report stage.

    I have listened to the speeches so far made, and I realise that some of the anxieties expressed by hon. Members opposite about the effect of this Clause, though as genuine as the anxieties of my hon. Friends about the present extent of tax evasion, are unjustified. I should like to show why the anxieties of hon. Members opposite are not justified.

    The right hon. Gentleman the Member for Leeds, North (Mr. Peake) asked me, first of all, about the purport of subsection 2, which refers to certain transactions at bank branches. In plain language—and I share his regret that these matters do not appear in plain language when drafted in Bills—the purport of that subsection is to enable Inspectors of Taxes, where convenient, to go to the branches of banks, rather than to the head offices, to get information about interest payments. That is intended mainly for the convenience of the banks themselves.

    Secondly, the hon. Gentleman asked me about the position of trustee savings banks, Co-operative societies, housing associations and various other savings institutions, under this Clause. Under the Income Tax laws, either tax is deducted at source or else there is an obligation on the payer to make a return of income to the Inland Revenue. In the case of certain savings institutions—on the one hand, of the savings banks under the Income Tax Act of 1918, and, on the other hand, of the Co-operative societies under Section 32 of the 1933 Act—there is a special arrangement in cases where the taxation of interest is deducted at source. In these two cases there is already an obligation, under the Acts I mentioned, to make a, return to the Inland Revenue. What the Clause does is to ensure that, where tax is either not already deducted at source or there is no obligation under existing law to make a return to the Inland Revenue, then a return shall be made in future by any institution of this kind which pays interest to depositors.

    10.30 a.m.

    As I think the right hon. Gentleman knows, building societies are covered by a very special arrangement under which they average out the tax and pay to the Inland Revenue on that basis. Therefore, they are unaffected by this Clause.

    Under the Post Office Savings Bank Act of 1861 there is an obligation of secrecy which prevents the servants of the Post Office disclosing the name of any depositor. Does this Clause repeal that, and, if so, why is the repeal not mentioned?

    As I understand the law, that Act would not make it impossible for the savings bank to give information to the Inland Revenue on a matter of Income Tax. The right hon. Gentleman also suggested that this Measure was futile because it would be perfectly easy to even out a tax evader's deposits to keep a person's interest below £15. I can only assure him that it is not the view of those responsible for tax collection that this proposal would be ineffective for that reason. That is not the view they take at all.

    To allay some of the anxieties on the matter of secrecy, Sir Charles, I would emphasise the point, which I think must be apparent to hon. Members, that of course no information about actual bank accounts will be given, or could be asked for, by the Inland Revenue under this Clause. It is, of course, only the interest, because interest is the income of the depositors that can be returned to the Inland Revenue.

    Secondly, I would emphasise particularly that, under this Clause, no information can be made available to the Inland Revenue which an honest taxpayer would not already have returned to them. I think really that is the whole and complete answer to any anxieties that may be felt by depositors in the savings banks, banks, or whatever it may be. Any taxpayer already making an honest return of his income, as presumably the great majority are, can be assured that no additional information will come to the Inland Revenue as a result of this Clause.

    Finally, I think hon. Members, and certainly the general public, do not fully realise the extent of the secrecy observed by the Inland Revenue itself in dealing with all information about the affairs of the individual taxpayer. It is certainly a secrecy quite as great as, and perhaps greater than, that observed by the banks themselves about their customer's affairs. The Inland Revenue not merely will not give any information about a person's tax affairs to anybody outside the official world; but they do not give and would refuse such information to any other Government Department, including the Treasury or, indeed, to any Minister. The Inland Revenue would refuse even the Chancellor information if he asked them about the affairs of a taxpayer, and I am assured that in no case has such information been given, even to a Chancellor of the Exchequer, in the whole history of the Inland Revenue. Therefore, I think that when that fundamental point is realised hon. Members will see that the anxieties raised by this Clause are really quite unjustified.

    A few hours ago I made a suggestion to the Committee that we might try to get to the placing of Clause 23 in the Bill and that then we would move to report Progress. I made the offer in all good faith. It was not immediately accepted by the right hon. Gentleman the Leader of the Opposition, who left me with a very ambiguous feeling as to what exactly was the advice he was tendering to the Committee, but we have managed now to get to the position where Clause 23 can stand part by the grace of every Member of the Committee. Any Member is now in the very powerful position of being able, by merely rising in his place, to continue the discussion on Clause 23—and I understand that within their legitimate rights the Opposition intend to divide on the Clause—with the result that Private Members' time for the last Friday for such time would be lost.

    I think I am accurate in regard to Bills, but there is another day for Private Members' Motions. After all it will be Private Members'—

    On a point of order. With great respect to my right hon. Friend and to you, Sir Charles, may I inquire to what Motion my right hon. Friend is now speaking? If this were a speech in support of a Motion to report Progress, I would understand it, but my right hon. Friend has not moved that Motion and at the moment we are debating whether a Clause of the Finance Bill shall stand part. I rose to continue that debate, but my right hon. Friend does not seem to be continuing that debate. May I ask how his speech is in order?

    I was waiting until the right hon. Gentleman finished his speech.

    I am trying to speak in support of the Motion that Clause 23 stand part of the Bill and that it do so very quickly.

    I understood you to say just now, Sir Charles, that you understood the right hon. Gentleman the Leader of the House was addressing the Committee with the intention at the end of his speech of moving to report Progress. The right hon. Gentleman, as I understood him, has now said he did not intend to move to report Progress.

    On a point of order. Even at this hour of the morning, and in view of the position of the Committee, we must have some regard to ordinary procedure. If the right hon. Gentleman wishes to address and appeal to the Committee, he should move to report Progress, not proceed to give us a lecture on a particular Amendment.

    I must make my position quite clear. I understand that the right hon. Gentleman is making a speech and is going to move to report Progress.

    On a point of order. I am very grateful for the support of the noble Lord. This is not a party point. If my right hon. Friend is really intending to conclude by moving to report Progress it would be a great convenience if he would say so.

    I do not intend to say any more. I am certain that the purpose of my rising was fully understood, and I regret that, after an amicable night, it has not met with any response.

    I feel a little diffident about impeding the juxtaposition of those two elements which the hon. Gentleman opposite mixed in his speech a few moments ago—the fire that we are playing with and the dangerous waters upon which we are embarking. It seems to me that in this Clause we are dealing with two very important principles which may not be compatible. I suppose that right hon. and hon. Gentlemen opposite would agree that their opposition to this Clause is not founded upon any small point or any desire to be obstructive or vexatious. They attach the utmost importance, as I do myself, to the principle of the confidential relationship between a bank and its customers.

    It is, of course, one of the foundations of our commercial life in this country, and would remain so under any Government and under whatever regime. The complaint of the Opposition about this Clause is that we are, for the first time, making a very serious inroad upon that principle. On the other hand, everybody in the House will agree that whatever is necessary to prevent wholesale tax evasion ought not to be shirked by Parliament or by this Committee. I want to suggest to the Opposition—

    There is so much noise that I cannot hear a word of what the hon. Gentleman is saying.

    I want to suggest to the Opposition that they are, in this instance, exaggerating out of all reasonable proportions the impairment or the alleged impairment of that confidential relationship. At the moment, the Revenue authorities are entitled to see all the accounts and all the books of every business in the country. They are entitled to go to accountants—I think usually with permission, but nevertheless they can go—so that all these books, figures and accounts are disclosed confidentially to the Income Tax Commissioners. They are disclosed confidentially, but nevertheless disclosed. There is one other thing—

    Surely, Sir Charles, if the Committee is called to order to stop the muttering, it ought to apply to both sides.

    I have made an appeal for order twice in a few minutes, because I have hardly heard a word of what the hon. Gentleman has said. I would again appeal for order in the Committee, because I, too, want to hear what is said.

    I should like to assure you, Sir Charles, that I am endeavouring to address a perfectly serious argument to what I regard as a very important Clause, and what, until a few moments ago, I thought the Opposition also regarded as a very important Clause. [HON. MEMBERS: "Hear, hear."] Well, if it is an important Clause, let us not try to rush it through in order to save five or 10 minutes. Let us examine it in a serious way; if we are going to examine it, let us do so with reasonable decorum.

    I suggest that this business of the confidential relations between bank and customer has to be seen in relation to other things. There used to be a principle, equally sacred as the confidential relationship between bank and customer, concerning the relationship between employers and employed about the amount of a man's earnings. That principle was abandoned during the war. Every person in this country who earns a weekly wage, man, woman or juvenile, without his or her consent, without having any part or lot in it, has his or her earnings disclosed to the Income Tax authorities every year. No fuss has ever been made about that.

    No one has ever talked about the necessity of reserving to the ordinary citizen, who has no money of his own or money in the bank, the confidential nature of his weekly earnings. It is not left to him, as it is to other people, first to disclose his income himself and then ask for reliefs. That is not good enough for the Opposition. In the case of the vast majority of Income Tax payers in this country, their means are disclosed to the authorities, and have been for some years.

    10.45 a.m.

    It seems to me to be sheer humbug to say that all these things shall be disclosed without consent and that the whole principle of confidential relationships, as far as it affects these people, shall be abandoned, but that the confidential relationship between banker and customer shall be preserved, even though all the other facts relating to the matter must be disclosed, and are, in fact, disclosed. It seems to me, therefore, that if one looks at the matter carefully, there is room for compromise between these two principles, and I do not think this Clause contains the dangers attributed to it by some of the speakers from the other side of the Committee.

    I want to make one other point. In the speeches which have been made against this Clause so far, it has been suggested that the mischief which is being attacked is the mischief of concealing certain income of certain interests from certain deposits in banks, but that is only a very small part of the story. The interesting thing about many of these accounts in the banks, from a tax evasion point of view, is not the undisclosed income from the deposits, but how the deposits themselves came into being at all. Very often, it is the result of previous concealment and evasion, and the importance of the thing is not the amount of income that would become taxable, and which, but for this Clause, might be concealed, but the accumulation of the profits of evasion over a great many years.

    If we are to deal seriously with the problem of tax evasion, and I hope the Committee will see that we do, we ought unanimously to accept this Clause and ask my right hon. Friend the Chancellor for an assurance that, on Report stage, so far from weakening the Clause, it will be strengthened to meet the very valid criticisms of the right hon. Gentleman the Member for Leeds, North (Mr. Peake). He said that this thing would not work and gave various reasons for thinking that. I do not know whether that is right or not, but I think it ought to be examined, because, if there is any danger whatever of the Clause not working as at present drafted, then it ought to be strengthened so as to make sure that it will work. I hope my hon. Friends on this side of the Committee will agree with me in this, and that, if necessary, they will make their views known.

    I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

    I do that to put myself in order and so that I may make one or two brief observations about the position of those of us on this side of the Committee. I think I must do that in view of the right hon. Gentleman's appeal. We tried earlier this morning to consider making progress with the business, because we all thought there was a fairly widespread desire to help Private Members get their Bills, particularly one Bill, if that could be done. In good faith, we tried to do that, as did the Leader of the House, but that endeavour has not succeeded.

    The immediate question is what we do now. I want to make plain the position

    Division No. 102.]

    AYES

    [10.55 a.m.

    Aitken, W. T.Bennett, Dr. Reginald (Gosport)Braithwaite, Sir Albert (Harrow, W.)
    Alport, C. J. M.Bennett, William (Woodside)Bromley-Davenport, Lt.-Col. W.
    Amery, Julian (Preston, N.)Bevins, J. R. (Liverpool, Toxteth)Brooke, Henry (Hampstead)
    Amory, Heathcoat (Tiverton)Birch, NigelBrowne, Jack (Govan)
    Arbuthnot, JohnBishop, F. P.Buchan-Hepburn, P. G. T.
    Ashton, H. (Chelmsford)Black, C. W.Bullus, Wing Commander E. E.
    Assheton, Rt. Hon. R. (Blackburn, W.)Boles, Lt.-Col. D. C. (Wells)Burden, F. A.
    Astor, Hon. M. L.Boothby, R.Butcher, H. W.
    Baker, P. A. D.Bossom, A. C.Butler, Rt. Hn. R. A. (Saffron Walden)
    Baldock, Lt.-Cmdr. J. M.Bowen, E. R.Carry, Robert (Mitcham)
    Baldwin, A. E.Boyd-Carpenter, J. A.Carson, Hon. E.
    Banks, Col. C.Boyle, Sir EdwardChannon. H.
    Baxter, A. B.Bracken, Rt. Hon. E.Churchill, Rt. Hon. W. S.
    Beamish, Major TuftonBraine, B. R.Clarke, Col. Ralph (East Grinstead)
    Bell, R. M.Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Clarke, Brig. Terence (Portsmouth, W.)

    of hon. Members on this side of the Committee. We were prepared to make that arrangement in the interest of Private Members and the general conduct of business. Since that arrangement has not been accepted, there appear to be two alternatives open to us, one to report Progress now, which is, of course, a matter for the Committee to decide, or, if that is not accepted—and I want to make it clear that we on this side deem ourselves entirely free from any arrangement that might have been made earlier today—to continue this debate as long as it shall be thought fit so to do.

    I am quite sure that the right hon. Gentleman will realise that I, too, have tried to do what I could to save today's Private Members' time. May I say, as I said earlier, that I think if it had been made more clear when I put forward the original suggestion that we were prepared to report Progress when we had obtained Clause 23, some of what has happened during the last half hour or so might have been avoided. My right hon. Friend the Chief Whip and I have done our best, and I want to make it quite plain that there was no bargain, and that everything which was said was said in the presence of the whole Committee. I made the offer, which was not actually accepted by the right hon. Gentleman, although may I say that with, perhaps, a rather longer knowledge of the right hon. Gentleman than that of some others, I interpreted his remarks as an expression of veiled good will towards the object that I expressed. I was genuinely anxious to save Private Members' time for today, and I regret that it does not appear likely that the right hon. Member for Warwick and Leamington (Mr. Eden) and I have succeeded in that endeavour.

    Question put.

    The Committee divided: Ayes, 265; Noes, 273.

    Colegate, A.Hutchison, Lt.-Com. Clark (E'b'rgh W.)Powell, J. Enoch
    Conant, Maj. R. J. E.Hutchison, Col. James (Glasgow)Price, Henry (Lewisham, W.)
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Jennings, R.Prior-Palmer, Brig. O.
    Cooper-Key, E. M.Johnson, Major Howard (Kemptown)Profumo, J. D.
    Corbett, Lt.-Col. Uvedale (Ludlow)Jones, A. (Hall Green)Raikes, H. V.
    Craddock, Beresford (Spelthorne)Joynson-Hicks, Hon. L. W.Rayner, Brig. R.
    Cranborne, ViscountKaberry, D.Redmayne, M.
    Crookshank, Capt. Rt. Hon. H. F. C.Kerr, H. W. (Cambridge)Remnant, Hon. P.
    Crosthwaite-Eyre, Col. O. E.Kingsmill, Lt.-Col. W. H.Roberts, Major Peter (Heeley)
    Crouch, R. F.Lambert, Hon. G.Robertson, Sir David (Caithness)
    Crowder, Capt. John (Finchley)Lancaster, Col. C. G.Robinson, Roland (Blackpool, S.)
    Cundiff, F. W.Langford-Holt, J.Robson-Brown, W.
    Cuthbert. W. N.Law, Rt. Hon. R. K.Rodgers, John (Sevenoaks)
    Darling, Sir William (Edinburgh, S.)Leather, E. H. C.Roper, Sir Harold
    Davidson, ViscountessLegge-Bourke, Maj. E. A. H.Ropner, Col. L.
    Davies, Nigel (Epping)Lennox-Boyd, A. T.Russell, R. S.
    de Chair, SomersetLindsay, MartinRyder, Capt. R. E. D.
    De la Bère, R.Linstead, H. N.Salter, Rt. Hon. Sir Arthur
    Deedes, W. F.Llewellyn, D.Scott, Donald
    Digby, S. W.Lloyd, Rt. Hn. Geoffrey (King's Norton)Shepherd, William
    Dodds-Parker, A. D.Lloyd, Maj. Guy (Renfrew, E.)Smithers, Peter (Winchester)
    Donner, P. W.Lloyd, Selwyn (Wirral)Smyth, Brig. J. G. (Norwood)
    Douglas-Hamilton, Lord MalcolmLockwood, Lt.-Col. J. C.Snadden, W. McN.
    Drayson, G. B.Longden, Gilbert (Herts, S. W.)Soames, Capt. C.
    Dugdale, Maj. Sir Thomas (Richmond)Low, A. R. W.Spearman A. C. M.
    Duncan, Capt. J. A. L.Lucas, Sir Jocelyn (Portsmouth, S.)Spence, H. R. (Aberdeenshire, W.)
    Dunglass, LordLucas, P. B. (Brentford)Spens, Sir Patrick (Kensington, S.)
    Lucas-Tooth, Sir HughStanley, Capt. Hon. Richard (N. Fylde)
    Duthie, W. S.Lyttelton, Rt. Hon. O.Stevens, G. P.
    Eccles, D. M.McAdden, S. J.Steward, W. A. (Woolwich, W.)
    Eden, Rt. Hon. A.McCorquodale, Rt. Hon. M. S.Stewart, Henderson (Fife, E.)
    Elliot, Rt. Hon. W. E.Macdonald, Sir Peter (I. of Wight)Stoddart-Scott, Col. M.
    Erroll, F. J.McKibbin, A.Storey, S.
    Fisher, NigelMcKie, J. H. (Galloway)Strauss, Henry (Norwich, S.)
    Fort, R.Maclay, Hon. JohnStuart, Rt. Hon. James (Moray)
    Fraser, Hon. Hugh (Stone)Maclean, FitzroySummers, G. S.
    Fraser, Sir I. (Morecambe & Lonsdale)MacLeod, Iain (Enfield, W.)Sutcliffe, H.
    Fyfe, Rt. Hon. Sir David MaxwellMacLeod, John (Ross and Cromarty)Taylor, Charles (Eastbourne)
    Galbraith, Cmdr. T. D. (Pollok)Macmillan, Rt. Hon. Harold (Bromley)Teeling, W.
    Galbraith, T. G. D. (Hillhead)Macpherson, Major Niall (Dumfries)Teevan, T. L.
    Garner-Evans, E. H. (Denbigh)Maitland, Cmdr. J. W.Thomas, J. P. L. (Hereford)
    Gates, Maj. E. E.Manningham-Buller, R. E.Thompson, Kenneth Pugh (Walton)
    Glyn, Sir RalphMarlowe, A. A. H.Thompson, Lt.-Cmdr. R. (Croydon, W.)
    Gomme-Duncan, Col. A.Marples, A. E.Thorneycroft, Peter (Monmouth)
    Gridley, Sir ArnoldMarshall, Douglas (Bodmin)Thornton-Kemsley, Col. C. N.
    Grimston, Hon. John (St. Albans)Marshall, Sidney (Sutton)Thorp, Brig. R. A. F.
    Grimston, Robert (Westbury)Maude, Angus (Ealing, S.)Tilney, John
    Hare, Hon. J. H. (Woodbridge)Medlicott, Brig. F.Turner, H. F. L.
    Harris, Frederic (Croydon, N.)Mellor, Sir JohnTurton, R. H.
    Harris, Reader (Heston)Molson, A. H. E.Tweedsmuir, Lady
    Harvey, Air-Codre. A. V. (Macclesfield)Monckton, Sir WalterVane, W. M. F.
    Harvey, Ian (Harrow, E.)Morrison, John (Salisbury)Vaughan-Morgan, J. K.
    Harvie-Watt, Sir GeorgeMorrison, Rt. Hon. W. S. (Cirencester)Vosper, D. F.
    Hay, JohnMott-Radclyffe, C. E.Wakefield, Edward (Derbyshire, W.)
    Head, Brig. A. H.Nabarro, G.Wakefield, Sir Wavell (Marylebone)
    Heald, LionelNicholls, HarmarWalker-Smith, D. C.
    Heath, EdwardNicholson, G.Ward, Hon. George (Worcester)
    Henderson, John (Cathcart)Nield, Basil (Chester)Ward, Miss. I. (Tynemouth)
    Hicks-Beach, Maj. W. W.Noble, Cmdr. A. H. P.Waterhouse, Capt. Rt. Hon. C.
    Higgs, J. M. C.Nugent, G. R. H.Watkinson, H.
    Hill, Mrs. E. (Wythenshawe)Nutting, AnthonyWebbe, Sir Harold
    Hill, Dr. Charles (Luton)Oakshott, H. D.Wheatley, Major M. J. (Poole)
    Hinchingbrooke, ViscountOdey, G. W.White, Baker (Canterbury)
    Hirst, GeoffreyO'Neill, Rt. Hon. Sir HughWilliams, Charles (Torquay)
    Holmes, Sir Stanley (Harwich)Ormsby-Gore, Hon. W. D.Williams, Gerald (Tonbridge)
    Hope, Lord JohnWilliams, Sir Herbert (Croydon, E.)
    Hopkinson, HenryOrr, Capt. L. P. S.Wills, G.
    Hornsby-Smith, Miss. P.Orr-Ewing, Charles Ian (Hendon, N.)Wilson, Geoffrey (Truro)
    Horsbrugh, Rt. Hon. FlorenceOrr-Ewing, Ian L. (Weston-super-Mare)Winterton, Rt. Hon. Earl
    Howard, Gerald (Cambridgeshire)Osborne, C.Wood, Hon. R.
    Howard, Greville (St. Ives)Peake, Rt. Hon. O.York, C.
    Hudson, Sir Austin (Lewisham, N.)Perkins, W. R. D.
    Hudson, Rt. Hon. Robert (Southport)Peto, Brig. C. H. M.

    TELLERS FOR THE AYES:

    Hudson, W. R. A. (Hull, N.)Pickthorn, K.Brigadier Mackeson and
    Hutchinson, Geoffrey (Ilford, N.)Pitman, I. J.Mr. Studholme.

    NOES

    Acland, Sir RichardAttlee, Rt. Hon. C. R.Bartley, P.
    Adams, H. R.Awbery, S. S.Bellenger, Rt. Hon. F. J.
    Albu, A. H.Ayles, W. H.Benn, Wedgwood
    Allen, Arthur (Bosworth)Bacon, Miss. AliceBenson, G.
    Allen, Scholefield (Crewe)Baird, J.Beswick, F.
    Anderson, Alexander (Motherwell)Balfour, A.Bevan, Rt. Hon. A. (Ebbw Vale)
    Anderson, Frank (Whitehaven)Barnes, Rt. Hon. A. J.Bing, G. H. C.

    Blenkinsop, A.Hardy, E. A.Pargiter, G. A.
    Boardman, H.Hargreaves, A.Parker, J.
    Booth, A.Hayman, F. H.Paton, J.
    Bottomley, A. G.Henderson, Rt. Hon. Arthur (Tipton)Pearson, A.
    Bowden, H. W.Herbison, Miss. M.Peart, T. F.
    Bowles, F. G. (Nuneaton)Hewitson, Capt. M.Porter, G.
    Braddock, Mrs. ElizabethHobson, C. R.Price, Philips (Gloucestershire, W.)
    Brook, Dryden (Halifax)Holman, P.Proctor, W. T.
    Brooks, T. J. (Normanton)Holmes, Horace (Hemsworth)Pryde, D. J.
    Broughton, Dr. A. D. D.Houghton, D.Pursey, Cmdr. H.
    Brown, Rt. Hon. George (Belper) Hoy, J.Rankin, J.
    Brown, Thomas (Ince)Hudson, James (Ealing, N.)Rees, Mrs. D.
    Burke, W. A.Hughes, Emrys (S. Ayrshire)Reeves, J.
    Burton, Miss. E.Hughes, Hector (Aberdeen, N.)Reid, Thomas (Swindon)
    Butler, Herbert (Hackney, S.)Hynd, H. (Accrington)Reid, William (Camlachie)
    Callaghan, L. J.Hynd, J. B. (Attercliffe)Rhodes, H.
    Carmichael, J.Irvine, A. J. (Edge Hill)Robens, Rt. Hon. A.
    Castle, Mrs. B. A.Irving, W. J. (Wood Green)Roberts, Goronwy (Caernarvonshire)
    Champion, A. J.Isaacs, Rt. Hon. G. A.Robertson, J. J. (Berwick)
    Chetwynd, G. R.Janner, B.Robinson, Kenneth (St. Pancras, N.)
    Clunie, J.Jay, D. P. T.Rogers, George (Kensington, N.)
    Cocks, F. S.Jeger, George (Goole)Ross, William (Kilmarnock)
    Coldrick, W.Jeger, Dr. Santo (St. Pancras, S.)Royle, C.
    Collindridge, F.Jenkins, R. H.Shawcross, Rt. Hon. Sir Hartley
    Cook, T. F.Johnson, James (Rugby)Shinwell, Rt. Hon. E.
    Cooper, Geoffrey (Middlesbrough, W.)Johnston, Douglas (Paisley)Shurmer, P. L. E.
    Cooper, John (Deptford)Jones, David (Hartlepool)Silverman, Julius (Erdington)
    Corbet, Mrs. Freda (Peckham)Jones, Jack (Rotherham)Silverman, Sydney (Nelson)
    Cove, W. G.Jones, William Elwyn (Conway)Simmons, C. J.
    Craddock, George (Bradford, S.)Keenan, W.Slater, J.
    Crawley, A.Kenyon, C.Smith, Ellis (Stoke, S.)
    Crosland, C. A. R.Key, Rt. Hon. C. W.Smith, Norman (Nottingham, S.)
    Crossman, R. H. S.King, Dr. H. M.Sorensen, R. W.
    Cullen, Mrs. A.Kinghorn, Sqn. Ldr. E.Soskice, Rt. Hon. Sir Frank
    Daines, P.Lee, Frederick (Newton)Sparks, J. A.
    Dalton, Rt. Hon. H.Lee, Miss. Jennie (Cannock)Sleele, T.
    Darling, George (Hillsborough)Lever, Harold (Cheetham)Stewart, Michael (Fulham, E.)
    Davies, A. Edward (Stoke, N.)Lever, Leslie (Ardwick)Stokes, Rt. Hon. R. R.
    Davies, Harold (Leek)Lewis, Arthur (West Ham, N.)Strachey, Rt. Hon. J.
    de Freitas, GeoffreyLewis, John (Bolton, W.)Strauss, Rt. Hon. George (Vauxhall)
    Deer, G.Lindgren, G. S.Stross, Dr. Barnett
    Dodds, N. N.Lipton, Lt.-Col. M.Summerskill, Rt. Hon. Edith
    Donnelly, D.Longden, Fred (Small Heath)Sylvester, G. O.
    Driberg, T. E. N.McAllister, G.Taylor, Bernard (Mansfield)
    Dugdale, Rt. Hon. John (W. Bromwich)MacColl, J. E.Taylor, Robert (Morpeth)
    Dye, S.McGhee, H. G.Thomas, David (Aberdare)
    Ede, Rt. Hon. J. C.McInnes, J.Thomas, George (Cardiff)
    Edelman, M.Mack, J. D.Thomas, Iorwerth (Rhondda, W.)
    Edwards, John (Brighouse)McKay, John (Wallsend)Thomas, Ivor Owen (Wrekin)
    Edwards, Rt. Hon. Ness (Caerphilly)Mackay, R. W. G. (Reading, N.)Thorneycroft, Harry (Clayton)
    Edwards, W. J. (Stepney)McLeavy, F.Thurtle, Ernest
    Evans, Albert (Islington, S. W.)MacMillan, Malcolm (Western Isles)Timmons, J.
    Evans, Edward (Lowestoft)McNeil, Rt. Hon. H.Tomney, F.
    Evans, Stanley (Wednesbury)MacPherson, Malcolm (Stirling)Turner-Samuels, M.
    Ewart, R.Mallalieu, E. L. (Brigg)Ungoed-Thomas, Sir Lynn
    Fernyhough, E.Mallalieu, J. P. W. (Huddersfield, E.)Vernon, W. F.
    Field, Capt. W. J.Mann, Mrs. JeanViant, S. P.
    Finch, H. J.Manuel, A. C.Wallace, H. W.
    Fletcher, Eric (Islington, E.)Marquand, Rt. Hon. H. A.Watkins, T. E.
    Follick, M.Mathers, Rt. Hon. G.Webb, Rt. Hon. M. (Bradford. C.)
    Foot, M. M.Mellish, R. J.Wells, Percy (Faversham)
    Forman, J. C.Messer, F.Wells, William (Walsall)
    Fraser, Thomas (Hamilton)Middleton, Mrs. L.West, D. G.
    Freeman, John (Watford)Mikardo, IanWheatley, Rt. Hon. J. (Edinb'gh, E.)
    Freeman, Peter (Newport)Mitchison, G. R.White, Mrs. Eirene (E. Flint)
    Gaitskell, Rt. Hon. H. T. N.Moeran, E. W.White, Henry (Derbyshire, N. E.)
    Ganley, Mrs. C. S.Monslow, W.Whiteley, Rt. Hon. W.
    Gibson, C. W.Moody, A. S.Wilcock, Group Capt. C. A. B.
    Gilzean, A.Morgan, Dr. H. B.Wilkins, W. A.
    Glanville, James (Consett)Morley, R.Willey, Frederick (Sunderland)
    Gooch, E. G.Morris, Percy (Swansea, W.)Willey, Octavius (Cleveland)
    Gordon-Walker, Rt. Hon. P. C.Mort, D. L.Williams, David (Neath)
    Greenwood, Anthony (Rossendale)Moyle, A.Williams, Rev. Llywelyn (Abertillary)
    Grenfell, D. R.Mulley, F. W.Williams, Ronald (Wigan)
    Grey, C. F.Murray, J. D.Wilson, Rt. Hon. Harold (Huyton)
    Griffiths, David (Rother Valley)Nally, W.Winterbottom, Ian (Nottingham, C.)
    Griffiths, Rt. Hon. James (Llanefty)Neal, Harold (Bolsover)Winterbottom, Richard (Brightside)
    Griffiths, W. D. (Exchange)Noel-Baker, Rt. Hon. P. J.Wise, F. J.
    Gunter, R. J.O'Brien, T.Woodburn, Rt. Hon. A.
    Hardy, E. A.Oldfield, W. H.Wyatt, W. L.
    Hannan, W.Oliver, G. H.Yates, V. F.
    Hale, Joseph (Rochdale)Orbach, M.Younger, Hon. K.
    Hall, John (Gateshead, W.)Padley, W. E.
    Hall, Rt. Hon. Glenvil (Colne Valley)Paling, Rt. Hon. Wilfred (Dearne V'lly)

    TELLERS FOR THE NOES:

    Hamilton, W. W.Paling, Will T. (Dewsbury)Mr. Popplewell and Mr. Delargy.
    Hannan, W.Pannell, T. C.

    Original Question again proposed, "That the Clause stand part of the Bill."

    If I may bring the Committee back to Clause 23, I should like to raise with the Financial Secretary to the Treasury a technical matter to which he referred. My hon. and learned Friend the Member for Norwich, South (Mr. H. Strauss), in an intervention, pointed out—[Interruption], I hope the Committee will appreciate my co-operation with their desire that the debate should continue. The Financial Secretary will recall that during his speech my hon. and learned Friend put to him the fact that Section 4 of the Post Office Savings Bank Act, 1861, forbids the Postmaster-General and his officers to give information about deposits to anybody outside the Post Office.

    I think the Financial Secretary would agree that the present Bill does not include in the Repeal Schedule any reference to Section 4 of the 1861 Act which therefore, of course, continues in effect. But the Financial Secretary did say that Section 4 of the 1861 Act did not interfere with the duty imposed by this Bill upon the Postmaster-General. I am bound to say that if one considers the actual words of the 1861 Act, it appears that the Financial Secretary's proposition is wholly untenable.

    The Financial Secretary will recall the actual wording of the Section:
    "The officers of the Postmaster General engaged in the receipt or payment of deposits shall not disclose the name of any depositor nor the amount deposited or withdrawn, except to the Postmaster General, or to such of his officers as may be appointed to assist in carrying this Act into operation."
    On the merits of the matter, that has been the law of this country for 90 years, and it has been the policy of successive Parliaments to preserve the security of information as to Post Office deposits.

    On the technicalities of the matter it appears that there is a clear prohibition on the Postmaster-General and his officers from disclosing, for example, to the Inland Revenue, information which comes to them in respect of those deposits. That seems clear and, therefore, if the desire of the Government is to secure that the Post Office should be compelled to furnish this information, it appears that they should have gone further and included in the Bill an express repeal of Section 4 of the Act of 1861. I must say that what the Financial Secretary said does not seem consistent with the words of the statute. Incidentally, I am not at this point saying a word as to whether the Government are right or wrong in what they are attempting to do.

    I hope that the Law Officers, both of whom I am glad to see are present, will be prepared to deal with the point which I have raised because I am sure that hon. Members on both sides of the Committee, whether they think what the Clause tries to do is a good thing or a bad thing—about which I shall say a few words in a moment—will agree that it would be quite wrong to leave the officers of the Post Office in the difficult position of having wholly conflicting and inconsistent duties imposed upon them by two Acts of Parliament, both in force at the same time. It may be that the Attorney-General has an answer, but the answer is certainly not that given by the Financial Secretary. I hope that at some stage in the discussion one of the Law Officers will be good enough to advise the Committee on the position.

    I desire to say a few words on the merits of the matter. As I understood the arguments of the hon. Member for Gloucestershire, South (Mr. Crosland) and the hon. Member for Bristol, South-East (Mr. Wedgwood Benn), they came to this: there is tax evasion; it is stated that this provision will deal with tax evasion; therefore, this is a good provision. That was their reasoning. But, of course, it ignores the two really fundamental considerations—first, whether this provision will be of any use at all in dealing with tax evasion, and second, whether, even if it is any use for that purpose, the price paid in violation of other understandings and other values is or is not too high. The very superficial reasoning which came from two of the most respected of the younger Socialist intellectuals was hardly up to their normal standard, no doubt as a result of the prolonged Sitting which His Majesty's-Government have imposed upon them.

    The best defence of the Clause came not from the Treasury Bench but from the hon. Member for Nelson and Colne (Mr. S. Silverman). But we have not heard from anybody any indication how the Clause will deal with tax evasion at all and, indeed, whether there is any substantial evasion with which it can deal. It seems to me, I confess, quite fantastic to believe that these dangerous manipulators, these super-spivs, are content to place their money in banks at a rate of interest of half of 1 per cent., which they placidly draw as a means of deceiving the Revenue. That conception of the people with whom the Government are seeking to deal seems to have a naive innocence which is very refreshing on a bright June morning, but which has remarkably little relevance to the practical issues.

    I suggest to His Majesty's Government, with all respect, that the people with whom they are seeking to deal—and nobody in any quarter of the Committee wishes to shelter or protect tax evaders—do not manage their affairs in that way. It is doubtful whether in many cases they deal with bank accounts at all, but one thing I should have thought was abundantly clear—that they did not just quietly put their money on deposit with the banks. It seems to me, therefore, that after all the trumpets have blown and all the speeches have been made saying that this is a great and valiant attempt to deal with tax evasion, in fact, as so often with His Majesty's Government, the trumpets have sounded the order of assault on the wrong fortress.

    There is the other point of view on the matter—whether, even if any tax evasion can be prevented in this way, it is worth it at the price. Several hon. Members have pointed out that in a commercial community such as ours the confidential and professional relationship between banker and client is a very valuable thing and that it should surely be the policy of Parliament not lightly to disturb that mutual relationship unless—which seems to me is not the case now—an overwhelming case can be made out on the merits.

    11.15 a.m.

    As I pointed out in referring to the technical point with which I opened, for 90 years it has been the policy of Parliament to protect from scrutiny by anybody outside the Post Office the Post Office deposit accounts which, by one of the subsections, are specifically brought with- in this Clause. That policy was adopted by our predecessors in deference to the principle to which I have tried to refer—that of the confidential relationship.

    When I recall what one hon. Member opposite said about small people not being considered in this matter. I would respectfully remind him that the vast majority of the depositors in the Post Office are small depositors and that they are at least as anxious, I believe, as those who have the good fortune to have larger accounts with the joint stock banks to protect the confidential nature of their holding. I thought the Financial Secretary was going very wide of the mark when he said that no honest taxpayer need mind these facts being disclosed. The overwhelming majority of people in this country are honest people, but the overwhelming majority very much resent having their private affairs forcibly disclosed to public officials, however innocent the conduct of those affairs may be. That, I think, will be the experience of all hon. Members and it seems to me terribly irresponsible and light-hearted for the Government to come forward at this moment to say that, in the name of preventing tax evasion, they have to violate those confidences.

    For those reasons, I think this is a bad Clause—not quite as bad as when we began the discussion, because of the acceptance by the Government of the principle of the Amendment moved by my right hon. Friend, but a bad Clause none the less and one which does some damage to valuable factors in our commercial life. It is a Clause which, I believe, so far as tax evasion is concerned is a sham and which achieves no object or very little object at the cost of considerable sacrifice of things that do matter to a good many people in this country. It seems to me, therefore, that it is a rotten Clause, and I think it should be out of the Bill.

    What the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has done is to underline the two criticisms made by the right hon. Member for Leeds, North (Mr. Peake), who said that the Clause was objectionable in principle and would be utterly futile in practice. If hon. Members opposite object to this Clause but are, nevertheless, anxious to check tax evasion, I respectfully suggest to them an alternative which will achieve the purpose of checking tax evasion without being objectionable in principle—that the cardinal principle of deduction of tax at the source should be applied to bank interests and all other interests now paid without deduction of tax.

    Why was interest on bank deposits and on quite a range of gilt-edged securities exempted from this firm principle which was applied almost everywhere else—the principle of deduction of tax at the source? Because the Inland Revenue desired to avoid having a large number of repayments of tax. Many taxpayers who had deposits in the Post Office Savings Bank, in trustee savings banks, in the joint stock banks, were not liable to pay tax at the time when this principle was first introduced. To avoid repayments a large range of interest from banks and certain Government stocks was allowed to be paid without deduction of tax. But there is no reason at all in principle why tax should not be deducted by the banks, and by the Co-operative societies, in just the same way as tax is deducted by limited companies when paying dividends on shares.

    Is the hon. Gentleman now suggesting that the Co-operative Society should deduct tax from the dividend they pay?

    What I am suggesting is that, if hon. Members opposite are sincere in their protestations of a desire to avoid tax evasion they should support the alternative to this Clause, which would be the deduction at the source when paying interest which is now paid without deduction of tax. I have no doubt that hon. Members opposite would dissent from such a proposition. I do not know why. They have introduced no Amendment to this Clause to strengthen it. If the Clause will be utterly futile in practice, why have the Opposition not brought forward a suggestion for making it effective in practice? It could be done quite simply. If, as the right hon. Member for Leeds, North, says some spiv or tax evader can ingeniously spread a large fortune over a large number of banks and still avoid any disclosure of his money to the Inland Revenue under this Clause, why did not he and his hon. Friend the Member for Kingston-upon-Thames suggest that the limit of £15 interest should be removed from the Clause?

    Does the hon. Gentleman want an answer to that Question? The answer, of course, is that it would have been out of order if they had tried to do so.

    There is not the slightest reason why hon. Members opposite should not have said that it would be their desire to strengthen this Clause, and they could have urged the Government to strengthen the Clause. They have not done so. All they have done is to pour scorn upon it, and yet at the same time avow their anxiety to check tax evasion.

    Since we were speaking on this last there has been a Third Report from the Public Accounts Committee which has underlined yet again the seriousness of the present position regarding tax evasion. We ask hon. Members opposite to show some serious intention to check this evasion and to strengthen the hands of the Government in dealing with it. If this is objectionable in principle, certainly the deduction of tax at the source is not, because it is the cardinal principle of direct taxation. The confidential relationship, if there is any, between shareholders and companies is overcome by the deduction of tax at the source. The confidential relationship between employee and employer is disposed of because the employer is required by law to disclose the earnings of his employees.

    My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) drew attention to the fact that, week by week, employers are disclosing the earnings of their employees as a means of ensuring the security of the revenue. Not only are the earnings being disclosed, but tax is being deducted from those earnings week by week. How can hon. and right hon. Gentlemen opposite expect the workers to go on submitting to the extraction from their pay packets, weekly and monthly, of the tax due to the Revenue, without any option on their part, notwithstanding any domestic difficulties they may have, and notwithstanding any personal inconvenience to which the direct payment of tax may give rise.

    They have no latitude, like taxpayers in business who pay under Schedule D, who are paying in arrear, and who can very frequently take a good slice of grace in addition. They are not in the same favourable position as those who are receiving untaxed interest, who again are paying tax on income in arrears, and have a certain latitude as to payment. P.A.Y.E., which is a principle introduced long since the first declaration of the sanctity of the confidentiality between bank and customer was proclaimed, is now a feature of our Income Tax system, and we must bring up to date, and into line with that principle, other aspects of the taxing machine.

    I suggest that it is not enough for hon. Members opposite merely to criticise this Clause without offering any suggestion as to an alternative way of checking this evasion. Evasion is known to be practised on quite a large scale. One means of detecting evasion or avoidance of tax is to have disclosure of the existence of bank accounts and the amount of interest paid from those accounts where it exceeds the modest sum of £15.

    I remind the Committee that 30 years ago a Royal Commission drew attention to the substantial evasion which was then taking place when taxation was very much lower, and when the number of taxpayers was very much smaller than it is at present. Having regard to the conventional ethics and the relationship between banker and customer of 30 years ago, while not able to recommend that a Clause on these lines should be introduced into a Finance Bill, they did propose that the banks and the Inland Revenue should get together with a view to reaching an agreement whereby the existence of bank accounts would be disclosed by the banks to the Inland Revenue: not the amount of interest paid, but the existence of bank accounts; the names and addresses of those who held deposits in the banks concerned. That would have been an effective measure; more effective than doing nothing, though not perhaps as effective as this, where there will be some indication of the size of the deposit from the amount of interest paid.

    I conclude by saying that, if the debate continues from hon. Members opposite on these lines, if there is nothing but criticisms of the Clause, with no support for the measure now being taken to check evasion, and no alternative to the method now proposed, we much dismiss their protestations on checking evasion as containing a good deal of hypocrisy.

    The hon. Member for Sowerby (Mr. Houghton) speaks with very great knowledge, and the remarks of the hon. Member for Nelson and Colne (Mr. S. Silverman) were in a similar strain. I submit that the charge really is that the savings bank depositors, of whom there are many millions, are dishonest, unreliable and disloyal citizens who are engaged in a large conspiracy of tax evasion. I speak as a trustee of a savings bank, and as one who has had a savings bank account since I was five years old, and I think that that is a slanderous statement to be made by any Member of Parliament.

    The hon. Member for Gloucestershire, South (Mr. Crosland) said that tax evasion had reached a very serious point. I do not know what his information is. Does he know any members of savings banks or thrift societies? Does he suggest that his constituents, that these millions of depositors, people who have got sums of £100, £200, £300, £400 or £500 in the bank, are engaged together in an elaborate method of defrauding the Revenue? That is an insulting and offensive suggestion which these many millions of investors will resent.

    11.30 a.m.

    One hon. Member said he moved about in a limited way and that he saw everywhere persons who spent money on a scale of £6,000 a year and who must certainly be evading taxation. Let me assure that hon. Member, who is young and innocent, that they are not bank depositors. I know I meet very few of them at the Dorchester when I go there occasionally as the guest of wealthy Socialist friends, and I see few of them at the Savoy. There is a widespread fear of this particular Clause and I would not say that if I had not very important evidence.

    In a letter which has reached me from an actuary of a savings bank in Scotland, the writer says that the point I had raised about the effect of Clause 23 in this Bill was causing real mental disturbance. It had been discussed at length at a meeting there and it transpired that a good deal of money was being drawn out simply for that reason—that is, there was a run on the banks. It goes on to say:
    "We had a priest in the bank lately who withdrew a very substantial sum. He was asked in the course of conversation what he proposed to do with it and his reply was 'Spend it'."
    That is the policy which the Chancellor of the Exchequer wants to encourage, apparently. The writer added that he hoped that if the Government were properly approached it might be possible to have the position reconsidered.

    Here is a letter from a bank actuary in Wales. He says:
    "I am very concerned by the heavy demands for withdrawals from bank balances in £1 notes …."
    Hon. Members opposite may laugh, but he is the trusted servant of the country, which is more than can be said for some of those who are laughing. The actuary added that a badly-worded report in the Press gave many depositors the impression that Inland Revenue inspectors were to go through the books in search of tax evasion. The result was that they withdrew their deposits in cash and kept them at home or split them in small amounts elsewhere. That is the opinion of those whom Clause 23 affects. Surely the Government want to take into consideration the millions of persons who place their savings at the disposal of the Government.

    I am not only suggesting they are honest depositors, but I am saying so on the authority of the actuary of a bank in Wales.

    Why are they seeking to withdraw the money if they have no fear of disclosure?

    The actuary went on to say that bank officials had tried to persuade a number of people from taking their money away and he knew of one case where withdrawal had been made when the person concerned was not even liable for Income Tax.

    Order. When I stand up, hon. Members must sit down. If the hon. Member for Edinburgh, South (Sir W. Darling) has not given way, he has the Floor of the Committee.

    I must ask the hon. Member to withdraw that remark. It is most uncalled for.

    I am sorry, Sir. I am accused of being something I am not, and I wanted to do the decent thing and correct the hon. Member for Edinburgh, South (Sir W. Darling). If you have anything against me and I have made an unfair remark against you I willingly withdraw it.

    I am sorry if I gave offence to the hon. Member for Warring-ton (Dr. Morgan) and I apologise for any offence I caused him.

    I shall now return to the important fact, which is the consideration of the feelings of some millions of depositors in trustee savings banks. They are persons of independent character. They have carefully hoarded their pounds, shillings and pence for many years. They have confidential relations with the managers and they do not want their neighbours to know they have saved £10, £20 or £80, and we must respect that confidence. Im there is this evil of tax evasion, then it is the responsibility of the Inland Revenue. We do not put everybody in gaol because there is one criminal. Surely, if there are as many spivs, as suggested by Government supporters, it should be possible to lay some of them by the heels, but every depositor in the savings banks must not be brought into this.

    I suggest sincerely to the Chancellor of the Exchequer, who is a strong supporter of the National Savings Movement and who believes in thrift and savings, that if this is done he will strike at the very foundation of the confidence of millions of depositors. If there are spivs and defrauders of the Revenue, let there be no penalty too heavy to punish them, but do not let us make everyone who has a savings bank deposit in Glasgow, Swansea or Woolwich feel that he is under suspicion of defrauding the Revenue. His Majesty's Government have plenty of enemies without adding another 10 million, and for personal reasons and for national reasons and in the interest of thrift and good government, I beg the Government to withdraw this Clause.

    I do not propose to travel generally over the criticisms that have been made of this Clause or the justification for it in reply to those criticisms. I rise to deal with the specific point of law that was asked of the Financial Secretary by the hon. and learned Member for Norwich, South (Mr. H. Strauss) and by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). The Financial Secretary at my prompting had given the answer, "No" and that is an answer, having considered it more carefully, which I think is right. It is the advice I offer to the Committee. I think there can be very little doubt about it.

    Both the hon. and learned Member for Norwich, South, and the hon. Member for Kingston-upon-Thames referred to Section 4 of the Post Office Savings Bank Act, 1861. If they will look more closely at that Section, they will see that it deals with making disclosure otherwise than to the Postmaster-General. The Clause we are talking about does not place any obligation on the officers of the Postmaster-General. It places an obligation on the Postmaster-General himself. [HON. MEMBERS: "Oh."] Well, that is how the thing stands, dealing with it on a purely legal plane. That is its legal effect, but whether that is the effect the Committee desire is another point. Subsection (4) says that the Act shall apply
    "in relation to the Post Office Savings Bank as if it were a trade or business carried on by the Postmaster General."
    The result of that, read in conjunction with subsection (1), shows that the obligation on the Post Office Savings Bank is an obligation placed upon the Postmaster-General himself. In that sense, when Section 4 of the 1861 Act is looked at more closely, there is no conflict between the two, but I would go further and say that even if there were a conflict it is quite clear that the terms of the latter Bill must be regarded as to that extent superseding the former Act. It was suggested that there should have been a specific repeal of the former Act, but I do not think that is possible, because the former Act remains in force for a great many purposes and it would not be desirable or possible to repeal it; but if to that extent there is a conflict, then the later Act would supersede the original one.

    There is one question which I should like to put arising out of the very clear statement of the right hon. and learned Gentleman. Does it follow from that that the only person entitled, therefore, to convey this information to the Inland Revenue is the Postmaster-General and that that prohibition will lie on all officers of the Post Office other than the Postmaster-General?

    No, the advice that I give is that the Postmaster-General is under an obligation and he can discharge that obligation through any person he authorises, including one of his own officers.

    When I stand up, hon. Members should sit down. We have had two hours' discussion on this Clause, and I think that it is time the Committee came to a decision.

    rose in his place, and claimed to move, "That the Question be now put."

    Question put, "That the Question be now put."

    The Committee divided: Ayes, 267; Noes, 256.

    Division No. 103.]

    AYES

    [11.45 a.m.

    Acland, Sir RichardFreeman, John (Watford)Monslow, W.
    Adams, RichardFreeman, Peter (Newport)Moody, A. S.
    Albu, A. H.Gaitskell, Rt. Hon. H. T. N.Morgan, Dr. H. B.
    Allen, Arthur (Bosworth)Ganley, Mrs. C. S.Morley, R.
    Allen, Scholefield (Crewe)Gibson, C. W.Morris. Percy (Swansea, W.)
    Andersen, Alexander (Motherwell)Gilzean, A.Mort, D. L.
    Anderson, Frank (Whitehaven)Gooch, E. G.Moyle, A.
    Attlee, Rt. Hon. C. R.Gordon-Walker, Rt. Hon. P. C.Mulley, F. W.
    Awbery, S. S.Greenwood, Anthony (Rossendale)Murray, J. D.
    Ayles, W. H.Grenfell, D. R.Nally, W.
    Bacon, Miss. AliceGrey, C. F.Neal, Harold (Bolsover)
    Baird, J.Griffiths, David (Rother Valley)Noel-Baker, Rt. Hon. P. J.
    Balfour, A.Griffiths, Rt. Hon. James (Llanelly)O'Brien, T.
    Barnes, Rt. Hon. A. J.Griffiths, William (Exchange)Oldfield, W. H.
    Bartley, P.Gunter, R. J.Oliver, G. H.
    Bellenger, Rt. Hon. F. J.Hale, Joseph (Rochdale)Orbach, M.
    Benn, WedgwoodHall, John (Gateshead, W.)Padley, W. E.
    Benson, G.Hall, Rt. Hon. Glenvil (Colne Valley)Paling, Rt. Hon. Wilfred (Dearne V'lly)
    Beswick, F.Hamilton, W. W.Paling, Will T. (Dewsbury)
    Bevan, Rt. Hon. A. (Ebbw Vale)Hardy, E. A.Pannell, T. C.
    Bing, G. H. C.Hargreaves, A.Pargiter, G. A.
    Blenkinsop, A.Hayman, F. H.Parker, J.
    Boardman, H.Henderson, Rt. Hon. A. (Rowley Regis)Paton, J.
    Booth, A.Herbison, Miss. M.Pearson, A.
    Bottomley, A. G.Hewitson, Capt. M.Peart, T. F.
    Bowles, F. G. (Nuneaton)Hobson, C. R.Popplewell, E.
    Braddock, Mrs. ElizabethHolman, P.Porter, G.
    Brook, Dryden (Halifax)Holmes, Horace (Hemsworth)Pries, Philips (Gloucestershire, W.)
    Brooks, T. J. (Normanton)Houghton, D.Proctor, W. T.
    Broughton, Dr. A. D. D.Hoy, J.Pryde, D. J.
    Brown, Rt. Hon. George (Belper)Hudson, James (Ealing, N.)Pursey, Cmdr. H.
    Brown, Thomas (Ince)Hughes, Emrys (S. Ayrshire)Rankin, J.
    Burke, W. A.Hughes, Hector (Aberdeen, N.)Rees, Mrs. D.
    Burton, Miss. E.Hynd, H. (Accrington)Reeves, J.
    Butler, Herbert (Hackney, S.)Hynd, J. B. (Attercliffe)Reid, Thomas (Swindon)
    Callaghan, L. J.Irvine, A. J. (Edge Hill)Reid, William (Camlachie)
    Carmichael, J.Irving, W. J. (Wood Green)Rhodes, H.
    Castle, Mrs. B. A.Isaacs, Rt. Hon. G. A.Roberts, Rt. Hon. A.
    Champion, A. J.Janner, B.Roberts, Goronwy (Caernarvonshire)
    Chetwynd, G. R.Jay, D. P. T.Robertson, J. J. (Berwick)
    Clunie, J.Jeger, George (Goole)Robinson, Kenneth (St. Pancras, N.)
    Cocks, F. S.Jeger, Dr. Santo (St. Pancras, S.)Rogers, George (Kensington, N.)
    Coldrick, W.Jenkins, R. H.Ross, William (Kilmarnock)
    Collindridge, F.Johnson, James (Rugby)Royle, C.
    Cook, T. F.Jones, David (Hartlepool)Shawcross, Rt. Hon. Sir Hartley
    Cooper, Geoffrey (Middlesbrough, W.)Jones, Jack (Rotherham)Shinwell, Rt. Hon. E.
    Cooper, John (Deptford)Jones, William Elwyn (Conway)Shurmer, P. L. E.
    Corbel, Mrs. Freda (Peckham)Keenan, W.Silverman, Julius (Erdington)
    Cove, W. G.Kenyon, C.Silverman, Sydney (Nelson)
    Craddock, George (Bradford, S.)Key, Rt. Hon. C. W.Simmons, C. J.
    Crawley, A.King, Dr. H. M.Slater, J.
    Crossman, R. H. S.Kinghorn, Sqn. Ldr. E.Smith, Ellis (Stoke, S.)
    Cullen, Mrs. A.Lee, Frederick (Newton)Smith, Norman (Nottingham, S.)
    Daines, P.Lee, Miss. Jennie (Cannock)Sorensen, R. W.
    Dalton, Rt. Hon. H.Lever, Harold (Cheetham)Soskice, Rt. Hon. Sir Frank
    Darling, George (Hillsborough)Lever, Leslie (Ardwick)Sparks, J. A.
    Davies, A. Edward (Stoke, N.)Lewis, Arthur (West Ham, N.)Steele, T.
    Davies, Harold (Leek)Lewis, John (Bolton, W.)Stewart, Michael (Fulham, E.)
    de Freitas, GeoffreyLindgren, G. S.Stokes, Rt. Hon. R. R.
    Deer, G.Lipton, Lt.-Col. M.Strachey, Rt. Hon. J.
    Delargy, H. J.Longden, Fred (Small Heath)Strauss, Rt. Hon. George (Vauxhall)
    Dodds, N. N.McAllister, G. Stross, Dr. Burnett
    Donnelly, D.MacColl, J. E.Summerskill, Rt. Hon. Edith
    Driberg, T. E. N.McGhee, H. G.Sylvester, G. O.
    Dugdale, Rt. Hon. John(W. Bromwich)McInnes, J.Taylor, Bernard (Mansfield)
    Dye, S.Mack, J. D.Taylor, Robert (Morpeth)
    Ede, Rt. Hon. J. C.McKay, John (Wallsend)Thomas, David (Aberdare)
    Edelman, M.Mackay, R. W. G. (Reading, N.)Thomas, George (Cardiff)
    Edwards, John (Brighouse)McLeavy, F.Thomas, Iorwerth (Rhondda, W.)
    Edwards, Rt. Hon. Ness (Caerphilly)MacMillan, Malcolm (Western Isles)Thomas, Ivor Owen (Wrekin)
    Edwards, W. J. (Stepney)MacPherson, Malcolm (Stirling)Thorneycroft, Harry (Clayton)
    Evans, Albert (Islington, S. W.)Mallalieu, E. L. (Brigg)Thurtle, Ernest
    Evans, Edward (Lowestoft)Mallalieu, J. P. W. (Huddersfield, E.)Timmons, J.
    Evans, Stanley (Wednesbury)Mann, Mrs. JeanTomney, F.
    Ewart, R.Manuel, A. C.Turner-Samuels, M.
    Fernyhough, E.Marquand, Rt. Hon. H. A.Ungoed-Thomas, Sir Lynn
    Field, Capt. W. J.Mathers, Rt. Hon. G.Vernon, W. F.
    Finch, H. J.Mellish, R. J.Viant, S. P.
    Fletcher, Eric (Islington, E.)Messer, F.Wallace, H. W.
    Follick, M.Middleton, Mrs. L.Watkins, T. E.
    Foot, M. M.Mikardo, IanWebb, Rt. Hon. M. (Bradford, C.)
    Forman, J. C.Mitchison, G. R.Wells, Percy (Faversham)

    Wells, William (Walsall)Willey, Octavius (Cleveland)Woodburn, Rt. Hon. A.
    West, D. G.Williams, David (Neath)Wyatt, W. L.
    White, Mrs. Eirene (E. Flint)Williams, Rev. Llywelyn (Abertillery)Yates, V. F.
    White, Henry (Derbyshire, N. E.)Williams, Ronald (Wigan)Younger, Hon. K.
    Whiteley, Rt. Hon. W.Wilson, Rt. Hon. Harold (Huyton)
    Wilcock, Group Capt. C. A. B.Winterbottom, Ian (Nottingham, C.)

    TELLERS FOR THE AYES:

    Wilkins, W. A.Winterbottom, Richard (Brightside)Mr. Hannan and Mr. Bowden.
    Willey, Frederick (Sunderland)Wise, F. J.

    NOES

    Aitken, W. I.Fraser, Sir Ian (Morecambe & Lonsdale)Maclean, Filzroy
    Alport, C. J. M.Fyfe, Rt. Hon. Sir David MaxwellMacLeod, Iain (Enfield, W.)
    Amery, Julian (Preston, N.)Galbraith, Cmdr. T. D. (Pollok)MacLeod, John (Ross and Cromarty)
    Arbuthnot, JohnGarner-Evans, E. H. (Denbigh)Macmillan, Rt. Hon. Harold (Bromley)
    Ashton, H. (Chelmsford)Gates, Maj. E. E.Macpherson, Major Niall (Dumfries)
    Assheton, Rt. Hon. R. (Blackburn, W.)Glyn, Sir RalphMeitland, Comdr. J. W.
    Astor, Hon. M. L.Gomme-Duncan, Col. A.Manningham-Buller, R. E.
    Baker, P. A. D.Gridley, Sir ArnoldMarlowe, A. A. H.
    Baldock, Lt.-Cmdr. J. M.Grimston, Hon. John (St. Albans)Marples, A. E.
    Baldwin, A. E.Grimston, Robert (Westbury)Marshall, Douglas (Bodmin)
    Banks, Col. C.Hare, Hon. J. H. (Woodbridge)Marshall, Sidney (Sutton)
    Baxter, A. B.Harris, Frederic (Croydon, N.)Maude, Angus (Ealing, S.)
    Beamish, Major TuftonHarris, Reader (Heston)Medlicott, Brig. F.
    Bell, R. M.Harvey, Air Cdre. A. V. (Macclesfield)Mellor, Sir John
    Bennett, Dr. Reginald (Gosport)Harvey, Ian (Harrow, E.)Molson, A. H. E.
    Bennett, William (Woodside)Harvie-Watt, Sir G. S.Monckton. Sir Walter
    Bevins, J. R. (Liverpool, Toxteth)Hay, JohnMorrison, John (Salisbury)
    Birch, NigelHead, Brig. A. H.Morrison, Rt. Hon. W. S. (Cirencester)
    Bishop, F. P.Heald, LionelMott-Radclyffe, C. E.
    Black, C. W.Heath, EdwardNabarro, G.
    Boles, Lt.-Col. D. C. (Wells)Henderson, John (Cathcart)Nicholls, Harmar
    Boothby, R.Hicks-Beach, Maj. W. W.Nicholson, G.
    Bossom, A. C.Higgs, J. M. C.Nield, Basil (Chester)
    Bowen, E. R. (Cardigan)Hill, Mrs. E. (Wythenshawe)Noble, Comdr. A. H. P.
    Boyd-Carpenter, J. A.Hill, Dr. Charles (Luton)Nugent, G. R. H.
    Boyle, Sir EdwardHinchingbrooke, ViscountNutting, Anthony
    Bracken, Rt. Hon. B.Hirst, GeoffreyOakshott, H. D.
    Braine, B. R.Holmes, Sir Stanley (Harwich)Odey, G. W.
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Hope, Lord JohnO'Neill, Rt. Hon. Sir Hugh
    Braithwaite, Sir Albert (Harrow, W.)Hopkinson, HenryOrmsby-Gore, Hon. W. D.
    Bromley-Davenport, Lt.-Col. W.Hornsby-Smith, Miss. P.Orr, Capt. L. P. S.
    Brooke, Henry (Hampstead)Horsbrugh, Rt. Hon. FlorenceOrr-Ewing, Charles Ian (Hendon, N.)
    Browne, Jack (Govan)Howard, Gerald (Cambridgeshire)Orr-Ewing, Ian L. (Weston-super-Mare)
    Buchan-Hepburn, P. G. T.Howard, Greville (St. Ives)Peake, Rt. Hon. O.
    Bullus, Wing Commander E. E.Hudson, Sir Austin (Lewisham, N.)Perkins, W. R. D.
    Burden, F. A.Hudson, Rt. Hon. Robert (Southport)Peto, Brig. C. H. M.
    Butcher, H. W.Hudson, W. R. A. (Hull, N.)Pickthorn, K.
    Butler, Rt. Hon. R. A. (Saffron Walden)Hutchinson, Geoffrey (Ilford, N.)Pitman, I. J.
    Carr, Robert (Mitcham)Hutchison, Lt.-Com. Clark (E'b'rgh W.)Powell, J. Enoch
    Carson, Hon. E.Hutchison, Colonel James (Glasgow)Price, Henry (Lewisham, W.)
    Channon, H.Jennings, R.Prior-Palmer, Brig. O.
    Churchill, Rt. Hon. W. S.Johnson, Howard (Kemptown)Profumo, J. D.
    Clarke, Col. Ralph (East Grinstead)Jones, A. (Hall Green)Raikes, H. V.
    Clarke, Brig. Terence (Portsmouth, W.)Joynson-Hicks, Hon. L. W.Rayner, Brig. R.
    Colegate, A.Kaberry, D.Redmayne, M.
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Kerr, H. W. (Cambridge)Remnant, Hon. P.
    Cooper-Key, E. M.Kingsmill, Lt.-Col. W. H.Roberts, Major Peter (Heeley)
    Corbett, Lt.-Col. Uvedale (Ludlow)Lambert, Hon. G.Robertson, Sir David (Caithness)
    Craddock, Beresford (Spelthorne)Lancaster, Col. C. G.Robinson, Roland (Blackpool, S.)
    Cranborne, ViscountLangford-Holt, J.Robson-Brown, W.
    Crookshank, Capt. Rt. Hon. H. F. C.Law, Rt. Hon. R. K.Rodgers, John (Sevenoaks)
    Crosthwaite-Eyre, Col. O. E.Leather, E. H. C.Roper, Sir Harold
    Crouch, R. F.Legge-Bourke, Maj. E. A. H.Ropner, Col. L.
    Crowder, Capt. John (Finchley)Lennox-Boyd, A. T.Russell, R. S.
    Cundiff, F. W.Lindsay, MartinRyder, Capt. R. E. D.
    Cuthbert, W. N.Linstead, H. N.Salter, Rt. Hon. Sir Arthur
    Darling, Sir William (Edinburgh, S.)Llewellyn, D.Scott, Donald
    Davidson, ViscountessLloyd, Rt. Hn. Geoffrey (King's Norton)Shepherd, William
    Davies, Nigel (Epping)Lloyd, Maj. Guy (Renfrew, E.)Smithers, Peter (Winchester)
    de Chair, SomersetLloyd, Selwyn (Wirral)Smyth, Brig. J. G. (Norwood)
    Deedes, W. F.Lockwood, Lt.-Col. J. C.Snadden, W. McN.
    Digby, S. W.Longden, Gilbert (Herts, S. W.)Soames, Capt. C.
    Dodds-Parker, A. D.Low, A. R. W.Spearman, A. C. M.
    Donner, P. W.Lucas, Sir Jocelyn (Portsmouth S.)Spence, H. R. (Aberdeenshire, W.)
    Douglas-Hamilton, Lord MalcolmLucas, P. B. (Brentford)Spens, Sir Patrick (Kensington, S.)
    Drayson, G. B.Lucas-Tooth, Sir HughStanley, Capt. Hon. Richard (N. Fylde)
    Dugdale, Maj. Sir Thomas (Richmond)Lyttelton, Rt. Hon. O.Stevens, G. P.
    Duncan, Capt. J. A. L.McAdden, S. J.Steward, W. A. (Woolwich, W.)
    Dunglass, LordMcCorquodale, Rt. Hon. M. S.Stewart, Henderson (Fife, E.)
    Eccles, D. M.Macdonald, Sir Peter (I. of Wight)Stoddart-Scott, Col. M.
    Erroll, F. J.Mackeson, Brig. H. R.Storey, S.
    Fisher, NigelMcKibbin, A.Strauss, Henry (Norwich, S.)
    Fort, R.McKie, J. H. (Galloway)Studholme, H. G.
    Fraser, Hon. Hugh (Stone)Maclay, Hon. JohnSummers, G. S.

    Sutcliffe, H.Turner, H. F. L.Webbe, Sir Harold
    Taylor, Charles (Eastbourne)Tweedsmuir, LadyWhite, Baker (Canterbury)
    Taylor, William (Bradford, N.)Vane, W. M. F.Williams, Charles (Torquay)
    Teeling, W.Vaughan-Morgan, J. K.Williams, Gerald (Tonbridge)
    Teevan, T. L.Vosper, D. F.Williams, Sir Herbert (Croydon, E.)
    Thomas, J. P. L. (Hereford)Wakefield, Edward (Derbyshire, W.)Wills, G.
    Thompson, Kenneth Pugh (Walton)Wakefield, Sir Wavell (Marylebone)Wilson, Geoffrey (Truro)
    Thompson, Lt.-Cmdr. R. (Croydon, W.)Walker-Smith, D. C.Winterton, Rt. Hon. Earl
    Thorneycroft, Peter (Monmouth)Ward, Hon. George (Worcester)Wood, Hon. R.
    Thornton-Kemsley, Col. C. N.Ward, Miss. I. (Tynemouth)York, C.
    Thorp, Brig. R. A. F.Waterhouse, Capt. Rt. Hon. C.

    TELLERS FOR THE NOES:

    Tilney, JohnWatkinson, H.Major Conant and
    Mr. T. G. D. Galbraith

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

    Division No. 104.]

    AYES

    [11.55 a.m.

    Acland, Sir RichardDye, S.Keenan, W.
    Adams, RichardEde, Rt. Hon. J. C.Kenyon, C.
    Albu, A. H.Edelman, M.Key, Rt. Hon. C. W.
    Allen, Arthur (Bosworth)Edwards, John (Brighouse)King, Dr. H. M.
    Allen, Scholefield (Crewe)Edwards, Rt. Hon. Ness (Caerphilly)Kinghorn, Sqn. Ldr. E.
    Anderson, Alexander (Motherwell)Edwards, W. J. (Stepney)Lee, Frederick (Newton)
    Anderson, Frank (Whitehaven)Evans, Albert (Islington, S. W.)Lee, Miss. Jennie (Cannock)
    Attlee, Rt. Hon. C. R.Evans, Edward (Lowestoft)Lever, Harold (Cheetham)
    Awbery, S. S.Evans, Stanley (Wednesbury)Lever, Leslie (Ardwick)
    Ayles, W. H.Ewart, R.Lewis, Arthur (West Ham, N.)
    Bacon, Miss. AliceFernyhough, E.Lewis, John (Bolton, W.)
    Baird, J.Field, Capt. W. S.Lindgren, G. S.
    Balfour, A.Finch, H. J.Lipton, Lt.-Col. M.
    Barnes, Rt. Hon. A. J.Fletcher, Erie (Islington, E.)Longden, Fred (Small Heath)
    Bartley, P.Follick, M.McAllister, G.
    Bellenger, Rt. Hon. F. J.Foot, M. M.MacColl, J. E.
    Benn, WedgwoodForman, J. C.McGhee, H. G.
    Benson, G.Freeman, John (Watford)McInnes, J.
    Beswick, F.Freeman, Peter (Newport)Mack, J. D.
    Bevan, Rt. Hon. A. (Ebbw vale)Gaitskell, Rt. Hon. H. T. N.McKay, John (Wallsend)
    Bing, G. H. C.Ganley, Mrs. C. S.Mackay, R. W. G. (Reading, N.)
    Blenkinsop, A.Gibson, C. W.McLeavy, F.
    Boardman, H.MacMillan, Malcolm (Western Isles)
    Booth, A.Gilzean, A.MacPherson, Malcolm (Stirling)
    Bottomley, A. G.Gooch, E. G.Mallalieu, E. L. (Brigg)
    Bowles, F. G. (Nuneaton)Gordon-Walker, Rt. Hon. P. C.Mallalieu, J. P. W. (Hudderfield, E.)
    Braddock, Mrs. ElizabethGreenwood, Anthony (Rossendale)Mann, Mrs. Jean
    Brook, Dryden (Halifax)Grenfell, D. R.Manuel, A. C.
    Brooks, T. J. (Normanton)Grey, C. F.Marquand, Rt. Hon. H. A.
    Broughton, Dr. A. D. D.Griffiths, David (Rother Valley)Mathers, Rt. Hon. G.
    Brown, Rt. Hon. George (Belper)Griffiths, Rt. Hon. James (Llanelly)Mellish, R. J.
    Brown, Thomas (Ince)Griffiths, William (Exchange)Messer, F.
    Burke, W. A.Gunter, R. J.Middleton, Mrs. L.
    Burton, Miss. E.Hale, Joseph (Rochdale)Mikardo, Ian
    Butler, Herbert (Hackney, S.)Hall, John (Gateshead, W.)Mitchison, G. R.
    Callaghan, L. J.Hall, Rt. Hon. Glenvil (Colne Valley)Moeran, E. W.
    Carmichael, J.Hamilton, W. W.Monslow, W.
    Castle, Mrs. B. A.Hardy, E. A.Moody, A. S.
    Champion, A. J.Hargreaves, A.Morgan, Dr. H. B.
    Chetwynd, G. R.Hayman, F. H.Morley, R.
    Clunie, J.Henderson, Rt. Hon. A. (Rowley Regis)Morris, Percy (Swansea, W.)
    Cocks, F. S.Herbison, Miss. M.Mort, D. L.
    Coldrick, W.Hewitson, Capt. M.Moyle, A.
    Collindridge, F.Hobson, C. R.Mulley, F. W.
    Cook, T. F.Holman, P.Murray, J. D.
    Cooper, Geoffrey (Middlesbrough, W.)Holmes, Horace (Hemsworth)Nally, W.
    Cooper, John (Deptford)Houghton, D.Neal, Harold (Bolsover)
    Corbet, Mrs. Freda (Peckham)Hoy, J.Noel-Baker, Rt. Hon. P. J.
    Cove, W. G.Hudson, James (Ealing, N.)O'Brien, T.
    Craddock, George (Bradford, S.)Hughes, Emrys (S. Ayrshire)Oldfield, W. H.
    Crawley, A.Hughes, Hector (Aberdeen, N.)Oliver, G. H.
    Crossman, R. H. S.Hynd, H. (Accrington)Orbach, M.
    Cullen, Mrs. A.Hynd, J. B. (Attercliffe)Padley, W. E.
    Daines, P.Irvine, A. J. (Edge Hill)Paling, Rt. Hon. Wilfred (Deame V'lly)
    Dalton, Rt. Hon. H.Irving, W. J. (Wood Green)Paling, Will T. (Dewsbury)
    Darling, George (Hillsborough)Isaacs, Rt. Hon. G. A.Pannell, T. C.
    Davies, A. Edward (Stoke, N.)Janner, B.Pargiter, G. A.
    Davies, Harold (Leek)Jay, D. P. T.Parker, J.
    de Freitas, GeoffreyJeger, George (Goole)Paton, J.
    Deer, G.Jeger, Dr. Santo (St. Pancras, S.)Pearson, A.
    Delargy, H. J.Jenkins, R. H.Pearl, T. F.
    Dodds, N. N.Johnson, James (Rugby)Popplewell, E.
    Donnelly, D.Jones, David (Hartlepool)Porter, G.
    Driberg, T. E. N.Jones, Jack (Rotherham)Price, Philips (Gloucestershire, W.)
    Dugdale, Rt. Hon. John (W. Bromwich)Jones, William Elwyn (Conway)Proctor, W. T.

    The Committee divided: Ayes, 267; Noes, 257.

    Pryde, D. J.Sparks, J. A.Webb, Rt. Hon. M. (Bradford, C.)
    Pursey, Cmdr. H.Steele, T.Wells, Percy (Faversham)
    Rankin, J.Stewart, Michael (Fulham, E.)Wells, William (Walsall)
    Rees, Mrs. D.Stokes, Rt. Hon. R. R.West, D. G.
    Reeves, J.Strachey, Rt. Hon. J.White, Mrs. Eirene (E. Flint)
    Reid, Thomas (Swindon)Strauss, Rt. Hon. George (Vauxhall)White, Henry (Derbyshire, N. E.)
    Reid, William (Camlachie)Stross, Dr. BarnettWhiteley, Rt. Hon. W.
    Rhodes, H.Summerskill, Rt. Hon. EdithWilcock, Group Capt. C. A. B.
    Robens, Rt. Hon. A.Sylvester, G. O.Wilkins, W. A.
    Roberts, Goronwy (Caernarvonshire)Taylor, Bernard (Mansfield)Willey, Frederick (Sunderland)
    Robertson, J. J. (Berwick)Taylor, Robert (Morpeth)Willey, Octavius (Cleveland)
    Robinson, Kenneth (St. Pancras, N.)Thomas, David (Aberdare)Williams, David (Neath)
    Rogers, George (Kensington, N.)Thomas, George (Cardiff)Williams, Rev. Llywelyn (Abertillery)
    Ross, William (Kilmarnock)Thomas, Iorwerth (Rhondda, W.)Williams, Ronald (Wigan)
    Royle, C.Thomas, Ivor Owen (Wrekin)Wilson, Rt. Hon. Harold (Huyton)
    Shawcross, Rt. Hon. Sir HartleyThorneycroft, Harry (Clayton)Winterbottom, Ian (Nottingham, C.)
    Shinwell, Rt. Hon. E.Thurtle, ErnestWinterbottom, Richard (Brightside)
    Shurmer, P. L. E.Wise, F. J.
    Silverman, Julius (Erdington)Timmons, J.Woodburn, Rt. Hon. A.
    Silverman, Sydney (Nelson)Tomney, F.Wyatt, W. L.
    Simmons, C. J.Turner-Samuels, M.Yates, V. F.
    Slater, J.Ungoed-Thomas, Sir LynnYounger, Hon. K.
    Smith, Ellis (Stoke, S.)Vernon, W. F.
    Smith, Norman (Nottingham, S.)Viant, S. P.

    TELLERS FOR THE AYES:

    Sorensen, R. W.Wallace, H. W.Mr. Bowden and Mr. Hannan.
    Soskice, Rt. Hon. Sir FrankWatkins, T. E.

    NOES

    Aitken, W. T.Darling, Sir William (Edinburgh. S.)Hutchison, Lt.-Com. Clark (E'b'rgh W.)
    Alport, C. J. M.Davidson, ViscountessHutchison, Colonel James (Glasgow)
    Amery, Julian (Preston, N.)Davies, Nel (Epping)Jennings, R.
    Arbuthnot, Johnde Chair, SomersetJohnson, Howard (Kemptown)
    Ashton, H. (Chelmsford)Deedes, W. F.Jones, A. (Hall Green)
    Assheton, Rt. Hon. R. (Blackburn, W.)Dodds-Parker, A. D.Joynson-Hicks, Hon. L. W.
    Astor, Hon. M. L.Donner, P. W.Kaberry, D.
    Baker, P. A. D.Douglas-Hamilton, Lord MalcolmKerr, H. W. (Cambridge)
    Baldock, Lt.-Cmdr. J. M.Drayson, G. B.Kingsmill, Lt.-Col. W. H.
    Baldwin, A. E.Dugdale, Maj. Sir Thomas (Richmond)Lambert, Hon. G.
    Banks, Col. C.Duncan, Capt. J. A. L.Lancaster, Col. C. G.
    Baxter, A. B.Dunglass, LordLangford-Holt, J.
    Beamish, Major TuftonEccles, D. M.Law, Rt. Hon. R. K.
    Bell, R. M.Erroll, F. J.Leather, E. H. C.
    Bennett, Dr. Reginald (Gosport)Fisher, NigelLegge-Bourke, Maj. E. A. H.
    Bennett, William (Woodside)Fort, R.Lennox-Boyd, A. T.
    Bevins, J. R. (Liverpool, Toxteth)Fraser, Hon. Hugh (Stone)Lindsay, Martin
    Birch, NigelFraser, Sir Ian (Morecambe & Lonsdale)Linstead, H. N.
    Bishop, F. P.Fyfe, Rt. Hon. Sir David MaxwellLlewellyn, D.
    Black, C. W.Galbraith, Cmdt. T. D. (Pollok)Lloyd, Rt. Hn. Geoffrey (King's Norton)
    Boles, Lt.-Col. D. C. (Wells)Galbraith, T. G. D. (Hillhead)Lloyd, Maj. Guy (Renfrew, E.)
    Boothby, R.Garner-Evans, E. H. (Denbigh)Lloyd, Selwyn (Wirral)
    Bossom, A. C.Gates, Maj. E. E.Lockwood, Lt.-Col. J. C.
    Bowen, E. R. (Cardigan)Glyn, Sir RalphLongden, Gilbert (Herts, S. W.)
    Boyd-Carpenter, J. A.Gomme-Duncan, Col. A.Low, A. R. W.
    Boyle, Sir EdwardGridley, Sir ArnoldLucas, Sir Jocelyn (Portsmouth, S.)
    Bracken, Rt. Hon. B.Grimston, Hon. John (St. Albans)Lucas, P. B. (Brentford)
    Braine, B. R.Grimston, Robert (Wastbury)Lucas-Tooth, Sir Hugh
    Braithwaite, Sir Albert (Harrow, W.)Hare, Hon. J. H. (Woodbridge)Lyttelton, Rt. Hon. O.
    Braithwaite, Lt.-Cr. G. (Bristol, N. W.)Harris, Frederic (Croydon, N.)McAdden, S. J.
    Bromley-Davenport, Lt.-Col. W.Harris, Reader (Heston)McCorquodale, Rt. Hon. M. S.
    Brooke, Henry (Hampstead)Harvey, Air Cdre. A. V. (Macclesfield)Macdonald, Sir Peter (I. of Wight)
    Browne, Jack (Govan)Harvey, Ian (Harrow, E.)Mackeson, Brig. H. R.
    Buchan-Hepburn, P. G. T.Harvie-Watt, Sir G. S.McKibbin, A.
    Bullock, Capt. M.Hay, JohnMcKie, J. H. (Galloway)
    Burden, F. A.Head, Brig. A. H.Maclay, Hon. John
    Butcher, H. W.Heald, LionelMaclean, Fitzroy
    Butler, Rt. Hon. R. A. (Saffron Warden)Heath, EdwardMacLeod, Iain (Enfield, W.)
    Carr, Robert (Mitcham)Henderson, John (Cathcart)MacLeod, John (Ross and Cromarty)
    Carson, Hon. E.Hicks-Beach, Maj. W. W.Macmillan, Rt. Hon. Harold (Bromley)
    Channon, H.Higgs, J. M. C.Macpherson, Major Niall (Durnfriss)
    Churchill, Rt. Hon. W. S.Hill, Mrs. E. (Wythenshawe)Maitland, Comdr. J. W.
    Clarke, Col. Ralph (East Grinstead)Hill, Dr. Charles (Luton)Manningham-Buller, R. E.
    Clarke, Brig. Terence (Portsmouth, W.)Hinchingbrooke, ViscountMarlowe, A. A. H.
    Colegate, A.Hirst, GeoffreyMarples, A. E.
    Cooper, Sqn. Ldr. Albert (Ilford, S.)Holmes, Sir Stanley (Harwich)Marshall, Douglas (Bodmin)
    Cooper-Key, E. M.Hope, Lord JohnMarshall, Sidney (Sutton)
    Corbett, Lt.-Col. Uvedale (Ludlow)Hopkinson, HenryMaude, Angus (Ealing, S.)
    Craddock, Beresford (Spelthorne)Hornsby-Smith, Miss. P.Medlicott, Brig. F.
    Cranborne, ViscountHorsbrugh, Rt. Hon. FlorenceMellor, Sir John
    Crookshank, Capt. Rt. Hon. H. F. C.Howard, Gerald (Cambridgeshire)Molson, A. H. E.
    Crosthwaite-Eyre, Col. O. E.Howard, Greville (St. Ives)Monckton, Sir Waiter
    Crouch, R. F.Hudson, Sir Austin (Lewisham, N.)Morrison, John (Salisbury)
    Crowder, Capt. John (Finchley)Hudson, Rt. Hon. Robert (Southport)Morrison, Rt. Hon. W. S. (Cirencester)
    Cundiff, F. W.Hudson, W. R. A. (Hull, N.)Mott-Redclyffe, C. E.
    Cuthbert, W. N.Hutchinson, Geoffrey (Ilford, N.)Nabarro, G.

    Nicholls, HarmarRoper, Sir HaroldThorneycroft, Peter (Monmouth)
    Nicholson, G.Ropner, Col. L.Thornton-Kemsley, Col. C. N.
    Nield, Basil (Chester)Russell, R. S.Thorp, Brigadier R. A. F.
    Noble, Comdr. A. H. P.Ryder, Capt. R. E. D.Tilney, John
    Nugent, G. R. H.Salter, Rt. Hon. Sir ArthurTurner, H. F. L.
    Nutting, AnthonyScott, DonaldTweedsmuir, Lady
    Oakshott, H. D.Shepherd, WilliamVane, W. M. F.
    Odey, G. W.Smithers, Peter (Winchester)Vaughan-Morgan, J. K.
    O'Neill, Rt. Hen. Sir. HughSmyth, Brig. J. G. (Norwood)Vosper, D. F.
    Ormsby-Gore, Hon. W. D.Snadden, W. McN.Wakefield, Edward (Derbyshire, W.)
    Orr, Capt. L. P. S.Soames, Capt. C.Wakefield, Sir Wavell (Marylebone)
    Orr-Ewing, Charles Ian (Hendon, N.)Spearman, A. C. M.Walker-Smith, D. C.
    Orr-Ewing, Ian L. (Weston-super-Mare)Spence, H. R. (Aberdeenshire, W.)Ward, Hon. George (Worcester)
    Peake, Rt. Hon. O.Spens, Sir Patrick (Kensington, S.)Ward, Miss. I. (Tynemouth)
    Perkins, W. R. D.Stanley, Capt. Hon. Richard (N. Fylde)Waterhouse, Capt. Rt. Hon. C.
    Peto, Brig. C. H. M.Stevens, G. P.Watkinson, H.
    Pickthorn, K.Steward, W. A. (Woolwich, W.)Webbe, Sir Harold
    Pitman, I. J.Stewart, Henderson (Fife, E.)Wheatley, Major M. J. (Poole)
    Powell, J. EnochStoddart-Scott, Col. M.White, Baker (Canterbury)
    Price, Henry (Lewisham, W.)Storey, S.Williams, Charles (Torquay)
    Prior-Palmer, Brig. O.)Strauss, Henry (Norwich, S.)Williams, Gerald (Tonbridge)
    Profumo, J. D.Studholme, H. G.Williams, Sir Herbert (Croydon, E.)
    Raikes, H. V.Summers, G. S.Wills, G.
    Rayner, Brig. R.Sutcliffe, H.Wilson, Geoffrey (Truro)
    Redmayne, M.Taylor, Charles (Eastbourne)Winterton, Rt. Hon. Earl
    Remnant, Hon. P.Taylor, William (Bradford, N.)Wood, Hon. R.
    Roberts, Major Peter (Heeley)Teeling, W.York, C.
    Robertson, Sir David (Caithness)Teevan, T. L.
    Robinson, Roland (Blackpool, S.)Thomas, J. P. L. (Hereford)

    TELLERS FOR THE NOES:

    Robson-Brown, W.Thompson, Kenneth Pugh (Walton)Major Conant and Mr. Digby.
    Rodgers, John (Sevenoaks)Thompson, R. H. M. (Croydon, W.)

    To report Progress; and ask leave to sit again.—[ Mr. Wilkins.]

    Committee report Progress; to sit again upon Monday next.

    House at its rising this day to adjourn till Monday next.—[ Mr. Wilkins.]

    Nigeria (Development Plan)

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

    12.6 p.m.

    Upon this unique occasion I wish to confer a valedictory benediction upon the departing and to thank those who stay for their stamina at the end of this long sitting.

    The words that I utter will go far beyond the bounds of this Chamber, and there will be a large audience to hear the words of the Minister in reply. Over 20,000 Nigerians will perhaps read the words of the Minister when he answers my speech, which is concerned with the 10-year development plan in Nigeria.

    The general policy of development in Nigeria was set out in 1945. In the following year this was approved by the Legislative Council. It was a comprehensive plan, and my object in speaking this morning is to ask if this plan has been implemented and if all the schemes are being co-ordinated—the Colonial Development Corporation scheme, the regional development board schemes and the community village schemes that have been set up with the surplus funds of the marketing boards of various commodities like cocoa and palm oil.

    Nigeria has a large and diverse territory with a population of something like 28 million. One would have expected to find in the last five years some divergencies in the original plan and perhaps some additions in the light of experience. The original estimate was some £55 million of which £23 million was to be found by the Colonial Development Welfare Fund, £17 million by loans and £15 million by means of taxes on the internal economy of Nigeria.

    There were the initial difficulties of the scarcity of materials and technicians and the scarcity of money. Over £13 million had been spent by 1950. Little has been heard about the plan lately, and I ask the Minister how it is getting on. What is happening in Nigeria at the moment? We have had by good fortune, in the last 24 hours, the issue of the Colonial Territories 1950–51 Report. There we find that the cost of the original estimates has gone up to something like £90 million. In the next five years we are to spend only some £34 million, but in a world of constant flux and continuous inflation we are somewhat philosophic when we look at the original figures and find out what is happening today.

    I accept the figure of £34 million, and I accept the modifications in the light of world economic conditions, but I ask what are these modifications at the moment. While I am asking that question, I want to say that I am glad that there has been public discussion and criticism by the Nigerian people. The various committees have a democratic composition and the Nigerians have been in on the ground floor and put forward their ideas and suggestions. Nigerians are like Yorkshiremen or Scotsmen. They have local patriotism, and many of them have put up their own local schemes. I hope that the co-ordinator-in-chief of the development for the whole of the Colony has paid attention to these schemes and bound them together.

    In the Northern, Eastern and Western Provinces there are three regional development boards. They are often termed loans boards because they are financed by the surplus funds of the marketing boards for cocoa, palm oil, and so on. Can we take it that there is coordination of all these development plans? I hope the Minister will tell us how this has been carried out.

    On top of this we have the Colonial Development Corporation which has, among many other schemes, the famous Mokwa farm. I hope that this scheme has not a special pull and is not getting loans and other facilities while more backward areas in the East on the Cameroons side are being starved. There are also the village development or community schemes in connection with which full-time development teams tour various parts of the Colony. With the help of local volunteers, they are doing such jobs as putting up well tops and building market stalls. I understand that the local voluntary schemes are receiving up to 50 per cent. of their cost. Is that happening, and what schemes have been carried out? In Sokoto Province in the North there are excellent developments. What is happening elsewhere? What are the development boards doing in the various regions?

    I should particularly like to know what is happening in regard to secondary industries. Nigeria and the Gold Coast, export palm oil and cocoa to the homeland and are piling up surpluses of £50,000 or £60,000 or more. At the moment we cannot supply those territories with the consumer goods which they require and I earnestly plead that we make efforts to build, for example, cotton mills so that textile development may take place at Kano and other large towns in the interior. There is scope in the country for industries making bicycles, boots and shoes and clothing of all kinds. What is happening in that direction?

    Just over the border but within the orbit of Nigeria lies the Cameroons, where we have a development corporation. The United Nations Organisation sent a mission there some while ago, and when I read its Report I was not too happy. It said that there was:
    "… uncertainty of getting capital or loan money in the immediate future."
    I do not believe that they have sufficient money to go on with and I should like to know what finances are being obtained, whether the work has been held up or not, and also whether the local population are being brought in, because the United Nations Report said that the native people were not associated with the schemes as they ought to be.

    There is also the Bamenda Cross Calabar Scheme. I should like to know the facts about it. Are the settlers doing a good job? I am told that they are not doing as much as we had hoped. Certainly not as much is being done as there is in connection with the scheme at Mokwa. Are things moving? Has the road been completed? A few families were settled there to form a pilot scheme. It is important that projects like the Mokwa and Bamenda Cross Calabar Schemes should do well because they can be an inspiration to the Niger Valley just as the Gezira scheme was an inspiration to the people of the Nile Valley.

    Allied to all this is the subject of technical education. I would emphasise the value of technical education in the light of the need for secondary industries in those territories. The point of my speech is to inquire if the economic development is being carefully planned and if there is co-ordination between the various schemes. Or is it in snippets and bits and pieces here and there? If the latter is the case and there is no overall development, we might as well spend the money on public works for the provision of roads and bridges in order to open up the country.

    At the moment the achievements appear to me to be somewhat meagre. I emphasise that it is not merely a matter of economic development. These are tremendous social experiments. They are organisms. If we can succeed with this development, we shall have done a tremendous amount to give the people faith in themselves. The 10-year plan was a fine conception. Some of us feel that if we do not go on with what we hoped to do, there will be disappointment and disillusionment among the people of Nigeria. That would be bad. We must give the people faith in their own future economic development; we have also to make the concerns go so that we can attract European technicians there, and, even more important, we must have a firm economic foundation for future political and constitutional advance. We expect Nigeria to follow in the path of the Gold Coast, and we shall be handing over a pretty poor bag of assets to a politically emancipated territory if we do not provide the people with an economic basis upon which to build their political independence.

    Economic development means jobs for the people there. If we give the people jobs, we can then start talking about giving them their independence. The Nigerians will soon come to their heritage, perhaps quicker than some people expect; we have seen the tempo in the case of the Gold Coast. If we are giving these people political emancipation, let us hand over to them a good bag of assets.

    12.18 p.m.

    Because of my memories of my recent visit to the Gold Coast, I should like to support what my hon. Friend the Member for Rugby (Mr. J. Johnson) has said. When we consider the 10-year plans for Nigeria and the Gold Coast, it is apparent that, once the political setup has been arranged and everybody is willing to work it, the economic difficulties constitute the first task to be tackled.

    Representatives are coming here from the Gold Coast to try to get capital equipment and technicians in order to put the country on an even keel. Nigerian re- presentatives will probably be coming here in the near future for the same purpose. We shall probably see in Nigeria much the same evolution as there has been in the Gold Coast. The country will settle down to some political stability and want to spend the surpluses from its marketing boards on technicians and capital equipment. We have learnt something from the Gold Coast and we shall be ready to tackle the development in Nigeria. We learn just as much as do the Africans as we follow their development. We should make these events well understood here and, if necessary do all we can to help the people with their development.

    12.20 p.m.

    I intend to intervene in the debate for a very brief period to put one case to which my hon. Friend the Member for Rugby (Mr. J. Johnson) referred, and that is in regard to the Cameroons Development Corporation. I had the opportunity to visit this Corporation when I went to the Cameroons last year. The Cameroons Development Corporation took over from the Custodian of Enemy Property banana and rubber plantations which had been run by German planters in the years between the wars. When the Custodian took over, quite capable men were enlisted to ensure that the banana plantations did not become derelict and neglected during the war. They did an extremely fine job, I understand, during the period when they were responsible.

    After the war, the Cameroons Development Corporation was formed, and Lord Milverton, the Governor of Nigeria, appointed a civil servant from the Nigerian Colonial Secretariat, to become chairman. It seems, according to the evidence that has been handed to me, that from that moment the Corporation became an unhappy organisation. Claims are made by the staff, rightly or wrongly, that it has gradually fallen into a state of inefficiency because of the discontent that has become prevalent. I sent information to my right hon. Friend the Secretary of State for the Colonies in November last year. He rightly said that the Governor was responsible.

    I do so hope that that will not be used as an excuse for not looking into this situation. I hope that the strongest possible representations will be made to the Governor to ensure that the complaints are fairly, honestly and earnestly looked at, because I believe that if they are not, only trouble will ensue. In fact, to some extent it has already occurred.

    I will mention only two instances. One is the native strike which occurred some 12 to 18 mouths ago because there was obstruction from the chairman to a number of native shops being opened where the workers could buy more cheaply than at the inflated prices elsewhere. Secondly, the banana ships are returning to this country only 70 per cent. full. Bananas are available from native plantations and the Corporation is not buying from them as did the Germans.

    I raise these points in order to ask my right hon. Friend the Minister of State if he will persuade his right hon. Friend to ensure that this matter is thoroughly looked into. The Chairman of the Corporation will be returning to this country in a few weeks' time, and that will give an excellent opportunity for this matter to be thoroughly investigated.

    12.23 p.m.

    Like other hon. Members I welcome this opportunity to have a discussion, at this very late—or early—hour. I hope that the people of Nigeria will realise that this Parliament, even under the extraordinary conditions which we have had during the past 24 hours, can still take the interest that it is right and proper that we should take in Nigerian affairs.

    The main questions raised by my hon. Friend the Member for Rugby (Mr. J. Johnson) were: Is there real co-ordination? Is the development plan just a hotchpotch of all sorts of bits and pieces, or is it something that is definitely planned? I can assure my hon. Friend that it is very carefully planned. There is a large document, which I did not bring with me here because it is rather complicated, which has been gone into not only in the Colonial Office, but by the Colonial Economic and Development Council, which includes Members from all sides of the House. That Council and the Colonial Office have gone very carefully into this plan. We are satisfied that the plan was carefully drawn up and that it is a real plan and not just a collection of bits and pieces.

    The revised plan was, in fact, drawn up in 1949. It had to be revised owing to rising costs and the shortage of materials and labour, which Nigeria has experienced along with other countries. As a result of this revision I think it can be said that rather more emphasis is now being placed upon productive services rather than on social services, but 20 per cent. is still allocated to social services. Each region has made its own plan, and the plans have been co-ordinated by the Central Nigerian Government, who have added certain schemes of their own of a more central nature than those which have been thought of by the regions. So far, £20 million has been spent and there remains just over £34 million to spend before the end of 1956, when the plan comes to an end.

    Community development was mentioned by my hon. Friend the Member for Rugby. This plays a very important and an increasingly important part in the life of Nigeria today, and I would like to give one example of the kind of work that goes on. "Community development" is a very vague phrase which might mean anything or nothing. I will take as an example the Man O'War Training Course in community development and leadership. This course covers all sorts of people—clerks, schoolteachers, junior Government officials, etc.—anybody who thinks he might benefit from a course by developing powers of leadership and learning to take a prominent part in the country's affairs.

    These people not only have lectures and courses to improve their intellect; they are also taken out on work which involves manual labour. They build bridges, go out in lifeboats, climb Mount Cameroon and, generally speaking, are made physically tough as well as given mental instruction. It is a course that might possibly be recommended to our Members of Parliament, although, after today's Sitting, those who have come through have shown that they have a sufficient amount of toughness not to need the course. All the same, we all might benefit from it.

    They are not boys. They are of various ages, such as 20 and 23.

    My hon. Friend the Member for Middlesbrough, West (Mr. G. Cooper), said that he was unhappy about the Cameroons scheme. He said it was an unhappy scheme. I wish to assure him that that is not our information.

    I did not say it was an unhappy scheme. I referred to the relationship between the staff and the management.

    I think a scheme where there is an unhappy relationship between the staff and the management can be described as an unhappy scheme. I have no reason to suppose that this unhappiness exists. I entirely agree with my hon. Friend that, while the Governor is responsible for the scheme—and it is right that he should be—my right hon. Friend the Secretary of State is personally interested, naturally, to see that the scheme is properly conducted. My right hon. Friend is making inquiries. It may be that the inquiries are taking longer than my hon. Friend expected, but we have not just put it aside. We realise its importance, but we feel that it is primarily the responsibility of the Governor and of the Government of Nigeria.

    The Corporation are anxious to obtain more money to go ahead but that depends whether or not and at what point they can go into the London market to obtain further loans. They share that difficulty with any other body that wants to enter the London market to obtain loans. At present, they have something like £500,000 and I understand that they may need £4 million or £5 million in the next five years to carry on all the work. The important point is that not only are they doing important and useful work, but they have actually made a profit in doing this work.

    Another question my hon. Friend the Member for Rugby raised was that of the Niger Agricultural Project. He said he hoped that this would go well, but that it should not be given a special pull. I can assure him it is not being given a special pull, but is treated just like any other development scheme and is not having extra things done for it which would not be done for other schemes. Naturally, it does have some things done for it. The provision of common ser- vices, one of the things with which my hon. Friend was concerned, is in the hands of the company. They make that provision, not the Government. The water supply provides considerable difficulty, because the water is 120 feet down and they are using windmills to raise the water and get a sufficient supply. The family compounds are sometimes built at Government expense and the Government have constructed the main service road, but all the other service roads are the responsibility of the company.

    I quite agree with my hon. Friend about the need for the development of manufacturing industry so that Nigeria can be supplied with all those things it needs today, some of which, unfortunately, it cannot get from abroad owing to the general shortage. Insofar as this shortage can be relieved by developments inside Nigeria, we shall welcome them and I wish to take the opportunity of saying that we shall see that Nigeria is not left behind in any allocation of whatever goods there may be. We fully realise that they have made a great contribution to the world's resources, in their developments of cocoa, palm oil and a great many other things, and it is right that they should get a reasonable share of the manufactured goods and raw materials which come from other countries. We wish to see that they get an adequate share.

    12.31 p.m.

    As this is a rather exceptional debate, coming after such a prolonged Sitting on the Finance Bill, I wish to say—as this debate will be read in Nigeria—that I think the whole House, not just hon. Members on one side, have the greatest sympathy with that great country. I join with the Minister in wishing it success.

    I think my right hon. Friend was wrong when he said he had not seen any evidence of widespread discontent among the staff. I think that is shown by the fact that 50 per cent. of the staff have left in disgust, or have been dismissed. Very full and factual information has been given to his right hon. Friend which, if he analyses it, he will see supports the statements I have made.

    If 50 per cent. have left that is not evidence that they have left in disgust as my hon. Friend says and I would want to be sure before taking that at its face value.

    Some years ago, when a deputation from the House visited Nigeria, there was great complaint of delay in getting essential goods, particularly capital equipment, from the Crown Agents and a promise was made that that matter would be looked into. Everywhere we went there were complaints of great delay whenever materials were indented for by works or estates. Can we be assured that that matter will be put on a proper basis?

    Question put, and agreed to.

    Adjourned accordingly at Twenty-seven Minutes to One o'clock p.m. 8th June, till Monday next pursuant to the Resolution of the House this day.