FIRST SCHEDULE.—(Matters to be regarded in fixing permitted increase.) (Hansard, 25 October 1939)

§ Rear-Admiral Beamish
I beg to move, in page 14, line 5, after "Cost" to insert "(at the current market prices)."
I move this Amendment not only because I have been asked to, but also because in my experience there is a good deal to be said for it. It appears necessary to clarify the meaning of the word "cost." It seems equitable that the cost should be the current market price at the date on which the permitted increase is ascertained, and not the price at which the trader has purchased his raw materials.

§ Mr. Mander
On a point of Order. Would it not be convenient to take the 1516 next Amendment together with this? It relates to the same thing though in a reverse direction.

§ The Chairman
I have no doubt that the hon. Member will express his views on the Amendment that is now being moved. That will be in order. I was not proposing to select the next Amendment.

§ Rear-Admiral Beamish
The first consideration with the trader is that he should replace his stock. If he has the good fortune to sell a large quantity of it and has to replace it and buy his raw materials at the current market prices, these words should be inserted in the Schedule. If he is not allowed to take into consideration the cost of replacement of his raw materials, he will steadily face what will ultimately come to him, namely, ruin. The Schedule says: Cost of the provision of materials, whether raw or semi-manufactured, and of stocks of goods requisite for the carrying on of the business. A man cannot carry on his business if he is not allowed to take into consideration the replacement of his raw material at current market prices.

§ Mr. Mander
I hope that discussion of this Amendment will enable us to obtain from the Government a clear statement as to what view they take of this matter. You could not have a clearer case of profiteering than where you get a man who has in stock a certain number of articles and says to himself, "When I have sold them I shall have to replace them, and I shall have to pay 50 per cent. more for my raw material. Therefore, I will at once put up by 50 per cent. the price of all the articles that I have in stock." There is a great tendency for people, without thinking the thing out, to do that. It is one of the worst forms of profiteering, and I think that is the view taken in the country generally. At the same time, I appreciate that there is an intermediate stage. A man may well say to himself, "I am getting near the end of my stock, or I have got some way through it, and I shall have to pay 50 per cent. more for the materials for manufacturing new stock. In order to avoid a large increase of 50 per cent. I will now, at this stage, make an increase of something much lower, say 25 per cent., so as to even the thing out between 1517 the one and the other." That sort of thing, no doubt, is legitimate, but we want to be careful not to give any encouragement to people to take advantage of the situation in which we find ourselves and at once put on the whole of their stocks the charge that they would have to pay if they bought the material at present prices.

§ Sir George Schuster
This is a very important matter, and it is not quite proper that it should be left where the hon. Member for East Wolverhampton (Mr. Mander) has left it. He told us the other day that his chief connection with trade is that he is president of the Fish and Chips Association of Wolverhampton. I have no doubt that, if one looks at trade from the point of view of a person dealing in fish and chips, this question of replacement value does not arise in an acute form. I am not so sure that I agree with the Amendment, but I certainly disagree with what has been said by the hon. Member for East Wolverhampton. I should like an assurance from the Government that the matter will be interpreted in a liberal and fair way. It is a very complicated question and it requires very careful consideration. It would be one of the most important points on which, perhaps, instructions will have to be issued to the committees. I hope my hon. and gallant Friend will give us an assurance that he appreciates the importance of the matter and that he will try to see that instructions are issued which will ensure that it is dealt with in a fair way from the business point of view.

Major Lloyd George
The two Amendments which we are discussing at the same time are two extremes on this question, and I propose to take the middle course. I think that both Amendments are quite unnecessary because they give an undesirable rigidity to the committee who are instructed under Clause 4 reasonably to take into account certain things. The committee, reading that Clause, would be perfectly entitled to take the cost of the provision of materials at a certain date, but it does not follow that it is necessary to do so, and in my judgment it is most undesirable that they should be bound to do so. It is the normal practice in many cases to cover 1518 costs over a period, and where there are stocks in hand to strike a balance between the two. I have come across cases where people have stock in hand bought at a pre-war price. It is essential that these stocks should be kept at a certain level, and you find the replacement cost is a little higher. That seems to be the common practice in the trade, and it is satisfactory to the consumer because it avoids the sudden rise in price that you would get if you did not do that. When stocks come down to the level when they would normally need replacement the general practice has been to marry the old price and the new. If you were to suggest that the replacement cost at a certain date should be in the Bill, you would have to deal with the problem of the people who bought large stocks. If prices were to rise at a certain date, that which you wanted to avoid would be encouraged. Therefore, it is absolutely essential that we should leave this to the committees. The words are perfectly clear that they should take reasonable account of what these costs should be. I would far rather leave it like that than have any definition one way or the other.

§ Mr. Mander
I am naturally satisfied with what has been said because the hon. and gallant Gentleman's argument was the same as that which I was endeavouring to put forward myself. I only put down the Amendment because I saw the other Amendment on the Paper, and I considered that there ought to be some challenge to that extraordinary point of view.

§ Rear-Admiral Beamish
In view of what has been said, and as it appears that there is a compromise in view and that the committee are to use their discretion, I beg to ask leave to withdraw the Amendment.

§ The Chairman
I understand that it is not the desire on the part of the Government to move the next Amendment—in page 14, leave out lines 9 and 10, and insert: Rent (or rental value of freehold premises), expense of maintenance of premises and plant, and expense of provision for depreciation and obsolescence thereof.

Mr. Alexander
Why is the Amendment not to be moved?

§ The Chairman
I cannot allow a debate or discussion on that at the moment. It must come on the question that the Schedule stand part.

§ Mr. Mander
I beg to move, in page 14, line 12, at the end, to insert, "Pensions, benevolent and welfare schemes."
This is merely another item that I thought ought to be added to the words "wages and salaries." It may well be that these items would be included under some of the other headings, but they are items that ought to be encouraged in every way, and that is why I want to emphasise the fact by actually inserting them in the Schedule, and I hope that the Government will be able to accept the Amendment.

Major Lloyd George
I shall be glad to accept the Amendment.

§ Rear-Admiral Beamish
I beg to move, in page 14, line 14, at the end, to insert "costs of packing, packages, and containers."
I move this Amendment on behalf of my right hon. and gallant Friend the Member for Burton (Colonel Gretton). I notice that in the Schedule there have been a number of omissions, and the Amendment moved by the hon. Member for East Wolverhampton (Mr. Mander), which has just been accepted, is an indication that the Schedule is hardly complete. That fact emboldens me to press for the acceptance of the Amendment I am moving, in view of the fact that in all forms of trade bottles, cases, cartons, tins, wrappings, etc., come into the question of the cost of production, and I would remind the Committee that a great many things are bought because they have suitable wrappings or containers or are contained in special bottles. The question that I am now raising is a very important one. Attractive containers mean much to traders, and although it is just possible that the cost of production of materials might cover what I am now moving, I think it would be a great deal better if the representative of the Board of Trade would accept the Amendment.

§ The Solicitor-General
I am afraid that my right hon. Friend cannot accept the Amendment which has been moved by 1520 my hon. and gallant Friend, and the reason is that it must be included in one or other of the categories for which we have already provided. The whole desire in this Schedule, and the reason why, incidentally, we have not moved some of the Amendments that we put down, is that we desire to leave the whole matter on as broad a basis as possible. The more you specify, the more difficulty you create and the more you bring into operation one of the most obnoxious principles of law that by expressing one thing you exclude another. If you leave the picture as broad and general as possible you can bring in any reasonable expense. I should think that the particular instances that occur in this Amendment relate to specified trades, and I should imagine that they are covered, for example, either in transport charges or perhaps under marketing measures—containers might very well come under that—or under manufacturing and processing operations. In one or other of these broad categories, these various things are covered. Suppose, on the other hand, that we included these particular words, then by implication we would exclude a whole lot of other things which might equally well come under one of the general categories I have described. For that reason, and desiring to keep the whole Schedule as general as possible, it would, I think, be undesirable to accept an Amendment which introduces this particular element.

§ Sir G. Schuster
I was very glad to hear my hon. and learned Friend say what he did about the danger of trying to make anything like an exhaustive list, but I would put it to him that the draftsman or the Government have not entirely avoided that danger. The Schedule seems to fall between two stools. It purports to be a very exhaustive list, but when we look at it we find a number of things omitted. For instance, there is no mention of cost of distribution. There is included the expense of manufacturing and processing operations, but there is no mention of the cost of distribution, which is an essential part of passing the goods on to the public. When my hon. and learned Friend spoke I was hoping that he would say that this would be covered by the words: any other matter specified in an Order made by the Board of Trade under this Schedule. If we could rely on that omnibus provision at the end being interpreted to cover this 1521 kind of thing, then we could be quite satisfied, because it is clear what the intention of the Government is, but I submit that it would be rather difficult to include the cost of packing, packages and containers in transport charges.

§ The Solicitor-General
I cannot say in any particular instance what packages, containers or packing would come under, but they must surely come under either the provision of materials requisite for carrying on the business, or under transport charges, or under marketing methods. As the hon. Member for Walsall (Sir G. Schuster) has raised the question of distribution, I should think that, on general examination, marketing methods cover the cost of distribution. I would, however, repeat what I have said, that it is far better to leave a broad picture, and in that connection it is essential to look at Clause 4, which provides that the "permitted increase" means: an amount not exceeding such increase as is reasonably justified in view of the matters specified in the First Schedule to this Act. That keeps the whole picture perfectly general. The moment you begin to narrow down and single out any specified thing you have to include all kinds of specific things, and you make the Schedule narrower than we prefer to see it.

§ Mr. Ammon
Having regard to the question of containers, I would ask how you would send beer away without a barrel.

§ Mr. Bevan
There is a further difficulty to which some attention ought to be paid, and that is that there is no language in the Schedule or in the Clause which relates to a reasonable charge. There is reference to a reasonable increase, but it does not make any modification of the original charge. It may be that at the time the basic price was fixed there was an entirely reasonable expense in connection with the business. A person may have been paid before 1st August a nominal sum, but subsequently he is paid a full salary of a considerable amount. The employment of that person at a full salary may not have been reasonable in the beginning but the increase may be reasonable later, although in the original charge it was not necessary.

§ The Chairman
The hon. Member is now discussing something that should be discussed on the Schedule as a whole and not on this Amendment.

§ Rear-Admiral Beamish
By reason of the fact that the previous Amendment was accepted I thought that my Amendment was in the same category, but realising, as I do, that cases of this kind will be decided fairly and reasonably, I beg to ask leave to withdraw the Amendment.

§ The Solicitor-General
I beg to move, in page 14, line 17, at the end, to insert, "Provision for bad debts."

§ Mr. K. Griffith
I am glad that the Minister is moving to insert this Amendment. It was a suggestion which I threw out on the Second Reading, without very thorough consideration, whether it was possible to include it in the Schedule; but I knew from practical experience that it might be a very important matter. I am, therefore, very glad that the Minister has found it possible to include it in the Bill.

§ Mr. Mander
I should like to ask how it is that the words were not included in the original schedule. Possibly it was intended to cover it under some other heading. It seems to me a very important item to have left out.

§ Mr. Ammon
I should like to ask whether it is good business to encourage this sort of thing in regard to bad debts. Is there not a possibility that this charge may be put on to the consumer?

§ The Solicitor-General
The origin of this Amendment was the observation of my hon. Friend the Member for Middles-brough, West (Mr. Griffith). When, as we always do, we scrutinised the hon. Member's observations closely, I came to the conclusion that there might be room for doubt whether, in the general words, "bad debts" were included. One could argue that they were, but I took the view that it would be better in the case of a general matter of this kind to include them specifically in the Schedule. With regard to the observations of the hon. Member for Camberwell North (Mr. Ammon), if he will devote his attention for a moment to his right hon. neighbour, the Member for Hillsborough (Mr. Alexander) I think he might find that his right hon. Friend would be horrified at 1523 the thought that he would not be allowed in his returns to make some allowance for bad debts.

Mr. Alexander
On the contrary, my experience so far as this war is concerned is that I am always being told that our business is so well managed that it does not make bad debts.

§ Mr. Bevan
To those hon. Members who are not trained in the law would the Solicitor-General define a bad debt? Is a bad debt one that the trader has written off?

§ The Solicitor-General
I am not a trader, but I have some little experience of the matter as dealt with under the Income Tax law. Under the Income Tax law provision is allowed in relation to a particular trade, based upon general experience, of the amount of bad debts that may be expected in that trade. It is a fixed amount. Sometimes it may be exceeded in the matter of debts and sometimes it may not be reached, but by general practice the amount is taken at a level figure of a percentage of the intake of the business. No doubt any accountant would be able in respect of any particular business to say what would be a fair percentage to take on account of bad debts.

§ Mr. Bevan
That raises an entirely different issue. I understand that normally, so far as the Inland Revenue are concerned, debts are taxed as recoverable, but that there is a certain practice which varies from trade to trade. Here we have a general statement that bad debts are to be included as the expenses of the business, as part of the costs of production, but there is no definition of what a bad debt is or what the percentage may be. A man may say that he has a certain amount of debts which he cannot collect; and he sells them. A trader often sells his debts to a collector, who is sometimes able to collect the whole of the debts from the original debtors. I should like to know whether the difference between the actual amount owing and the amount which a trader gets from his factor for the debts is to be written off as a bad debt? He may have an arrangement with the person to whom he sells his debts—I have known that to happen. He is prepared to sell his debts and take a certain percentage from the collector. The Solicitor- 1524 General must really define what he means by a bad debt. Is there to be a percentage, and is it to be the amount fixed by the Inland Revenue? Otherwise it can be such an elastic amount as to concede almost anything.

Mr. Alexander
This, of course, is based on the interpretation of Clause 4, which says that the "permitted increase" means an amount not exceeding such increase as is reasonably justified. We are not dealing with Income Tax at all but with the price of goods. Surely the prewar price of goods is what can be got in competition from the market, and in respect of which every trader has to make his own arrangements in relation to his ordinary charges before he is able to fix his price. Is it suggested that in ordinary business in peace times there is a percentage added in a competitive market to deal with bad debts? It may be so. It may be that the general level of distributive business may be affected to a slight margin by the existence of bad debts, which may have to be written off or which may be sold at a discount to a contractor. But in respect of "permitted increase" how does that come in? I do not see how it can be applied to the interpretation of Clause 4, and that is why I do not think it is reasonable to insert it in the Schedule.

§ Mr. K. Griffith
In so far as bad debts are a permanent liability on industry, if one assumes that they are going on at the same level after the war when the local committee comes to take the First Schedule into consideration and the case for bad debts is the same as before the war, there will be nothing to allow for. It is only if there is an increase. What I had in mind was that there has been, as a result of war circumstances, in certain businesses a peculiar volume of bad debts, the direct result of Government action. There is the evacuation scheme, where you have people driven away and you cannot find the debtors. If there is no actual increase in bad debts nothing will be allowed under the Schedule.

§ The Solicitor-General
The hon. Member for West Middlesbrough (Mr. K. Griffith) has made my speech for me. 1525 The discussion really arises from a misunderstanding. What we are dealing with in the Schedule is the "permitted increase" and it is only when the volume of bad debts provides an increase that the trader can evoke that increase in order to say that it justifies some increase in the overhead charges which are reasonable to the business as a whole.

§ Mr. Bevan
Can a trader take any action which alienates money from himself before he can claim it as a bad debt?

§ The Solicitor-General
Picture the position. A trader comes before the tribunal to justify a charge for some goods. Whatever the ordinary price it is now £2 more, and he is called upon to justify it. He says that he justifies it by reference to a variety of causes; wages have gone up, the cost of transport has gone up, and many other things, and that since the outbreak of the war there has been a vast increase in the bad debts which he has incurred. Before the war his accountant regularly allowed in his returns 5 per cent. on his turnover for bad debts, but since the war, owing to circumstances such as those pointed out by the hon. Member for West Middlesbrough, they have been greatly increased. He says, "Here are my books. You will find that over the period of the last six months my cash transactions are in arrears to the extent of four months." Any accountant would find no difficulty in those circumstances in assessing the amount by which the allowance for bad debts on the profit and loss account should be increased over the allowance which was made over the pre-war turnover. It is only in respect of the increase due to war circumstances that he is entitled to come under the Schedule at all.

§ Mr. Bevan
Will a trader be permitted to take an accountant's certificate and give it to the Inland Revenue officer in discharge of revenue?

§ The Chairman
I think I must interfere here. We have already passed Clause 4, and I must call the attention of hon. Members to the fact that Cluase 4 provides for these matters in the Schedule as matters which have to be taken "in view." We must not discuss the methods by which they will be taken in view.

§ Mr. Bevan
The matters which are dealt with in Clause 4 have now been added to by the Government. They have added an entirely new category, and a highly controversial category which they have not defined for the benefit of the Committee.

§ The Chairman
I must interrupt the hon. Member in order to justify myself. The hon. Member will see that the actual words are "provision for," and my point is that this item is one which can be taken "in view," to use the actual words of Clause 4, and that therefore we must not discuss here how the question is going to be taken in view. That is a matter to be settled under Clause 4.

§ Mr. Bevan
It is necessary for the Committee to obtain from the Solicitor-General a definition of what he considers to be a justifiable increase in bad debts. He has told us that there is a practice in trade by which a certain amount of the debt which accumulates in the books of a trader is regarded as irrecoverable, and he has said that over and above that there is an increase due to certain circumstances. I want to ask whether the trader has to do anything about that debt in order to prove to the persons who are examining the books that it is, in fact, an irrecoverable debt and should be regarded as a bad debt. The other day, when we were discussing an entirely different matter, it was stated that the courts would take a very lenient view of debts accumulating at this time. Must the trader get an order from the court, or fail to get such an order, in respect of the debt referred to by the hon. Member for West Middlesbrough (Mr. K. Griffith) before he can prove to the investigating persons that the debts are, in fact, irrecoverable? How is he to prove that? If the debts had merely accumulated by way of a normal increase, he would get it in the usual fashion, but here the reference is to a war-time increase in bad debts. What must the trader do in order to prove that those debts are irrecoverable?
Furthermore—and this is very important—I submit that the trader could have a first-class wangle over this, especially in the depressed areas. That was the case in 1921 and 1922. The Inland Revenue lost large amounts of money there, and 1527 yet the poor people, the consumers, got no redress. They were pursued by debt collectors for years. The Inland Revenue lost the money because the trader was able to say that he had sold the debts, but the consumers did not gain. As a matter of fact, on top of the original debt, there were court charges added. In South Wales there was the bitter experience of harpies who accumulated fortunes out of the poor. The trader lost, the Inland Revenue lost, the consumer lost, and only a very undesirable kind of dealer in this most unfortunate business succeeded in fattening himself. Exactly the same kind of thing can happen in the present circumstances. Certainly, there is no redress for the person whom we are trying to protect. We have here the inclusion of an item which does not seem to me to have been given proper consideration and which might change the whole basis of the calculation of what is really increasing the prices. I think the Solicitor-General ought again to consider the Amendment before asking us to accept it.

§ Mr. Bevan
The point raised in this Amendment is a simple one, and I think it is largely a matter of drafting. If hon. Members will look at Clause 4, they will see again that it is only an increase in the items set forth in the First Schedule that can be taken into account. Obviously, not only increases, but also reductions should be taken into account. I understand from the Parliamentary Secretary to the Board of Trade that on the Report stage he proposes to introduce a form of words on the Clause itself which will meet the point raised in the Amendment, and therefore, I shall not move the Amendment.

§ Mr. Ammon
I think the Committee ought to have some explanation as to why the Amendments at the top of 1528 page 2070 of the Order Paper—In page 14, leave out lines 9 and 10, and insert: Rent (or rental value of freehold premises), expense of maintenance of premises and plant, and expense of provision for depreciation and obsolescence thereof. and in page 14, line 12, at the end, insert: Administration and establishment expenses."— were withdrawn by the Government. They must have had some purpose in putting these Amendments on the Paper, and I think we ought to be given some explanation. I can see a good deal of substance in the Solicitor-General's statement that it may be undesirable to be too specific in certain details that may have a limiting effect. In that respect, I would suggest that the Amendment to line 12 should not be dropped, as the words which it proposes to insert would enlarge the scope, and consequently, the Solicitor-General's contention does not obtain in the case of that Amendment. I should think that it might be worth while for the right hon. and learned Gentleman to consider whether in another place that Amendment should not be inserted.

§ The Solicitor-General
I am obliged to the hon. Gentleman for giving me an opportunity of saying why we have not proceeded with these Amendments at the moment. Between now and the Report stage we propose to consider whether the words of those Amendments are happy from an accountancy point of view. It does not follow that we shall leave the Schedule exactly as it is, but on looking at the Amendments we had put down, it seemed to me that they would infringe the principle I stated a minute or two ago of trying to keep the picture as broad as possible. In including with such precision things like maintenance, obsolescence and depreciation, I was not sure whether, for example, such expenditure as that on air-raid precautions was covered by those words. It is covered by the original words and not by the new words, and consequently, the Amendment seemed to narrow the picture, and it might have made it necessary to give a further definition in the case of some of the remaining parts of the Schedule. That was the reason we did not proceed with that Amendment. With regard to administration and establishment expenses, it may be that on the Report stage we shall have 1529 to put in something which is understandable on an accountancy basis which will give effect to those words, and perhaps to some of the words that we have in the Amendment on the Paper, which was not moved.

§ Mr. Ammon
I largely agree with the Solicitor-General with regard to the first Amendment, which I think is limiting in effect, but I am bound to say that to add administration and establishment expenses, following on wages and salaries, would seem to me to broaden the picture, and I think that Amendment should be given further consideration.

§ Mr. Mander
There is one sentence in the Schedule which I would ask the Solicitor-General to be good enough to elucidate, as I think it needs to be made somewhat clearer to some people, at any rate. In line 18, there is a reference to: Changes in the total volume of the business over which the overhead expenses thereof fall to be spread. Does that mean that if a particular firm thought that its trade next year, owing to the war, was going to fall off by 50 per cent., it would be entitled to place on the price of the article the increased overhead expenses in which it would be involved? If that is so, and they are entitled to do that to the full extent, it seems to me that it is rather a loophole for putting on very considerable increases. I should like to know what view the Government take on that matter.

§ The Solicitor-General
We had in mind that kind of situation. Working on the view that we accept the principle of the Amendment of the hon. Member for Ebbw Vale (Mr. Bevan) both upwards and downwards, suppose that one found that there had been an enormous shrinkage in the ordinary trade of a particular firm, we felt it should be justifiable, when there is a criminal charge of profiteering being made against a person, to permit him to attribute a somewhat larger proportion of his overhead expenses to a particular transaction than he would have been able to do in the previous year. The hon. Gentleman accurately diagnosed what may happen and what may cause a rise in the price of a particular article, but he must bear in mind that the question is whether a trader is committing a criminal offence and whether, in relation to a particular 1530 article, he is charging rent and working expenses beyond his usual limits.

§ Mr. Bevan
It seems to me that it is the individual trader who is always taken into account in these matters and not the practice in the trade. It is the trader's individual expenses and his own conduct that are taken into account, but his own conduct may be quite unreasonable having regard to the practice of the trade. In the Schedule the word "reasonable" does not occur. If it did occur, the court would be able to take into account whether the trader had behaved reasonably, having regard to the general practice of the trade. Clause 4 does not help because it applies merely to "reasonable increase" but the original expense may be unreasonable, having regard to the general practice of the trade. It seems to me that the word "reasonable" ought to be in the Schedule if the court is to be able to say to a trader, "You should not have charged the price of this article with the expenses of the maintenance of your son or daughter." The court should be able to have regard to the actual expenses of the trader in relation to what the expenses of an analogous trader might reasonably be supposed to be, in the same line of treatment. Perhaps at a later stage the hon. and learned Gentleman will consider some form of words which would take that into account. I know that Members are anxious to get home but there is no reason why we should leave loopholes of this kind in a Bill.

§ The Solicitor-General
I should be the last to crave mercy from the Committee for letting through a slipshod Bill, but the hon. Member will accept it from me as a matter of interpretation that the word "reasonable" being in the Clause it is unnecessary to repeat that word in the Schedule. The Schedule has to be interpreted in the light of the Clause. The words of Clause 4 have been chosen to give as broad and generous a view of the situation as possible. It is impossible to make a complete rule-of-thumb guide as to whether a person has committed the offence of profiteering or not. We thought the words of Clause 4 provided to any body of ordinary men a good working guide as to whether people were making undue profit or not. The basic price was fixed and there is no 1531 doubt about that. These are cases in which there is no specified permitted increase. Therefore, the prosecution goes on the basis, "There is a price that existed six months or 12 months ago; that price has been exceeded. Now justify yourself." That is the burden thrown on the trader. He has to satisfy people that he is reasonably justified in putting his price up to that extent, having regard to all these other matters. That reasonable consideration that he has to establish to the tribunal covers everything that is included in the Schedule. I agree with the instance that the hon. Gentleman gave. Suppose there is some nominal salary earner who was only entitled to a nominal salary before, but whose salary has been put up. If it had been put up on the outbreak of war, I do not believe he could establish to my satisfaction, if I was on the tribunal, that that was reasonable. Personally, I think the hon. Gentleman's apprehensions are really without foundation and that the adjective to which we both attach so much importance covers the whole area.

§ Mr. Bevan
I should like to put it on record that I do not accept the hon. and learned Gentleman's interpretation for a moment. I believe that the word "reasonable" applies only to the in- 1532 crease, and I think it will be found in administration that that is the case.

§ The Solicitor-General
I beg the hon. Gentleman's pardon. The whole principle on which we are trying to found this legislation is that on 1st August, 1939, people were charging a reasonable price. If they were not so doing at that time, it is very unfortunate, and it may have been so because there was no profiteering legislation then. I am afraid that the Bill is not adapted to deal with the case in which people were charging too much on 1st August.