Commons Sitting of 16 April 1923

Preamble
The House met at a Quarter before Three of the Clock, Mr. Speaker in the Chair.

PRIVATE BUSINESS.
Bootle Corporation Bill [Lords],
General Reversionary and Investment Company Bill [Lords],
Runcorn District Water Board Bill [Lords],
Read a Second time, and committed.
Caledonian Railway Bill (by Order),
Second Reading deferred till Thursday next.

MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 4) BILL,
" to confirm certain Provisional Orders of the Minister of Health relating to Altrincham, Ashton-under Lyne, Brighouse, Ealing, Hale, Uckfield, and Wath-upon-Dearne," presented by Mr. Neville Chamberlain; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 84.]
OYSTER AND MUSSEL FISHERY (SEASALTER AND HAM) PROVISIONAL ORDER BILL,
" to confirm a Provisional Order under the Sea Fisheries Act, 1868, and Acts amending the same, relating to an oyster and mussel fishery in the estuary of the River Thames," presented by Sir Robert Sanders; read the First time; and referred to the Examiners of Petitions for Private Bills?, and to be printed. [Bill 85.]
LONDON COUNTY COUNCIL (MONEY) BILL,
" to regulate the expenditure on capital account and lending of money by the London County Council during the financial period from the first day of April, one thousand nine hundred and twenty-three, to the thirtieth day of September, one thousand nine hundred and twenty-four, and for other purposes," presented, and read the First time; and referred to the Examiners of Petitions for Private Bills.
ORAL ANSWERS TO QUESTIONS.
  INDIA.

    PUBLIC HEALTH COMMISSIONER.
    Sir JOHN HEWETTasked the Under-Secretary of State for India whether any decision has been arrived at on the proposal of Lord Inchcape's Committee to abolish the appointment of Public Health Commissioner in India?
    The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): The answer is in the negative.

    MURDER OF MR. SYDNEY M. SMITH.
    Sir J. HEWETTasked the Under-Secretary of State for India whether his attention has been called to the murder in the Purnea district of Mr. Sydney M. Smith, an English planter of over 60 years, by a gang of robbers, who killed him in his sleep under most revolting circumstances; whether any persons have been placed on trial for the crime; and whether any steps have been taken to render the position of Europeans in outlying districts less insecure than this crime shows them to be?
    Earl WINTERTON: I have at present seen only a Press report of this brutal murder, which appears to have been committed by a gang of dacoits and not to be connected with any racial or political movement. I understand that the police are searching for the murderers. Apart from this tragic occurrence, recent reports do not indicate any general feeling of insecurity among Europeans in outlying districts.

    GERMAN SWORD-BAYONETS.
    Sir J. HEWETTasked the Under-Secretary of State for India whether he is aware that many thousand Gorman sword-bayonets, adapted for use as wood or betel-nut splitters, have been recently imported into Calcutta; and, if so, whether steps have been taken by the Customs authorities to prevent the further importation of such articles, which readily lend themselves for use for criminal purposes?
    Earl WINTERTON: Yes, Sir. Nearly two-thirds of these bayonets have been recovered by the authorities, and

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    stringent precautions have been taken against further import.

    PLAGUE.
    Lieut.-Commander KENWORTHYasked the Under-Secretary of State for India what information he has about the reported outbreak of plague in India; what is its extent and nature and what steps are being taken to deal with it?
    Earl WINTERTON: I am sending the hon. and gallant Member a copy of the full statement received on this subject from the Government of India, which has been communicated to the Press, and which gives the latest information available.
    Lieut.-Commander KENWORTHY: Is there any cause for alarm in regard to the statements in the Press as to the extent of the outbreak?
    Earl WINTERTON: It is difficult to say that there is no cause for alarm. There is always cause for alarm when there is a fresh outbreak of plague, but I can inform the hon. and gallant Member, as stated in the Press communication, that the number of deaths for the last week in March, for which we have particulars, is less than the mean average for the 20 years up to 1917.

    RUPEE (EXCHANGE).
    Mr. WARDLAW-MILNEasked the Under-Secretary of State for India whether his attention has been drawn to a meeting between the Finance Minister of India and certain Bombay merchants in which the Finance Minister expressed himself as opposed to the abolition of the 2s. standard of rupee exchange and the reversion to the 1s. 4d. rate, and foreshadowed the introduction of a Bill into the Indian Legislative Assembly to amend the Currency Act so that 12 crores of emergency currency can be issued against trade bills instead of five crores as at present; and if he will say whether it is the intention of the Government of India to make another attempt to raise the sterling value of the rupee above its present level of about Is. 4d.?
    Earl WINTERTON: The answer to the first part of the question is in the affirmative. As regards the second part, the view of the Government of India and the
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    Secretary of State is, as was explained by the Finance Member in his Budget statement, that the time has not yet come for a new attempt to fix the rupee, whether at Is. 4d., 1s. 6d., or any other figure.

    RIOT (HINDUS AND MUSSULMANS), AMRITSAR
    Mr. HOPE SIMPSONasked the Under-Secretary of State for India whether, in connection with the religious riot between Hindus and Mussulmans that took place at Amritsar on the 9th instant, he will say whether any, and, if so, how many, casualties occurred; whether it was necessary to call out troops to quell the riot; and whether any detailed report on the subject has been received from the Government of India?
    Earl WINTERTON: Detailed reports from the Government of India confirm generally the telegrams published in the Press as to the culmination in rioting on the 11th and 12th April, of tension which had existed between Hindus and Mahommedans at Amritsar. The local British garrison were called out to the satisfaction of the people of the city, and a section of armoured cars was despatched from Lahore, followed by a force of 100 cavalry. The number of casualties mentioned in the reports is 17 cases of injury, two being serious. An earlier statement that two deaths had occurred is now believed to be incorrect. The latest report of the Government of India, dated the 13th April, states that all was quiet since about midday of the 12th, and that the authorities are maintaining order.
    Mr. J. HOPE SIMPSON: Can the Noble Lord tell us the actual cause of the riot?
    Earl WINTERTON: The cause of the riot is, I think, the same cause which has led to similar riots at Amritsar, namely, the extremely acute state of feeling between the people of these two religions.
    Colonel Sir CHARLES YATE: Considering that British troops have to be called out to quell these religious riots between Hindus and Mahommedans, is not the proposed reduction of the British troops in India by 10,000 men a danger to the peace of India?

    MURDER AND ABDUCTION, KOHAT.
    Sir J. HEWETTasked the Under-Secretary of State for

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    India whether he can state the facts regarding the murder of Mrs. Ellis at Kohat, and whether he has any reassuring news to communicate to the House regarding the fate of the young lady said to have been abducted by frontier raiders?
    Earl WINTERTON: I can at present add little to the accounts of this deplorable occurrence that have already appeared in the newspapers. The Government of India report that Mrs. Ellis was murdered early on Saturday morning, and Miss Ellis carried off, and that suspicion rests on certain trans-border offenders. The ladies were sleeping in a bungalow next door to the General's bungalow, where there was a military guard, but the raiders fired no shots and succeeded in escaping. The Chief Commissioner of the North-West Frontier Province, telegraphing later on Saturday, stated that he had arrived at Kohat that morning, and that the whole countryside had been set in motion on both sides of the border, and patrols were out in all directions, but that there was so far no further news. The Chief Commissioner added that he was sending up all Afridi Maliks and Elders from the Peshawar and Khyber side to the central Afridi areas to assist in clearing up the case. I regret that I have no news at present regarding Miss Ellis, but every effort is being and will be made to effect her rescue, and to relieve the great anxiety which must be felt by her relatives.
    Sir A. SHIRLEY BENN: Is the Noble Lord satisfied that all reasonable precautions were taken prior to this outrage for the protection of British women at Kohat?
    Earl WINTERTON: I should say, from my personal knowledge—and I have been to Kohat on two occasions in October— that both the military and police arrangements for the safety of the town were admirable, but, of course, it is difficult in the case of a town situated so near a turbulent frontier as Kohat to ensure absolute security in every circumstance. I have no doubt, however, that careful consideration will be given to all the arrangements, in view of this tragical occurrence.

    SLAVE TRADE, ABYSSINIA.
    Dr. CHAPPLEasked the Under-Secretary of State for the Colonies
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    whether the Colonial Office has received from Colonial officials any information upon the existence of slavery in Abyssinia; whether Captain J. E. T. Philipps, M.C., whose statements on the subject have been recently reported in the Press, is an official in the Colonial service; and, if so, will the Secretary of State call for a report from him?
    The UNDER-SECRETARY of STATE for the COLONIES (Mr, Ormsby-Gore): As explained by the Under-Secretary of State for Foreign Affairs in his reply on the 27th March to a question addressed to him by the hon. Member, the internal affairs of Abyssinia would not be a matter on which the Secretary of State for the Colonies would expect to receive information from Colonial officials; and, so far as I am aware, reports on slavery in that country have not been made to the Colonial Office by any such officials. The report referred to by the Under-Secretary of State for Foreign Affairs on 27th March was a special report from the Governor of Kenya called for as the result of an inquiry received from the Foreign Office. Captain J. E. T. Philipps, who now holds a junior administrative appointment in the service of the Government of Uganda, was for a short time in Abyssinia in 1917, and has not been there recently, and, therefore, the Secretary of State does not think it desirable to call for a report from this officer.
    Dr, CHAPPLE: Has a report been received by the Colonial Office?
    Mr. ORMSBY-GORE: I believe that in 1917 a letter was received from Captain J. C. Philipps about this matter, but that is, obviously, out of date.
    Dr. CHAPPLE: Does that report establish the existence of slavery?
    Mr. ORMSBY-GORE: As my hon. Friend the Under-Secretary for Foreign Affairs stated the other day, domestic and other forms of slavery do exist in Abysinnia.
    Captain BERKELEY: Will the hon. Gentleman call for another report?
    Mr. LINFIELDasked the Under-Secretary of State for Foreign Affairs whether he has information to the effect that British patrols upon the Abyssinian border have captured men raiding for slaves in certain districts of the Sudan;

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    that the rifles of these raiders have been confiscated; and that the Abyssinian. Government stamp has frequently been found on the rifles; and whether he can make a statement on the subject?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ronald McNeill): The reply to the first part of the hon. Member's question is in the negative and the points raised in the remainder of the question, therefore, do not arise.

  PALESTINE.

    JORDAN HYDRO-ELECTRIC SCHEME.
    Mr. BECKERasked the Under-Secretary of State for the Colonies what progress has been made with the harnessing of water power for producing electrical energy from the River Jordan and are contracts for plant and equipment being placed in this country?
    Mr. ORMSBY-GORE: The actual work of equipping the station and plant for the Jordan hydro-electric scheme cannot be undertaken until the formation of the company which is to hold the concession has been completed; but I am informed that, concurrently with the legal procedure which this involves, good progress is being made with the preparation of plans and specifications, which will enable tenders for plant and equipment to be called for.

    LOAN (ISSUE).
    Mr. BECKERasked the, Under-Secretary of State for the Colonies how the Palestine Loan will be floated on the same basis as other Colonial loans; and is the credit of the Palestine Government sufficient to guarantee the success of the proposed loan?
    Mr. ORMSBY-GORE: It has not yet been decided whether the Palestine loan m be issued through a finance house, as was the recent British Guiana loan, or by the Crown Agents. A prospectus will be issued giving all necessary information when the loan is issued which will set out all relevant facts, and in the meantime I cannot anticipate the statement which will be set out in the prospectus.
    Mr. BECKER: When will this prospectus be issued?
    Mr. ORMSBY-GORE: When the loan is issued. I hope it will be in the course of a month or six weeks.
    Sir C. YATE: Will the British Government be responsible for the loan?
    Mr. ORMSBY-GORE: No.

    BRITISH TROOPS.
    Mr. BECKERasked the Under-Secretary of State for the Colonies if he can give any information as to when the British troops will be withdrawn from Palestine?
    Mr. ORMSBY-GORE: I would refer the hon. Member to the reply given by my right hon. Friend the Prime Minister to the hon. Member for Kennington on the 26th February, to which I have nothing to add.

  IRELAND.

    ROYAL IRISH CONSTABULARY ( D. HARTERY).
    Mr. ROBERT MORRISONasked the Under-Secretary of State for the Colonies whether he is aware that David Hartery, Tottenham, was disbanded from the Royal Irish Constabulary in February, 1922; that in August last, being unemployed, he applied to have his compensation allowance commuted in. order that he might purchase a small business to earn a living; that between August and December he sent to the Resettlement Department particulars of five businesses, three of which were subsequently withdrawn by the vendors, owing to the delay of the Department in coming to a. decision, and the other two were declared unsuitable; that in December last he found a business which satisfied all the requirements of the Department, and after all arrangements had been made and his pension papers called in he was rejected on medical grounds, although two independent doctors have since certified and that he is in good physical health and free from any ascertainable organic disease; whether he is aware that, as a result of this unexpected decision after the man had been led to believe for five months that his compensation would he commuted if he found a satisfactory business, he is now in debt and for the past two months has been an inmate of Edmonton workhouse; and whether he

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    will look into this case and allow this man to be medically examined by a medical man who is independent of the Pensions Commutations Board?
    The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Bridge-man): With the consent of the House, I will reply to this Question. The answer to the first, second and fourth parts of the Question are in the affirmative; as regards the third part, Mr. Hartery made in all five applications the last of which was approved by the tribunal in December last, but of the four preceding applications only one was withdrawn by the vendor; of the others, the first contained no concrete proposition, the second was withdrawn by Mr. Hartery, while the third was rejected by the tribunal as offering no prospect of success. As regards the fifth part, Mr. Hartery in common with other applicants was informed that commutation was conditional upon his passing a medical examination. This examination is held under the direction of the Pensions Commutation Board who are bound by statute to satisfy themselves in regard to the health of applicants before recommending commutation. Mr. Hartery was examined in the first place by a special independent Medical Referee of high standing, and subsequently by the permanent Medical Officer of the Board. In these circumstances, I cannot see my way to accept the suggestion contained in the last part of the Question. Mr. Hartery, who served for less than two years in the Royal Irish Constabulary, is in receipt of a compensation allowance for life at the rate of £50 14s. per annum, and I regret it is not possible to grant him further financial assistance.

    SURRENDERED FIREARMS (RETURN).
    Mr. LUMLEYasked the Under-Secretary of State for the Colonies what arrangements have been come to regarding the return of arms taken by Government authority from civilians in Ireland; and to whom applications for compensation for the loss or damage to such arms should be. Addressed?
    Mr. ORMSBY-GORE: Arrangements have been made for the return of arms surrendered in Ireland in accordance with military proclamations to owners qualified for the possession of such arms. Owners resident in Great Britain and Northern Ireland who desire the return
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    of such weapons, and who are in possession of the necessary licences and certificates, should apply in the first instance to the Secretary, the War Office, while owners resident in the Free State, who are in possession of the necessary authority, should apply to the Ministry of Defence, Dublin. In cases where it has been ascertained that guns, &c., so surrendered have been lost or cannot now be traced, application for compensation may be addressed to the Under-Secretary of State, the Colonial Office.
    Captain ARTHUR EVANS: Can the hon. Gentleman say whether the Free State was consulted before this decision was arrived at?
    Mr. ORMSBY-GORE: Yes. It was consulted, and a rather fuller statement than I have given will be published in the Press notice shortly.
    Sir JOHN BUTCHER: Is it necessary for the owner of arms who lives in Southern Ireland to get a licence from the Free State Government?
    Mr. ORMSBY-GORE: Yes, it is necessary, because nobody is allowed to bear firearms in Southern Ireland without a special licence.

    DAMAGE TO PROPERTY (COMPENSATION).
    Sir WILLIAM DAVISONasked the Under-Secretary of State for the Colonies, whether ho has received a Report from the Irish Claims Compensation Association with reference to the provisions of the Damage to Property (Compensation) Bill, which has just passed the Lower House in the Irish Free State Parliament; whether he is aware that the provisions of this Bill do not carry out the understanding which was arrived at between the representatives of the British Government and the representatives of Southern Ireland at the time of the signing of the Treaty with regard to the payment of compensation for injuries to the lives and property of Southern loyalists; and, if so, what action he is taking in the matter?
    Mr. ORMSBY-GORE: The reply to the first part of the question is in the affirmative. In reply to the second and third parts, I would refer the hon. Member to the answer which I gave on the 12th instant to a question addressed to me by the hon. and gallant Member for Finchley.
    Sir W. DAVISON: Do the Government still recognise their moral obligation to see that adequate compensation is paid to these unfortunate loyalists?
    Mr. ORMSBY-GORE: That is a question of the interpretation of words which must be addressed to the Prime Minister.

    KENYA COLONY (VOI TAVETA RAILWAY).
    Sir ROBERT HAMILTONasked the Under-Secretary of State for the Colonies whether representations have been received from any non-official body in Kenya against the proposed removal of the Voi Taveta Railway; and if the proposed removal of the line from Kenya for the purpose of improving an existing line in the mandated territory of Tanganyika has the approval of the Kenya Government?
    Mr. ORMSBY-GORE: The Acting Governor of Kenya has recently telegraphed representations from the Associated Chambers of Commerce in Kenya against the removal of the Voi Taveta Railway. The Governor of Kenya bad previously asked that definite steps should not be taken in the matter pending further discussion, but, as I stated in my reply to the hon. Member's question of the 27th March, the decision arrived at has been taken after long and careful consideration and the Secretary of State has informed the Governor that it cannot be reconsidered. I may explain that this line is not the property of the Kenya Government but of the War Office, and that its reconditioning was estimated to cost half a million, with a loss of £5,000 to £6,000 a year on its working.
    Sir R. HAMILTON: Are we to understand that the decision was taken without consulting the Government of Kenya?
    Mr. ORMSBY-GORE: Reports were received from Kenya and from an inspector, and the matter was very fully discussed for many weeks, and in the interests of the Tanganyika Territory, as a mandated country, we had no option but to take up this extremely costly and military railway.

    MERCHANDISE MARKS BILL.
    Mr. PRINGLEasked the Undersecretary of State for the Colonies
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    whether he has received any communication from representatives of any of the Colonies, and, if so, which, expressing views unfavourable to the proposals relating to the marking of eggs or any other commodities included in the Merchandise Marks Bill?
    Sir C. KINLOCH-COOKE: Is it not. a mistake on the part of the hon. Member to have omitted the word "Dominions "? Should it not say "representations from any of the Dominions and Colonies "?
    Mr. PRINGLE: I am sorry for the omission.
    Mr. ORMSBY-GORE: The answer is in the negative, so far as the principle of the Bill is concerned, as regards both the Dominions and the Colonies, but representations suggesting modifications in the proposed method of marking certain imported foodstuffs have been made on behalf of some of the self-governing Dominions, and are under consideration
    Mr. PRINGLE: Should not the House be made acquainted immediately representations are made while the Bill is under discussion?
    Mr. ORMSBY-GORE: I do not think that that necessarily follows.
    Mr. PRINGLE: In view of the importance of the House being made acquainted with the views of the Colonies, will the hon. Gentleman not reconsider the decision?
    Mr. ORMSBY-GORE: These are representations of one Government to another Government. Any recommendations which are considered desirable will be stated by the Minister representing the Government on the Committee stage of the Bill.
    Mr. PRINGLE: Is it not the case that when representations affecting legislation are made between one Government and another within the Empire, the legislature affected should be acquainted with these representations? [HON. MEMBERS: "Agreed! "]
    Mr. PRINGLEasked the Under-Secretary of State for Foreign Affairs whether he has received any communication from representatives in this country

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    of any foreign Government, and, if so, which, expressing views unfavourable to the proposals relating to the marking of eggs or any other commodities included in the Merchandise Marks Bill?
    Mr. McNEILL: Communications of the nature indicated by the hon. Member have been received from the French, Netherlands and Lithuanian representatives in this country.

    NYASALAND (CONSCRIPTION).
    Mr. SHORTasked the Under-Secretary of State for the Colonies whether proposals have been submitted through the Governor of Nyasaland for the adoption of some scheme of military conscription in the Protectorate; and, if so, will he state what action has been taken thereon?
    Mr. ORMSBY-GORE: Legislation involving the principle of compulsory service for Europeans and Asiatics in Nyasaland was prepared, but it has been decided not to proceed with it, and the Governor has been so informed.
    Mr. SHORT: Was the scheme prepared with the sanction of the Governor?
    Mr. ORMSBY-GORE: The matter was, I think, the subject of considerable difference of opinion on the Executive Council of Nyasaland.

    FEDERATED MALAY STATES (INDIAN REPRESENTATION).
    Mr. J. H. SIMPSONasked the Under-Secretary of State for the Colonies whether he is aware that the Indian inhabitants of the Federated Malay States comprise 23 per cent. of the population, but are unrepresented on the reformed Federal Council and will he have this fact taken into consideration?
    Mr. ORMSBY-GORE: Yes, Sir. The High Commissioner is considering, in consultation with the Malay Rulers, what arrangements can best be made for securing the representation of Indian immigrant labourers in the States comprising the Federation, which he considers would be more conducive to their own interests and generally preferable to their being represented on the Central Council.

  RUSSIA.

    BRITISH TRAWLERS (PROTECTION).
    Mr. SUTCLIFFEasked the Under-Secretary of State for Foreign Affairs what arrangements His Majesty's Government propose to make for the protection of British trawlers fishing off the Murmansk coast during the winter season 1923–24?
    The FIRST LORD of the ADMIRALTY (Mr. Amery): I have been asked to reply. I am afraid it is not yet possible to say more than that we hope to be able to make arrangements to give some measure of protection throughout the whole of next winter season.

    TRADE DELEGATION.
    Sir W. DAVISONasked the Under-Secretary of State for Foreign Affairs if he will inform the House as to the action which has been taken by the British Government, in view of the affront to Great Britain contained in the Soviet Government's reply to the representations made by Mr. Hodgson, on behalf of the British Government, in connection with the condemnation to death of Father Butkevitch; and whether, in view of the refusal of the Soviet Government to make redress for the injuries to British citizens for which they are responsible, and also having regard to the continuance of Bolshevik propaganda within the British Empire, an intimation will be given forthwith to the Soviet Government that their trade delegation with its special privileges will no longer be permitted to remain in Great Britain
    Mr. McNEILL: I am unable at present to add anything to the reply I gave on 9th April to the hon. Member for the Scottish Universities.
    Sir W. DAVISON: Would the hon. Gentleman say what object this trade delegation serves in this country, except to circulate propaganda?
    Sir HENRY CRAIK: In view of the fact that a considerable time has elapsed since I put a question on the subject, is it not possible now to announce a decision?
    Mr. McNEILL: No decision can yet be announced.
    Sir W. DAVISONasked the Under-Secretary of State for Foreign Affairs whether he is aware that the Russian

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    trade delegation in Great Britain have negotiated the sale in this country, on behalf of the Soviet Government, of goods which are the property of British citizens, and what action is being taken in the matter?
    Mr. McNEILL: I am aware that in certain cases the title of the Soviet Government to goods sold by them in this country has been challenged, but where goods sold on behalf of the Soviet Government are claimed by British subjects as their property, it is for them to establish their right to these goods by proceedings in the courts.
    Captain ERSKINE-BOLSTasked the Under-Secretary of State for Foreign Affairs if it is a fact that the Russian trade commission in London have diplomatic privileges, and are their couriers allowed to bring their luggage through free at the Customs; and if the Government will consider this question very seriously with a view of withdrawing this privilege?
    Mr. McNEILL: The Russian trade delegation in London has no regular diplomatic status but enjoys the privileges set forth in Article 5 of the Trade Agreement. Its couriers are allowed to carry sealed bags which are exempt from Customs examination up to a limit of 10 kilos per week. With regard to the last part of the question, I would refer the hon. Member to my reply to the question of the hon. Member for the Scottish Universities on 9th April.
    Captain ERSKINE-BOLST: Is it not a fact that this so-called trade organisation is repeatedly abusing its privileges, and is it not high time that the whole question was reviewed?
    Mr. SPEAKER: That is a matter for debate, and not for a question.

    METROPOLITAN BENJAMIN.
    Mr. BRIANTasked the Under-Secretary of State for Foreign Affairs if he has any information as to the arrest of the Metropolitan Benjamin, of Petrograd, in November last; if there is any report of his trial issued by the Soviet Government; and is it known if he has been shot or otherwise executed?
    Mr. McNEILL: The Metropolitan Benjamin, after a trial lasting three
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    weeks, was condemned to death last July, and there is every reason to believe that he was shot shortly afterwards. It is not known whether any report of the trial was published.
    Mr. BRIANT: Can the hon. Gentleman say whether a British representative had access to this trial, and whether an official report has been sent to his Department?
    Mr. McNEILL: I do not know whether there was an official report.
    Mr. BRIANT: Will the hon. Gentleman ascertain?

    RELIGIOUS BODIES (PROTEST).
    Mr. PENNEFATHERasked the Prime Minister if his attention has been drawn to the protest against the ruthless warfare upon all forms of religious belief carried on by the Soviet Government which has been signed by leaders of most of the religious bodies in this country; and, if so, will he state what response, if any, the British Government propose to make to this protest and appeal?
    Mr. McNEILL: The answer to the first part of the question is in the affirmative. As regards the second part, I must refer the hon. Member to the reply I have just given to the hon. Member for South Kensington (Sir W. Davison).
    Mr. LANSBURY: In view of the contradictory reports on this matter, will the Government request the British representative in Moscow to furnish an official report, so that the House may have a purely non-partisan statement on the subject?
    Mr. McNEILL: I do not know that it is necessary to call for a special report. We are constantly receiving information.
    Mr. LANSBURY: May we not have publication of the information which comes through from the, British representative in Moscow?
    Mr. McNEILL: I cannot promise that at the present time.
    Mr. LANSBURY: We should have it.

    BRITISH WORKMEN IN FRANCE.
    Mr. D. G. SOMERVILLEasked the Under-Secretary of State for Foreign

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    Affairs if, owing to the shortage of labour in France, foreign workmen are still being invited to that country from all parts of Europe; whether any invitations have been issued to workmen in this country; and whether, even admitting the difficulties of their position, there is any reason why the openings, such as they are, should not be explained to single men?
    The MINISTER of LABOUR (Sir Montague Barlow): I have been asked to reply. I have no precise information as to the number of foreign workmen who are being invited to work in France, but no invitations have as yet been issued by the French Government as regards workmen in this country. The British Government is in correspondence with the French authorities on the subject, and I hope it may be found possible in the near future to notify a certain number of vacancies for the consideration of persons out of employment in this country.

    LIQUOR TRAFFIC (UNITED STATES).
    Mr. J. H. SIMPSONasked the Under-Secretary of State for Foreign Affairs whether he will inform the House of the terms of the representations made by the United States Government with regard to the export of liquor from West Indian ports?
    Mr. FOOTasked the Undersecretary of State for Foreign Affairs whether any representations have been made to this country by the Government of the United States with reference to the unlawful importation of intoxicating liquor into America; and, if so, what these representations were?
    Mr. McNEILL: I cannot, in answer to a question, give the actual terms of the representations made by the United States Government, but the suggestions they have made are that restrictions should be placed on the transfer of United States vessels to British registry, and that a treaty be concluded containing reciprocal provisions authorising the authorities of the British and American Governments respectively to exercise a right of search of vessels of the other beyond the three-mile limit of territorial waters.
    Mr. SIMPSON: Can the hon. Gentleman lay Papers on the Table of the
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    House, or revert to the practice which obtained during the War, and lay Papers in the Library?
    Mr. McNEILL: I will consider that.
    Mr. FOOT: Has any answer been made yet to the representations of the United States Government?
    Lieut.-Colonel ARCHER-SHEE: Will the hon. Gentleman give the House an assurance that in no circumstances will we agree to have our ships searched outside the three-mile limit.?
    Mr. McNEILL: In reply to the hon. Member for the Bodmin Division (Mr. Foot), answers have been sent and we have shown every desire to meet the United States wherever possible.
    Mr. PRINGLE: Did you not say that we were in favour of the freedom of the seas?

  FRANCE AND RUHR DISTRICT.

    BRITISH TRADE.
    Mr. FRANK GRAYasked the Under-Secretary of State for Foreign Affairs whether the French authorities have established an office in Cologne for the purpose of collecting French Customs duties; whether these functions are in competition with functions claimed to be within the rights of the German authorities; whether this office has been established by the French authorities with the approval of His Majesty's Government; and can he make a statement as to the effect which these competing claims have upon British trade in Cologne?
    Lieut.-Colonel BUCKLEY (Secretary, Overseas Trade Department): I have been asked to reply. His Majesty's Government agreed on 17th January, 1923, to the application in the British zone of the French Customs sanction and an office has been set up by the French, authorities in Cologne the functions of which arc, so far as I am aware, limited to the grant of permits for the export of goods from occupied to unoccupied territory and for the collection of export duties on such goods. If this is so, its functions can scarcely be regarded as in competition with the functions claimed to be within the rights of the German authorities, who, in the ordinary course, would not levy duties on such traffic.
    Mr. GRAY: Did the Government, in making that concession, take steps to protect British trade?
    Lieut.-Colonel BUCKLEY: The question has been answered.
    Captain WEDGWOOD-BENN: Why did the British Government consent to the setting up of this office, which harasses British trade? [HON. MEMBERS: "Answer! "]
    Mr. DARBISHIREasked the President of the Board of Trade the value of goods exported from occupied Germany to this country since the recent French advance into German territory, the value of goods exported from unoccupied Germany to this country in the same period, and the corresponding figures over the same period for 1922?
    Lieut.-Colonel BUCKLEY: I regret that I am unable to furnish the particulars desired by the hon. Member,
    Mr. D. G. SOMERVILLEasked the President of the Board of Trade if he has yet received any statistics showing the effects, and, if so, of what nature, on any British industries of the French occupation of the Ruhr and the commercial consequences resulting from it?
    Lieut.-Colonel BUCKLEY: No statistics of the kind mentioned are available.
    Mr. SOMERVILLE: Is it not a fact that certain British industries, such as iron and steel, have benefited?
    Mr. SHINWELL: Are we to understand from the reply that the Board of Trade are not in possession of any information showing the alleged disastrous effect on British trade as a result of the occupation of the Ruhr?
    Lieut.-Colonel BUCKLEY: I have no information.
    Mr. SHINWELL: No information whatever?
    Lieut.-Colonel BUCKLEY: No special information.
    Captain BENN: Does the hon. and gallant Gentleman mean that he cannot state the amount of shipments from Cologne for the period mentioned?
    Lieut.-Colonel BUCKLEY: Oh yes, if a question be put down.

    TRANSPORT FACILITIES.
    Mr. F. GRAYasked the Under-Secretary of State for Foreign Affairs whether his attention has been called to the increased activities of the French military authorities in the Ruhr area who are committing acts which are not sanctioned by treaty, international arrangement, or law, but constitute acts of war; and whether the British Government is giving transport and other facilities for such acts?
    Mr. McNEILL: As the hon. Member is aware, His Majesty's Government have expressly dissociated themselves from the French action in the Ruhr, and they are giving no facilities other than those which were afforded before the occupation.
    Mr. GRAY: Is it not a fact that the Government have promised special transport facilities and have also facilitated the action of the French in rearranging the areas?
    Mr. McNEILL: The facilities that have been given for transport are those which were enjoyed before the occupation began.
    Captain BENN: Has the hon. Gentleman read the speech in which General Smuts said that it was time we spoke out?
    Mr. McNEILL: I have seen the speech.

    RHINELAND.
    Captain BENNasked the Prime Minister whether he has indicated to the French Government the policy of His Majesty's Government towards the proposal for the declaration of a Rhineland republic?
    Mr. BRIDGEMAN: No such proposal has been made to His Majesty's Government?
    Captain BENN: Has His Majesty's Government indicated to the French Government their attitude towards the proposal to set up a Rhineland Republic?
    Mr. BRIDGEMAN: It would be premature to indicate the attitude of this Government towards the proposal before the French Government have made it.
    Captain BENN: Is it not a fact that such proposals have been made—not, indeed, directly by the French Govern-

    1661
    ment—and have they been apprised of our attitude? [HON. MEMBERS "By whom? "]
    Lieut.-Colonel WATTS-MORGAN: By your Press—Lord Rothermere yesterday and the "Pictorial" and others. [HON. MEMBERS: "Order "] Well, you asked for it.

    TRADE LICENSING OFFICES.
    Mr. DARBISHIREasked the President of the Board of Trade if he is aware that the three licensing offices now in existence in the occupied area (Franco-Belgian, Ruhr and German) are all working against one another, and are causing great confusion; and if he will accede to the request of the British Chemical Trade Association that a new licensing office should be opened at Cologne, which should have full authority to deal with goods consigned to this country.
    Lieut.-Colonel BUCKLEY: I am aware that the absence of a central authority for the uniform regulation of trade with the occupied territories has led to some confusion, but the present licensing arrangements are now under review, and His Majesty's Government are in communication with the French Government on the matter. I have every reason to hope that the new arrangements will improve conditions in this respect. As regards the last part, of the question, I would refer the hon. Member to the reply returned to his similar question on the 26th March.

    MEMEL.
    Mr. F. GRAYasked the Under-Secretary of State for Foreign Affairs whether he can inform the House of the present state of affairs in Memel; and whether the unrest and disturbances have arisen as a result of taxation to meet the cost of occupation by the Allies?
    Mr. McNEILL: According to the information of His Majesty's Government there has been a general strike in Memel, but this has now ended and work has been completely resumed. I have no information confirming the suggestion made by the hon. Member in the last part of the question.

    EMPIRE SETTLEMENT.
    Lieut. - Colonel Sir J. NORTON-GRIFFITHSasked the Parliamentary Secretary to the Overseas Trade Department (1) if he will arrange for the Oversea Settlement Committee to get into direct communication with boards of guardians with a view to interesting local authorities in Empire settlement;
    (2) if he will state under which Act boards of guardians can contribute £10 towards the expenses of people, who are desirous of migrating; and whether the efforts of boards of guardians in the direction of migration can be co-ordinated with the work of the Oversea Settlement Committee?
    Lieut.-Colonel BUCKLEY: The Over-sea Settlement Committee, which is working in close co-operation with the Ministry of Health, is preparing a circular letter to boards of guardians in regard to schemes under the Empire Settlement Act, which will, it is hoped, be issued at an early date. I am sending my hon. and gallant Friend a note of the statutes to which he refers.
    Sir C. KINLOCH-COOKE: Have not the Poor Law guardians the necessary powers already under the Poor Law Acts?
    Lieut.-Colonel BUCKLEY: Yes. I am sending my hon. and gallant Friend a list of the statutes.
    Sir C. KINLOCH-COOKE: And the Poor Law authorities already emigrate numbers of people?
    Lieut.-Colonel BUCKLEY: Yes.
    Sir J. NORTON-GRIFFITHSasked the Parliamentary Secretary to the Overseas Trade Department if he is now in a position to state what improvements he proposes to effect with a view to speeding up the machinery of the Oversea Settlement Committee for the migration of those families who wish to settle in the Dominions?
    Lieut.-Colonel BUCKLEY: Delays in connection with family migration are not, I think, attributable to any defects in the machinery of the Oversea Settlement Committee, but to two great difficulties, namely, the lack of accommodation for families in the country districts overseas, and the question of providing maintenance

    1663
    for families overseas whilst the breadwinners are obtaining the necessary training in land work. As I have already informed my hon. and gallant Friend, these two questions are engaging my particular attention, but I am not yet in a position to make any statement.
    Lieut.-Colonel CROFT: Have the Government any definite plan, or is a plan contemplated for laying before the Imperial Conference in October?
    Lieut.-Colonel BUCKLEY: We are considering it. I cannot say that we have a definite plan yet.
    Sir J. NORTON-GRIFFITHS: Is there any need to await the Imperial Conference?
    Lieut.-Colonel BUCKLEY: No, Sir.
    Captain BERKELEYasked the Prime Minister whether he is aware of the existence of the European Settlers' League in Fiji; and whether, in view of the potentialities of this Colony, the Government is prepared to co-operate with that organisation in encouraging British settlement in that Colony?
    Mr. ORMSBY-GORE: I am aware of, and sympathise with, the feeling in Fiji in favour of British settlement but I am not at present in a position to give any assurance as to the prospect of His Majesty's Government being able to co-

    SAILINGS FOR 12 MONTHS ENDED 31ST MARCH, 1923.

    Destination

    Under free passage scheme (Two months estimated)

    Under Empire Settlement Act.

    Total.

    Canada

    …

    …

    …

    3,619

    167

    3,786

    Australia

    …

    …

    …

    9,691

    11,740

    21,431

    New Zealand

    …

    …

    …

    2,597

    1,767

    4,364

    Totals

    …

    15,907

    13,674

    29,581

    Mr. JARRETTasked the Parliamentary Secretary to the Overseas Trade Department if he is in a position to give the names of the gentlemen who are serving on the Oversea Settlement Committee; whether any of them have never visited the Overseas Dominions or Colonies; and, if so, whether he can give their names?
    Lieut.-Colonel BUCKLEY: In view of the length of the answer, I will, with the
    1664
    operate under the Empire Settlement Act in assisting persons in this country to settle in the Colony.
    Captain BERKELEY: Will the Government be in a position in the near future to make a statement on the subject of encouraging settlement in Fiji?
    Mr. ORMSBY-GORE: The matter will have to be discussed very carefully with the Governor, in view of the financial position of Fiji, and I am afraid it will take a long time to communicate with him and to get his answer back.
    Sir J. NORTON-GRIFFITHS: Is it not the intention, as far as possible, that the various Crown Colonies are to participate in the Empire Settlement Act?
    Mr. ORMSBY-GORE: If they are suitable.
    Mr. GILBERTasked the Parliamentary Secretary to the Overseas Trade Department the number of persons who have been sent by the Oversea Settlement Committee to Canada, Australia, and New Zealand during the last 12 months?
    Lieut.-Colonel BUCKLEY: The total number of persons who have proceeded to the three Dominions in question during the 12 months ended the 31st March, 1923, under the free passage scheme for ex-service men and women and the Empire Settlement Act, respectively, is as follows:
    hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The names of the members of the Overseas Settlement Committee are as follow:—

    Lieut.-Colonel A. Buckley, D.S.O., M.P. (Chairman).

    The Hon. W. Ormsby-Gore, M.P. (Deputy-Chairman).

    1665

    Mr. H. B. Betterton, C.B., O.B.E., M.P. (Deputy-Chairman).

    Mr. T. C. Macnaghten, C.M.G., C.B.E. (Vice-Chairman).

    Mr. J Ambrose.

    Mr. G. F. Baker (Board of Trade).

    Mrs. Harrison Bell.

    Viscount Burnham.

    Sir William Clark, K.C.S.I., C.M.G. (Department of Overseas Trade).

    Mr. L. Cuthbertson (Treasury).

    Mr. A. B. Lowry, C.B. (Ministry of Health).

    Mr. J. Paterson (Ministry of Labour).

    Colonel L. H. R. Pope-Hennessy, D.S.O. (War Office).

    Dame Meriel Talbot, D.B.E.

    Mr. Oscar Thompson.

    Mr. Christopher Turner.

    Mr. Wignall, M.P.

    Mr. Cecil H. Wilson, M.P. (acting for Mr. Wignall).

    Sir William Windham, C. B.E.

    Of these, seven have never visited the Dominions or Colonies. Their names are:—

    Mr. H. B. Betterton.

    Mr. G. F. Baker.

    Mrs. Harrison Bell.

    Mr. L. Cuthbertson.

    Mr. A. B. Lowry.

    Mr. J. Paterson, and

    Mr. J. Wignall, M.P., who is now on his way to Australia as a member of the delegation which is visiting the Commonwealth.

    Major Sir GEORGE HAMILTONasked the Parliamentary Secretary to the Overseas Trade Department if he is in a position to indicate what arrangements, if any, have been made by his Department, in conjunction or otherwise with the Oversea Settlement Committee, to extend credit facilities for the purchase of materials necessary for the opening up and development of new areas suitable for settlers overseas?
    The FINANCIAL SECRETARY to the TREASURY (Major Boyd-Carpenter): I am at present unable to add anything to the statement made by my right hon. Friend the President of the Board of Trade on the 10th April.

  TRADE AND COMMERCE.

    COMMERCIAL REPRESENTATIVES (WITHDRAWAL).
    Major Viscount SANDONasked the Parliamentary Secretary to the Overseas Trade Department if he can give a list of the places where his Department have been in the past but fire no longer represented; how much this retrenchment save the Treasury directly: and, in view of the cost entailed upon the country indirectly through not bring so represented, whether he is prepared to regard the recreation of these posts, as the first call, when any further funds are made available for his Department?
    Lieut.-Colonel BUCKLEY: Posts in the Commercial Diplomatic or Trade Commissioner Services have been closed at the following places:

    Bogota.

    Havana.

    Lisbon.

    Santiago.

    Sofia.

    Hong Kong.

    Lima.

    Montevideo.

    Singapore.

    Teheran.

    In addition the junior officer has been withdrawn from the following posts:

    Buenos Aires.

    Brussels.

    Madrid.

    Rio de Janeiro.

    Washington.

    The annual cost of maintaining these posts was, approximately, £31,000. As regards the last part of the question, I can assure my Noble Friend that I am fully alive to the importance of strengthening our commercial representation abroad as soon as the financial position permits, and at places where British interests will most benefit.
    Mr. HANNON: Would it not strengthen the financial position to re-create these offices?

    DECOLOURISING CARBON.
    Mr. ROBERT YOUNGasked the President of the Board of Trade what was the quantity and value of decolourising carbon imported into this country during the years 1920, 1921, and 1922, with the amount and value of such

    1667
    imports from Holland, Germany, Austria, and America, respectively; and what amount during the same period was re-exported and to which countries?
    Lieut.-Colonel BUCKLEY: I regret that I am unable, to furnish the particulars desired by the hon. Member.

    IMPERIAL PREFERENCE.
    Captain BENNasked the Prime Minister whether he can make any statement as to the Government's policy for the extension of Imperial preference?
    Mr. HANNONasked the Prime Minister whether his attention has been drawn to a statement made by the Prime Minister of Australia in a speech at Sydney on the 5th April, wherein ho complained of inequalities in regard to trade preference; and whether, seeing that in 1921 Australia gave a preference to Great Britain representing nearly £9,000,000, while Great Britain's preference to Australia amounted only to £45,000, he will consider the advisability of extending the preferential duties now given to Australia?
    Mr. BR1DGEMAN: My right hon. Friend has seen the Press report of the statement by the Prime Minister of the Commonwealth of Australia. It has already been announced by my right hon. Friend the President of the Board of Trade, in his speech on the 10th April, that the question of Preference will be included among the subjects considered at the Imperial Economic Conference.
    Captain W. BENN: Would the right hon. Gentleman answer my question? What is the policy of the Government in reference to the extension of Preference? Has the Government a policy, and, if so, what is it?
    Mr. BRIDGEMAN: I have given an answer.

    IMPERIAL ECONOMIC CONFERENCE (CROWN COLONIES).
    Captain BERKELEYasked the Prime Minister whether, in view of the economic importance of the Crown Colonies, he will consider inviting the
    1668
    leaders of the elected members of the legislative councils, and/or the most recently retired ex-governors of each of the principal of these colonies, to attend the Imperial Economic Conference in an advisory capacity?
    Mr. BRIDGEMAN: I am not in a position at present to add anything to the reply given to the hon. Member for Dart-ford on the 20th March.

    LAUSANNE CONFERENCE.
    Lieut.-Commander KENW0RTHYasked the Prime Minister whether the place and date for the resumed Peace Conference with Turkey has been decided upon; if so, what are they; who will be the British representatives at the Conference; and whether the Russian Government has been invited to participate in the resumed Conference?
    Mr. McNEILL: The negotiations for a treaty of peace with Turkey will be resumed at Lausanne on 23rd April. The British representative will be Sir Horace Rumbold, His Majesty's High Commissioner at Constantinople-. The answer to the last part of the question is in the negative.
    Lieut.-Commander KENWORTHY: Why was the Russian Government invited to the first Conference and why is it omitted from the second?
    Mr. McNEILL: That is a question for debate rather than for an answer to a question.
    Lieut.-Commander KENWORTHY: I submit that that answer should have been given, as the question is on the Paper. Am I not entitled to a reasonable answer?

    ASIA MINOR (AMERICAN CONCESSIONS).
    Colonel WEDGWOODasked the Prime Minister whether the Chester concessions in Asia Minor have as yet been the subject of discussion between His Majesty's Government and the French Government; and whether we may be assured that an attitude of hostility towards these American concessions will not be adopted by His Majesty's Government?
    Mr. McNEILL: The answer to the first part of the question is in the negative. In reply to the second part, His Majesty's Government have; not yet received -definite information as to the exact nature of the concessions, but it is evident that there could be no grounds for hostility to the grant of new concessions by the Turkish Government in Turkish territory except in the event of their conflicting with concessions previously granted to British subjects.

  SCOTLAND.

    SECRETARY FOR SCOTLAND.
    Mr. STURROCKasked the Prime Minister whether, in view of the fact that the Convention of Royal Burghs has again urged the creation of a Secretaryship of State for Scotland, and that many public j bodies in Scotland have reiterated their view that, in the interests of administration, the status of the Scottish Secretary should be improved, he can give an undertaking that action in the matter is in contemplation by the Government?
    Mr. BRIDGEMAN: The Government recognise the importance of this question, but my right hon. Friend cannot hold out any hope of being able to deal with it this Session.
    Mr. SHINWELL: Having regard to the; important part which Scotland plays in national affairs, will the Government give immediate consideration to this question?
    Mr. RHYS DAVIES: Will the right hon. Gentleman remember Wales in this connection?
    Mr. MACPHERSON: Is the right hon. Gentleman aware that all parties in the House are anxious for this reform?
    Mr. BRIDGEMAN: I think that is conveyed by my right hon. Friend s answer, but he says he is unable at the moment to deal with the matter.

    COUNTY COUNCILS (BURGHAL MEMBERS).
    Mr. WESTWOODasked the Undersecretary to the Scottish Board of Health if he is aware that burghal members of county councils in Scotland are not allowed to vote on any question which entails expenditure by the county council, and is he prepared to consider the neces-
    1670
    sary amendment to the Local Government Acts to give all members of county councils absolute equality?
    The SOLICITOR-GENERAL for SCOTLAND (Mr. F. C. Thomson): My Noble Friend is not aware that there is any demand for an alteration of the statutory provisions of the nature suggested by the hon. Member, and he does not contemplate legislation on these lines.

    WATER SUPPLY (SCHOOLS).
    Mr. WESTWOODasked the Undersecretary to the Scottish Board of Health if he is aware that certain education authorities in Scotland have had difficulty in obtaining a water supply for certain of their schools; and that the procedure to allow them to get the same, laid down by the Education (Scotland) Act, 1S18, Section 11 (3), is both cumbersome and costly; and will he consider the simplification of procedure to obtain the necessary water supply for schools?
    Captain ELLIOT (Parliamentary Under-Secretary for Health, Scotland): The only case involving water supply which has come under the notice of the Scottish Education Department recently was settled by agreement. On the information before him, my Noble Friend is not prepared to promote fresh legislation until he has had further experience of the procedure laid down in the Education ("Scotland) Act, 1918.
    Mr. WESTWOOD: Is it not a fact that the County of Berwickshire Education Authority have had very great difficulty in getting a supply of water for some of their schools, and that it has been a, costly procedure, due to the fact that landlordism has kept them from supplying water?
    Captain ELLIOT: There is only one ease which has come under the notice of the Department, and that case was settled by agreement. It does not, therefore, appear that landlordism has been responsible for holding up the water supply of these schools.
    Mr. KIRKWOOD: Of course, that is the answer of a landlord.

    INTERMEDIATE SCHOOLS.
    Mr. MacNEILL WEIRasked the Under-Secretary to the Scottish Board

    1671
    of Health why the Scottish Education Department, in pursuance of the policy laid down in Circular 44, are proposing to limit ox1 abolish the intermediate schools which provide for a three years' course in higher education, seeing that the Education (Scotland) Act, 1918, Section 6 (1) (a), specifically enjoins upon education authorities a scheme for the adequate provision throughout the education area of the authority of all forms of primary, intermediate, and secondary education in day schools?
    Captain ELLIOT: The hon. Member would appear to be under some misapprehension. Whilst Circular 44 foreshadows the discontinuance of the Intermediate Certificate in its present form, it does not propose to limit or to abolish intermediate schools as denned in the Education (Scotland) Acts.

    COMMITTEE OF IMPERIAL DEFENCE.
    Lieut.-Colonel MOORE-BRABAZONasked the Prime Minister whether he can give any information to the House as to the progress which is being made by the Committee of Imperial Defence on the problems now before them, more especially on the subject of co-operation between the Navy and the Air Force?
    Mr. BRIDGEMAN: Steady progress is being made in taking evidence and collecting material for the decision. Nine meetings have already been held.

    WAR PENSIONS ACTS (AMENDMENT) BILL.
    Mr. FREDERICK ROBERTSasked the Prime Minister whether he is aware of the general approval given to the War Pensions Acts (Amendment) Bill by the central organisation and branches of the British Legion and other ex-service men's organisations: and whether, in the event of its being shown that the Measure meets with the general acceptance of the House, the Government will allow time this Session for the further consideration of the Measure referred to?
    Mr. BRIDGEMAN: My right hon. Friend sees no prospect at present of
    1672
    being able to find time for this Bill, but an opportunity will arise for a discussion of the administrative principles involved on the Vote for the Ministry of Pensions.

    EGYPT (DEPORTEES).
    Mr. MORELasked the Prime Minister whether the members of the Egyptian delegation, arrested and deported without trial, together with Zaghloul Pasha, are still in the Seychelles; and whether His Majesty's Government propose to keep them there now that their leader is at liberty?
    Mr. McNEILL: The reply to both parts of the question is in the affirmative.

    RENT RESTRICTIONS BILL.
    Sir KINGSLEY WOODasked the Prime Minister whether he can state when the text of the Rent Restrictions Bill will be circulated and the date of its Second Reading?
    Mr. BRIDGEMAN: It is hoped to make an announcement in regard to this matter within the next few days.
    Sir K. WOOD: Is my right hon. Friend aware that the provisions of the present Act expire in a few weeks, and that there is great anxiety in the country as to the intentions of the Government in this connection?
    Mr. BRIDGEMAN: I have no information to add.
    Mr. PRINGLE: Is it the intention to delay the introduction of this Bill so long that the House will not have adequate opportunity of discussing it; and, consequently, may we not have another House of Lords decision as in the case of the last Act?

    STATIONERY OFFICE (PUBLICATION OF OFFICIAL PAPERS).
    Sir EDWIN STOCKTONasked the Prime Minister whether his attention has been called to the fact that His Majesty's Stationery Office has just been publishing statistics for 1920, and that instances of delay of this nature are frequent; whether he will consider the desirability of an inquiry into the methods of compiling and

    1673
    publishing these documents, which, when issued, contain no real effective up-to-date information; and whether he will also institute an inquiry into the means of publishing and distributing Official Papers by the Stationery Office generally?
    Major BOYD-CARPENTER: I am unable, without a reference to the particular statistics which the hon. Member has in mind, to say whether the Stationery Office is responsible for a delay in publication, but generally speaking the causes of delay in any such cases would not rest with the Stationery Office. An advisory committee is inquiring into the methods of compiling and publishing official statistics and I will see that instances of late publication receive attention. I see no occasion for setting up machinery, other than that which already exists, for inquiring into the general work of the Stationery Office in the directions indicated.

    BRAZIL CENTENARY EXHIBITION (BRITISH PAVILION).
    Mr. R. DAVIESasked the Parliamentary Secretary to the Overseas Trade Department whether it is contemplated, or has been decided, to hand over the exhibition buildings at Rio to the Brazilian Government; what amount was granted by the British Government towards such buildings; and what are the reasons for now handing the buildings to the Brazilian Government?
    Lieut.-Colonel BUCKLEY: The answer to the first part of the question is in the affirmative. His Majesty's Government contributed last year £35,000 towards British participation in the Rio International Exhibition against £26,000 contributed by financial and commercial firms and companies having interests in Brazil. The greater part of these amounts was required for the construction and decoration of the British pavilion. As regards the last part of the question, the committee presided over by my hon. Friend the Member for the Aylosbury Division which organised the contribution referred to above suggested to His Majesty's Government, on behalf of the firms concerned, that at the close of the exhibition the pavilion should be handed over to the Brazilian Government as a permanent memorial of the centenary of the Brazilian
    1674
    Republic, and His Majesty's Government had no hesitation in agreeing to the proposal.
    Mr. DAVIES: Does not the hon. Gentleman think that this £30,000 would be better spent in building houses for our own people?

    OVERSEAS TRADE DEPARTMENT (SHOWROOMS).
    Mr. GILBERTasked the Parliamentary Secretary to the Oversea Trade Department (1) whether his Department maintain any sample, showrooms other than those in the City of London; if so, in what towns they are provided and what is the staff employed at each; and what is the approximate annual charge for maintaining the same;
    (2) what is the area of the permanent sample rooms maintained by his Department in the City of London; what is the number of staff engaged in the same; and what is the estimated yearly cost of these sample rooms; whether he has any Reports as to the value of these showrooms to British trade; and if it is intended by his Department to permanently continue the same?
    Lieut.-Colonel BUCKLEY: In view of the length of the answers I will with the hon. Member's permission circulate the answer to these questions in the OFFICIAL REPORT.
    Mr. A, V. ALEXANDER: Are these showrooms actually self-supporting, or is there any chance at all of revenue from them?
    Lieut.-Colonel BUCKLEY: Not the travelling showrooms.
    Following if the answer promised:
    No sample showrooms other than those in the City of London are maintained by my Department. The area of the sample rooms at 7–9, Old Bailey is 6,720 square feet. It is intended in the interests of economy to dispense with these premises as soon as the necesarry arrangements can be made. The samples will then be displayed in such space as can be made available in the headquarters office of the Department of Overseas Trade. The staff engaged in the Foreign Samples Section consists of three permanent and four temporary officers, whose total remuneration,

    1675
    inclusive of bonus, amounts to £1,577. As regards the annual cost of the premises; I would refer the hon. Member to the First, Commissioner for Works. The Foreign Samples Section also organises at industrial and commercial centres in the provinces displays of samples of special interest to the district concerned. These displays are organised in collaboration with local chambers of commerce, trade associations, etc., who make arrangements for the necessary accommodation and who have frequently expressed their sense of the value of the exhibits. In these circumstances, I propose to continue their organisation.

    GERMAN REPARATION (POTASH).
    Mr. BLUNDELLasked the Minister of Agriculture whether any reparations have been paid by Germany in the form of potash for agricultural purposes; if any such reparation payments have been made to this country and, if so, what persons or firms have dealt with the potash handed over?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Viscount Wolmer): No reparations have been paid by Germany in the form of potash, but I would refer to the answer given by the Financial Secretary to the Treasury on 29th March to the hon. Member for Dumfries.

  AGRICULTURE.

    PHOSPHATES.
    Mr. BLUNDELLasked the Minister of Agriculture whether any experiments have been carried out to ascertain the value to the British farmer of any of the phosphatic manures derived from the deposits on Nauru and Ocean Islands; and if he can state the results of any such, experiments?
    The MINISTER of AGRICULTURE (Sir Robert Sanders): Experiments with these phosphates were begun in 1921 at two centres, and in 1922 at 50 centres. The season of 1921 was unfavourable. The results for the season of 1922 arc rot yet fully available, and in any case are not likely to be conclusive. As soon as sufficient information has been obtained, the results will be published.
    Mr. BLUNDELLasked the Minister of Agriculture whether he is aware that, during the two and a half years ending 31st December last, the amount of phosphates imported into this country from Nauru and Ocean Islands was approximately one-seventh only of the amount to which we are entitled under the agreement with the Dominions of Australia and New Zealand; whether he will state the terms on which these phosphates are consigned to this country and the firms to whom they are consigned; and whether he will introduce some scheme whereby the cost of phosphatic manures may be cheapened for the British farmer by the use of the large supplies available from this source.?
    Sir R. SANDERS: As regards the first part of the question, the amount of phosphate imported from Nauru and Ocean Islands during the period in question was about one-tenth of the quota to which the United Kingdom is entitled under its agreement with Australia and New Zealand. With regard to the second part of the question, I would refer my hon. Friend to the reply given to the hon. Member for Armagh on the 20th February last. The question of securing the introduction of this material for the benefit of British agriculture is under constant consideration.
    Sir NEWTON MOORE: Can the right lion. Gentleman say what one-tenth of the quota is in tons?
    Sir R. SANDERS: I must have notice of that question.

    CONTROLLER OF HORTICULTURE.
    Lieut.-Commander KENW0RTHYasked the Minister of Agriculture whether there is an office known as the controller of horticulture at the Board of Agriculture held by a Mr. Lobjoit; if so, what are his exact duties; whether he is a grower of fruit and vegetables in Middlesex; and whether he was consulted before His Majesty's Government decided to support the Merchandise Marks Bill now before Parliament?
    Sir R. SANDERS: The reply to the first part of the question is in the affirmative. The Ministry's horticultural division, of which Mr. Lobjoit is in charge, is responsible for the administrative action which is taken under the

    1677
    Destructive Insects and Pests Acts for the eradication or control of diseases and pests of plants and fruit; and for the initiation and administration of schemes for the development of commercial horticulture, etc. The reply to the third part is in the affirmative. Mr. Lobjoit is not a member of the Ministry's permanent staff, and the Ministry is indebted to him for placing his long experience at the service of the Department. It. is not the practice to give the names of Departmental officers consulted about particular Measures. The decision to support the Merchandise Marks Bill was taken by His Majesty's Government on grounds of general policy; and they accept responsibility. Technical officers arc consulted on points of detail as necessity arises.
    Lieut. - Commander KENWORTHY: May I ask whether, among these technical officers, anyone was consulted with a knowledge of the import trade in fruit and vegetables, and also whether any importers of fruit or vegetables were consulted by the Department'
    Sir R. SANDERS: I must have notice of that question.

    CANADIAN CATTLE.
    The Marquess of TITCHFIELDasked the Minister of Agriculture whether lie is aware that of the 221 Canadian store cattle landed at Glasgow a, short time ago a large proportion arc reported to have been purchased by butchers for immediate slaughter, and whether the meat from these animals can be sold as Scotch beef?
    Sir R. SANDERS: I have seen statements of the kind in question. In the case of the cargo of 221 cattle landed at Glasgow, 92 were considered by the Ministry's inspector to be ready for immediate slaughter and were slaughtered in the landing place. The answer to the last par:, is in the affirmative, as it is impossible to distinguish between different kinds of fresh killed meat I would add than fat cattle from Canada have been slaughtered at the port of landing for many years past, so that no new question has arisen as to the classification under the Sale of Food Order, 1921. of the meat from such animals.
    Mr. STURROCK: Is it not the case that this particular cargo of Canadian
    1678
    cattle was landed in such a condition as to dispose of all the arguments of those who opposed the removal of the embargo?

    BARLEY.
    Mr. SHORTasked the Minister of Agriculture the total number of acres under cultivation for the production of barley during 1913 and every successive year down to and including 1922?
    Sir R. SANDERS: As the answer is in the form of a statistical table, I will, with the permission of the hon. Member, circulate it in the OFFICIAL REPORT.
    Following is the table:

    Acres under barley in England and Wales.

    1913

    …

    …

    …

    1,558,856

    1914

    …

    …

    …

    1,504,771

    1915

    …

    …

    …

    1,281,722

    1916

    …

    …

    …

    l,332,076

    1917

    …

    …

    …

    1,459,796

    1918

    …

    …

    …

    1.500.809

    1919

    …

    …

    …

    1,509,716

    1920

    …

    …

    …

    1,637,222

    1921

    …

    …

    …

    1,435,020

    1922

    …

    …

    …

    1,364,018

    AGRICULTURAL LAND (ASSESSMENT).
    Mr. NOEL BUXTONasked the Minister of Agriculture if he will give an approximate figure showing the total amount of relief to local rates which would result from the reduction in the assessment of agricultural land proposed by the Government in his communiqué of 11th April?
    Sir R. SANDERS: It is estimated that the Exchequer Grant necessary to make good the deficit resulting from a reduction in the assessment on agricultural land from one-half to one-quarter will amount to about £2,750,000 per annum for England and Waifs, and corresponding provision will be made in the case of Scotland.
    An HON. MEMBER: Is the right hon. Gentleman aware that this is just about the figure we want for rate relief in necessitous areas?

    WAGES DISPUTE.
    Mr. BONWICKasked the Minister of Agriculture what are the rates of agricultural wages now in force in Suffolk and Cambridgeshire, respectively?
    Sir R. SANDERS: I understand that the wages now prevailing in the counties referred to are about 25s. a week.
    Mr. NOEL BUXTON(by Private Notice) asked the Minister of Agriculture whether, in view of the breakdown of the conferences of representatives of the farmers and the farm workers at Norwich, arranged by the Ministry of Agriculture, he will take steps to apply to the farming industry the provisions of the Trade Boards Acts?
    Sir R. SANDERS: The question as to whether the Trade Boards Acts could be applied to the farming industry without fresh legislation is a matter for the Minister of Labour, but I believe it is, at any rate, doubtful whether the Acts could be so applied.
    Mr. BUXTON: Will the right hon. Gentleman bear in mind that delay in settling the strike involves the possible loss of the barley crops in Norfolk, and will he undertake to maintain the policy of protecting the standard of life which has been so long embodied in the Trade Boards Acts?

    NITRATE.
    Mr. T. SMITHasked the Minister of Agriculture whether he is aware that the nitrate producers' ring decided, at a meeting held in London on 27th March, to increase the price of nitrate, one of the farmers most important fertilisers; and whether he will see that any subsidies or protection granted to the farmers do not result in these rings and combines taking all the benefit?
    Sir R. SANDERS: The answer to the first part is in the negative, and the second part of the question, therefore does not arise.

    IMPERIAL INSTITUTE (WAR MUSEUM).
    Mr. A. M. SAMUELasked the First Commissioner of Works whether the Committee of Inquiry has reported upon the proposal of adaptation of the Imperial Institute for purposes of a war museum: and, if not, whether it is proposed to expend any money on such an adaptation before the Committee has reported and in opposition to the declared wishes of
    1680
    the commercial community against expenditure on a war museum at the Imperial Institute?
    The FIRST COMMISSIONER of WORKS (Sir John Baird): The matter is still under consideration, and I am not in a position to make a statement at present,
    Mr. SAMUEL: Is the right hon. Gentleman aware that there has been a pledge given that no money should be expended or alteration carried out until the Committee has reported?
    Sir J. BAIRD: I cannot add anything to what I have stated.

    WESTMINSTER HALL.
    Sir HARRY BRITTAINasked the First Commissioner of Works whether he can arrange to have the electric lighting of Westminster Hall so placed as to enable visitors to appreciate the beauty of the unique oak roof?
    Sir J. BAIRD: Yes, Sir. I hope that the object desired by the hon. Member will be achieved.
    Sir H. BRITTAINasked the First Commissioner of Works when it is expected that Westminster Hall will be cleared of all scaffolding, etc., and be reopened for visitors?
    Sir J. BAIRD: The hall will be clear of scaffolding in about one month, and a further three or four weeks will be required for the repair and part renewal of the large paving slabs. The hall, therefore, should be free for opening by the end of June.

  POST OFFICE.

    ACCOMMODATION, SOUTHEND-ON-SEA.
    Captain MARTINasked the Postmaster-General whether he is aware of the great increase of all branches of Post Office work at Southend-on-Sea consequent on the growth of that town; that the present General Post Office and telephone exchange are totally inadequate for the amount of work that has to be done, especially during the summer season; that the telephone exchange, with over 1,000 subscribers, is situated in a private house,

    1681
    and the operators are confined to a room of about 27 feet by 12 feet, which is very unhealthy; and whether he will consider the advisability of erecting a more suitable building that would house all branches of Post Office work?
    The POSTMASTER - GENERAL (Sir William Joynson-Hicks): The defects in the accommodation for all branches of postal work at Southend-on-Sea are fully recognised, and the question of providing more suitable accommodation is under consideration. The present financial situation, however, and the difficulty of securing a suitable site, render it impracticable at the moment to proceed with a comprehensive solution of the problem. As the need for increased telephone accommodation has developed into a matter of great urgency, it has recently been decided to provide forthwith a new building to accommodate an up-to-date automatic telephone exchange, and the provision of the building and the equipment will be pressed forward without delay. I fear that some time must necessarily elapse before new premises for the postal work can be provided, but everything is being done to improve the present conditions as far as possible.

    RIDGMONT ( POSTAL ADDRESS).
    Mr. LINFIELDasked the Postmaster-General if the attention of his Department has been called to the protests by the Ridgmont parish council and residents in the Woburn district of Bedfordshire to the serious delay, loss, and inconvenience caused during the past few months by the alteration by the postal authorities of the postal address from Ridgmont, Aspley Guise, Beds, to Ridgmont, Bletchley, Bucks; whether he is aware that traders in these districts are suffering loss through goods being addressed to Bletchley, which is some miles distant; and whether, in view of these difficulties, he will instruct that the original postal address be adverted to.
    Sir W. JOYNSON-HICKS: The alteration of address to which the hon. Member refers was made in May of last year, in connection with a general re-arrangement of the local postal services. If delay to correspondence is to be avoided, Bletchley must form part of the address. There is no reason, however, why Aspley Guise should not also be included, if desired. It is not necessary to mention the county.
    1682
    It is not always practicable to arrange that the head post office which serves a rural district shall hear the same name as the nearest railway station.
    Mr. LINFIELD: Is the right hon. Gentleman aware that great complaints arc being made of the delay caused by the alteration?
    Sir W. JOYNSON-HICKS: I can only say that the General Post Office has received only one complaint of delay in the last 11 months.

  NAVAL AND MILITARY PENSIONS AND GRANTS.

    EXPLANATORY CIRCULARS.
    Mr. WEBBasked the Minister of Pensions whether, in view of his desire to afford to Members the fullest possible information as to the practice with regard to pensions, he will arrange for the circulation to Members of the explanatory circulars issued by him, or at least for their delivery in the Vote Office to such Members as apply for them?
    The PARLIAMENTARY SECRETARY to the MINISTRY of PENSIONS (Captain Craig): As stated in the reply given to the hon. Member for Chester-le-Street (Mr. Lawson) on the 22nd March, my right hon. Friend will gladly arrange for copies of these circulars to be sent direct to hon. Members who let him have their names.

    LIFE CERTIFIVATES (ALTERATION).
    Lieut.-Colonel POWNALLasked the -Minister of Pensions whether, in view of the reduction in the number of war pension committees, he can see his way to authorise all members of such committees, it,Lead of the chairman and vice-chairman oily, to attest pensioners' life certificates?
    Captain CRAIG: My right hon. Friend has had under consideration the restriction of facilities for attestation of life certificates which resulted incidentally from the reorganisation of war pensions committees, and the Treasury have agreed at his instance to accept not only certificates attested by any member of a war pensions committee, but also certificates attested by any duly accredited voluntary worker attached to such a committee, or by a member of any of his advisory committees.

    DISABILITY PENSION (H. W. TIPPERTON).
    Mr. SHORTasked the First Lord of the Admiralty whether he is aware that Henry W. Tipperton joined the Navy for a period of 12 years on 10th September, 1917; that he was invalided from the Navy on 4th September, 1918, and discharged from hospital on 18th September, 1916; that his discharge was due to mental trouble; and that he is now an inmate of the Brentwood mental hospital: and will he inquire into the circumstances of his discharge with a view to Tipperton receiving a disability pension?
    Captain GRAIG: I have been asked to reply. If the man referred to is Henry W. Titterton, about whom the hon. Member asked a question on the 20th March, I would refer him to the answer given on that date. I would add that every assistance would be given his relatives in making a claim on his behalf through the local office.

  HOUSING.

    SUBSIDY.
    Mr. GEORGE HALLasked the Minister of Health if he has seen a resolution passed at a conference of local authorities, held at Cardiff on 24th March last, protesting against the proposed grants towards new housing schemes as being totally inadequate; and whether he will consult with representatives of the Welsh local authorities upon the matter before the Second Reading of the Housing, etc. (No. 2) Bill?
    The MINISTER of HEALTH (Mr. Neville Chamberlain): I have seen a copy of the resolution passed by the conference of representatives of urban district councils of South Wales and 'Monmouthshire to which the question refers. The action taken appears to me to be due to some misapprehension of the position, and I am communicating with the authorities in the matter.

    BUILDING MATERIAL (PRICES).
    Mr. G. HALLasked the Minister of Health whether his attention has been called to a -Resolution passed at the last meeting of the urban district councils of Aberavon and Mountain Ash, expressing the opinion that the shortage of houses is largely due to the high cost of building
    1684
    material arising from the monopoly of the combines of building material manufacturers and merchants and urging the Government at once to lane action to prevent such monopolies being carried on to the detriment of the building trades; and whether he can now state when the committee he promised will be set up to deal with the matter?
    Mr. CHAMBERLAIN: The answer to the first part of the question is in the affirmative. With regard to the second part, I hope to be able to announce the names of the members of the committee in the course of a few days.

    TUBERCULOSIS.
    Mr. TURNERasked the Minister of Health what is the daily death roll from tuberculosis?
    Mr. CHAMBERLAIN: The total number of deaths in England and Wales from all forms of tuberculosis in 1922 was 42,777, or an average of 117 per day.

    TEACHERS' PENSIONS.
    Mr. LINFIELDasked the President of the Board of Education whether he is aware that teachers retiring at. a pensionable age, or under pressure of ill-health retiring when very near to the pensionable age, have been kept waiting for their pensions, or even for an intimation of what pension will be granted and when it will be paid, for a period of over six months; and whether, in such cases, he will expedite the procedure of his Department so that the possibility of inconvenience to public servants may be avoided?
    The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Lord Eustace Percy): I much regret the delays to which the hon. Member refers. Every effort is made to announce awards of pensions as soon as possible after retirement, but delay is unavoidable in some cases by reason of the number of applications, the number of points both of principle and practice arising upon them, and the necessity of investigating back service extending sometimes over 40 years. When delay is unavoidable, efforts are made to avoid hardship by

    1685
    means of interim awards. My right hon. Friend has given directions that inquiry should be made into the special case to which the hon. Member has privately called his attention, in which an interim award was on the point of being made.

  COAL INDUSTRY.

    WORKMEN'S COMPENSATION.
    Mr. D. G. SOMERVILLEasked the Secretary for Mines whether, in any legislation which may be introduced affecting workmen's compensation, he proposes to recommend the inclusion of provisions safeguarding the position of miners who have been injured in pursuit of their calling, but are left without any assistance owing to the bankruptcy of the concerns for which they have worked?
    Mr. BRIDGEMAN: I have been asked to reply. The question to which the hon. Member draws attention has not been overlooked, but I am not in a position to make any statement at present. I hope to introduce an amending Workmen's Compensation Bill very shortly.

    COKE (SHORTAGE).
    Mr. HARDIEasked the Secretary for Mines whether he has been made aware of the statement made on behalf of the iron and steel trade in Sheffield and Rotherham that the works cannot take orders owing to the shortage of coke; and will he take steps to have a home supply secured?
    Viscount WOLMER: I have been asked to reply. My hon. Friend the Secretary for Mines has not seen the statement referred to, but his attention has been drawn by other bodies to the short supplies of coke. Every effort is being made by suppliers of coke to meet inland requirements, and it is hoped that supply will soon overtake the recent sharp increase in demand.
    Mr. HARDIE: Can the Noble Lord tell the House now how much of the coke that ought to go into our furnaces has gone abroad, because of the higher prices?
    Viscount WOLMER: I am afraid I must ask for notice of that question.

    PIT PONIES.
    Mr. T. SMITHasked the Secretary for Mines the result of the Inquiry held
    1686
    in 1921 by the mines inspectors as to the numbers of hours worked by ponies and horses underground?
    Viscount WOLMER: I have been asked to reply. I would refer the hon. Member to the reply given him by my hoe. Friend the Secretary for Mines on 20th March. The further Inquiry then promised is in progress.

    TANGANYIKA (TRADERS BOOKS).
    Sir R. HAMILTONasked the Under-Secretary of State for the Colonies whether the Measures recently passed into law for the taxation of trade and places of business in Tanganyika also require Indian and Arab traders to keep their books in English; whether such traders are entitled to use their own languages in the mandated territory for the purposes of keeping accounts: whether places of business have been closed in consequence of the law: and whether, in view of the depressed state of trade and of the obligations on the Government of His Britannic Majesty as mandatory, instructions can be cabled to the Governor to suspend the operation of the said Measures pending the receipt by the Secretary of State of his despatch?
    Mr. ORMSBY-GORE: I must refer my hon. Friend to the answer which I have given to-day to my hon. Friend the Member for Sevenoaks (Sir T. Bennett).
    Sir R. HAMILTON: Are we to understand that the law as to the keeping of the accounts in English will refer to all the natives of the different countries—French, Italian, English, and so on?
    Mr. ORMSBY-GORE: They can all keep their accounts in their own language—in whatever language they like; but when the assessor comes he may require the accounts to he presented to him translated into English or Swaheli. That is very largely done. There are, however, so many languages spoken in the country, and the cost of administration is so great, that it is absolutely impracticable for every printed thing to be in every language.
    Mr. HANNON: On a point of Order. May I ask why this question was not put on the paper: where is its urgency?
    Mr. SPEAKER: The hon. Member who has just put it told me that he had a question to put in connection with the immediate visit of the Governor, and I allowed him to put it.

    FIGI (SUGAR TAX).
    Captain BERKELEYasked the Prime Minister whether he is aware that the elected Members of the Legislative Council of Fiji, as a protest against the action of the Secretary of State for the Colonies in remitting in favour of the Colonial Sugar Refining Company the Export Tax imposed on sugar by the Legislature of the Colony, have refused to participate further in the deliberations of the Council until an assurance has been given that no similar infringement of Constitutional rights will be attempted in future—[Interruption]—whether the Legislative Council now stands adjourned sine die on that account; and whether he will immediately give the required assurance in order that the business of Government in that Colony may be constitutionally carried on? [Interruption.]
    Mr. GRATTAN DOYLE: On a point, of Order. May I ask where is the special urgency in this question that it should not, have been put on the Paper?
    Mr. PRINGLE: On a point of Order. Is it not strange that the Imperialists on the opposite benches are the first to raise an objection to a question put to the right hon. Gentleman representing the Colonial Office?
    Mr. SPEAKER: In view of the important business down for to-day, I must say that I was somewhat doubtful as to whether this question was urgent., but I gave the hon. and gallant Gentleman the benefit of the doubt.
    Mr. BRIDGEMAN: The Secretary of State for the Colonies has received from the Governor of Fiji the communication made to him on this subject by the elected members of the Legislative Council. It is now engaging his careful consideration.

BUSINESS OF THE HOUSE.
Mr. RAMSAY MacDONALD: May I put two questions to the Home Secretary? First of all, what Vote does he propose to put down on Thursday; and does he propose to take any other business other than the Budget Resolutions to-night, provided he gets the suspension of the Eleven o'Clock Rule?
Mr. BRIDGEMAN: The answer to the lust question is that we propose to take the Vote for the Mines Department on Thursday. In regard to the suspension of the Eleven o'Clock Rule, it is a Motion taken always on Budget day, but it is not intended to take anything except the necessary Resolutions.
Motion made, and Question put,
" That the Proceedings of the Committee of Ways and Means be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The House diveded: Ayes, 287; Noes, 143.

Division No. 99.]

AYES.

[4.3 P.M.

Agg-Gardner, Sir James Tynte

Bentinck, Lord Henry Cavendish-

Button, H. S.

Alexander, E. E. (Leyton, East)

Berry, Sir George

Cadogan, Major Edward

Allen, Lieut.-Col. Sir William James

Betterton, Henry B.

Caine, Gordon Hall

Amery, Rt. Hon. Leopold C. M. S.

Blades, Sir George Rowland

Campion, Lieut.-Colonel W. R.

Apsley, Lord

Blundell. F. N.

Cassels, J. D.

Archer-Shee, Lieut.-Colonel Martin

Bowyer, Capt. G. E. W.

Cautley, Henry Strother

Ashley, Lt.-Col. Wilfrid W.

Boyd-Carpenter, Major A.

Cayzer, Sir C. (Chester, City)

Astor, J. J. (Kent, Dover)

Brass, Captain W.

Cecil, Rt. Hon Sir Evelyn (Aston)

Baird, Rt. Hon. Sir John Lawrence

Brassey, Sir Leonard

Chadwick, Sir Robert Burton

Baldwin, Rt. Hon. Stanley

Bridgeman, Rt. Hon. William Clive

Chamberlain, Rt. Hon. N. (Ladywood)

Baliour, George (Hampstead)

Brittain, Sir Harry

Chapman, Sir S.

Banbury, Rt. Hon. Sir Frederick G.

Brown, Major D C. (Hexham)

Churchman, Sir Arthur

Banks, Mitchell

Brown, Brig.-Gen. Clifton (Newbury)

Clarry, Reginald George

Banner, Sir John S. Harmood-

Brown, J. W. (Middlesbrough, E.)

Clayton, G. C.

Barlow. Rt. Hon. Sir Montague

Bruford, R.

Coates, Lt.-Col. Norman

Barnett, Major Richard W.

Buckingham, Sir H.

Cobb, Sir Cyril

Barnston, Major Harry

Buckley, Lieut.-Colonel A.

Cockerill, Brigadier-General G. K.

Barrie, Sir Charles Coupar (Banff)

Bull, Rt. Hon. Sir William James

Cohen, Major J. Brunet

Becker, Harry

Burn, Colonel Sir Charles Rosdew

Colfox, Major Wm. Phillips

Bell, Lieut.-Col. W. C. H. (Devizes)

Burney, Com. (Middx., Uxbridge)

Colvin, Brig.-General Richard Beale

Bellairs, Commander Carlyon W.

Butcher, Sir John George

Cope, Major William

Benn, Sir A. S. (Plymouth, Drake)

Butler, H. M. (Leeds, North)

Courthope, Lieut.-Col. George L.

Bennett. Sir T. J. (Sevenoaks)

Butt, Sir Alfred

Craig, Captain C. C. (Antrim, South)

Cralk, Rt. Hon. Sir Henry

Hutchison, G. A. C. (Midlothian, N.)

Reid, D. D. (County Dow)

Croft, Lieut.-Colonel Henry Page

Hutchison, W. (Kelvingrove)

Remer, J. R.

Crook, C. W. (East Ham, North)

Jackson, Lieut.-Colonel Hon. F. S.

Remnant, Sir James

Curzon, Captain Viscount

James, Lieut.-Colonel Hon. Cuthbert

Rentoul, G. S.

Davidson, J. C. C. (Hemel Hempstead)

Jephcott, A. R.

Reynolds, W. G. W.

Davidson, Major-General Sir J. H.

Jodrell, Sir Neville Paul

Richardson, Sir Alex. {Gravessness)

Davies, Alfred Thomas (Lincoln)

Joynson-Hicks, Sir William

Richardson, Lt.-Col. Sir P. (Chertsey)

Davison, Sir W. H. (Kensington, S.)

Kelley, Major Fred (Rotherham)

Roberts, Samuel (Hereford, Hereford)

Dawson, Sir Philip

Kennedy, Captain M. S. Nigel

Roberts, Rt. Hon. Sir S. (Ecclesall)

Dixon, C. H. (Rutland)

King, Captain Henry Douglas

Robertson, J. D. (Islington, W.)

Doyle, N. Grattan

Kinloch-Cooke, Sir Clement

Robinson, Sir T. (Lanes., Stretford)

Du Pre, Colonel William Baring

Lamb, J. Q.

Rogerson, Capt. J. E.

Edmondson, Major A. J.

Law, Rt. Hon. A. B. (Glasgow, C.)

Roundell, Colonel R. F.

Elliot, Capt. Walter E. (Lanark)

Leigh, Sir John (Clapham)

Ruggles-Brise, Major E.

Ellis, R. G.

Lloyd, Cyril E. (Dudley)

Russell, Alexander West (Tynemouth)

Erskine, James Malcolm Monteith

Lloyd-Greame, Rt. Hon. Sir Philip

Russell, William (Bolton)

Erskine, Lord (Weston-super-Mare)

Lorden, John William

Russell-Wells, Sir Sydney

Erskine-Bolst, Captain C.

Lorimer, H. D.

Samuel, A. M. (Surrey, Farnham)

Eyres-Monsell, Com. Bolton M.

Lort-Williams, J.

Samuel, Samuel (W'dsworth, Putney)

Falcon, Captain Michael

Lougher, L.

Sanders, Rt. Hon. Sir Robert A.

Fall, Major Sir Bertram Godfray

Lowe, Sir Francis William

Sanderson, Sir Frank B.

Fawkes, Major F. H.

Loyd, Arthur Thomas (Abingdon)

Sandon, Lord

Fermor-Hesketh. Major T.

Lumley, L. R.

Sassoon, Sir Philip Albert Gustave D.

Ford, Patrick Johnston

M'Connell, Thomas E.

Sheffield, Sir Berkeley

Foreman, Sir Henry

Macnaghten, Hon. Sir Malcolm

Shipwright, Captain D.

Foxcroft, Captain Charles Talbot

McNeill, Ronald (Kent, Canterbury)

Simms, Dr. John M. (Co. Down)

Free, Sir Walter de

Maddocks, Henry

Simpson-Hinchcliffe, W. A.

Fremantle. Lieut.-Colonel Francis E.

Maitland, Sir Arthur D. Steel-

Skelton, A. N.

Furness, G. J.

Malone, Major P. B. (Tottenham, S '

Smith, Sir Allan M. (Croydon, Souths

Ganzonl, Sir John

Manville, Edward

Smith, Sir Harold (Wavertree)

Garland, C. S.

Margesson, H. D. R.

Somerville, A. A. (Windsor)

Gates, Percy

Martin, A. E. (Essex, Romford)

Somerville, Daniel (Barrow-in-Furness)

Gaunt, Rear-Admiral Sir Guy R.

Mason, Lieut.-Col. C. K.

Sparkes, H. W.

Goff, Sir R- Park

Milne, J. S. Wardlaw

Spears, Brig.-Gen. E. L.

Gould, James C.

Mitchell, W. F. (Saffron Walden)

Spender-Clay, Lieut.-Colonel H. H.

Gray, Harold (Cambridge)

Mitchell, Sir W. Lane (Streatham)

Stanley, Lord

Greene, Lt.-Col. Sir W. (Hack'y, N.)

Molloy, Major L. G. S.

Steel, Major S. Strang

Greenwood, William (Stockport)

Molson, Major John Elsdale

Stewart, Gershom (Wirral)

Gretton, Colonel John

Moore, Major-General Sir Newton J,

Stockton, Sir Edwin Forsyth

Guinness, Lieut.-Col. Hon. W. E.

Moore-Brabazon, Lieut.-Col. J. T. C.

Stott, Lt.-Col. W. H.

Gwynne, Rupert S.

Morden, Col. W. Grant

Stuart, Lord C. Crichton-

Hacking, Captain Douglas H.

Morrison, Hugh (Wilts, Salisbury)

Sueter, Rear-Admiral Murray Fraser

Hall, Rr-Adml Sir W.(Liv'p'I.W.D'by)

Murchison, C. K.

Sutcliffe, T.

Halstead, Major D.

Nall, Major Joseph

Sykes. Major-Gen. Sir Frederick H.

Hamilton, Sir George C. (Altrincham)

Nesbitt, Robert C.

Terrell, Captain R. (Oxford, Henley)

Hannon, Patrick Joseph Henry

Newson, Sir Percy Wilson

Thompson, Luke (Sunderland)

Harmsworth, Hon. E. C. (Kent)

Newton, Sir D. G. C. (Cambridge)

Thomson, F. C. (Aberdeen, South)

Harrison, F. C.

Nicholson, Brig-Gen. J. (Westminster)

Titchfield, Marquess of

Harvey, Major S. E.

Nicholson. William G. (Petersfield)

Tryon, Ht- Hon. George Clement

Hawke, John Anthony

Norman, Major Rt. Hon. Sir Henry

Tubbs, S. W.

Hay, Major T. W. (Norfolk, South)

Norton-Griffiths, Lieut.-Col. Sir John

Vaughan-Morgan, Col. K. P.

Henn, Sir Sydney H.

Oman Sir Charles William C,

Wallace, Captain E.

Hennessy. Major J. R. G.

Ormsby-Gore, Hon. William

Ward, Col. L, (Kingston upon-Hull)

Herbert, Dennis (Hertford, Watford)

Paget, T. G.

Waring, Major Walter

Herbert, S. (Scarborough)

Parker, Owen (Kettering)

Watson, Capt. J. (Stockton-on-Tees)

Hewett, Sir J. P.

Pease, William Edwin

Watts, Dr. T. (Man., Withington)

Hilder, Lieut.-Colonel Frank

Pennefather, De Fonblanque

Wells, S. R.

Hiley, Sir Ernest

Penny, Frederick George

Wheler, Col. Granville C. H.

Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

Percy, Lord Eustace (Hastings)

White, Col. G. D. (Southport)

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Perkins, Colonel E. K.

Willey, Arthur

Hohier, Gerald Fitzroy

Perring, William George

Wilson, Col. M. J. (Richmond)

Hood, Sir Joseph

Peto, Basil E.

Winterton, Earl

Hopkins, John W. W.

Pielou, D. p.

Wise, Frederick

Hopkinson, A. (Lancaster, Mossley)

Plldltch, Sir Philip

Wolmer, Viscount

Horne, Sir R. S. (Glasgow, Hillhead)

Pownall, Lieut.-Colonel Assheton

Wood, Sir H. K. (Woolwich. West)

Houfton, John Plowright

Preston, Sir W. R.

Wood, Major Sir S. Hill- (High Peak)

Howard, Capt. D. (Cumberland, N.)

Pretyman, Rt. Hon. Ernest G.

Woodcock, Colonel H. C.

Howard-Bury, Lieut.-Col. C. K.

Privett. F. J.

Worthington-Evans, Rt. Hon. Sir L.

Hudson, Capt. A.

Raeburn. Sir William H.

Yate, Colonel Sir Charles Edward

Hughes, Collingwood

Raine, W.

Yerburgh, R. D. T.

Hums, G. H.

Rankin, Captain James Stuart

Hunter-Weston, Lt.-Gen. Sir Aylmer

Rawlinson, Rt. Hon. John Fredk. Peel

TELLERS FOR THE AYES.—

Hurd, Percy A.

Rawson, Lieut.-Com. A. C.

Colonel Leslie Wilson and Colonel

Hurst, Lieut.-Colonel Gerald B.

Reid, Capt. A. S. C. (Warrington)

Gibbs.

NOES.

Adams, D.

Bonwick. A.

Burnie, Major J. (Bootle)

Adamson, W. M. (Staff., Cannock)

Bowdler, W. A.

Buxton, Charles (Accrington)

Alexander, A. V. (Sheffield, Hillsbro')

Bowerman, Rt. Hon. Charles W.

Buxton, Noel (Norfolk, North)

Ammon, Charles George

Briant, Frank

Cairns, John

Attlee, C. R.

Broad, F. A.

Cape, Thomas

Barker, G. (Monmouth, Abertillery)

Brotherton, J.

Chapple, W. A.

Batey, Joseph

Buckle, J.

Charleton, H. C.

Bennett, A. J. (Mansfield)

Burgess, S.

Clarke, Sir E. C.

1690

1691

Collins, Sir Godfrey (Greenock)

Johnstone, Harcourt (Willesden, East)

Saklatvala, S.

Collison, Levi

Jones, T. I. Mardy (Pontypridd)

Scrymgeour, E.

Cowan, D. M. (Scottish Universities)

Jowett, F. W. (Bradford, East)

Shaw, Hon. Alex. (Kilmarnock)

Darbishire, C. W.

Jowitt, W. A. (The Hartlepools)

Shaw, Thomas (Preston)

Davies, Rhys John (Westhoughton)

Kenworthy, Lieut.-Commander J. M.

Shinwell, Emanuel

Dudgeon, Major C. R.

Kenyon, Barnet

Short, Alfred (Wednesbury)

Duffy, T. Gavan

Kirkwood, D.

Simpson, J. Hope

Duncan, C.

Lambert, Rt. Hon. George

Sitch, Charles H.

Ede, James Chuter

Lansbury, George

Smith, T. (Pontefract)

Edmonds, G.

Leach, W.

Snell, Harry

Emlyn-Jones, J. E. (Dorset, N.)

Lee, F.

Snowden, Philip

Entwistle, Major C. F.

Lees-Smith, H. B. (Keighley)

Spencer, H. H. (Bradford, S.)

Foot, Isaac

Linfield, F. C.

Stephen, Campbell

Gosling, Harry

Lunn, William

Stewart, J. (St. Rollox)

Graham, W. (Edinburgh, Central)

MacDonald, J. R. (Aberavon)

Sullivan, J.

Gray, Frank (Oxford)

McEntee, V. L.

Thomas, Rt. Hon. James H. (Derby)

Greenwood, A. (Nelson and Colne)

McLaren, Andrew

Thorne, G. R. (Wolverhampton, E.)

Grenfell, D. R. (Glamorgan)

Maclean, Neil (Glasgow, Govan)

Thornton, M.

Groves, T,

March, S.

Trevelyan, C. P.

Grundy, T. W,

Marshall, Sir Arthur H.

Turner, Ben

Hall, F. (York, W.R., Normanton)

Martin, F. (Aberd'n & Kinc'dine, E.)

Watts-Morgan, Lt.-Col. D. (Rhondda)

Hall, G. H. (Merthyr Tydvil)

Maxton, James

Webb, Sidney

Hamilton, Sir R. (Orkney & Shetland)

Middleton, G.

Wedgwood, Colonel Josiah C.

Harbord, Arthur

Millar, J. D.

Weir, L. M.

Hardie, George D.

Morel, E. D.

Welsh, J. C.

Harris, Percy A.

Morrison, R. C. (Tottenham, N.)

Westwood, J.

Hartshorn, Vernon

Mosley, Oswald

Wheatley, J.

Hastings, Patrick

Muir, John W.

White, Charles F. (Derby, Western)

Hay, Captain J. P. (Cathcart)

Murray, Hon. A. C. (Aberdeen)

White, H. G. (Birkenhead, E.)

Hayes, John Henry (Edge Hill)

Murray, R. (Renfrew, Western)

Whiteley, W.

Henderson, Rt. Hon. A. (N'castle, E.)

Nichol, Robert

Williams, David (Swansea, E.)

Henderson, T. (Glasgow)

O'Connor, Thomas P.

Williams, Dr. J. H. (Llanelly)

Herriotts, J.

O'Grady, Captain James

Williams, T. (York, Don Valley)

Hill, A.

Oliver, George Harold

Wintringham, Margaret

Hillary, A. E.

Paling, W.

Wood, Major M. M. (Aberdeen, C.)

Hinds, John

Phillipps, Vivian

Wright, W.

Hirst, G. H.

Ponsonby, Arthur

Young, Robert (Lancaster, Newton)

Hodge, Lieut.-Col. J. P. (Preston)

Potts, John S.

Hogge, James Myles

Ritson, J.

TELLERS FOR THE NOES.—

Irving, Dan

Roberts, Frederick O. (W. Bromwich)

Mr. T. Griffiths and Mr. Morgan Jones.

Jenkins, W. (Glamorgan, Neath)

Rose, Frank H.

John, William (Rhondda, West)

Royce, William Stapleton

Question put, and agreed to.

SALE OF INTOXICATING LIQUORS BILL.

  QUESTION OF PRIVILEGE.
  Mr. J. H. THOMAS: I have to submit to you, Mr. Speaker, a constitutional question, and to ask whether the matter I am about to bring before you constitutes a breach of the privileges of the House. As you are aware, a Bill dealing with the sale of intoxicating liquors passed its Second Reading and was referred to Standing Committee C, of which I am Chairman. Certain alterations in the original text of the Bill have taken place as a result of Amendments being carried. On Thursday morning last, at the opening of the Committee session, the hon. and gallant Member for Altrincham (Sir G. Hamilton) drew my attention to the following letter that he and many other hon. Members of the Committee had received. In my judgment it constitutes a breach of the privileges of this House. When the question, however, was put to me I was unable to give a decision, but intimated that I would refer it to you immediately. The letter is as follows:
  " British Temperance League,
  29, Union Street,
  Sheffield.
  Sandbagged by Liquor and Lunacy.
  Dear Sir,
  The House of Commons by 338 votes to 56 affirmed the need for the protection of the young of both sexes under 18 years of age from alcohol because of its poisonous influence, spiritual and physical. Those who prosper by the sale of the alcoholic poison are working by subtle and dubious ways to sandbag Lady Astor's Bill. In Committee 24 to 16 have voted apparently 'out of the Bill and 'knowingly' in, so that the trafficker in liquor may have legal immunity to continue to deal out his moral and physical poison for profit, and reap a rich harvest of gold by tempting the young of both sexes to ruin. The 24 who voted are made up of 18 Conservative, four Liberal, and two Labour, the Conservative, as usual, leading for liquor. That they have Liberal and Labour allies in that lead shows the power of liquor to deflect and seduce. The voters who sent these 24 to Parliament, especially the mothers, wives, and sisters amongst them, should learn that their Member regards liquor and profit therefrom as a supreme consideration, and is prepared to continue the poison of our young rather than stop the flow of gold to the traffickers in that drug.
  Yours faithfully,
  CHARLES SMITH."
  As you are aware, Sir, a Member's right in this connection lapses after one day, any, therefore, to safeguard the rights of the Members interested, I undertook to put the point at once. I have, therefore, to submit this question at the request of the Members, intimating to you that copies of the letter were received by a large number while the Committee was in session, and ask you to say whether, in your opinion, the letter constitutes prima four a breach of the privileges of the House of Commons.
  Mr. SPEAKER: In my opinion, this is a grossly improper letter to be addressed to members of a Committee to whom the House has delegated the duty of considering a particular Bill. As to the taste of the letter, I think everyone can judge, and I need make no remark. The style is enough for anyone to form his own opinion about it. I am asked whether it constitutes a breach of the privileges of the House, my recommendation to the House would be to treat it in the way it deserves. The machinery which the House holds in reserve for dealing with attempts at in timidation, or at wrongfully influencing any of its Members, is hardly the machinery to be brought into operation in a case of this kind, though, a course, it would be open to the hon. Member to move. Do I carry the House with me in this view?[HON. MEMBERS: "Hear, heard!"]

  MOVABLE DWELLINGS BILL,
  " to provide for the regulation of movable dwellings," presented by Sir COURTENAY WARNER; supported by Major Wheler, Brigadier-General Cockerill, and Sir Henry Buckingham; to be read a Second time upon Thursday, and to be printed. [Bill 86.]
ORDERS OF THE DAY.

  WAYS AND MEANS.
  Considered in Committee.
  [Mr. JAMES HOPE in the Chair.]

  FINANCIAL STATEMENT.
  The CHANCELLOR of the EXCHEQUER (Mr. Baldwin): To frame a Budget has at no time been deemed a light task, but in recent years, in the present year, and in years immediately to come, it has been, it is, and it will be a task which has exercised, and must exercise, to the greatest extent, the powers and wisdom of the men engaged upon it. Calculations to-day are made in a world of rapidly-changing values. Vast sources of revenue obtained from the liquidation of war-time assets are rapidly disappearing, and claims of expenditure are urged by men who have learned to think in millions whereas they formerly thought in pounds.
  The very figures of revenue and expenditure are so swollen that they hardly convey any clear meaning to many of those who read them, and there is, above all, the persistent unknown quantity which prevents the solution of each equation as it arises. It is because of these conditions that such variations from estimated figures arise as led to the criticism levelled in last year's Budget Debate against the deficiencies then shown and will lead in this year's Debate to criticisms on the reverse ground of the surpluses which have emerged. But this environment, however unpropitious for the prophets, is the one in which we have to work, and it. is not the creation of my own fancy. Hon. Members may remember that what I have tried to express was put clearly and succinctly in the "Manchester Guardian" only two or three weeks ago, and with the permission of the Committee I will read two paragraphs because they are so apposite:
  "There was in those days (and the writer means before the War) a certain continuity in the financial and commercial curves, hut the War has shattered that continuity, and those curves are now in the habit of perpetrating the most unmathematical jumps and changes of direction, so that the prophet who has any care for his reputation would do well to keep silent for a year or two pending the restoration of something like the pre-War rhythm in the economic body."
  1722
  Unfortunately, on the occasion of his Budget, the Chancellor of the Exchequer may not keep silent, but if prophets had always been compelled to prophesy, whether they wished it or no, the reputation of prophets through the centuries would have stood a great deal lower than it does to-day.

  RESULTS of 1922–23.
  The financial year through which we have just passed was a year in which got steadily better as it proceeded. Trade, both home and foreign, improved, unemployment, though still grievous, decreased, and Government securities steadily appreciated. A very striking indication of the general tendency is to be found in the Post Office savings banks deposits. In January, February and March of last year withdrawals considerably exceeded deposits, while in the corresponding three months. of the current year the deposits exceeded the withdrawals by more than £1,300,000. The Exchequer itself shared in the improvement, and has given us a result which I think must have exceeded the wildest hopes of that confirmed optimist my right hon. Friend the Member for Hillhead (Sir R. Horne), and certainly far exceeded the prophecies of some of-his critics last year.
  Hon. Members have the figures before them on the Blue Paper. The Committee will remember that last year's Budget. Estimates were balanced at, in round figures, £910,750,000. In the actual result the Revenue total has exceeded the estimate by about £3,250,000—a very close approximation to the original estimate, although there are considerable differences in detail. The expenditure, after providing out of Revenue for the statutory Sinking Funds which my right hon. Friend contemplated might have to be borrowed, has been £812,500,000 and there has thus been a surplus of £101,500,000, which has gone to the reduction of debt.
  In some quarters it is thought that the surplus of last year is still at our disposal, but this is a misapprehension. In pre-War days the surpluses were small. For the ten years previous to the War the highest was £6,500,000, and there was no difficulty in taking such amounts from the market and keeping them in the Exchequer balances. But with the large surpluses of modern times any such practice would be impossible. To hold

  1723
  up in the Exchequer a surplus of £100,000,000 or even £50,000,000, would produce a crisis of the greatest severity in the money market, and, in fact, would make it impossible to collect the Income Tax revenue in the last quarter of the year. Consequently, in the Finance Act, 1920, provision was made to enable the Treasury to apply surpluses as they accrued to the redemption of Debt. The effect of this procedure is that. the Treasury can apply its surplus receipts forthwith to a reduction of Debt without keeping them idle in the Exchequer, and thereby not only avoid a loss of interest, but, what is even more essential, the excessive stringency in the money market during the most important period of the collection of the Imperial taxes.
  There is a further point, and a most important one, to be borne in mind. The term "debt reduction" is sometimes used as though it referred to something infinitely remote and as though provision for that purpose tended to cripple the resources of this generation to ease the circumstances of our grandchildren. Nothing could be further from the truth. There will be plenty of debt for our grandchildren to deal with, but equally debt to-day is insistent, and knocking at the door of this generation. Each year since the War, this year, and for many succeeding years, obligations are maturing obligations which, if not converted, must be paid off in cash. I have had a table (No. 4 on the Blue Paper) specially prepared to show hon. Members the position. This is a new situation in the finances of the country. Students of the subject will remember the discussions which used to take place if there chanced to be a million or so of Exchequer Bonds maturing in a year. How best could so troublesome a situation be met? Now we are dealing with hundreds of millions over a sequence of years. We are fortunate indeed if by a, series of events unforeseen and unforeseeable, the revenue of last year has done something, to mitigate this year an anxiety that is and must be constant and sustained.

  REVENUE, 1922–23.
  I need only comment on the salient points in the results of 1922–23, and I will take revenue first. The Budget Estimate for Customs and Excise was £273,000,000. This represented a decrease of £51,000,000 on the Exchequer
  1724
  receipts of the previous year; £18,000,000 of this estimated decrease was due to the exclusion of Irish revenue; £5,000,000 to the reduction in last year's Budget of the duties on tea, coffee and cocoa; and balance of £28,000,000 to the allowance for continued industrial depression.
  The actual receipts have been over £280,000,000, so that there is a surplus of more than £7,000,000. The true position is better since it is anticipated that when the necessary adjustments have been made with the Irish Free State in regard to the Customs and Excise Revenue for the past year, a further sum of about £3,000,000 will be found to be due to the Imperial Exchequer. The surplus is due mainly to beer, sugar, tobacco and the new Import Duties. There is also a small surplus under each of the heads of wine, matches and entertainments. Spirits are down on the Estimate, and there is a deficit on tea, consumption having failed to respond to the reduction in duty made last year.
  The Inland Revenue duties, as a whole, have far surpassed the expectation of my predecessor, yielding an excess over the original Budget Estimate of £36,300,000. This arises from surpluses on Death Duties, £8,871,000: Stamps, £3,972,000, and Income Tax and Super-tax, £50,045,000. But there are deficits on the Excess Profits Duty of £25,796,000 and on Corporations Profits Tax of £773,000.
  The Death Duty revenue is, of course, always subject to considerable variation, due to the irregular intervals at which the large estates subject to the higher rates of duty fall liable to taxation. In the past year large estates have been unusually numerous.
  The surplus on the Stamps revenue arises mainly from the activity which Stock Exchange business has displayed uniformly throughout the year.
  The yield of Income Tax and Super-tax is the most reliable index of the gradual emergence of industry and trade out of the depths of the 1920–21 depression. In the year 1921–22, collection proved difficult, and an unusually large amount remained in arrear at the close of the year. The figures of arrears were £99,000,000 for Income Tax and £23,500,000 for Super-tax. These particular arrears were, of course, in the main, cleared up in the early months of

  1725
  the year which has just closed; hut, what is more important, notwithstanding the retarding influence on current collection of a large volume of arrears, the progress.of the 1922–23 collection has been more rapid than that of the previous year, and more rapid than could have been forecast when the Estimates were framed a year ago. This acceleration of the current collection accounts for more than half of the surplus of £50,000,000. The remainder of this surplus arises from a number of causes, of which the most important is to be found in the fact that the volume of profits to be brought into assessment has substantially exceeded expectations.
  The Excess Profits Duty has proved very disappointing. The gross collection amounted to only £57,000,000, in place of an expected receipt of £75,000,000. Repayments in the year came out approximately at £55,000,000, or £8,000,000 more than we anticipated. The system of payment by instalments, accompanied by a charge for interest, introduced by my predecessor, was brought into operation towards the end of last year, but has not, so far, yielded very satisfactory results. The interest charged during last year amounted to £3,500,000, of which only 21,250,000 was paid.
  Special Receipts—always an uncertain item—show a deficit of nearly £39,000,000. This is mainly a postponement. Disposals realised £15,000,000 less than the Estimate, and other considerable accounts, such as the Food and Wheat Commission accounts, could not be liquidated during the year. Hon. Members may be interested in the main items of the £51,000,000 collected, which were as follows:

  £

  Disposals

  26,780,000

  Sales of Ships and Freights

  4,500,000

  Reparation Recovery Act and other German Receipts

  6,800,000

  Repayment of Pre-Moratorium Bill Advances

  6,100,000

  EXPENDITURE, 1 922–23.
  As I have said, the total revenue for 1922–23 was surprisingly near the Estimate. The surplus arises from the best of all possible causes, a reduction in expenditure, which was £97,500,000 within the Budget forecast;:and here I should like to pay a tribute to my predecessor in office, whose persistent efforts during two-thirds of the last financial year have contributed so
  1726
  largely to such a striking result. Consolidated Fund Services show a saving of nearly £10,000,000, even after providing £21,750,000 for Sinking Fund payments. As the Budget Estimates did not contemplate this latter provision, the real reduction is over £30,000,000, due almost entirely to the reduced volume of Treasury Bills and the cheap rates at which we were able to place them. The remaining saving arose on Exchequer issues for Supply, and amounted to £87,500,000 This is partly due to over-issues in the previous year, which operated to reduce the issues in 1922–23. The chief items of saving are £27,000,000 on the Fighting Services, £55,500,000 on Civil Votes, including £6,000,000 on the general provision of £25,000,000 made last year for Supplementary Estimates. It was made clear in the last Budget speech that during the year reductions in expenditure were hoped for, and I suggest that it is somewhat ungrateful now to complain because the reductions were large, and were made without waiting for this year's Estimates. I, at least, am so far unrepentant that I hope that economies can and will be made on the Estimates during the current year, and I certainly intend to do my best to secure them. In so large a figure, the causes are, of course, very various Among others, I may mention the continued drop in prices and in wages and bonus—a factor which affects all Government expenditure, not only direct, but, for instance, grants which depend primarily on the expenditure of local authorities; reduced supplies owing to the contraction of Government activities —to give but one instance, on the Stationary Office Vote there is a saving of £900,000; and changes of policy, such as the postponement of recruitment for the Militia and reduction in the personnel of the Army and Navy.

  EXTERNAL AND INTERNAL DEBT.
  This brings me to the position of the Debt. The Dead-Weight Debt on the 31st March, 1922, was £7,676,000,000. The corresponding figure on the 31st of last month, as nearly as I can estimate it, was £7,773,000,000. The figures, as is customary, value External Debt at par, and do not include premiums due on repayment of War Bonds or interest accrued on Savings Certificates. Both the figures are, of course, face value, and it must not be inferred that there has, in fact, been an

  1727
  increase in the burden of our Debt. The face value increase is due, in the first place, to the conversion of 5 Per Cent. War Bonds and Exchequer Bonds, and 5½ Per Cent. Treasury Bonds, into 3½ Per Cent. Conversion Loan, which resulted in a nominal increase of about £135,500,000; and, in the second place, to the inclusion in the capital of our debt of the arrears of interest due on our debt to the United States of America. If these disturbing factors are eliminated, the effective reduction has amounted to over £149,000,000 (face value). Quite apart from savings due to actual repayment, the taxpayer will have saved, by conversions of Bond Debt during the year, rather over £750,000 a year in interest, and £4,500,000 in premiums which would have been payable on the Bonds had they matured instead of being converted.
  I will take External and Internal Debt separately, and would again remind hon. Members that I have had the details printed in Table IV. of the Blue Paper. A year ago, External Debt stood at £1,090,184,000 at par of exchange. On 31st March last it stood at £1,155,652,000, the apparent increase being more than accounted for by the addition to the debt of the three years' interest in arrear on the American Debt. In the four years from the 31st March, 1919, we have reduced our External Debt by no less than £209,198,000. As the Committee knows, the only important external debts now remaining arc our debt to Canada and our debt to the United States of America. The precise amount of our dollar debt to Canada has recently been determined, and I should like here to thank most warmly and sincerely the right hon. Gentleman the Member for Paisley (Mr. Asquith) for the great service he rendered in arbitrating on a very difficult and technical point. We have repaid to Canada in the year 62,000,000 dollars, and the amount of dollar debt outstanding is practically equivalent to the Canadian Sterling Bonds which we ourselves hold. I anticipate that these debts will be set off one against the other, and that, for all practical purposes, we may regard our Canadian debt as settled.
  Apart from 61,000,000 dollars in respect of Pittman silver, our debt to the United States Government stands at a total of 4,600,000,000 dollars. The Committee are aware of the terms on which this debt
  1728
  has been funded over a period of 62 years, and I hope shortly to settle the final details of the Bonds to be given in replacement of our demand obligations. I will not stop to comment on the settlement, except to express once again my satisfaction at a step which I feel certain will be in the interests of the peoples of both countries.
  As regards Internal Debt there has been a very satisfactory improvement. A year ago the floating debt was £1,029,500,000. On 31st March last it was just under £810,000,000—a reduction of £219,573,000. Other internal debt maturing in the year amounted to about £169,000,000, of which £64,500,000 was paid off and £104,500,000 converted. mostly into 3½ per cent. Conversion Loan We have also succeeded in lightening our future by converting into long term debt £132,750,000 of debt maturing during the current year and £216,250,000 of debt maturing at later dates. As a consequence of these operations and of the issues of 10 year 4½ per cent. Treasury Bonds, recently I am glad to say reduced to 4 per cent. Treasury Bonds, we have now only to face this year about £84,500,000 of 5 per cent. National War Bonds maturing in September and February next. Savings Certificates, thanks to the untiring efforts of the National Savings Committee and their Chairman. Lord Islington, produced, net. i.e., after allowing for withdrawals, 233,500,000, as compared with 236,250.000, net in 1921–22.

  EXPENDITURE, 1923–24.
  I come now to the financial year 1923–24. The Supply Estimates are known to hon. Members, and there will be other opportunities of debating them. I will make but one comment, namely, that the total Supply figure of £436,000,000 is £110,500,000 below the Estimate for last year, of which £45,500,000 is on special expenditure. Hon. Members may have the curiosity to cast their minds back to two-years ago, and compare the achieved results with the recommendations of the Geddes Committee. I will deal only with the Ordinary Estimates, omitting the Special War Services altogether. Ordinary Estimates in 1921–22 amounted to 2668,000,000. For 1922–23 the Departments in their preliminary figures indicated reductions of £75,000,000, and the Geddes Committee, who intervened at this stage,

  1729
  suggested specific economics of £87,000,000. The total suggested reduction was thus £162,000,000, which would leave a total of £506,000,000. The actual Ordinary Estimates for 1922–23 were £473,000,000, and those for 1923–24 are £421,000,000. Allowance must be made for the change with regard to Irish expenditure, representing, approximately, £20,000,600, but, even so, £421,000,000 is far below the Committee's figure. It is true the Geddes Committee hoped to achieve another £13,000,000 of unspecified savings in the course of 1922–23, but the fact remains that, in spite of certain new charges, we have made an enormous reduction. I am encouraged to pursue the Committee's aim by the fact that in two years there has been a drop of £247,000,000 on the Ordinary Estimates. In addition, in the two years there has been a large drop of £82,000,000 in Special Expenditure.
  I do not intend to provide any special margin for Supplementary Estimates. If these are found to be necessary in some Departments, I think it is time we reverted to the pre-War practice and to the custom of providing for them out of savings elsewhere, without upsetting the general Budget total.
  Consolidated Fund charges I put at £380,470,000, of which Debt Charges account for £350,000,000. Of this £350,000,000, £40,000,000 is for Sinking Fund and £310,000,000 is interest—a decrease of £25,000,060 on last year's Estimate, in spite of the increase of £5,000,000 in the provision for interest on the American Debt. The Committee will remember that we are not free agents in debt repayment. We have responsibilities to the holders of our securities, contracted under the prospectuses of the various issues and ratified by Statute. These statutory repayments are estimated as follows:—In respect of 4 per cent. Funding Loan and 4 per cent. Victory Bonds, £4,428,000; in respect of 3½ per cent. Conversion Loan, £13,500,000, a considerable increase on the figures of the previous year due to the increased total of Conversion Loan owing to the Conversions to which I have alluded. To these sums must be added the amounts required for Victory Bonds tendered in payment of Death Duties—£7,500,000; the Sinking Fund on the American Debt, $23,000,000, and the amount we have agreed to repay this year in respect of American loans for
  1730
  the purchase of silver, viz.:— $30,500,000. Moreover, I shall have some small payments to complete the Canadian Debt settlement, and altogether I cannot put my total requirements at less than £40,000,000. In this figure 1 make no allowance for Depreciation Fund for 4 per cent. and 5 per cent. War Loan, which might in given circumstances involve £32,000,000 per annum, or for the tender for Death Duties of securities other than Victory Bonds. These liabilities have only to be met if the price of the Bonds falls below the issue price, but I hope I may assume that this will not happen during the current year.
  I propose, therefore, to include in the Finance Bill a Clause providing a Sinking Fund of £40,000,000 this year, increasing to £45,000,000 in 1924–25, and £50,000,000 as a maximum thereafter—a sum approximately equal, it will be observed, to the yield of the Death Duties. I wish to emphasise the point that the provision of these sums is not for the most part optional. We are bound by contract to provide them. It may be said they could be met, as it was intended to meet them last year, by borrowing, but I feel confident the Committee will riot support this view. We may suggest borrowing for Sinking Funds once, but to suggest it for two successive years would be a serious blow to our credit. It has been one of our greatest sources of strength that we have met all our recurrent charges out of revenue. We cannot pretend that these charges are not recurrent. It should, moreover, be remembered that money spent on the reduction of internal debt returns at once to the investment market as soon as the Government securities redeemed are bought up, and nothing, I believe, will ease the finding of capital for industrial purposes so much as a steady and recognised policy of redeeming public debt.
  There is, however, yet another reason. Our debt burden is very heavy. Interest alone absorbs over £300,000,000 a year—50 per cent. more than our total pre-War Budget, and not very much under half our present Budget. Whatever saving we may be able to make in Supply services, the time will come when it will be on debt that big savings for the future will have to be found. A reduction in the interest rate from 5 per cent. to 4 per cent. would save, for every £1,000,000,000 of debt, £10,000,000 a year in interest. I

  1731
  firmly believe that, unless we take proper steps to deal with our debt in time, we may find it, an intolerable burden, perhaps at a moment when other countries who are our commercial competitors may find themselves, for various reasons, more or less free from any such corresponding load. I therefore attach the greatest importance to a steady reduction of debt from revenue. In the next seven years we have some £1,300,000,000 of bond debt maturing, in addition to £2,100,000,000 of War Loan which we can redeem, at our option, in 1929. Much depends on the terms on which we re-borrow this debt—in all, nearly half our total debt. I do not believe we can re-borrow it satisfactorily unless we aid our credit by an avowed and sustained programme of debt reduction from revenue. I am taking every step which prudence and foresight can dictate to prepare the way for my successor who will have to deal with these great conversions.
  Sir R. HORNE: Will my right hon. Friend forgive me asking what he is doing in regard to the new Sinking Fund, which was suspended last year? Is he reestablishing that Sinking Fund—the Sinking Fund established by Sir Stafford Northcote in 1875?
  Mr. BALDWIN: I thought it was clear from what. I have said that I am proposing to make these provisions in the Finance Bill this year.
  Sir R. HORNE: But these provisions, I understand, do not cover that case.
  Mr. BALDWIN: My right hon. Friend can discuss that better in Debate.
  5.0 p.m.
  I come to the total expenditure for 1923–24, which I estimate at £816,616,000, made up of £380,470,000 Consolidated Fund charges, and £436,146,000 Supply Services, or, following the division between Ordinary and Special expenditure, £801,013,000 Ordinary expenditure, and £15,603,000 Special expenditure.

  REVENUE 1923–24.
  What revenue have we to meet this expenditure? Although there are many signs that the industrial depresson is lifting, it is doubtful whether yet there has been any appreciable rise in the purchasing power of the great mass of our
  1732
  population on which the Customs and Excise revenue so largely depend. Most of that revenue comes from five articles—beer, spirits, tea, sugar, and tobacco. The consumption of beer and spirits, and to a less extent the consumption of tobacco, has been falling, and it is not certain that the bottom has been touched. The consumption of tea and sugar was rising, but this has been checked recently by advances in prices due to the fact that the world's demand is expected to exceed the supply. The result is that I have to count on a smaller revenue from Customs and Excise in the current year. I put Customs at £118,300,000 and Excise at £155,700,000, making, in all, £274,000,000, about £6,000,000 less than the Exchequer receipts of last year.
  I estimate the total Inland Revenue duties at 2445,000,000, which compares with last year's Estimate of £445,800,000, and the realised receipt of £482,000,000. In the coming year, I cannot, anticipate another exceptional yield from Death Duties, and the yield from Income Tax will fall, because the good trading year, 1919–20, is replaced in the average by the poor year, 1922–23, and because last year included considerable arrears at the 6s.rate. Super-tax I also expect to yield a smaller amount. On the other hand, with diminishing liabilities for repayment, I expect to receive a larger net receipt from the arrears of Excess Profits Duty, though any estimate under this head is somewhat uncertain.
  The details of the Inland Revenue figures are as follow:

  £

  Death Duties

  52,000,000

  Stamps

  20,000,000

  House Duty, Land Tax, and Mineral Rights Duty

  3,000, 000

  Income Tax

  280,000,000

  Super-tax

  58,000,000

  Excess Profits Duty

  12,000,000

  Corporation Profits Tax

  20,000,000

  Total

  £445,000,000

  The other Revenue items are:

  £

  Motor Vehicle Tax

  13,250,000

  Post Office

  54,500,000

  Crown Lands

  900,000

  Sundry Loans

  12,500,000

  Ordinary Miscellaneous Receipts

  12,500,000

  Special Receipts

  40,000,000

  The total Revenue, on the basis of existing taxation, therefore, is £852,650,000, of which the Tax Revenue is £732,250,000. With an estimated expenditure of £816,616,000, this leaves me with a surplus of about £36,000,000.

  MINOR MATTERS.
  Before coining to my main proposals, I turn for a moment to certain other matters, on which I contemplate introducing legislation. For a long time past the question of Income Tax evasion has been an increasingly serious problem. It was the subject of a number of important and valuable recommendations by the Royal Commission on the Income Tax. It is, moreover, a matter on which, I think 1 may safely say, there is practical unanimity amongst all right-thinking citizens in the feeling that it is especially necessary, at a time when taxation is unfortunately at so high a rate, that everything possible should be done to discourage and punish that small minority of persons who fraudulently evade the liability imposed.upon them by Parliament, and in so doing cast an additional burden on the shoulders of their honest fellow taxpayers. I shall not ask Parliament to deal with all the recommendations of the Royal Commission, but I select for this Finance Bill a few of the more important, proposals. In doing so, however, I sincerely trust I shall give no ground for any expectation that the remaining recommendations can be regarded as unlikely to find a place on the Statute Book at a future date as opportunity arises.
  Briefly, the proposals which I shall put before the House in this connection are the extension to six years of the existing three years time limit for the making of Income Tax assessments and surcharges, and a similar extension of the time limit for the recovery of the statutory penalties, together with an increase in the amount of certain of the smaller penalties. At the same time, I shall propose a corresponding extension to six years of the existing three years time limit for claims for repayments in cases where no specific time limit is prescribed by the Income Tax Acts. Among other matters which require legislation, I would briefly mention an alteration which I shall propose in the law governing the assessment of life insurance companies to Income Tax, and a rectification of the machinery
  1734
  for collecting Income Tax from certain pensioners and certain servants of the Crown, employed abroad, who from time to time become chargeable to tax here in respect of leave pay, and the like. A short provision will also be required to rectify for the future a flaw in Estate Duty law revealed by a recent decision of the Law Courts. I shall also include in the Finance Bill certain minor provisions of a technical kind relating to debt, some of them consequent on the American settlement.

  ANALYSIS OF SURPLUS, 1923–24.
  Hon. Members will have observed that the surplus in 1923–24 of £36,000,000 on the existing basis of taxation arises mostly on Special Account, where Receipts of £40,000,000 show an excess of £24,500,000 over Expenditure of £15,500,000. On the Ordinary Account there is, in fact, even on the existing basis, only a small margin of about £12,000,000. Here, J must ask the Committee to extend their consideration beyond the year 1923–24. In considering the financial programme, it is essential that we should look to the future and not to the past, and that we should not forget that revenue is still swollen by War causes. The days of special receipts are rapidly closing, and we have to reckon with that. In 1919–20, we got over £264,000,000 from this source; in 1920–21, £288,000,000; in 1921–22, £170,000,000; in 1922-23, £51,000,000, and in the current year, I hope, £40,000,000; but thereafter there will be little. Moreover, next year there will be three, not merely two, bad years in the average for Income Tax. I can hardly anticipate that I shall lose less than £50,000,000 on those two accounts, I sum much in excess of my estimated surplus this year. I intend to press to the full the possibilities of reducing expenditure, but I cannot hide from myself, nor do I think it right to conceal from the Committee, that, apart from the extinction of the remanet of War services, savings are becoming increasingly difficult to make. I can see many directions in which it may be necessary to incur increased expenditure. I cannot see so many in which I can be certain of reduction. Yet, how can I make reductions in taxation—the full effect of which would naturally only be felt next year—unless I can assure my position for the future? Reduction of taxation is very necessary, but will it help us if we have to

  1735
  reimpose taxation next year? Will it help us if it weakens our Budget position in the future? Some would say, "Make no provision this year for debt redemption." But, if so, and I give away the saving so accruing in aid of the taxes this year, what about next year? Can I again postpone debt redemption, year after year? That way, in my view, lies insolvency.

  BETTING DUTY (SELECT COMMITTEE).
  With this consideration in mind, I have felt it my duty to examine the innumerable suggestions for new taxes which every Chancellor of the Exchequer receives, in order to see if any fresh source of revenue can be found which would assist the Exchequer in meeting the cost in future years of any present concession without imposing new and unjustifiable burdens on the people of this country.
  The fact that the exigencies of war finance have compelled successive Chancellors to exhaust practically every method of raising additional revenue has made my task no easy one. As a result., I am greatly attracted by a tax on betting. It appears to me that at a time when expenditure on so many necessaries, as well as the amenities, of life are subject to heavy taxation, there is no reason why betting should escape; but I realise that in the short time that I have held my present office, interrupted as it has been by a General Election and a visit to America, I have had insufficient opportunity of examining in all its aspects this question, which involves more than mere taxation.
  I have, therefore, decided to seek the assistance of hon. Members in considering this question, and I propose to move for a Select Committee to be set up at once to consider the question of a tax on betting in all its aspects.
  I do not not wish in any way to pre-judge the Committee's decision, but it is my duty to add a word of warning. On consideration of all the circumstances, I think it right to take an optimistic view of the future, and possibly in the proposals I am going to make for reductions of taxation this year to run certain risks. This may very well mean, however, that some new source of revenue will be necessary if we are to be safe in future years
  1736
  and to be able, as we all hope, to reduce still further existing taxes. I hope I may find this new source of revenue in the tax which I have described; but if this hope proves illusory it will then be necessary to consider very seriously other alternative.
  I wish also to make it clear that in my proposals I count on the full support of hon. Members in obtaining still further substantial reductions in Supply expenditure. When Chancellors of the Exchequer speak at Budget time about reductions in taxation, they have always the enthusiastic support of the Committee. I want some of that enthusiasm preserved for other occasions, when hon. Members are apt to forget the close connection between expenditure and the taxpayers' burden. The Government are anxious to make reductions, and the country expects them, and I hope that hon. Members will do their part. Reductions, and substantial reductions, are essential, not merely in special war services which are now dwindling almost automatically, but also in normal services where they are more difficult to obtain. Taxpayers who welcome reduced taxes must not forget that these reductions are only the fruit of reduced expenditure, and that it is only by the continuance of reductions in expenditure, year by year and year after year, that reductions in taxes can be made.

  POSTAL BATES (REDUCTION).
  I can now address myself to the disposal of the estimated surplus for the current year. Last year some considerable reductions were made in postal charges. I think all Members of the Committee will agree that, provided the expenditure of the Post Office is also reduced, we should welcome further reductions. We propose to effect substantial reductions in the charges for the heavier inland letters and for inland parcels; as regards the latter, a uniform reduction of 3d. per parcel. In addition, we propose to reduce the rate of foreign letters to 2½d. for the first ounce plus l½d., as at present, for each succeeding ounce, and to lower from 1½d. to 1d. per ounce the rate for Imperial letters above the first ounce. The inland printed paper rate will in future be ½d. for every two ounces.
  TELEPHONE CHARGES (REDUCTIONS).
  On the telephone side, we propose a reduction of 10s. in the annual rental of ordinary telephone installations and reductions in the annual charge for extension instruments, to extend the free radius outside the London areas from one mile to one-and-a-half miles from the subscribers' exchange, to reduce from 3d. to 2d. the fee for local messages at public call offices, and to make certain minor reductions in the charges for short distance trunk calls. Full details of the alterations will be given in the White Paper in due course. It is proposed to make the postal reductions effective as from the 14th May and the telephone reductions on the 1st July. The net cost of the reductions is estimated at £1,560,000 for the postal concessions and £840,000 for the telephone concessions in a full year, a total of £2,400,000. In the current year they will cost about £1,900,000. I should explain that the figures I have given relate to the cash revenue. The effect of these reductions on the commercial account of the Post Office will be somewhat greater, as they involve corresponding reductions in the sums debited against Government Departments for correspondence carried without payment.

  SUGAR DUTY.
  I will deal now with the duties of Customs and Excise. In considering to which dutiable articles it would be proper to grant relief this year, I have borne in mind that my right hon. Friend who was Chancellor of the Exchequer last year (Sir Robert Horne) reduced the Tea Duty by 4d. per 1b. in the last Budget. In these circumstances I do not think any further relief from the Tea Duty is called for this year. The next duty which I have had under consideration is the Sugar Duty, and in this connection I thought it important to investigate very carefully how far, in the present condition of the world's markets, the consumer could be expected to retain for any length of time the initial advantage that he would derive from a reduction of the present rate. As the Committee is aware, sugar prices have risen, owing to the anticipated shortage of the world's supplies of sugar. In other words, the; sugar market to-day is a seller's market.
  In these circumstances, although it is practically certain that a reduction of duty would be at once accompanied by a proportionate reduction in price, I think it is highly improbable that the consumer would be the gainer for more than a very short time. The reduction in price would lead to an increased demand which would tend further to increase the world price, and the result would be that the money sacrificed by the Exchequer would go straight into the hands of the producers and the dealers in sugar. It may be argued that, even if prices did rise, they would still be lower by the extent of the reduction of the duties. In my opinion this would not follow, as the increased demand following an immediate reduction in price must lead, under present conditions, to a greater increase in price than would otherwise take place. In these circumstances I have, with great reluctance, refrained from proposing any reduction in the Sugar Duty, but it is my sincere hope that the position of the world's markets will be such that a reduction may be justified at an early date.

  BEER DUTY (REBATES).
  I have, therefore, turned my attention to those commodities which arc mainly produced in this country and the prices of which arc not dependent to anything like the same extent upon foreign conditions. I propose to reduce the Beer Duty, and my object is to make a reduction which will result in retail prices being lowered by one penny a pint all round. Hence, the first point for consideration is how to ensure a uniform reduction in price. As the Committee are aware, the duty is assessed on the standard barrel, which means that it varies in strict accordance with the gravity or strength of the beer. If the duty on the standard barrel were reduced by an amount which represented one penny a pint on the average, it would mean more than one penny on strong beers, but much less than one penny on lighter beers, and the result would be that, generally speaking, the price of the beer now sold at 6d. or 5d. a pint could not be lowered by Id. In these circumstances, I concluded that, in order to meet the special conditions of to-day, when the spending power of the poorest classes of the people has been so greatly diminished, the best course would be to keep the present duty of 100s. per

  1739
  standard barrel and to effect the reduction in duty by giving a rebate on each bulk barrel of beer, whatever its strength. Thus, the advantage conferred on the lighter beers will be of the same value as that conferred on the heavier beers and a uniform reduction in retail price can be made without question.
  The next question is, what should be the amount of the rebate per bulk barrel. The full equivalent of 1d. a pint is 24s. per barrel of 36 gallons, but the Committee will not be surprised to hear that I do not intend that the cost of the reduction in the Duty should fall entirely on the Exchequer. It is generally agreed that the trade may fairly be asked to hear part of the cost, and after going into the question very carefully I am satisfied that they may reasonably be asked to contribute 4s. out of the full 24s. The rebate of Duty that I propose is, therefore. 20s. per bulk barrel. I should add that it will not be possible to allow the full rebate of 20s. on beers of very low gravity, as the result would be to repay the whole of the Duty. All beers down to about 1,024 degrees of gravity will receive the full 20s., but below that Point the rebate will gradually diminish, so that it will not make the Duty on any beer less than 24s. per barrel. The rebate will be given on home-manufactured beer brewed from 1st April and on imported beer from to-morrow. This will enable retail prices to be reduced forthwith at present gravities. The cost of the reduction is estimated at £13,000,000 in the current year, and £16,600,000 in a full year.

  SWEETENED TABLE WATER DUTY.
  I next come to the Table Water Duty. This duty is levied at the rate of 8d. a gallon on unsweetened and 4d. a gallon on sweetened waters. The, intention was to make a rough distinction between the, cheaper and more expensive kinds of table waters and to make some allowance for the fact that certain ingredients of sweetened table waters, such as sugar, arc dutiable. With the increase in other duties since the Table Water Duty was originally imposed in 1916, this margin has disappeared and to-clay the total duty payable on sweetened table waters averages about 8d. per gallon. In these circumstances I am proposing to reduce the Excise Duty on sweetened table
  1740
  waters from 4d. to 2d. per gallon as from 1st May next, at an estimated cost to the Exchequer of £160,000 this year and £175,000 in a full year, after making an allowance for increased revenue from dutiable ingredients. I am also proposing to abolish the duty of 4d. per gallon on cider, as from the 1st May next, at an estimated cost to the Exchequer of £90,000 this year and £100,000 in a full year. The duty is unimportant from the point of view of revenue, and its repeal should be of some assistance to agriculture.

  INCOME TAX (REDUCTION).
  Every one of our great direct taxes has demands upon my attention, and it has been a matter of difficulty to decide between the competing claims. But in the end I have come to the conclusion that such sum as I can afford to lose must in the main he devoted to reduction of the Income Tax. Continuing, of necessity more modestly, the good work of my predecessor, I propose to reduce the Income Tax to 4s. 6d. in the pound. This course spreads the relief which I can afford over the widest possible area, and at the same time it will, in my belief, give at least as great a stimulus to trade as any other proposal which I could make. The reduction will cost me £26,000,000 in a full year. This year, although of course the reduction will take effect as from the 6th of this present month, the cost will be £19,000,000.
  CORPORATION PROFITS TA (REDUTION).
  I have felt it right to give preference to the Income Tax payer, who has borne, and for many years will continue to bear, the burden and heat of the day. At the same time I feel that I must make some change in the Corporation Profits Tax. Everyone admits that this is not a good tax; many think that it bears exceptionally heavily on enterprise and industry. I cannot give it up entirely, but I propose to reduce it by one-half, reducing the rate from 1s. to 6d. in respect of profits arising after the 30th June next. This will involve little or no less of revenue this year, and will cost only about £2,000,000 next year. But it will ultimately involve a loss of £12,500,000, against which must be set some increase in Income Tax.

  FINAL BALANCE SHEET.
  All these reductions will cost together £34,150,000 in the current year, and next year about £47,250,000. The final balance sheet for 1923–24 will thus be:

  £

  Revenue

  …

  …

  …

  818,500,000

  Expenditure

  …

  …

  …

  816,616,000

  leaving a nominal margin of

  £

  which it is only prudent to keep for contingencies.
  I have now laid before the Committee as clearly as I am able the financial statement of the year. I can only thank them for the courteous attention they have given to me. I have gone to the utmost limit of my power to relieve the taxpayer without impairing the credit of the nation, for, after all, the credit of the nation and relief for the taxpayer are in the long run inextricably interwoven. I believe that although we are still in the series of transition years, we have already passed the peak load of taxation, and we may hope soon to have relief, after the calamitous years of trade depression. But our hopes may be frustrated by untoward events on the Continent and they may be shattered by untoward events at home. Industrial peace would do more for trade than reduced taxation. Reduced taxation itself is the offspring of peace. If the people of this country will only unite to take advantage of the better trade that undoubtedly is coming, I can face the financial future with confidence, and neither I nor my successor in this place will then be oppressed by those peculiar anxieties which have weighed so heavily in the framing of this Budget and the four preceding post-War Budgets.

  CUSTOMS AND EXCISE.

    CONTINUATION OF DUTY ON TEA.
    Motion made, and Question proposed,
    "That the Customs duty charged on tea until the first day of August, nineteen hundred and twenty-three, shall he charged as from that date until the first day of August, nineteen hundred and twenty-four, that is to say—
    Tea the 1b. eightpenee.
    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.",
    Mr. J. RAMSAY MacDONALD: There is always a very unenviable task before whoever follows the Chancellor of Exchequer in his Budget speech. He himself is the centre of interest, and anything which can be said immediately after he has resumed his seat must be of very limited importance. But the difficulties of my task this afternoon are lightened somewhat by one circumstance. That is that it is my duty to on presenting his first Budget to this House. I go a little further than that. He has said many things with which my friends and myself disagree. He has imposed taxes, or he has failed to take off taxes, in a manner which has caused us great regret. He has selected the lightening of burdens in a way which we do not think is altogether good for the country. Nevertheless we cannot forget that on the great fundamental point of the reduction of debt the Chancellor has shown a courage and a wisdom which has not been shown by any of his predecessors since the War started. I hope, when the Chancellor referred to his successor finding the task lightened by what he has said he is going to do to-day, that that time is a little bit remote, and that. he will have an opportunity next year of pursuing this great problem of reduction of debt as well, unless—I am sure he will agree with this proviso—his place is taken by one who proposes not only to reduce debt from revenue, but from a capital levy such as a Labour Chancellor would undoubtedly try. This is an extraordinary Budget. By accident, my right hon. Friend found himself with an unexpected surplus of £100,000,000, and apparently hon. Members, like the right hon. Member who is now leaving, were under the impression a few days ago that that £100,000,000 was lying in gold in the Bank of England, and could be spent immediately in relieving the difficulties of finding the wherewithal to build horses.
    Sir LAMING WORTHINGTON EVANS: There was nothing in what I wrote which should have made the hon. Gentleman so misapprehend my words.
    Mr. MacDONALD: Reading, as I always do, what the right hon. Gentleman wrote, I do not quite understand the point of his appeal. If he meant that the right hon. Gentleman should have to reborrow a debt which he had

    1743
    paid by the continued accumulation, which amounted at the end of the year to £101,000,000, it was a little bit misplaced, because during the whole of the year exactly the same thing could have been done, and the one occasion for the hon. Member's letter was the announcement that there was a balance of £101,000,000 when the figures were totalled up. If the right hon. Gentleman has done himself an injustice in leaving that impression, then not only I, but a great many' other people, misread him in exactly the same way. However, that is only an aside.
    My right hon. Friend's predecessor, in introducing his Budget., declared that he was pursuing a certain policy. He said: "I am not going to reduce debt. Not only am I not going to reduce debt, but I am going to suspend the sinking fund. I am so profoundly convinced that it is necessary to reduce taxation that I am going to emphasise that policy in the most extreme way in which a Chancellor of the Exchequer can emphasise it; I am going to produce to you a Budget which is just going to balance after the suspension of the sinking fund, and after no attempts are to be made during the 12 months to pay off debt." That was his intention. He said, "Whoever produces a Budget, a large part of which is to be concerned in the reduction of debt, is doing damage to his country." After all that, after the resumption of the sinking fund, by an accident that Budget, which was drafted for the purpose of relieving taxation without reduction of debt, has yielded a surplus of.E101,000,000 which is going to pay off debt. There is something wrong somewhere. There has been no Chancellor of the Exchequer, I think, who ever produced a Budget who made an estimate which was further out than that of the right hon. Gentleman. Either we had too much taxation last year or we had too little expenditure.
    According to the appeals made by the Government again and again during the past 12 months, "We must not vote money for this and must not vote money for that. We are in favour of doing better for the ex-service men and for the old age pensioners and so on, but we are compelled so much to reduce expenditure that, whatever our hearts may impel us to do, our financial wisdom tells us to
    1744
    harden our hearts." Remembering those things after listening to the Tight hon. Gentleman to-day, it is perfectly evident that if last year we could have a surplus of £101,000,000 to reduce debt by accident there has been absolutely nothing in the plea so often made that the nation cannot afford to do justice to its poor people. I am rather sorry that the Chancellor of the Exchequer has not shown even a little more courage. It may seem unthankful, after what he has shown, to complain that he has not shown more. But he knows perfectly well that his Budget now does not balance. He knows perfectly well that when he takes out of his next year's revenue those sums which really belong to capital, and those sums of Excess Profits Duty which are debts so far as the future is concerned, which come in now only in driblets in relation to past obligations—when he next year finds on his reduction of Beer Duty and reduction of Income Tax the full weight of the year affecting his proposal to-day, his Budget does not balance. He is still depending upon that profoundly unsatisfactory expedient of taking in the current revenue huge sums of money that when originally spent during the War were provided out of capital.
    We have been listening to and have been reading a great deal of the rival contentions between two schools. One school says, "Reduce taxation and do not trouble about the debt "; the other school says, "Reduce the debt, even if you are to keep a high standard of taxation.' But when the first school talks about taxes, it has in its mind mainly taxes on property. I am sorry that the Chancellor of the Exchequer to-day, in reducing taxation, has dealt more with the property tax than with the life tax, and that when he dealt with beer—this is the most desponding word I shall say to him—he spoke more as a politician than as a sound financier. What is the position? The working classes are admittedly overtaxed. Is there anyone who understands the life of the working classes, anyone who sits at their firesides and knows the prices that they have to pay, anyone who knows the troubles they have to undergo to make ends meet., week in and week out, but knows also that the working classes are suffering a reduced standard of life to-day on account of the amount of taxation that enters into the prices of the ordinary

    1745
    commodities of life? Moreover, their consumption is materially reduced, of sugar as well as of beer, of tea and of tobacco in fact, everything that the working classes consume to-day is diminished in amount on account of the large proportion of taxation that enters into the average living expenditure of a working-class household.
    The argument is put up by the reduced taxation school that the great purpose should be, not so much directly to reduce taxation as to do something which would stimulate trade. There is a great deal to be said for it, and I am not going to resist that individual form of statement. I know perfectly well that if the Chancellor of the Exchequer was going to devise a system of taxation that would stimulate trade through channels that are now inadequately filled, commodities rushing from the point of production to the point of consumption, and if he could do that without to any material extent reducing the taxation paid by the wage-earning families, he would probably be doing a better thing than if he directly reduced taxation without effecting an increased volume of trade and consumption. I am certainly not going to resist that proposition. Therefore, the question is, What is the best way to stimulate trade? When you have done it, you have not solved so very much. Still, it is in the interests of everyone to make this country economically a going concern. It is only in so far as it is kept a going concern that reforms and changes, whether big or small, can be imposed upon its organisation.
    Therefore, the claim of those who are in favour of the greatest weight of reduction being put on Income Tax is, first of all, that it will lower the cost of production, and, still more important than that, it will thereby provide a fund from which capital for the renewal of machinery and the expansion of trade can be drawn, and that in that way you fill the pockets of certain classes of the community, and those pockets are emptied in due course, not in personal expenditure, but in investments which increase the volume of trade and improve the whole of your business. That is the argument. I have stated it very briefly, and not with all the provisos and conditions that one could introduce. To me that argument is profoundly false. I regret that the
    1746
    Chancellor of the Exchequer did not deal with this matter in his speech. What I mean is this: Last year his predecessor took a shilling off the Income Tax. Why Not, as he said, to increase the wealth of the wealthy; that was not his object. He believed that he was really providing a fund for investment. That was his argument.. In any event, that is the argument which has been familiar in our newspapers during the last three or four weeks. Before the Chancellor of the Exchequer consented to reduce the Income Tax by another 6d. I think he ought to have told us what is the opinion of the Treasury regarding the effect of that 1s. taken off the Income Tax a year ago. What has been its effect upon investments or on trade? He has told us that the or figures show that, whilst the Income Tax receipts during the past 12 months have gone up enormously, the arrears of Excess Profits have not been paid so rapidly. Therefore, I do not think that the increased payment under the head of Income Tax shows that that Is. has had any appreciable or large effect.
    What happened was this: There is not the least doubt that there was a great expectation of a revival of trade. The minds of the people turned more towards investment. They had more confidence, and they were more willing to take bank balances that had been lying in safety and to transfer them to company promoters, good, bad and indifferent, and in that way provide a certain amount of investment. What is perfectly evident from last year is not that the pockets of the people were full to overflowing and therefore money flowed into investments, but that their minds extracted what happened to be in their pockets and disposed of it by investment. I do not believe that the Is. taken off the Income Tax last year had an appreciable effect as a stimulus upon business during the past 12 months. If you consider it, you can see why, at best, it must have a very small effect. First of all, limited liability companies are influenced by Income Tax payments in a very minor degree. The late Chancellor of the Exchequer is now the director of a large limited liability company, and he knows perfectly well that, the Income Tax does not influence him or his fellow directors in estimating what costs that company is going to put. in its tenders.
    Sir R. HORNE: The hon. Member is quite wrong.
    Mr. MacDONALD: I am amazed at that statement. Income Tax is not a charge upon limited liability companes. Besides, I know what I am talking about, though I have not had the wide experience of the right hon. Gentleman. It is a perfectly well known fact that when a limited liability company, Vickers Maxim, for instance—I would like the directors of that company to deny this—are putting in tenders for some large piece of work, they do not consider at all what the Income Tax is, because it has nothing to do with the matter. When they distribute their profits, they may have to consider the psychological effect of paying 10 per cent. when the Income Tax is 5s. in the and. say, 12 per cent. when the Income Tax is 45. 6d. in the £. That is a totally different thing. As a matter of fact, a very large part of our production to-day is done under economical conditions that are very slightly and indirectly affected by the amount of Income Tax that the individual possessor of income has to pay on account of his annual Income Tax Charge.
    Then take Schedule A. Does the right hon. Gentleman say that a reduction of Income Tax under Schedule A gives any stimulus to trade? I am talking about direct stimulus. It may be that the 1s. remaining in the pockets of the landowner may he invested, but it does not enable him to do more business in land or anything of that character. My point is, how does it stimulate trade?
    Mr. A. M. SAMUEL: It enables people to put more capital into stocks.
    6.0 P.M.
    Mr. MacDONALD: If that be so, will the hon. Member then go in for all the proposals made on this side of the House, in order to make improvements free of taxation and free of excessive rating such as has been advocated for many years? As a matter of fact, it is perfectly true that to a certain extent —I say, a small extent—a stimulus does conic from this source, but nothing like a stimulus equal to the amount taken off the Income Tax last year and proposed to be taken off this year. The same remark applies to Schedule D, under which debenture holders, preference share holders and so forth are dealt with. The real stimulus
    1748
    to trade from reduced Income Tax comes from private businesses where the individual paying tax is the proprietor of the business and from the consumption by professional people and by people with fixed incomes. When the whole is put together we have an estimate like that made by Sir Josiah Stamp, who certainly knows what he writes about. He, taking all these facts into account and addressing himself to the question of what is the real effect of a reduction in Income Tax as a stimulus to trade, has come to the conclusion that not more than 2d. or 2½d. in the shilling saved in Income Tax goes directly to stimulate trade. A very extravagant method indeed of stimulating trade. The Exchequer loses 1s. in order that trade may receive 2d. or 2½d. Where does it go? We know perfectly well where a large amount of it goes. [HON. MEMBERS: "Where?"] Into luxuries. There is not the least doubt about it. It goes to increase those luxurious displays which are so detestably prevalent to-day and are, under these conditions, not only a crime, but a danger to social stability and a certain destruction of inter-class good feeling. I venture to say that of the 6d. which is now being taken off, not more than 1d. will go to stimulate trade, and from 4d. to 5d. will be spent on unnecessary and parasitical forms of luxury.
    What is our view of the situation today? We take the view that debt reduction is the best highway to tax reduction. In present circumstances—I am speaking of the conditions of the present Budget—if you propose a system of tax reduction which is not based upon a substantial programme of debt reduction, then the only way the Budget can be balanced is by drawing from the human capital of the State, and by reducing expenditure for necessary social purposes like education, housing, public health, and so on. Whilst you are apparently reducing taxation, as a matter of fact you are only taking the taxation out of the human capital upon which you depend. our view is that the only way to stimulate trade is to increase the standard of life of the people, and to amplify in volume consumption by the masses. Let us imagine for a moment on the one hand a nation of people dwelling in non-parlour houses, and, on the other hand, a nation of exactly the same people, with the same incomes and the some working conditions outside, living in parlour

    1749
    houses. The difference in the standard of living is enormous. The difference is also enormous from the point of view of stimulating trade, because people who are living in freedom, in happy harmony in a home with a. spare room and spare space, are a people who are consuming directly the essentials, the necessities of life, whereas the very same people in different home conditions are consuming other things to make an unhappy and burdensome life bearable to them.
    The psychological difference between the two is complete. The policy, on the one hand, is to save money and build small houses in order to stimulate trade. Our policy is not to save money of that sort—because by doing so you are only taking away from your capital in order to be able to save—but to spend money in getting right conditions and thus stimulate trade by increasing the standards and the demands of the people and making them consume more things and better things than they would consume in worse conditions. That conception goes right down to the fundamentals, to the root of the division between the two schools. The same applies to the Entertainments Duty. That duty is scandalous. If I want to buy, say, £1 worth of cheap tickets to give a number of my friends an entertainment I have to pay so much duty upon the lot. If, however, I selfishly buy a £1 seat for myself the duty payable by me is very much smaller than the duty upon the spent in buying cheap seats. Then there are the limitations put upon educational work and the limitations upon homely, quiet, reasonable and proper recreation. That is the sort of thing on which the Chancellor of the Exchequer and the Treasury should not for a moment depend in order to help to balance the Budget.
    So I repeat, our position is this. Trade can be stimulated, but only by the stimulation of consumption on the part of the great mass of the people. You can supply capital by reducing income Tax, but trade is not merely supplying capital. The right hon. Gentleman knows that he can save as much capital as he likes for his business, but if he has no outlet for his production then his capital is no use to him. The problem is not the supply of capital only; the problem is also to supply an outlet for the production which issues
    1750
    as a result of the spending of the capital. On the one hand, you keep your people under lowered wages and under a high taxation, with limited accommodation in their homes, and expensive entertainment —you keep them on a very low and excessively limited standard of consumption and at the same time you imagine you are stimulating trade by providing millions of pounds every year for increased capital. It reminds one of the Coalition Government. I remember its great campaign all over the country—produce, produce, produce! It was perfectly right so far as it went, but the Government which was spending public money in printing and posting those bills throughout the country was destroying the very markets upon which our production depended for an outlet. This financial policy is going upon exactly the same lines. Business is not isolated. Business is the delicate interchange and inter-relation between production and consumption. If consumption is above production then you go wrong; if production is above consumption then again you go wrong, and therefore a Chancellor of the Exchequer desiring to stimulate trade, as trade should be stimulated under present national conditions, should not merely apply all his savings to the Income Tax and leave an excessive burden of non-productive expenditure still lying upon the shoulders of the working class, but should balance consumption and production so that consumption will respond to the extra production which he expects from his relief of taxation.
    When the right hon. Gentleman came to his consumption proposals he had to consider whether he was to take the tax off beer or tea or sugar. Tea, he said, was relieved last year. Sugar he could not relieve because the world price was so uncertain and fluctuating. What is the meaning of that 1 Will the right hon. Gentleman tell us next year, supposing the world price of sugar to have gone down, that it is unnecessary to relieve it because in any event the working classes are going to get cheaper sugar. As a matter of fact, the question of the world price—which may change in the course of a week and is very likely to change inside 12 months—has got nothing whatever to do with the duty placed on sugar by the Chancellor of the Exchequer. Has the right. hon. Gentleman or has he

    1751
    not, the right to charge a duty upon sugar that has been multiplied 11 times since the War? The taxation on a pound of sugar before the War was ¼d., to-day it is 2¾d. The vast amount of sugar directly consumed in the form of sugar, is consumed by people who are struggling every week to make ends meet. If the world price is so uncertain why should the Chancellor encourage it to keep up. As a matter of fact he knows perfectly well that if he took off his tax the price would go down by the amount of that tax, whatever the world price was. [HON. MEMBERS: "No."] It is perfectly true. [An HON. MEMBER: "What about a shortage? "] The price will go up if there is a shortage, but under present; conditions the increase due to the shortage would be plus 2¾d. the amount of the tax. Am I to understand hon. Members opposite to say that the 2¾d. is going to play no part at all in forcing up the price? [HON. MEMBERS: "Decreased consumption t "] That. comes back to my original point.. You are getting this money at the expense of the people by reducing the bulk of consumption in sugar, which it is so necessary should be kept up in working-class homes. We know perfectly well that taxes are not going to make or unmake market laws, but you cannot avoid that position. Either this or the other thing happens. You take the tax off and reduce the price by the amount of the tax. It may be that the price goes up, but if the consumption keeps the same, then the price is kept down by 2¾d., as compared with what it would have been had the tax been kept on. On the other hand, it may be that the price will go up so much that, with the 2¾d. added, the consumption has to come down. Then, by keeping the tax of 2¾d. on, instead of a working-class household being able to get two or three lbs. of sugar a week, it is able to get only 1 1b. or 1½bs. You can choose whichever you like, but whichever you choose the tax is wrong. It is a burden imposed on working-class consumption, either in price or in quality, for which no Chancellor of the Exchequer ought to make himself responsible. We have this situation: The working classes now, out of tea and sugar taxes, find for national expenditure £40,000,000 per annum. That sum is by far and away the best stimulus 'and fund of- expansion for trade that is
    1752
    at the disposal of the Chancellor of the Exchequer, if he would only allow it to flow.
    I congratulate the right hon. Gentleman most heartily, as I have said, on the stand he has taken on debt reduction. We were rather surprised, as we sat here and felt the silence on the benches opposite when the Chancellor was laying down such sound and admirable doctrines of an economic character. (HON. MEMBERS: "No! "] There was one exception, and that was when my right hon. Friend emphasised that he was in favour of the reduction of debt from income, from revenue, then there was a cheer, a cheer, I think, to salve troubled minds, because hon. Members before that were under the impression that the Chancellor was giving us far too much—{HON. MEMBERS "Nor "] There is no doubt about that., but I do not want to labour the point, because, as a matter of fact, it is not a point of substance at all, and I never pretended that it was. All the same the phenomenon was there. We felt it very much, and we cheered the Chancellor of the Exchequer because he was preaching good, sound economics when he said that high taxes have to be endured in order that the problem of debt should be faced. He proposes a Sinking Fund of £50,000,000. Is he sure that that is enough? I have an extract here from an interview which the right hon. Member for Hillhead gave the other day to some newspaper:
    " Nobody, not even the most ardent enthusiast for reducing debt, ever suggested that we should pay it off at the rate of £100,000,000 a year."
    Is he quite sure about that? Ts he quite sure about himself when he makes that statement? I have his Memorandum here. In 1921 the Treasury issued a circular, dated 13th May, relative to securing a large reduction in the Estimates for the financial year 1922–23, and I think the right hon. Member for Hilhead has some paternal relationship to this circular, which says:
    " Mr. Chamberlain then indicated that the reduction in expenditure which would make the amount available for debt redemption in 1922–23 out of ordinary revenue £.100,000,000 could not be considered to he excessive, even allowing for tire fact that in 1922–23 there might be a non-recurring surplus of special revenue over special expenditure."
    That was the Treasury view in 1921. The reason why the name of the right hon.

    1753
    Member for West Birmingham (Mr. A. Chamberlain) is inserted is, of course, within the recollection of the Committee. One hundred million pounds is the statement of the Treasury; the right hon. Gentleman has found only £50,000,000. I am glad he has found that. It may be that there is a good deal to be said about this before we finish our Debates in the next two days, and I shall not take up the time of the Committee in commenting further upon it now, because there are sonic figures that have to be examined and matters to be gone into. I have ventured to rise now, first of all, because it is a real pleasure to me to have to congratulate my right hon. Friend on his first statement as a Chancellor of the Exchequer—a real pleasure. I disagree with much that he has done; I agree with a good deal of what he has done. I disagree with a good deal of what he has said; I agree with a good deal of what he has said. At Worcester, just before the Election, he made a statement which was extraordinarily true, and of which I venture to remind him. He said:
    " One thing that stood out amongst the hundred and one causes of our troubles today was the heavy taxation to which our people were subject. It not only tended to cripple industry, but it pressed with a crushing weight on the poor. It did not matter, for the purpose of that argument. whether the poor luau was taxed directly mach or little, but the fact remained tint ultimately the accumulated weight of taxation of the country fell on those least able to boar it. This must be so, because by its incidence on the individual and on industry it, came down through all the stages ultimately to expression in the amount of wages the poor man got, and therefore, slow as the process might be, the only sound and secure way in which they could better the poor man's condition was to reduce taxation."
    That is profoundly true, and in so far as my right hon. Friend has embodied that in his Budget, good; in so far as he has not, we shall have to offer hostile observation, hostile Amendments, as the clays go on, and these Resolutions and the subsequent Finance Bill work their way through this House.
    One thing only we press upon him. He has to provide even now a bigger sinking fund. It was one per cent. on the pre-War debt. but is only half per cent. upon this debt—the pre-War debt of £650,000,000, this debt of £7,700,000,000. The reason why the year that has just ended has resulted in such extraordinary miscalcula-
    1754
    tions, both in revenue and in expenditure, was not the fault of the officials of the Treasury. When the Treasury has got to deal with such colossal figures as those figures that my right hon. Friend has dealt with this afternoon, no scientific accuracy in estimating is possible; you have again and again to estimate by rule of thumb. We have had Budgets carefully drafted showing a deficit; we had had this Budget last year carefully drafted for one specific purpose, as I pointed out at the opening of the remarks I addressed to the Committee, and ending in exactly the opposite effect that the right hon. Gentleman had in view when he presented is to the Committee. There is no member of this Committee who ought to deplore the £101,000,000 surplus more than the right hon. Member for Hillhead, because it has been accumulated by his sins, both of omission and of commission, his mistakes on both sides, his under-estimates here and his over-estimates there, a thing for which I do not blame him, because, as I say, when such colossal figures are dealt with as, roughly, a thousand millions expenditure and income, who can estimate with scientific accuracy what the yield of the various parts of the Budget will be?
    Yet we must get back to Budgets so compassable in their figures that scientific estimating is again possible, so that we may know upon whose shoulders taxes are to fall, so that we may know whether we are going to reduce debt or only to reduce taxation, so that we may know whether this duty, that duty, or the other duty is to lie oppressively or fairly upon the shoulders of the various classes that ultimately pay them, so that we may able, by reducing the dead weight of debt, so to stimulate trade that capital will be required and labour will be required. [Interruption.] An hon. Member imagines, apparently, that we, on this side, do not think capital is required, but I beg hon. Members to seize themselves with the arguments on the matter before they imagine that one who believes in Socialism ought to find it impossible to say that he is in favour of finding capital for industry. The problem is this: We have so to adjust our taxation, we have so, first of all, to adjust our debt that it is a compassable debt, we have then to adjust our taxation that we may scientifically estimate how it is to be met,

    1755
    who is to bear it, who is ultimately to find it. Then, and then only, we will be able to put our country upon such an economic and industrial footing as will enable it to bear the competition of the other countries in the world.
    Sir SAMUEL ROBERTS: I should like to answer some of the remarks made by the hon. Member for Aberavon (Mr. Ramsay MacDonald), who has just resumed his seat, but I should like, first of all, to congratulate my right hon. Friend the Chancellor of the Exchequer upon his very clear statement. We have felt a certain amount of disappointment at the fact that there is no larger surplus at his disposal in reduction of taxation than £36,000,000, but, on the other hand, we have felt some gratification because he is using £40,000,000 for the reduction of debt. Our reduction of expenditure has continued since the War. The expenditure in 1918–19 was £2,579,000,000. Now it has gone down to £812,000,000, or a reduction of £1,767,000,000 in four years. My right hon. Friend the late Chancellor of the Exchequer had a margin of £91,000,000 owing to the unexpected success of the measures he took for the reduction of expenditure. In the course of his Budget speech, he said:
    "Indeed, I am confident that in the course of the present year, as we did in the course of last year, we shall succeed in making very appreciable reductions in expenditure in the present year, and still more in the year following."
    He prophesied in his speech last year that in the course of that year they would succeed in making very appreciable reductions in expenditure, and still more in the year following, that is, the financial year just begun. With regard to the future, I was very glad to hear my right hon..Friend the Chancellor of the Exchequer say that he was confident in his mind that he could make still more reductions. But I should like to call his attention to what happened two years ago. The Committee will remember that the Geddes Committee went into the question as to how far expenditure could be reduced. The Departments had been asked to reduce their Estimates in that year by £120,000,000. They only succeeded in reducing them by £75,000,000. The Geddes Committee recommended reductions amounting to £86,000,000. This is the point I want to impress upon my
    1756
    right hon. Friend. When the Departments were asked to make a reduction, the reductions they proposed were very largely automatic, that is, those reductions would be made in any ease. The Geddes Report said:
    " In many cases the reductions proposed by the Departments are automatic, due to the fall of prices and wages, or to windfalls, or to the cessation of special expenditure on services arising out of the War. The reductions in Estimates are therefore by no means fully the result of curtailment of activity or of economical administration, and this point cannot he too clearly brought out."
    With regard to the Sinking Fund, we have two schools of thought, one school recommending that the whole of the balance should go to the repayment of debt, and the other that it should go very largely in the reduction of taxation. My right hon. Friend has done neither, but has adopted a via. media, and out of the money at his disposal has both relieved taxation and paid off debt. I think the country will be of opinion that he has acted wisely, and that we cannot afford to pay more than £40,000,000 this year. I do not know whether the House is aware that a sinking fund of £32,000,000 on the 4 per cent. tables will pay off the whole debt in sixty years.
    One way by which money can be saved is by adopting the proposal to fund the pensions. The Industrial Group of the House of Commons the other day sent out a circular making the proposal that if the pensions were funded in the current year, it would mean a reduction in taxation of over £40,000,000. Why should people living to-day have to pay the maximum amount in respect of a sum which is becoming less and less every year? The War was fought not only for this generation, but for succeeding generations as well. I believe that this proposal has the approval of the present Prime Minister, because on 2nd May last year he said:
    "If that were treated, not as a debt to he paid in 50 years, but as something to ho paid in proportion each year as long as it lasts, for, say, 40 years, it would mean that we were paying between £40,000,900 and £50,000,000 more this year than would he necessary to be paid off had it been treated in that way. In my opinion, that is to be regarded as a real meeting of our Debt obligation."
    I do not know whether my right hon. Friend the Chancellor of the Exchequer has considered that question, but, if not,

    1757
    I hope he will do so. Further reductions of the Income Tax depend mainly on strict control by the Treasury and the Government, but also largely on this House. If hon. Members would assist the Government and refrain from bringing forward schemes involving Exchequer expense when the country is in its present financial position, and would join with the Government in keeping down expenditure, I am quite sure their help would be of the greatest value to my right hon. Friend the Chancellor of the Exchequer and the Government.
    Sir ALFRED MOND: I want to congratulate my.right hon. Friend the Chancellor of the Exchequer who, to-day, has had the heavy duty cast on him of explaining the Budget which he has so Ably introduced, and which he dealt with in that lucid and masterly way which those of us who have had the pleasure of working with him fully expected he would do. After all, there were, naturally, a number of points in a statement of that length and complexity which even he, with all his lucidity, did not make entirely clear, at any rate, to my mind, and some of those points, perhaps, will be explained to us on a further occasion. In the course of his speech, he mentioned the question of the large amount of arrears of income Tax, amounting, with Super-tax, to £128,000,000, and he mentioned that the extraordinary discrepancy in last year's figures between the estimate of Income Tax and the Income Tax received was largely due to acceleration in the payment of those arrears beyond that which was anticipated. What I was going to ask him was, whether it could be stated at some future time what is the balance of the unpaid arrears of Income Tax and Super-tax which is still being carried forward, and how far is it affecting the Estimates he has made for the Income-Tax and Super-tax return in the receipts of the next financial year? Because no doubt. a disturbing element has crept in in all Budgeting owing to these large arrears in various forms of taxation, throwing out, necessarily, very considerably the Estimates made by the Treasury experts. The same question arises, I see, on the Special Receipts, which, of course, were an important feature in last year's receipts. I did not quite understand whether the Special Receipts were entirely written off, or were merely post-
    1758
    poned payments, and my right hon Friend estimated sonic £40,000,000 would come in next year, and very little in the years afterwards, which would leave a very large gap between the figures estimated last year and the figures which would otherwise have occurred. I think we shall want some further information as to what is the actual position of this particular Estimate.
    The right hon. Gentleman pointed out with great fairness, as he always does, that the large surplus of last year, and even, to some extent, the anticipated surplus of next year, is due to the drastic reductions in expenditure which were made with the assistance, very largely, of Sir Eric Geddes' Committee. I am glad he pointed that out, because I must say I am sometimes surprised to see how little recognition is given in the country and in the Press to the very large reduction in expenditure due to the very considerable effort on the part of all the Ministers in the last Government during the last year or two. Comparing the actual expenditure of the financial year 1921–22 with the actual expenditure of the financial year 1922–23, there was a reduction of something like £266,000,000 achieved by those of us who were concerned in the late Government, not without much difficulty and much labour, as my right. hon. Friend knows. I was very glad to hear from him that he was not going to abandon the good cause in which he and I were associated on more than one occasion in endeavouring to reduce expenditure still further. I am sure that, so far as those with whom I am associated are concerned, we will support him on every possible occasion in this connection. I have no doubt that further reduction in Government expenditure is still possible. One of the most difficult things with which to contend is the stonewall opposition on each side. Everyone is able to make out a strong ease that his own particular item is a thing on which the Empire depends, and it needs a stony heart on the part of my right hon. Friend to insist on having his way. Of course, the sound foundation of finance must necessarily be the spending of less money, and although great reductions have been made, we, are still very far away from our pre-War figure — immeasurably removed from it. There is still, I am perfectly convinced, a very large measure of reduction possible, and I am glad to

    1759
    think that that question is going to be pursued with energy by my right hon. Friend.
    While I am glad to agree with my right lion. Friend on those points, I cannot altogether agree with him on the general aspect of his Budget. What my right hon. Friend discussed was a very old question, not one merely dealing with the present, but it was the question which other countries have had to face on more than one occasion, and that is the relative matter of the reduction of taxes and of debt. Anyone who cares to go back to, and read up the discussions after, the Napoleonic Wars, when this country was carrying a debt immeasurably greater in proportion than at present, will find that a very similar type of discussion went on at that time. Again, anyone who looks at the course of events in the United States after the Civil War will find that, something like 10 or 15 years after the destructive effect of that conflict, the Government devoted all their attention to building up their country and none to paying off their debt. I cannot agree, therefore, on the question of debt reduction which seems to obsess everyone who goes to the Treasury, is appalled by the large amount of debt that has been incurred, and considers that that really ought to fix our financial program. On the contrary, I think you ought to fix it on the basis of what is the proper burden of taxation which the country is able to carry, and under which industry can flourish. We have got so used to enormous taxation that we consider Income Tax of 4s. 6d. in the is quite a normal thing.
    Lieut.-Colonel NALL: Not on this side.
    Sir A. MOND: It must be considered abnormal. I cannot, however, understand hon. Members on the opposite side cheering the Chancellor of the Exchequer as they do, for obviously they cannot have it both ways. We ought at present to go very slowly in the matter of debt reduction. The policy which I believe is the soundest financial policy to pursue is to stabilise our taxation. But hon. Members opposite one moment cheer wildly the idea of reducing debt, and expect at the next moment to cheer the Chancellor of the Exchequer in proposing to reduce taxation. The two things run on different lines. Therefore, personally—and I am not expressing this opinion for
    1760
    the first time—I am of the view that taxation is still too high, arid is crippling industry; is productive of unemployment, and till we have got into a much more normal condition we ought not to trouble ourselves to anything like the extent we are doing to put forward large proposals and to devote large sums to a reduction of our debt. Undoubtedly the right hon. Gentleman has undertaken contractual obligations to different holders of Government loans, and we have to foot the bill, but I should like to draw the attention of the Committee to the fact that last year we reduced our debt by over £120,000,000. There is not one country in Europe to-day that is in that position; and I should be very sorry to sec us going further into debt. But you had £126,000,000 of debt reduction under the late Government. We are considering very carefully amounts which total something like £40,000,000 or £50,000,000 per annum, to which must be added this windfall of a surplus, which the careful estimate of the Treasury always produces at the end of a financial year, and about which I shall have a word to say in a few minutes.
    Apparently the right hon. Gentleman considers that, as a matter of course, £100,000,000 of surplus must necessarily go to the Old Sinking Fund. Surely he cannot mean by what he assumed as to the Old Sinking Fund? Under the Finance-Act, 1920, a surplus should be handed over to the Treasury in the repayment of debt. The right hon. Gentleman cannot mean, that Parliament divested itself of its control which it has previously continuously exercised when a surplus has been declared of utilising that surplus for such purpose as Parliament thought fit? Such an assumption would really mean that Parliament has surrendered its right at the end of the financial year of saying what should he done with a surplus that had been created and had not been allocated. Really, that is a doctrine which I think would be quite revolutionary, that is to say, divesting ourselves of our power. There is nothing either novel or unprecedented in dealing with the Old Sinking Fund at tin, end of the financial year. The Old Sinking Fund was established by the Act of 1875, and the Act made it plain that in the fortnight or 15 days after the close of the fianancial year the Treasury should make up their accounts, and tell Parliament what the surplus was. I think it

    1761
    was the hon. Member for Aberavon (Mr. E. MacDonald) who quoted my right hon. Friend, and I was somewhat amused at him, because my right hon. Friend's knowledge of Treasury and financial matters is very much more intimate than that of the hon. Member, and much more profound. But the hon. Gentleman the Leader of the Opposition entirely overlooked the fact, which I have pointed out, that with these windfalls some of this money might be used for other purposes which we have been asked to help and which help up till now has been denied. I think it was in 1912 that my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) started out of the Old Sinking Fund both the Development Fund and the Health Sanatorium Fund. There are occasions when the Old Sinking Fund has been used to pay capital charges, for instance, and the purchase of the Anglo-Persian oil shares. There are schemes which lack funds that would relieve unemployment and help the people of this country. My right hon. Friend the Minister of Labour has always been struggling to get more money for unemployment. He may look with some envy at these sudden windfalls. Why then should we not be allowed to divert some of this money for big road schemes which are so much wanted, and which produce so large an amount of employment. I do not say it is necessary to use the whole of this fund, but there are so many schemes for which money is sadly needed that some of it could be used for the purposes I have indicated, and this without imposing any additional burden upon the taxpayer.
    It surely seems unreasonable that when Parliament last year deliberately decided to suspend the Sinking Fund and so release certain sums, that the whole of this money should go into the vast sea of debt instead of being utilised to fructify and develop the country. Surely we can only develop our wealth and re-establish our trade in the way I have suggested. My right hon. Friend's successor will stand at that table in future years, estimate as to the productivity of taxation, and put forward estimates so great that he will not be troubled to say how he shall pay off his debt. You want to put capital into the businesses of the country so that they may pay. Why should the present generation, suffering from the cataclysm
    1762
    of the European disturbance, and the aftermath of heavy trade depression, have to shoulder all this heavy burden for the next few years in view of the difficulties of the present time? Take the matter of pensions. Why cannot my right hon. Friend deal with that matter in the way he dealt with the American debt when he was at Washington? It is a simple operation. By it you would at once increase your revenue by no less than £40,000,000 a year without imposing any more taxation, or in any way interfering with sound finance. What we are doing now is unsound finance, putting the burden on the generation least able to bear it, a burden so heavy as actually to crush enterprise.
    7.0 P.M.
    The reduction of the Income Tax has been criticised by an hon. Member who said that the Income Tax did not in any way damage industry. I am afraid that hon. Member has not gone very deeply into the subject. It might be argued, perhaps that industry was not so much hurt as it was levied on profits, but if these had remained in the business to keep it efficient, it would have been all to the good. To tell me after you have taken away nearly 25 per cent. of the profits of an industrial concern that the proprietor is as well able to keep his plant up to date is to argue against the facts of the case. It was suggested that money paid for gilt-edged investments flow back into industry, but it does nothing of the kind. The holders of gilt-edged investments are not the people who want to invest their money in the ordinary shares of industrial companies. They are big banking institutions, trustees, insurance corporations and so on. Take money out of industry in order to pay off the people with gilt-edged investments, and that money returns to industry too slowly to be of much use. That is one of the chief criticisms against the capital levy. Limited liability company shareholders are made up of a different class of persons, debenture, preference, and ordinary shareholders who are usually different classes of people, and you cannot interchange in the manner suggested. Therefore the argument does not hold, and it is not a good guide. A great many years ago Mr. Gladstone made a very important speech on a similar topic—the question of the relation of taxation to capital. Mr. Gladstone then said what is perfectly true, that money fructifies much more readily in the pockets of the

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    private people of this country than in the coffers of the Government. Nobody would accuse Mr. Gladstone of being anything but a very conservative financier. The right hon. Gentleman the Chancellor of the Exchequer has not done himself justice. The reductions which he has introduced are really of a trifling character and will not achieve any serious object. I am astonished that he should think it worth while to halve the Corporation Profits Tax. He admitted that the Corporation Profits Tax is a bad tax. It is a tax which brings in about 18 to 19 millions. Why not take it off altogether? He knows as well as I do that the surpluses in fact will turn out bigger than they are expected to do. Half measures will never achieve any result. We must nave courage in these matters and some faith. He accused the right hon. Gentleman the Member for Hillhead (Sir H. Horne) of being an optimist, but the right hon. Gentleman's optimism has been justified by the Budget results. Last year when we made a reduction in Income Tax of 1s. all kinds of dire things were prophesied, but in the result we were justified. I think my right hon. Friend will find, if he will take his courage in both his hands and go further into this matter, that his Estimates of Income Tax, which T think are framed unnecessarily low, will really he much higher than he anticipates.
    There is one thing, I think, we ought to bear in mind. We owe a lot of money, but we have a lot of money owing to us. Some of it, I dare say, we ought to write off as bad debts. Some of it we may have to reduce, but is it to be contended that the whole of the debt owed to us by our Dominions, by our Allies, and as German reparations is worth nothing? Are the Government prepared to relinquish all this? If they are not, it is, surely, quite unreasonable from a financial point of view to keep pointing out how much we owe without any set-off at all on the other side. £2,000,000,000 appearing on paper may be only worth a third of that sum, but, surely, there must be some asset of some kind to be treated in our annual accounts. If that is so, the future of our debt redemption will become lighter as soon as these debts begin to be paid. I do not think this country should consent to relinquish our entire claim on German
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    reparations or relinquish a reasonable claim against our Allies who, although they are at the present time in financial difficulties, must at some future time be getting into a condition to liquidate part of their debt.
    I thought the way the Government proposed to deal with the proposal to tax betting was very extraordinary. The right hon. Gentleman the Chancellor of the Exchequer seemed to be rather taken with this new source of revenue, and I am astonished, if he was so much taken by it, that he did not have the courage of his convictions to impose the tax. It is rather an innovation that new taxes are not to be decided upon by the Government, but are to be referred to Select Committees of the House of Commons.
    Mr. PRINGLE: The tax on luxuries and the tax on war wealth were referred to Select Committees by the late Government.
    Sir A. MOND: They were not analogous cases. I must say it seems a doubtful expedient. I am afraid such a tax will be found very difficult from a practical point of view. Then I am not at all convinced about what my right hon. Friend said as to the Sugar Tax. He said that owing to the sugar shortage even a reduction of the amount of the tax on sugar would not give any relief to the taxpayer, as, owing to the world shortage in sugar, the producers of sugar would raise the price again owing to the increased consumption. I cannot believe that if you reduce any tax the reduction in the price of the articles would be defeated for any length of time, even if it were temporarily postponed, Our tax on sugar is extra-ordinarily high. Sugar is a foundation article of diet, especially for children Sugar is one of the first things in which all of us would like to see a reduction made. We on this side shall certainly use all the pressure we can to induce the Government to make a reduction in the Sugar Duty.
    There are, no doubt, many points of view which will have to be raised when the Finance Bill comes into Committee. One of the suggestions I would like to make now, however, to the Chancellor of the Exchequer is that it would be worth while to consider a differentiation of Income Tax in the case of money not distributed by trading concerns, but which is kept in the business for the sake

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    of the business, instead of treating the whole of the profits on a uniform scale. I am sure my right hon. Friend with his long business experience will appreciate that point. An opportunity should be given to industrial concerns as far as possible to build up strong financial positions. A differentiation of that kind, which I think would be technically possible, would do much to case the difficulties of the industrial situation and would do much to stimulate trade and enterprise. I would also like to suggest, in regard to Super Tax, that the Chancellor of the Exchequer should consider something analogous to earned and unearned incomes. Super-tax in the case of a man at the head of a very large concern can become a very excessive burden. I do not think my proposal would cost the Treasury much money, but it would be a very useful thing to do. We have to consider not only the financial, but also the psychological effect of taxation. When you pass a certain limit of taxation, you are depriving industry at its spring. That is why those like myself who believe that the soundest finance is reduction of taxes believe that the reduction of taxation would stimulate private enterprise. It would act as one of those psychological factors which would do more than anything else to set the wheels of industry spinning round again and relieve the serious position which now exists in this country and on the continent of Europe.
    Mr. A. M. SAMUEL: I do not think the right hon. Gentleman who has just spoken has done justice to the Chancellor of the Exchequer in regard to his efforts at debt reduction, nor do I think the Chancellor of the Exchequer explained it fully when he was stating the amount of the surplus. I was not aware that he had repaid in addition to £101,000, 000, till I obtained this White Paper, £25,000,000 out of revenue, so that we have really paid off the astonishing amount of £126,000,000, nor did the Chancellor of the Exchequer give himself proper credit when he told us that we were to have a surplus of £35,000,000 or £36,000,000 which is to be devoted to tax reduction, for, in addition to that, he will be able to devote in the current year another £40,000,000 to the relief of debt out of revenue to sinking funds. The Chancellor of the Exchequer skimmed over another point, which I think he ought to have dealt with.
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    We are faced with the astonishing total of £177,000,000, the estimated amount, collected by rates by local authorities in 1921–22. I think hon. Members will agree with me when I say that that is an amazing total which the ratepayers of this country have been called upon to bear. I believe there are 159 millions raised by authorities in England and Wales and about 17 in Scotland. I think more attention ought to be called to legislation which forces upon local authorities expenditure of this kind in addition to Imperial taxation.
    I was astonished to hear what the right hon. Gentleman the Member for West Swansea (Sir A. Mond) said about sugar, and I would like to know how he squares his equation about the Sugar Duty. The sugar crop's price is regulated by speculators in the United States. I understand that the object of the Labour party is to bring to the poor as much sugar as possible; and if shops can sell more sugar at lower prices, and thus enable the population to provide more sugar for the children, then we have achieved an object in regard to which we are all agreed. If we take off the Sugar Tax, the effect will be admittedly that you will have an increased consumption of sugar here faced by a restricted crop and a restricted amount of sugar, all of which is in the hands of speculators in America; up will go the price of sugar, and the tax remitted to the consumer goes into the pockets of the speculator.
    Sir A. MOND: The ultimate result will be to increase sugar production.
    Mr. SAMUEL: Yes, but it takes a year to grow the sugar, and you will have to wait a year for that result. For these reasons I do not think there is so much in the right hon. Gentleman's argument as he has tried to make out. There is another matter to which I would like to draw attention. I could not understand the hon. Member for Aberavon (Mr. Ramsay MacDonald) in regard to what he said about the incidence of taxation under Schedule A. The class he mentioned are not the only people who own land. Dukes are not the only landlords. I own some land on which are business premises and I pay Income Tax under Schedule A. The result is that whatever relief Schedule A gives to me I can put back into my trade. And then, many shopkeepers, large and small, own their shops. In the

    1767
    case of a shopkeeper, if he gets relief to the extent of 6d. in the £ under Schedule A then he has that amount more to put into his stock-in-trade, and it is nonsense to say that this relief given under Schedule A will not be a great advantage to traders large or small. I would like to ask the Chancellor of the Exchequer one or two questions. Some time ago we saw something of the question of the pre-moratorium bills and I am glad that the balance is being successfully dealt with. I think the late Premier did a great national service at the time those bills were taken up by the Government. There was nothing which earned for him more the gratitude of the commercial community than the adoption of that pre-Moratorium Bill policy involved in the assistance given at the outbreak of war. I would like to ask the Chancellor of the Exchequer how much is there outstanding of these bills and whether we have come through without any very great loss. I would also like to know what is our revenue and capital investment in limited liability companies in addition to our shares in the Suez Canal.
    The right hon. Gentleman the Member for West Swansea talked against debt reduction. I am in favour of debt reduction not so much for the reasons which were given by the right hon. Gentleman, but because of the effect it will have upon pulling down the price paid by the Government for money. We have £7,000,000,000 of debt—perhaps this is talking rather widely, but I do not attach so much importance as to whether it is £6,000,000,000 or £7,000,000,000, but what I am more concerned about is, the more we pay off that debt the more we shall pull down the value of money. I am not a stockbroker, but if you can put up the market prices of your long-dated instruments of credit I think you will be able to repay and reborrow money at a much lower rate of interest. Supposing you were able then to borrow money at 2 per cent. less interest than the ruling average in that case on a sum like £7,000,000,000 you would be able to save £140,000,000 a year, and that would represent about 3s. in the off the Income Tax. By continually strengthening the credit of the British Government you would make the market prices of Government stocks better, and thus establish a lower rate
    1768
    of interest. I think that is the line of policy which the Chancellor of the Exchequer ought to take.
    There is another reason why we should reduce our capital debt. We are taking as revenue about £50,000,000 every year in Death Duties. That is just as bad as war expenditure, and I think this fact ought to be borne in mind in our using capital as revenue. It is all very well to say that we have paid off a large sum during the last few years. It may be true that we have paid off £400,000,000 since the Armistice, but I would like to point out that most of that money, if not much more even, has been realised from the sale of war stores by the Disposal Board, though, had we not used that money in that way, we should have had to borrow. We fail to face and admit the difference between cancellation of debt and debt repayment. You cannot pay off debts by taking money out of one pocket and putting it into the other pocket. The only real way in which you can repay debt is by increasing your assets, or, in other words, by squeezing the water out of your capital account. At the present time you have £7,000,000,000 of water in your capital, and you cannot meet that difficulty by taking the money out of one pocket and putting it into another. The only way to meet the difficulty is by increasing the volume of your wealth, creating assets, and in that way squeezing the water out of your capital.
    Let me for a moment examine the effect of these debt repayments. Most of our Treasury Bills are issued for three or six months, and I understand that none of them are for more than a year. Supposing the Government were suddenly called upon at inconvenient times to meet these Treasury Bills, it would gravely hamper our national existence. Let hon. Members remember what happened just before the Spanish Armada. That was put off for a whole year simply because the Florentine bankers held up the short-dated paper of the Spanish Government and paralysed the supply of funds to Spain. Such a state of things might very well happen here, by some wicked action outside, or, even, inside this country owing to panic. We do not want any possibilities of that kind, so the sooner we get more of these I O U's, called Treasury Bills, out of the pay the

    1769
    better it will be for all concerned, for the Government as well as for traders. What happens if you reduce the supply of your Treasury Bills? It would enable the Government to reissue Bills at an increasingly lower rate of interest. Many people become then dissatisfied with the rate of interest on the Bills, and therefore buy War Loan of various long-dated kinds for the purpose of replacing short-dated paper. Up goes the market price, and it becomes more easy for us to redeem or convert the long-dated loans.
    In my opinion the Floating Debt has been reduced, for the time being, nearly enough, and I think attention should now be turned to the reduction of long-dated paper. I think it was the right hon. Gentleman the Member for Ecclesall (Sir S. Roberts) who said that there has been a constant struggle between financiers and manufacturers as to whether it was better to reduce debt or to reduce taxation, but I do not think there is any such struggle. I believe that the intention on both sides is the same, namely, to strengthen the finances of the country by paying off debt and cheapening money, and, if the Committee will allow me, I want to go on repeating that point as to the advantages of cheap money. The advantage of debt reduction lies not so much in reducing the capital of the debt as in bringing down the rate of interest by effect of supply and demand. In 1929 we have power to convert something like £2,000,000,000 of 5 per cents.; I am totally against forcing any lender, even if I have to pay a higher rate of taxation, to take for his loan a lower rate of interest than he bargained for. I do say, however, that, if you put the price of 3½ per cent. Conversion Loan up to about 90, as you will do if you drive people out of the short-dated market into the long-dated market, you will be able, in 1929, honourably to say to the man who holds 5 per cent. War Loan, "We can borrow money now at 3¾ per cent.; we will give you 3¾ or 4 per cent. for your 5 per cent. War Loan, or pay you off." If you pay off that £2,000,000,000 of 5 per cent. Stock by conversion, and get the interest reduced by 1¼ per cent, you will have a very large amount of money which you can remit to the Income Tax payer, as the right hon. Gentleman the Member for West Swansea (Sir A. Mond) has just asked, while the Sinking Fund, on those lines, will bring all the benefit that he
    1770
    would like to see from reduced Income Tax, and in healthier form.
    There is another reason why I should like to see the price of money brought down, namely, that there is nothing that helps more, in trade and manufacture, than cheap money. If money can be borrowed for long-dated Government loans at under 3¾ per cent., the bankers will soon be forcing money on the market, and the manufacturer, saying to himself that, with the great abundance of money, and not being likely to be called upon to repay at short notice, he will borrow and set more men to work, and, by that increased production due to the cheapness of money, the cost of living will be brought down, because the cheaper money is, the better chance there is of reducing the price of materials and factory and other costs. Moreover, cheap money will create a demand for loans here from foreign countries, and when people from foreign countries come here to borrow they do not take the money away in Treasury notes or in the form of gold and silver in little bags tied up with string; they take it ultimately in our goods. The more tempting terms to borrowers that we can offer to countries like South America and Japan, to the North American railroads, to our Dominions, the better it will be for every working man and every factory throughout this country. Our beacon light is cheaper money. In the past the cheapness of lendable money in London, whether from the point of view of the National Debt or manufacturers, working people, merchants, railways, steamship and insurance companies or bankers, has been a great blessing to our British trade, and, therefore, I say that debt repayment leading to cheaper money is the foundation of the rehabilitation of our prosperity. Too quick a reduction of debt, however, is a form of deflation, and, therefore, we must not go to extremes of speed, lest we, as Bacon said, bring upon ourselves a trouble by reducing what he called "expenses" too quickly. If we reduce too quickly the instruments of credit in the hands of manufacturers and bankers we shall come to the effects of too rapid deflation which occurred in 1920, and throw people out of work. The most undesirable of all the results of too quick a repayment of debt is that people are thrown out of work, and that to those who remain in work we have to pay

    1771
    reduced wages. We want to avoid that, because to reduce wages and to throw men out of work are the very abrogation of statesmanship.
    It has been argued by some people that one way of paying off debt is to have the debt running for, say, 99 years at 4 per cent., or whatever the rate may be, on the understanding that at the end of that time the whole thing falls in and becomes extinguished, like the "A" annuities of the Indian Railways. That is certainly an automatic way of re-paying debt, but it is a dangerous way. What man would invest for his children, or what charitable institution would put money into a wasting asset of that kind? No trustee, no institution or business would invest money where the capital dwindled automatically. Moreover, when the 99 years came to an end, our sons and grandsons would be dead. But, looking back to the progress of my family's firm, which go back now for 120 years, I am perfectly certain that in 99 years' time from now this country—and it is indeed a mighty country, for it must be borne in mind that we have wiped off £126,000,000 in one year—will again, as after Waterloo, have replaced the whole of this unproductive War debt by assets which it will have created of its own trading momentum, and we shall have paid the debt by new assets without bothering about what would happen by a wasting-asset loan in 99 years' time.
    I am sorry that the right hon. Gentleman the Member for Colchester (Sir L. Worthington-Evans) is not here. I was very much astonished at what he said about borrowing money from the sinking fund for the purpose of putting up houses. I know as well as anybody the necessity for houses, for, as a former chief magistrate of my own city, I have seen and grieved over the slums in which poor people have to live. I am as anxious as anyone to see these beastly houses swept away and better houses and more and more houses built in their place, but the way to do it is not by borrowing money from the expended sinking fund or diverting sinking funds to meet future debt. That is what used to be called "silhouette finance," which, it may he remembered, was so named after the French Finance Minister, Etienne de Silhouette, who started financial hares of this very shadowy kind. Let us have
    1772
    housing schemes by all means, but let, us borrow the money for housing, if we need it, like honest people, and pay the interest on it, and not merely trace in profile this difficult financial problem like M. de Silhouette. Much too unsubstantial! Subsidies, loans, sinking funds, cross entries and shiftings! Under which thimble is the debt to be found Did not Moses, in the "Vicar of Wakefield,' carry out an equally skilful juggle of finance with his father's horse and the green spectacles in shagreen cases. This suggestion as to charging money irons the Sinking Fund to future housing debts is really not up to the standard of a man who has been a Cabinet Minister. I will not discuss whether the Member for Colchester is right about the manipulation of last year's Sinking Fund repayments from the bookkeeping point of view, but the Chancellor of the Exchequer told us, quite rightly, that whenever he had instalments of this surplus available for debt reduction he could not afford in the interests of commerce—and I should have been very angry with him had he done so—to hold up £126,000,000 as a total lump sum until the end of the year and then redeem debt. He has paid off debt as he went along—he has paid off his weekly bills of debt as though they were butcher's or baker's bills and replaced the money in trade. These other suggestions about annuities for funding pensions supported by the right hon. Baronet the Member for West Swansea, recall to one's mind the kind of wriggling that took place in 1720 around the South Sea Company and the funding of the war debts and pensions, and gave rise to the great South Sea Bubble. The Government, sold annuities to the company because it could not pay the war pensions, and, if hon. Members will look at W. R. Scott's "History of Joint Stock Companies," they will find described there the story of the South Sea Bubble funding of pensions and war debts, proposals exactly like those which have been suggested. Those proposals ended in the South Sea Bubble and the consequent collapse. The South Sea. Bubble was then result of war debt conversion or funding of 1720.
    I do not like to say any unkind word about my right hon. Friend the Member for Hillhead (Sir R. Horne), but I said, on the occasion of the last Budget, that I did not like that Budget on its face, that

    1773
    there was nothing in the figures given to justify the reduction of 1s. in the Income Tax, and that my right hon. Friend must have bad something up his sleeve. The right, hon. Gentleman the Member for Paisley (Mr. Asquith) said it was a gamble, and so it was if there was nothing up the Treasury's sleeve. The reductions of last year were not justified on the figures of last year's Budget. They were justified on the facts, as we now see, but it was very wrong of the Treasury, whom I do not acquit in this respect, for they ought to have known that there were mere possibilities in. regard to the bringing in of Income Tax arrears. They should not have presented a loose balance sheet like that. It is all very well to say that my right hon. Friend cannot prophesy. The Chancellor of the Exchequer, like myself, has been in trade, and understands the meaning of a factory costing sheet. If I had brought to my father a factory costing sheet showing a margin of error of 12 per cent. he would have said that I had better take another job. If a Budget is brought in with a margin of error of 12 per cent., what does it make for? Not only does it mislead the country, but it makes for extravagance. It is too large a margin to Government Departments, and I hope that such a thing as an error of £126,000,000 will never occur again in a peace Budget.
    There was one Clause in the Finance Bill of last year on which I myself wrestled with the Chancellor of the Exchequer and the Financial Secretary to the Treasury. It was ultimately Clause 21, which dealt with the Super-tax and Corporation Profits Tax charges on private companies. So far as the Corporation Profits Tax is concerned, I do not say it is a bad tax, I say it is a silly tax. We may do bad things in the House of Commons, but we ought not to do silly things, and to put on a silly tax like that does not do the House of Commons credit. What is the result in the particular case of Clause 21 of the 1922 Finance Act? I drew the attention of the Chancellor of the Exchequer to it the other day. It is that if you obey the law as laid down by the new Clause which I got the Chancellor of the Exchequer to put in—it was the best I could get, and I had to be satisfied with it—you pay a certain amount; but, if you disobey the law and elect to submit to assessment and pay
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    the assessed tax penalty, you pay less than if you had obeyed the law. You have a Clause in. the Act, put in last year, dealing with the Corporation Profits Tax, by which disobedience to the law is more profitable than obedience. Nothing dishonourable is involved. You can do what you like, the Act allows that. You can elect to obey the law or to let the officials assess you, but if you disobey the law you get off cheaper than if you obey it. To what a farce the Corporation Profits Tax has brought us! The right hon. Gentleman talked about a betting tax. I express no opinion on it as a tax. That is not what I have in mind. I daresay we, shall have shoals of postcards about it. Suppose I go to Newmarket Heath, put £100 on a horse at 10 to one and make £1,000, I put the money in my pocket and do what I like with it. If I put it into my factory and put 40 men to work and myself sweat and grind for a year and get the thing busy, the right hon. Gentleman takes a certain percentage out of it. If I go to Newmarket I have not taken an hour's trouble in winning. But I have much trouble in putting up the factory and setting trade going, yet he penalises me with a Corporation Tax on my factory work, and lets the man who wins easy money by betting off from the Corporation Profits Tax. I do not put that instance forward in any way to support a betting tax, but the man who takes a risk in business and goes to much exertion is at once discouraged and taxed by the Corporation Profits Tax, and the bet-winner is left to retain his whole profit.
    There is a word which is not very unlike Corporation Profits Tax and the Government has shown a terrible lack of courage in dealing with it: Co-operative Societies Tax. They can do their worst to me. I spoke in the same sense that I am speaking now when we were beaten in a Division by two votes on this point two years ago, and in my own division the Co-operative Society put round a postcard—I have it now—in which they asked their people to vote against me at the last election, so they can again do their worst. My majority was increased by 5,000 last November. Some years ago the area over which we received taxes was allowed to be encroached upon by what we thought were thrift or charitable institutions under Friendly Societies Acts. We are all for helping thrift and for co-operation. We

    1775
    are all for Co-operative Societies if they bear their fair share of taxation. They are now doing £400,000,000 a year turnover. They have encroached on a large slice of the area of taxation. How long and to what extent are the Government to allow these privileged people to trench on the taxable area? How long are they going to throw the whole of their share of taxation on to the non-co-operative trade? The House has a right to ask the Government whether it is going to put co-operative trade on the same footing as other trade or not, and what is the limit to which they are going to allow these exempted co-operative people to have these privilege? There are other things I should like to see dealt with. We ought to have had a tax on imported malting barley and a tax upon imported flour, though not on wheat. I am sorry the right hon. Gentleman has not mentioned these points. I am all for a reduction, by Sinking Fund or any other means, of the dead weight debt, not so much for the purpose of reducing the debt itself, but to bring down the rate of interest so that the largest cause of expenditure, namely, the service of the debt, should be brought down, and in bringing it down we shall have reached the ideal we are all aiming for—the lessening of taxation, a reduction of the cost, of living and a general rehabilitation of trade.
    Mr. MOSLEY: There will be ample opportunity at a subsequent stage of these discussions to develop yet further the controversy which has raged round the Co-operative Societies, and which the hon. Member has just had the temerity once again to initiate. For the present occasion I will refrain from following him into that discussion, but I prophesy that he will find it yet more difficult to reverse the decision of the last House in the present House. The right hon. Baronet the Member for West Swansea (Sir A. Mond) has advanced that opinion upon our Budget problems which is commonly ascribed to big business interests, and which, as far as we can judge, is directly in contravention of the view commonly ascribed to the Treasury which is reflected in the present Budget. The right hon. Baronet, with the full authority which he has on this subject, came down in favour of the reduction of direct taxation and against either a remission of debt or the reduction of indirect taxation. That is a
    1776
    view which I believe can be successfully combated, not only on the adequate grounds to which we have just listened, but from yet other aspects. I wish he had seen fit to elaborate his argument and describe to us in some detail the actual working of the economic argument which he adduced. He was contented with sweeping generalisations. He merely said it was fatal to maintain the present rate of Income Tax as it was a crushing burden upon productive industry, and was detrimental to the development of those savings which alone can initiate new enterprise. I believe that from the point of view which he had in his mind when he spoke it is possible to argue that both indirect taxation and the remission of debt are far more beneficial for this purpose than the reduction of direct taxation. The right hon. Gentleman and other advocates of that point of view base their argument upon two factors. They say firstly that direct taxation is a factor in the cost of production which curtails the home market and fatally handicaps this country in foreign markets. They claim secondly that this direct taxation saps, as it were, those savings which are essential to the development and initiation of new enterprise. I think it can be proved that indirect taxation is a far more powerful factor in the case of production than direct taxation. Wages, after all, are a factor in the cost of production. In these days wages are directly based upon the cost of living. Therefore any tax which tends to raise the cost of living tends to raise the cost of production. I am putting it upon the most material ground, apart from all those humanitarian considerations which should animate us. There is the further argument that indirect taxation tends to raise the cost of those necessaries of life upon which physical efficiency depends, and anything that tends to impair physical efficiency tends to impair industry. Therefore I say indirect taxation is a greater factor than direct in the actual cost of production and has a far greater effect on industrial efficiency.
    The right hon. Gentleman and others argue that Income Tax is a factor in the cost of production. The hon. Member for Aberavon (Mr. R. MacDonald) argued very successfully that Income Tax is not taken into consideration prior to the

    1777
    making of profits, but subsequently. It is on an altogether different basis, for instance, from rates. Rates are an overhead charge. They are considered prior to the making of profit. Income Tax is not an overhead charge. It is not considered till the moment arrives when the income has to be distributed. The late Chancellor of the Exchequer interrupted the hon. Member for Aberavon, and said Income Tax was taken into consideration by his company, and other companies, prior to the making of profit. The right hon. Gentleman is in an awkward dilemma, for the logical outcome of his argument is, that he and his friends are not bearing the Income Tax out of their own resources—out of normal profits—but are handing on the whole burden to the consumer. Which way is he going to have it? Is he handing on the whole of the tax to the consumer or is he paying it out of his own resources, as we pay, in which case a direct tax is no factor whatever in the cost of production. That is a dilemma from which the right hon. Gentleman and his friends will find some difficulty in escaping. May I turn to the other argument, that remission of Income Tax is essential to the development of that saving capacity by which new industries are initiated, and, particularly, to the argument that it is more conducive to that end than redemption of debt—an argument against this conception was advanced by the hon. Member for Aberavon and contravened from the other side. Is a man more likely to invest income which is handed back to him by the State, or which is not demanded of him by the State, or to invest his capital money which he advanced for the purposes of the War and which is refunded to him by the redemption of debt? Which is more likely to be invested, money paid off to the holders of War Bonds or money handed back to the Income Tax payer? Surely the redemption of debt is far more conducive to the development of new capital undertakings than any remission of Income Tax. I read an article by the late Financial Secretary to the Treasury, written in the full enthusiasm which denotes a transfer from the Government to the Opposition Benches, and he sought to point out that the money invested in War Bonds would be reinvested in gilt-edged securities and consequently would not be very conducive to the development
    1778
    of new industrial enterprise. That argument appears to be fallacious. Money invested in War Bonds was derived from every conceivable category of industry. It was money which patriotic men advanced in a great emergency, to help their country, and there is no earthly reason to suppose that money refunded to those War Bond holders would be reinvested in gilt-edged securities. Therefore for these reasons I support, so fair as he went in this direction, the attitude of the Chancellor of the Exchequer in resisting the rather reckless demands which have been hurled at his head. I wish he had gone even further in the direction of remitting indirect taxation, so far as he was able, rather than direct taxation, for the reasons I have advanced.
    Debt redemption must continue to be the only way of paying off the losses of the War until you can ensure that any money remitted to the direct taxpayer will be saved and will not be spent. I think an even less proportion of a is remission than the 2½d. adjudged by Sir Josiah Stamp is actually invested. I believe nearly all that is last year and nearly all the 6d. in the 'present year will not be saved but will be spent, and for very obvious reasons. The people who before the War were accustomed to pay tax are confronted with the alternative of abandoning their average pre-War savings or greatly reducing their standard of living, and in nearly every case, as is evident from the ordinary evidence of everyday life, they have chosen to abandon their savings rather than reduce their standard of living. It is not unnatural after all, if we consider the pre-War and the present position. The pre-War surplus of production over consumption was estimated at about £600,000,000—made up of £200,000,000 Budget and £400,000,000 estimated annual savings.
    8.0 P.M.
    You translate that£600,000,000 into modern values, and you get a sum of about £1,000,000,000. The Chancellor of the Exchequer is demanding well over £800,000,000 this year. Then we have to consider the great reduction in the surplus of production which follows from the loss of foreign investment, through the doubling of the rates of the country, from £75,000,000 to £150,000,000 a year, and from the lesser production and the

    1779
    lesser sales which we find in the post-War period. If we take into account the fact that much of the money raised in revenue flows back to the community in interest, even then this margin of production over consumption, amounting to a sum of £1,000,000,000, as expressed in modern values, must considerably depreciate. It is evident, a priori, from the arguments I have striven to adduce; it is further evident, from the evidence of nearly all the great bankers, at their annual meetings, that the country in point of fact is not saving to-day, and that practically no money is flowing back to industry for the initiation of new enterprise. I would therefore very seriously ask the Treasury to consider whether we cannot, to a certain extent, readjust in this respect the whole incidence of taxation in this country, and revise very considerably our existing provisions. I should like to see a differentiation, even more considerable than that suggested by the right hon. Member for West Swansea (Sir A. Mond), between money saved and spent. I believe that is practicable, from the administrative standpoint. It certainly is no new idea. The Treasury have had many years to consider it. That view was first advanced by John Stuart Mill, and was recommended to hon. Members opposite before he became a Socialist. It was a very old idea, and many competent economic authorities have long examined it. The arguments against it are that it permits an undue accumulation of wealth in the hands of those who already possess money, or rather that it assists them unduly to accumulate yet further wealth. That is off-set by the consideration that the income on the money saved in one year is taxed in the following year. I do not think any such differentiation could be made without some corresponding tax of a different character upon the very rich. We should not only give an incentive to saving, but also present by the incidence of our taxation, a deterrent to spending. We all know the immense difficulty of any such procedure as a luxury tax. We have had Committees of this House which have not reported altogether favourably, and we have the adverse experience of other countries. It is always said that France has tried the luxury tax, and that it has failed. After all, every tax fails in France. The English Treasury has proved
    1780
    itself competent to levy many taxes which the French financial authorities are quite incompetent successfully to levy. I would ask the Treasury whether we could not have a readjustment of taxation, both to encourage saving and to discourage this reckless spending?
    I would even venture to throw out one suggestion, which cannot be more startling to hon. Members than the suggestion flung out from the Treasury Bench this afternoon, in regard to a betting tax. There is a possible tax which fulfils the fundamental conditions of all good taxes, namely, that it is easy to administer and difficult to evade. Why should we not have a sharply graduated tax on the number of domestic servants kept? That would be a tax from which it would he very difficult to escape, and which would fall directly upon the standard of life maintained. It is impossible for a rich man to maintain a very great standard of life unless he employs a very large number of domestic servants. You would catch them almost every time, in almost exact proportion to what they spend. Hon. Members may say that a number of these people would be flung out of employment. That is possible, but if, through that, you affect a great saving of money, which would be put back into productive industry, then not only those people, but far more, would be absorbed, not in parasitic operations, but in productive industry, which would immensely ameliorate the lot of their fellowmen. The representative of the Treasury very properly smiles at my suggestion. I can assure him I speak with that full disability of anyone who ventures in this Assembly to advance any novel suggestion in a financial Debate. It is the haunting fear of all politicians that they will be characterised as cranks, and consequently we are deterred at all times from advancing any thoughts which may be in our minds, and which may be of advantage in these matters. I was only emboldened to do this by the remarkable suggestion made from the inner sanctum of the Treasury this afternoon.
    Seriously, I put it to the Treasury, that we must induce saving of some sort, either collectively or individually. In any system, individualist or socialist, you must have saving and the initiation of new undertaking. There is no alternative to the redemption of debt, unless you have some such readjustment of taxation

    1781
    as will encourage individual saving. The redemption of debt, after all, is a form of compulsory saving. It is taking money from Income Taxpayers which would otherwise be spent, and devoting it to making good the losses of the War. It is only in that way that you can make good the losses of the War. A very great case exists for the capital levy, with which I will deal in a moment. There is a very powerful case for the Capital Levy, but its advocates do not claim that it will make good the loss of the War, they only claim that it will create a condition whereby the loss may be more rapidly met. You can only repair the loss of that £8,000,000,000, which has been blown into the ground and into the air in the shape of shells, by some form of saving, collective or individual. The plan of debt redemption pursued by the right hon. Gentleman is a collectivist plan. The plan advocated from these benches, of a capital levy, is an individualist plan. [HON. MEMBERS: "No! "] May I explain that? [HON. MEMBERS "No! "] I can assure hon. Members that in the last House of Commons we became too accustomed to the jeers which inevitably accompanied speeches by hon. Members on this side to be greatly disconcerted by the derisive jeers of the belated reinforcements who have now arrived and most of whom have not yet made their maiden speech. We were accustomed, in the last House of Commons, to the emanation of those zoological noises. They represent a kind of dumb, instinctive yearning towards human speech. I myself never tried to discourage them. I hope they will develop and extend, and that one day they will burst into the flowers of rhetoric, and charm and. enlighten this assembly. Therefore, I shall be only too glad if hon. Members will interrupt me as much as they like, in the hope that they will develop the faculty, and that one day I may be present on the glorious occasion when I may uproariously cheer the maiden speech of hon. Gentlemen.
    Mr. BECKER: You talk enough.
    Mr. MOSLEY: It is developing. May I explain to hon. Members why, on their conception of things, a capital levy should be peculiarly acceptable? It is an individualist solution. What is it a capital levy says? It says, "We will take all this burden of debt from the shoulders of the State and transfer it to the shoulders
    1782
    of the individual, by taking capital from the individual to enable the State to pay off the bondholders, who have put up money until such time as the State can discharge it." Thus, you shift the burden on the State of making good the losses of the War to the shoulders of the individual, and the onus on them is to make good the loss of their capital. Therefore, prima facie, it would not appear that such a solution would be unduly resented by hon. Gentlemen opposite. The whole argument which has been advanced by the right hon. Member for West Swansea, and hon. Gentlemen opposite, is in favour of some such solution of our difficulties, because they have all harped on the great psychological problem that men will not continue to work so long as an enormous percentage of their earnings are taken by the State. They say that that is a deterrent to exertion and labour, and that it cannot continue or the springs of initiative will be dried up. That presents a very great argument to those who say it is cheaper to have one upheaval and one transfer of capital; to thrust this burden on to the shoulders of individuals, and then to let them have a greater percentage of their earnings than they at present enjoy. May I deal with some of the arguments advanced, because it is essential this should be brought to the test and analysis of Debate, and I hope it will be advanced in the course of this Debate.
    There are two main objections to the capital levy system. The first very powerful objection is that it is wrong to pay off money, which you have borrowed in a period of great inflation, during a period of acute deflation, because by so doing you are presenting a premium to the bondholders and repaying cheap money with dear money. Hon. Gentlemen on these benches can well reply that money is likely to get not cheaper but dearer, and that the longer you wait the heavier the burden will become.
    Mr. BECKER: Speak up, a little bit.
    Mr. MOSLEY: I did not know that the hon. Member was interested in what I had to say. I am only too willing to gratify him. That is a partial objection, which might be countered by other powerful arguments, but there is another point, and this is the whole gravamen of the case against the capital levy. Its opponents say that, however good a scheme it may be on paper, it will create

    1783
    psychologically a panic which will be fatal to its working. Even if that panic were not in existence, hon. Gentlemen may be fairly sure, if a Government were in power which was disliked by the great City interests, that panic would be created, and they would stand in some danger. May I advance yet another suggestion, to meet, as I see it, the desirability of a speedy reduction of the great burden of debt. There are a great many, as it were, rogue elephants in the world of big finance, who, in order to make good their own escape, may see fit to stampede their more placid brethren amongst the investors. If you are to defeat that influence you have to erect a zeriba of thorny dilemmas around these people so that they cannot act in that way. I suggest that that may be done in this way—by throwing the whole incidence of this undertaking on to the existing death duty machinery. Take your death duties, as the Chancellor of the Exchequer has done to-day, and earmark them for the purpose of debt; raise them, graduate them, and put them on a more practical basis. I believe that, economically, death duties can substantially be raised. Then give a good premium, a really substantial premium, to any man who will pay his death duties in advance of his death within a specified number of years from the present date. [HON. MEMBERS: "Oh! "] Yes. Consider the position. Supposing, on the other hand, you made the death duties so very heavy that a man would have very grave fears as to the position of his children if he did not pay his death duties within a specified number of years. It may be argued that certain people would refuse to pay their death duties within a specified number of years. Hon. Members may say that they would remove themselves and their capital from the country. If they were willing to take so drastic a step, they would do it at the, present time to escape the very high death duties, Income Tax, and Super-tax.
    If you make the advantage sufficiently great, the advantage between the man who pays at once and who co-operates with the community to raise this great burden, and the man who refuses to pay and who waits until his death, I see no reason why the men who have children, who care for their children and who have
    1784
    some feelings for their position, should not so co-operate with the State and so discharge their obligations within a very short space of time. At any rate it surely could be argued that an enormous percentage, or a very large percentage, of people would follow some such line, and by that means we might get very great assistance and secure alleviation of debt, and consequently a remission of all forms of taxation at a very early date. The advantage of such a scheme, if it could be worked, and I should be interested to hear arguments against it, are very obvious. The existing machinery would carry it out. There would be no chance of panic or a stampede of any kind, because people could realise their assets and within a specified number of years, as opportunity offered could liquidate their undertakings.
    Lastly, and most important of all, the prospects of evasion would be enormously reduced. It is obvious that all men know when a levy is coming, and they may, by means of taking themselves and their capital abroad before that period, escape it. They may transfer their capital into foreign currency. There are a hundred ways open for great financiers to escape taxation. Everybody knows when a levy is coining, but nobody knows, or few men know, when death is coming. Though people may be willing to go abroad with their capital for the period of the levy, and may be able so to do, few of them would be willing to go abroad until their death; if they were so willing they would be abroad now in order to avoid the heavy duties and the Super-tax. I suggest that a scheme such as I have outlined might go far towards alleviating the burden of debt and might secure substantial advantages to the taxpayer at an early date.
    While the Government continue to. resist any suggestion except that of a tax on betting, the only hope for the taxpayer lies in far-reaching and drastic economies on unproductive services. We find in this year an increase over last year in the Estimates for the defence of this country of £11,000,000. That is an increase in the Estimates this year over the actual cost last year. We find in the Estimates for the Civil Service that there is an apparent saving of £36,000,000, but there is no mention made of the fact that last year there was a payment of

    1785
    £30,000,000 to the railways and £17,000,000 also last year on war liquidation, items which cannot be recurring. Therefore, if you take these facts into consideration you find, not a decrease of £36,000,000 on the Estimates of this year over last year, but an actual increase of £11,000,000. So, in every field, we shall find no far-reaching and searching economies until we have drastic changes of policy on the part of the Government. We are getting down close to the bone in social matters. We find that we are so close to the bone that we have had proposals to tax the education of the children at the museums. We find on the social side that the knife is applied drastically, even with danger to the life of the patient.
    We shall never succeed in effecting the real economy which is vital to the future productive life of the nation unless the whole trend of our foreign policy is changed, until we are willing to withdraw from absurd, fantastic adventures in countries like Mesopotamia, and until, above all, we find a virile, strong and powerful foreign policy in this country, taking the lead in international affairs and seeking to effect a drastic, far-reaching and all-round reduction of armaments. That is the way to effect real economy. The eternal truth is writ large in this Budget, so that all may read, that there is no greater extravagance in the world than a feeble, vacillating, inept foreign policy and until we have this country taking its courage in its hands and taking the lead, as in the past, in the world's affairs, the taxpayers of this country may look in vain to the Treasury bench for a constructive conception of things, and for a remission of taxation which will lighten their burdens and restore prosperity to the productive industries of this country.
    Mr. SAKLATVALA: I wish to put a few questions to the Chancellor of the Exchequer in order that we may understand some of the issues raised by him in his speech. The Chancellor congratulated the country and the Government upon the appreciation of all Government stocks. I should like to know from the Chancellor, who is a man of business experience, if he does not attribute some of this apparent financial appreciation and prosperity to the continuance of unemployment in this country. There is no doubt that the public debt at the present moment is of
    1786
    a different character from what it was in pre-War days. The finances of this country as well as the finances of other countries are also of a different character. Everywhere we suffer either from inflation of currency, from paper currency or from unemployment. At the present time Great Britain is in the happy position from the financial point of view, from the bankers' point of view, of not having continually to put forward more paper money, because of the very substantial reduction in the wage-earning power of the working classes. I will not enter into any disputable figures, but it is admitted that between £300,000,000 and £500,000,000 a year represents the reduced wage bill, so that the Government has not to produce so much money to be paid in wages. Is not that responsible for this apparent prosperity?
    There is another lesson in this apparent prosperity. Last year Income Tax was reduced by 1s. in the pound, and it was supposed that all these shillings would go back into industrial investments In stead of that it is obvious that those who have saved a. shilling are loss anxious to spend it on private enterprise and are running to Government securities, and that is the reason for the appreciation of Government securities. That appreciation must be directly in proportion to the lack of private enterprise and industrial investment. It. shows how sadly money is running away from industrial investment, and is trying to get some earning on a safe basis from Government securities. If that is so, is it wise for the Chancellor of the Exchequer to give another reduction of ed. in the same fashion?
    If reduction in the Income Tax was justifiable, was there not a way of making that reduction so as to increase, the buying capacity of the consumer? That way of doing it is by exemption of all incomes up to £250 from any Income Tax what ever. This is done in the case of large companies, which, before making their Income Tax returns are permitted to deduct the sums that are necessary for the requirements of staff and plant. The individual wage earner's staff and plant is his body. Why should we not allow for the maintenance of that before he begins to be taxed? Who can argue that £4 or £5 is not a bare allowance to keep a man and. his family going? That is

    1787
    the staff by which he earns his income. If the Chancellor could still see his way to give this relaxation out of the Income Tax, not in the shape of another 6d. which will go into the pockets of the dividend earner, but by exempting entirely incomes up to £250 the people with the higher incomes will also get the benefit because they will get their first £250 free from all taxes.
    There was one curious argument which the Chancellor applies to Income Tax and refuses to apply to the Sugar Duty and the Tea Duty. He refuses to lower the Sugar Duty because of the uncertainty of the sugar price in the sugar market. More uncertain than that at present are the incomes of the people in this country. In the matter of tea he does not give a reduction because last year he gave one, but he does give a reduction of Income Tax although last year he gave one. There is something contradictory in the Chancellor's argument as well as in his policy.
    The Chancellor has referred to the interest on debt and the method of lightening it as speedily as possible. He has not said much with regard to his own successful manipulation of the American debt. The Chancellor went to America. He made certain appeals to the reason of the American financiers and was successful in inducing them to accept 3 per cent. interest Why should not the Chancellor, immediately after coming back, have called together the British financiers and appealed to their sense of patriotism and sense of human duty and told them that the Americans had put them to shame by reducing the interest, and why should the British financier not reduce the interest to the British poor and the working classes? That remains yet to be explained. We were told in a speech in this House that the question of interest on the debt is a question of contract. When there was an interjection regarding the American debt it was said that America voluntarily reduced the interest. Why do not the British owners of the national stock offer voluntarily to reduce their interest? Are they waiting for us to compel them to do so? Has the Chancellor of the Exchequer made any attempt? It was his sacred duty to this nation to make that attempt and if has failed he has not stood by the British
    1788
    nation as his duty required. If he made private efforts and failed it was his duty to expose the names of all those patriots who refused to act towards the British people as the American financiers agreed to act. That information would be enlightening if the Chancellor of the Exchequer would give it.
    It has been well known that out of the National Debt there is about £250,000,000 which may be said to belong to the man in the street. The remainder belongs to fairly comfortable people and to the big financiers themselves, and these people, in paying Income Tax and other taxes, are merely paying to themselves the interest on their national stock, and they are not shouldering the burden of national revenue for education, Army, Navy, and all the other estimated expenditure of the country. If the Chancellor would take the trouble to place the Income Tax payer on the same basis now as he was before the War, to make some substantial contribution towards standing expenses of the country, apart from what he pays to himself in the shape of interest on the stock which he himself holds, the Chancellor would be making a just distribution of taxation between the different classes in this country. At present the burden of taxation for maintaining the services of the country falls upon the poor people, and those who pay Income Tax out of their incomes, which the poor people earn for them, are getting back almost the whole sum in the shape of interest due to themselves on the national stock which they hold. I submit to the serious consideration of the Chancellor that he should devise a method by which the Income Tax payer would do no more than he did before the War, paying a just contribution towards the standing expenses of the country.
    Mr. WISE: I regret very much that am unable to follow the hon. Member for North Battersea (Mr. Saklatvala). He has various complaints to make about the Chancellor of the Exchequer, and I am, indeed, sorry that I cannot follow him. I should like to congratulate the Chancellor of the Exchequer on this Budget and on renewing the Sinking Fund. One of the great aims at the present time, under this Budget, is to renew the Sinking Fund. The hon. Member for Farnham (Mr. A. M. Samuel) brought that point out before the Committee. The

    1789
    right hon. Baronet the Member for West Swansea (Sir A. Mond) did not approve of the full amount which has been suggested, £40,000,000, going towards Sinking Fund. He referred to what happened 100 years ago. I am only speaking from memory, but I think that, if he refers to what happened 100 years ago, he will find that there was a suggestion put forward then by the Chancellor of the Exchequer for a Sinking Fund of £5,000,000. I do sincerely hope that the Sinking Fund will be continued, and it will not altogether he to the detriment of trade. The present Government came into power loaded with obligations and, to a certain extent—and I say it advisedly—menaced by an opposition who franctically desired more subsidies, and yet more subsidies from the State.
    The late Chancellor of the Exchequer took a shilling off the Income Tax. I think he did right. I contend that that gave the greater purchasing power which has already improved our trade. His estimates of the revenue were very good; they were ·34. But his estimates of expenditure were not up to the usual standard of Chancellors of the Exchequer. What are the principles of taxation The chief is that taxation should be fair. If you are obliged to raise £800,000,000, you must have various modes of taxation to get the money. I hold that direct taxation should be more or less equal to indirect taxation. It is an old axiom, which was preached in this House by no less a man than Benjamin Disraeli. If direct, taxation is confined to a few, what does it become? It becomes what the Opposition would call a capital levy. It is an invasion of the very fund which gives employment to the people. We all agree that we are overburdened with taxation. In 1913–14 our system of taxation and our position was good. We raised £200,000,000. It was an elastic system, and worked well in the War. But to-day conditions have altered, and I contend that we want some change in our system of taxation. Even the Chancellor of the Exchequer stated recently that he paid his Income Tax with a loan from his bankers. Sir Eric Geddes, the President of the Federation of British Industries, stated that the trade of the country was being strangled by high taxation that took the savings which provided the capital, the life blood, of industry.
    1790
    We want brains and muscle to get together so that we may improve our industry. I know of certain fms which are paying £2 this year in taxation for every £1 earned. Where does the extra £1 come from? It comes from capital. If you reduce capital you reduce enterprise, and eventually you stop the industry of the country. If there is one thing we require to understand more than another, it is that every party, every class, and every individual is dependent on the defence of the Empire and the payment of the Government interest on our stock. After the War the Government brought in many new social organisations, which undoubtedly impoverished the Exchequer. Of a population in the United Kingdom of 48,000,000 people, 30,000,000 are supposed to benefit from the relief of the poor, from the Education Act, the Old Age Pension Act, the National Health Insurance Act, and the Unemployment Insurance Act. In 1922 the Poor Law expenditure was bigger than it has ever been before. In his speech against the capitalist system the hon. Member for Colne Valley (Mr. Snowden) stated that 88 per cent. of the wealth was with 2½ per cent. of the people. That may be right, but he has to remember that 2½ million people pay half the taxes of this country.
    I have said that we want some sort of alteration. There was a Royal Commission on the Income Tax in 1919–20. In the Report of that Commission a reservation was signed by four Commissioners—one, I think, was Mr. Geoffrey Marks—in reference to the scope and incidence of taxation. They stated that an inquiry into the scope and incidence of a tax is incomplete unless the effect of that tax is considered in connection with the imposition of other burdens, and unless taxation is regarded, not merely from the point of view of the individual, but from that of the general result on production, industry, and savings. Those are three very important points. They went on to say that, in view of the growing disparity between direct and indirect taxation, the absence of any direct taxation of the mass of taxpayers, and the I enormous sum allocated out of revenue of the State for so-called public assistance, the burden which was the price of the safety achieved for the whole community by the War should be more widely distributed. I would like to suggest to the Financial Secretary that

    1791
    the Royal Commission be recommissioned. They had only begun their work, and it was good work they did. They would bring fairness and evenness into taxation.
    We have had the Budget. What are its main points? As far as I can read it, the great point is its sound finance. It will lead to stability. The great idea of paying off war debt with £101,000,000 surplus is bound to lead to stability and to increased credit. The great thing this country has to do is to keep its credit at a high point. We have to buy immense quantities of raw material and food from abroad. The better our credit is the cheaper the price at which we buy our goods. What is happening in other countries? It must be remembered that in finance we and other countries are interlaced. We are dependent on other countries. In many ways it is just as essential that other countries should balance their Budgets as it is that we should balance ours. What is the position in South America? I find that the Argentine has improved its last Budget But there is an estimated deficit of 172,000,000 pesos in 1922. In Brazil there is an estimated deficit of 200,000 contos this year. Chile hopes to balance its Budget. All these things affect us. Take the United States of America. We have all heard of the vast fortunes that have been made in the United States as a result of the War. The estimated deficit in the Budget of the United States of America for the year 1922–23 is 273,000,000 dollars. It is a large sum. She may be able to balance it by not building warships. Japan to-day is balancing her Budget entirely owing to the Washington Conference. In Europe we find Switzerland with an estimated deficit of 84,000,000 francs; Holland with an estimated deficit of 226,000,000 guilders and Spain with an estimated deficit of 427,000,000 pesetas. These are gigantic sums. We are practically the only country which is balancing its Budget at the present time. Let me say a few words on the National Debt. The peak of the National Debt was £7,988,000,000. It. is, I agree, essential that we should endeavour to have this reduced but it should be reduced by revenue. After the Napoleonic Wars, as mentioned by the right hon. Baronet the Member for West Swansea (Sir A. Mond). we had a debt of
    1792
    £800,000,000 and the country suffered owing to this gigantic amount. Anybody who reads history knows that it was more felt then than our debt is felt to-day. We got over that feeling of debt by increasing the wealth of the country. To-day I contend although we may reduce our debt by a few hundreds of millions it is only wealth which will enable us to get over the pressure of debt because to-day we are living on quite a different basis to that of 1914.
    Continental countries have dealt with their debts in quite a different way. They have dealt with debt by inflation. If we were to inflate—and I know certain hon. Members think it is the right thing to do—what would be our position in regard to food? Our food and also our raw materials would go up in price. We may divide our debt into two parts, the internal debt and the external debt, and there is a great difference between them The internal debt you produce and consume; the external debt you produce but do not consume. What is the position of our internal debt? Hon. Members opposite, particular the hon. Member for Govan (Mr. N. Maclean), are anxious to have this debt considered with a view to having the interest reduced at an early date. We must not fight our obligations. We have two thousand millions of pounds which can be paid off in 1929 or 1947. The hon. Member for North Battersea said that we should pay it at once and reduce the interest at once. Let us realise that to-day an immense number of foreigners are holding our War Loan, which is a benefit to this country. The more money we can get into the country the better for the trade of the country.
    Mr. T. WILLIAMS: Why send money out of the country?
    Mr. WISE: We do not send it out of the country. I am coming to that point, and I will explain it to the hon. Member. The only money we send out is for the purpose of buying our raw materials and our food, and also to pay our United States debt. After the Napoleonic wars there was a great difference of opinion as to interest on internal debt being reduced, and the reply given by the Chancellor of the Exchequer in those days applies to-day. He said that this country would lose more in credit and resources of every kind than would be in any

    1793
    manner gained by such an enormous breach of faith. I sincerely hope we shall be able to have a large conversion loan, a voluntary conversion loan, so that we may get 5 per cent. War loan transferred into 3½ or 4 per cent., and in that way perhaps save 35 or 45 million pounds per year. The external debt is indeed a difficult problem. I should like as a back bencher, and as one interested in finance, to congratulate the Chancellor of the Exchequer upon what be did in the United States. I do not think his action is fully appreciated in this country. We have to pay £33,000,000 in the first year, but what did the Chancellor save us? In the ordinary course, had the debt not been funded, the amount would have been £65,000,000, and that is a big difference when the rate of exchange is against us. How can this debt be paid? There are only three ways—by gold, by services, or by goods. The Fordney Tariff has not helped us in delivering goods to the United States of America. I understand imports from Great Britain to the United States have gone up recently, but the tariff makes it more difficult to transfer goods. I leave out the question of services and there remains the question—can it be done with gold? I think a great deal can be done with gold.
    We are the largest producing gold country, or rather Empire, in the world. Last year £65,000,000 of gold were produced, of which the British Empire produced £44,000,000. That is 67 per cent. of the whole. A great deal of our gold is worked commercially. It is said that out of every £9, £5 is used commercially and £4 as bullion. We want gold at the present time, and why should not some system be introduced by which the amount could be reduced so that we might obtain more gold with which to pay the United Stases. India is taking a vast amount of gold at the present time. India has deflated too quickly. They have a bank rate of 8 per cent., and owing to this deflation, which has made higher prices, they are importing gold from this country and from the United States of America. India in 1922 took £30,000,000 of gold, and in the first quarter of 1923 India has taken £10,000,000 of gold and £3,500,000 of silver. Could not some system be devised by which India need not buy this gold at the present time? As it is, she buys it owing, as I have said, to deflation, and owing to the
    1794
    fact that the natives are not willing to accept paper currency. There is another way by which one might be able to obtain gold, and that ifs to obtain it from the Bank of England and the other banks. In 1913 the Bank of England and the Joint Stock Banks had £105,000,000, and to-day it is £208,000,000. That is at the end of December. Could not we use £100,000,000 of that, and send it to the United States of America?
    Mr. HARDIE: They do not want it.
    Mr. WISE: That does not matter. We want to pay our debt.
    Mr. HARDIE: Why not ask them to take goods and put our men into full employment?
    Mr. WISE: The Fordney Tariff makes it very difficult. If we could send £100,000,000 of gold it would reduce the interest we have to pay. We are getting no interest on the gold or the bullion. It is simply lying idle. Of course, probably the Bank of England would say that we should not take it because to do so would reduce our credit. I contend that it would not reduce our credit. I contend that gold to-day is good only as a banking reserve. Gold in the old days, in 1913–14, acted with currency and exchange To-day your exchange has run away from gold, and it has not the same value as it had previous to the War. Also, there is gold in our Dominions. I do not want to take their gold, but they might help. We are all one, or we should be all one. One hon. Member referred to the amount the Allies owed us. France has £200,000,000 of gold, Italy £38,000,000, and Belgium £13,000,000. Why should not some of this gold be banded over for part of our debt, and in that way not only pay us what they owe us, but We be able to send it over to the United States?
    There is another system by which this debt might be reduced. During the War we sold an immense amount of foreign securities but we still have a large amount of dollar securities. Although in no way do I wish control to be exercised again, I feel that some benefit might be given to a person who holds a dollar security, if he would transfer it to the Government again, so that we might be able to send it over to the United States. Then, take the investments that the United States of America is making in

    1795
    this country. Our debt can be paid in that way, but let me point out to hon. and right hon. Members that we may lose our market in that way. The amount which the United States has invested in foreign securities on the New York Stock Exchange, taking the amount at par of exchange, in 1919 was £60,000,000, in 1921 £120,000,000, and in 1922 £130,000,000. We may be able to pay off a. certain amount of debt in that way, but, as I say, we may lose the market of the world for securities. Do we realise how America has expanded in that way 7 In Britain, in 1911, we invested in foreign countries £100,000,000, and the United States only £6,000,000. The position in 1922 was that we in Britain invested £55,000,000 in foreign securities, and America £130,000,000. There is another method which might be put forward for the payment of this external debt, which is the most dangerous debt you can have. Rubber, as some hon. Members may know, has increased in price lately, and America has not got. rubber. Rubber was as low as 7d. a lb., and, I believe, it is now 1s. 5d. The United States of America buys 300,000 tons of rubber a year. What is the difference in that price? The difference between 7d. and is. 5d. is £25,000,000. We want to keep up the price of rubber, so that the Americans can buy it from the rubber market which is here, and in that way we can reduce our debt.
    9.0 P.M.
    I should like to suggest to the Financial Secretary to the Treasury that a Committee be set up to go into the gold position. I know it may be difficult, but such a Committee has been set up in the United States of America, and if they think it worth while to set up such a Committee, it is far more essential that we should set one up in this country and endeavour to pay our external debt, which is the great danger that we have to contend with at the present time. There is one more point I should like to bring to the notice of the Committee, and that is in regard to direct and indirect taxation. The leader of the Labour party, in his election address, stated that Labour is, in principle, opposed to indirect taxation. I differ from the hon. Member. I contend that, if you want to assist the labouring classes and to do the maximum
    1796
    of good, it is not enough to operate on articles consumed by them, but you should operate on the articles that will give them the maximum of employment. What is our indirect and direct taxation? Hon. Members opposite have referred to it. In 1899–1900 our indirect taxation was 52 per cent. and our direct taxation 48 per cent.; in 1905–6 our indirect taxation was 50 per cent., and our direct taxation 50 per cent.; in 1913–14 our indirect taxation was 42 per cent., and our direct taxation 58 per cent.; in 1917–18 the indirect taxation was 17 per cent., and the direct taxation 83 per cent.; in 1921–22 the indirect taxation was 33 per cent., and the direct taxation 67 per cent.; in 1922–23, the last Budget, the indirect taxation was 36 per cent., and the direct taxation 64 per cent.
    I believe we will never settle our unemployment problem until we get our direct taxation down, and I say that after having studied it and referred to other countries. In Switzerland, the indirect taxation is 56 per cent., and the direct taxation 44 per cent., and in France, where there is supposed to be no unemployment, the indirect taxation in 1913 was 63 per cent and the direct taxation 14 per cent., with 23 per cent. of what was called monopolies. In 1922, on the Estimate Budget, the indirect taxation was 75 per cent., the direct taxation 15 per cent., and the monopolies 10 per cent., and for the month of March last the French revenue totalled approximately 1,874,000,000 francs, of which indirect taxation was responsible for 1,289,000,000 francs, and there is no unemployment there. I press on the members of the Labour party to consider those figures. Never mind shaking your heads, but consider them.
    Mr. BROAD: They have not undertaken deflation in France, as we have here.
    Mr. WISE: Then it is all the worse for them, as they have to pay higher prices for their food. In the United States of America indirect taxation was 35 per cent. in 1921, and direct taxation 65 per cent., and in 1922 the indirect taxation was 43 per cent., and the direct taxation 57 per cent. What is the position in the United States to-day? There are practically no unemployed there.
    Mr. T. JOHNSTON: Will the hon. Member tell us if it is not the case that the unemployment figures got better after they stopped the policy of deflation?
    Mr. WISE: No.
    Mr. JOHNSTON: Is that not the state-merit made by the Chairman of the London, City and Midland Bank?
    Mr. WISE: I do not know what was the statement made by the Chairman of the London, City and Midland Bank. All that I can say is that the American Debt, which means inflation, is twenty times bigger than it was in 1914–15.
    Me. JOHNSTON: But they stopped the policy of deflation; we continued it. Their unemployment figures went down; ours remained steady.
    Mr. WISE: No. The only thing that America has really done is to convert a certain portion of her Liberty Loan into a reduced interest loan. But I maintain it is almost entirely due to direct taxation coming down. We sometimes have the pleasure of seeing in this country Prime Ministers from our various States and Dominions. The Prime Minister of the State, of Victoria is here at the present time. He told me that the revenue of the State of Victoria was £12 16s. 3d. per head of the population, of which £10 9s. 6d. was indirect taxation, and £2 6s. 9d. direct taxation. I said, "Have you any unemployment?" He replied, "We have no unemployment." Is not that again another point to consider? I feel confident we want to consider at the present time is that we should get our direct taxation on a more level basis with indirect taxation. In conclusion, I wish the Government would consider these three points of mine: (1) that the Royal Commission should be set up again to consider the taxation of this country; (2) that a Committee should be appointed to go into the gold position; and (3) that we should bring direct taxation on a level, or as near a level as possible, with indirect taxation. There are many canons in finance, but no greater canon than to have -fair and equitable taxation with sound finance.
    Mr. GRAHAM WHITE: Like the hon. Member for Ilford (Mr. Wise), I was not able to follow the argument of the hon. Member for North Battersea (Mr. Saklatvala) when he devoted some
    1798
    minutes of his speech to the question of the price of British Government securities. He seemed to attribute that rise in the main to the reduction in the Income Tax, and in that he is to some extent right. Reduction in the Income Tax is, and will be, reflected in the price of Government securities, but there are many other factors which have led to the recent rise in the price of those securities. The price of Government securities has risen in the last 12 months owing to the pressure of unemployed capital, and until there is an improvement in the general course of trade, that rise in securities will continue. It is also due in part to the fact, which has been mentioned by the hon. Member for Ilford, that we have had left in this country—because, in the main, our financial policy has been recognised as sound—very large sums of foreign money. Owing to the fact that this money has been left here it has raised the price of our securities, it has enabled our Government to borrow more cheaply and it has conferred an indirect benefit on everybody living in these islands. In so far as it has not been remitted abroad, it has helped the foreign exchanges and, in particular, the dollar exchange, and in that way, too, we have derived benefit from the financial policy which has been pursued.
    I am at one with the hon. Member for Ilford when he congratulated the Chancellor of the Exchequer. I disagree with a great deal which the Chancellor of the Exchequer proposes to do in regard to the present Budget, but he at least has not made the mistake, which was made last year, of putting the remission of taxation before debt redemption. That is a most important factor. The right hon. Member for West Swansea (Sir A. Mond), like the hon. Member for Ilford, referred to the position a hundred years ago, and raised the point which has a very great lesson for us at the present time, which I think is worth pursuing a little further. The right hon. Member for Swansea was mistaken, I think, if I understood him aright, when he said that the relative position then was worse than it is to-day. As a matter of fact, in 1818 19 per cent. of the national income was raised in taxation. In 1922, 25 per cent. of our income was raised in taxation. In 1818, 10 per cent. of the amount raised in taxation was used for the reduction of debt. In 1922 11 per cent. of the national income was devoted

    1799
    to the debt services. So that the actual position in 1818 was somewhat better than it is to-day, but in those days—and this I think is the important point to bear in mind—the problem solved itself, owing to the very rapid increase in the population, and owing to the equally rapid increase in the national wealth. I do not think there is any Member of this House who is sufficiently optimistic to think that the problem of the enormous dead weight of debt which we have to bear to-day can be solved so simply and by the same means.
    Therefore, we are to-day confronted with a very serious problem, and, although I congratulate the Chancellor of the Exchequer on the step which he has taken, I am not convinced that it is an adequate step for the reduction of debt, having regard to the magnitude of the debt which is weighing upon us. I think that he should have gone even further, and I think it would have paid even the taxpayer in the long run. The taxpayer, I agree, has had an extraordinarily heavy burden to bear, but, as a matter of fact, he has never yet been called upon to face the full blast which naturally resulted from the War, for the reason that we have already had relief to the extent of £750,000,000 of war stores, which, on the strictest canons of pure finance, would have been devoted to the reduction of debt, rather than used, as they have been, in the reduction of taxation. So that I think the taxpayer, everything considered, has been treated fairly well. We are still, as far as finance is concerned, living in the days of the War. It is too early yet, in my opinion, to call a holiday for taxation. The hon. Member for Aberavon (Mr. R. Macdonald), in his opening remarks, referred to the possibility of a capital tax. He mentioned that as being the alternative. That is what we have to bear in mind. We have got this almost insuperable burden ahead of us. The charge upon it amounts to something like 40 per cent. of our national expenditure, and as other items of expenditure decline, as we hope they will—and they ought to do so—it will be more than 40 per cent. It is a national debt which is equivalent to something like £150 per head of the population. I suggest it is too much to expect that posterity will bear quietly and patiently indefinitely this enormous debt. Therefore it is for us to decide how, in the best interests of
    1800
    the country, we shall deal with this matter. I am not quite clear as to what are the suggestions of the Chancellor as to the Sinking Fund of £50,000,000 per annum, a sum that would be reached in three years' time. I am not clear whether it is included in or in addition to the Sinking Fund for the American debt. In my view the least that can be put forward as a satisfactory alternative to some special taxation of capital is a cumultive Sinking Fund of £50,000,000 per annum which would reduce by some £5,000,000,000 our debt in the next 38 or 40 years.
    The suggestion of a special capital tax is a very interesting suggestion, but in my view it could only be brought to a successful issue if a majority of the people were convinced that it was a just and a necessary tax. The state of public opinion at the present time is such that such a tax could not he introduced with any chance of success. At the present time the immediate effect of an attempt to introduce a capital tax would he that to which I have referred, and would have the effect of imposing an indirect tax upon everybody in the country. It would set the exchanges against us, and lead to increased cost of the necessaries of life. I will not argue this at any length, but I have an entirely open mind on the subject and I wish to point out that at the moment it would have the effect I have mentioned. It would also have the effect of transferring to the local rates certain charges which at present are borne otherwise. We are all concerned with the state of trade and if it is important that national taxation should be carefully watched it is also important that local taxation should not he unnecessarily increased. We cannot come-to a final decision en the question of a capital tax. It is a question which will have to be carefully considered, but possibly some succeeding Chancellor will have to introduce an alternative such as has been suggested.
    Leaving that for the moment I should like to say I very much regret that the Chancellor of the Exchequer has not seen his way to reduce the tax upon sugar. I am entirely unconvinced by the arguments which he laid before us. I hope that he will see his way to re-consider that particular item because a tax upon sugar is a tax upon human welfare. I trust that in one way or another he will

    1801
    do something, in particular for the women and children. So far as I can see in the lower orders of life they are not going to benefit in any way from the present Budget. An hon. Member who preceded me in the course of an interesting speech gave us the figures of direct and indirect taxation, and dwelt upon the influence these have upon the course of trade. I could not help feeling, however, that these were really small matters in comparison with many far bigger subjects which we have been discussing here this Session. I should be out of order if I pursue that point, but I desire to congratulate the Chancellor on the strong stand he has taken in rectifying the mistakes which have been made in previous Budgets. I hope he will continue on those lines, for, I am sure, they are in the long run in the best interests of the country.
    Mr. SEXTON: I regret that the Chancellor of the Exchequer has again overlooked the very great claim of the bottom dog in respect to the minimum income upon which Income Tax is levied. The pre-War standard was £160, and at that time, in view of the cost of living, it was considered a fair minimum. The War came, and the cost of living went up out of all proportion to the advance in wages. -The minimum was reduced from £160 to £120, and as a result of that to-day, the men for whom I speak and particularly the one who is not permanently employed and who is assessed quarterly is still before us, and I have again to bring his case before the House. He is assessed quarterly on his earnings. The lean quarter is the quarter in which he gets the demand for the tax. If he has a fat quarter before he receives the demand he has taken the money to pay off his debts. In the following lean quarter he gets a demand note for the tax and if he does not pay it he goes to gaol.
    I have brought case after case before the Chancellor of the Exchequer. What is the use of sending these men to gaol? The Chancellor of the Exchequer would lose nothing by adopting the suggestion we put forward. Indeed, he would not lose, but gain, if he were to reduce the basis, for the House knows that it takes more to collect the Income Tax from the lower-paid man than it does from the higher-paid man. Let me give a case. It is not only on the money that the man
    1802
    actually earns that he is taxed. He is assessed for taxation on what is called the dole, and even on Poor Law relief. A man contributes to Poor Law relief. So you have the paradox of the man paying, so to speak, twice. Let me give another typical case. A man gets a demand for the payment of the tax in a lean quarter. He perhaps did fairly in the quarter before, but having paid his debts, he has nothing left. A warrant is issued against him for the amount, and if he does not go to gaol, that warning is held over his head like the Sword of Damocles. The result is that the man is careless about looking for work, because he knows when he gets his wages they will be collared by the Chancellor of the Exchequer. I want to give a harder case still. What is the position if the man goes to gaol for non-payment of tax? His wife and children are chargeable to the parish and cost, say, about 30s. a week. It costs nearly that to keep the man in prison, that is £3and if that goes on for a fortnight or three weeks or a month it costs more, and all that money is expended, it may be, to collect 50s. by way of tax!
    I know a case not very long ago where a man was sent to gaol not for failing to pay his quarterly Income Tax—that is not what they call it—but for contempt of court. His wife went to the workhouse and his children went with her. As soon as the man's time was up and be was released from gaol, the absurd economy of the whole position was shown. The Poor Law authorities put his wife and children into a taxicab and drove them to the gaol gates and told the man. when he was released, that he must find them a home. The poor devil had not a home to go into. Shortly afterwards he got a summons for neglecting to provide for his children. I am sorry the Chancellor of the Exchequer has not listened to our pleadings year after year on this point. Personally I would like to see the whole business so regulated that even a man with £500 a year would not have to pay anything, and I know some of the middle-class people of this country have borne the brunt of the burden of the War. No man has borne a heavier burden than the man with a fixed income, and the lower you go clown the scale the harder and heavier the burden. I hope, therefore, the Chancellor of the Exchequer will reduce the

    1803
    amount. The game is not worth the candle.
    Lieut.-Colonel DALRYMPLE WHITE: I think in nearly all quarters of the Committee it will be agreed, and it will he agreed by thinking people throughout the country, that the Chancellor of the Exchequer has introduced a very sound and statesmanlike Budget, but there are two points which will cause considerable disappointment to the country. The first is in regard to the Sugar Duty. I think a large number of Members, probably in all quarters of the House, have always put first in reduction of taxation the reduction of the Sugar Duty. I am disappointed it has not been reduced, but, contrary to the hon. Gentleman who has spoken on this side of the House, I am convinced by the statement of the Chancellor of the Exchequer that, if there is to be a world shortage and the inevitable effect will be what the right hon. Gentleman foreshadowed, there is not the slightest use of depriving the Exchequer of something like £11,000,000 for the benefit of the sugar growers or of the middlemen of this country. The other point that will cause equal or more disappointment is that there is no reduction in the Entertainments Duty on the lower priced seats. I wish the Chancellor of the Exchequer had been able to see his way to allow remission of the Entertainments Duty on admissions or seats of 6d. and less. Not only, as we all know, has there been a far greater proportionate tax on the lower prices of entertainment, but, in addition, it severely cripples small agricultural shows and others where very often the entrance fee is only 6d. I hope even now the Chancellor of the Exchequer may see his way to do what I say. I have not seen the figures worked out to show how much loss it would cause in revenue, but I hope he may see his way clear to meet the demand which is general throughout the country, that entertainment admission of 6d. and under should be exempted from taxation.
    Mr. T. WILLIAMS: I should like to make one or two observations on the most lucid Budget introduced this afternoon. The hon. Member for Ilford (Mr. Wise) gave the Committee figures to indicate that there is something seriously wrong
    1804
    with British finance because of the relationship between direct and indirect taxation. He gave various figures for various years to prove that unemployment to a large extent was due to the fact that too much money had been paid in direct taxation, but he never made reference to the fact that, although they received during the past year some £379,000,000 in direct taxation and Supertax, we actually paid in interest to those people who paid the taxes some £325,000,000. Neither did he make reference to the fact that this year, with 6d. taken off the Income Tax, we are called upon to pay some £350,000,000 in interest, while the total sum that will be paid, according to the Chancellor of the Exchequer's estimate, in direct taxation will be some £322,000,000. So that for every £ they pay in taxation we give them 21s. to pay it with. I fail to see the connection between the burden of direct taxation and the colossal amount of unemployment we have at the present moment. Another important factor the hon. Member for Ilford referred to was the amount of money we must retain in this country if we hope to stimulate trade and re-absorb all our men in industry. I wonder if the hon. Member for Ilford ever gave a single thought to the avenues to which the money is diverted? A brief. examination of the figures shows that interest, the cost of the Army, Navy and Air Force, and the charge for pensions amount to £545,000,000. Most of that money finds its way into the pockets of residents of this country. Since the money can be spent by these people who receive it as wages, or re-invested by those who receive it as a kind of sideshow, I see no connection between the suggestion that this money has been totally lost once it is handed in to the Exchequer. Once the money is received, if it is repaid in the shape of wages, automatically the money is expended in some form of employment. Therefore the philosophy of the hon. Member for Ilford does not seem to me to be quite correct.
    The same hon. Member made a reference to our duty to America, and he went on to point what a brilliant scheme it was to the British producers of rubber to bring up the price from 7d. to 1s. 5d. per lb., and he stated that the difference between 7d. and 1s. 5d. per lb. was equivalent to £25,000,000. He argued that, as we had to pay America some £30,000,000 every

    1805
    year in interest, we must keep up the price of rubber in order that we can make the Americans pay for rubber what we are actually paying them in interest. I know hon. Members interested in cotton will not agree with that philosophy, because if British producers of rubber are going to exact from the Americans £25,000,000 or £30,000,000 over and above a legitimate price, it is only fair to assume that those who produce cotton in America, where they have a monopoly of that commodity, are going to make the cotton buyers in this country pay an excessive price. Consequently, there is no basis in that philosophy, and therefore the hon. Member who suggested rubber was going to be a helpful factor was wrong.
    Mr. WISE: It is already a helpful factor.
    Mr. WILLIAMS: The hon. Member will agree that if this nation has a monopoly of the rubber trade, and they are able to extract an extraordinarily high price, and the Americans have a monopoly in regard to cotton, they in turn will extract the same retribution from the British, with the net result that we do not get the advantage we are alleged to receive from the rubber trade, and we do not get the maximum amount of employment, which is what hon. Members opposite urge we should aim at. I have the statement of the chairman of one of the largest rubber associations in this nation, who declares that the late Colonial Secretary (Mr. Winston Churchill) assisted the rubber growers to restrict their output in order to enhance the price, and icy doing that they put thousands of people out of employment, with the result that you do not get employment and the other benefits from that particular thing. We seem to he quite willing to raise £816,000,000 a year by taxation, and upon three items, namely, interest, the Army, Navy and Air Force and pensions, or shall I say provision for past., present and future wars, we spend over 66 per cent. of the total of £816,000,000, whilst on such services as education, old age pensions and all the other things you are only spending one-third of that total sum.
    The reduction in the Income Tax following upon the reduction that took place 12 months ago has at least had one effect, if not the effect that is expected and anticipated by the Chancellor of the
    1806
    Exchequer. We were told last year when the Budget was introduced and 1s. was taken off that once the Income Tax came down there would be volumes of employment for everybody. What has actually taken place is that the bondholders have found their holdings appreciated as the general effect of decreased taxation, and the effect has been to make the wealthy extremely wealthy, and this reduction of. 6d. in the Income Tax will have a similar effect. Every time direct taxation is reduced the value of the War Loans. automatically increases to that extent, and we are impoverishing the nation which we are supposed to be assisting in regard to industries. Clearly this Budget is one for the rich people. I can imagine the wives of the working men of this country, whose husbands are receiving 30s. a week smiling when they read the announcement of this reduction of the Income Tax. That class of family has never had enough wages to pay direct taxation at all.
    Such an argument as that used by the Chancellor of the Exchequer with regard to sugar ought to have been applied on a more comprehensive scale. If there is any truth in the suggestion that the vendors of sugar would take advantage of a decrease in taxation how is it that something similar is not going to take place in the case of beer? If we reduce taxation on beer, is it not fair to assume that the brewery people will immediately take advantage of any concession granted by the Chancellor of the Exchequer? The suggestion of the Chancellor of the Exchequer is that the remission or rebate of £1 will be given only where beer is brewed at a gravity of 10·24. I have been told that the beer sold during the last few years possesses neither body nor soul, and it seems to me that the gravity of beer of 10·24 on which a rebate of £1 will be given is simply an invitation to the brewery companies not to brew a reasonable quality of beer, but to continue treating the people as they have been doing during the last few years.
    The Chancellor of the Exchequer said that he could not see his way to reduce taxation on tea because his predecessor made a concession on this article last year. The right hon. Gentleman's predecessor also made a concession last year with regard to the Income Tax, but the right hon. Gentleman fails to use the same argument in that direction this.

    1807
    year, possibly because of the fact that those people who are struggling gamely along on very small wages would receive some small benefit in the case of a reduction of taxation on tea. Entertainment is one of the few comforts the working people are getting to-day, and yet the Entertainments Duty has to remain just as it was, and you are going to continue to exact your toll as usual from the people who are least able to bear it. I could go on dealing with a great many of these items affecting the well-being and comfort of the working-class families of this country, and it seems to me that this Budget is merely a repetition of the Budget of 12 months ago, and it is simply alleviating the burden of that class of the community who could very well manage without any further alleviation at all.
    You are relieving people of £26,000,000 in taxation who are well able to bear it, and you are making very small concessions to the millions of people who cannot bear any further taxation of about £100,000 or £200,000 a year. I hope agriculture will benefit by the concession in regard to the duty on cider, and I trust that. the farmers will grow more apples and that the cider trade will be developed in the near future. The hon. Member for Ilford (Mr. Wise) said that we were one of the few nations in Europe who were balancing their Budgets. That may be so, but we are balancing our Budget at the expense of the millions of workpeople in this country. We are balancing our Budget because of the terribly low wages of the people, because we have filched away, from those who cannot hope to buy it, education in its real sense. We cannot afford to give houses, and to that extent we are balancing our Budget, on the poverty of the people in regard to their physical well-being. Unless many changes are made before the passing of the Finance Act, it can safely be said that we are balancing our Budget on the poverty as regards human comfort of that section of the community who produce all the things in this nation.
    The hon. Member for Ilford said that we ought to keep as much money in this country as we possibly can, first of all, in order to find employment for those who work, and, secondly, in order to stabilise our credit. There is no Member of the House of Commons who is better acquainted than he is with the facts in
    1808
    regard to the money that is exported annually, and it seemed to me that the argument was false and was not actually intended, except that he wanted to prove that direct taxation was the very best thing that any Chancellor of the Exchequer could impose. I hope that before the Finance Act is passed more concessions will be given to those people who have been bearing the heat of the battle during the past few years. They have done more than their fair share, and it is now the turn of the millionaires—who, after all, are only millionaires because other people made it possible for them to be so. If they are nearly as patriotic as they would have us believe, I am convinced that they will not merely cheer the Chancellor of the Exchequer to the echo when he places millions of pounds in their pockets, hut will support Amendments that will be proposed with the object of alleviating the lot of the multitudes of workers of this country.
    Mr. RAWLINSON: The hon. Member who has just sat down did not seem to follow what was said, either by the hon. Member for Ilford or by the Chancellor of the Exchequer, and, as regards the Beer Duty, he did not seem to understand, firstly, why it differs from the Sugar Duty, and, secondly, why it is not an inducement to brewers to brew bad beer. I think the Chancellor of the Exchequer put it fairly clearly when he said that he had arranged that, if the Government took off 20s. a barrel, the brewers would have to take off 4s., and, therefore, the reduction to the consumer would be 1d. a pint.
    Mr. WIILIAMS: My point was that the gravity on which the 20s. rebate would be made could be as low as 1024, which beer drinkers tell us is equivalent to the very best water.
    Mr. PALING: Did I understand the Chancellor of the Exchequer to say that that has already been arranged, or that he hoped it would be arranged?
    Mr. BALDWIN: It is arranged.
    Mr. RAWLINSON: There is all the difference in the world between the Beer Duty and the Sugar Duty. The reason, why the Sugar Duty cannot be reduced is because at the present moment the market is very much in the hands of middlemen and of certain original

    1809
    owners of sugar, and it would be impossible to see that any concession that was made by the Government was passed on to the consumer. With the Beer Duty that is not the case. The hon. Member tells us that the specific gravity he mentioned is merely equal to water. I think he comes from the North, but in London they could teach him a lot about this particular subject, There is a. good deal of beer brewed in England of a. great deal less than that gravity, and the whole value of this proposal, as the Chancellor of the Exchequer has pointed out, is that it will be an inducement to these people to reach that standard of gravity, below which they have been going for a considerable time. I do not doubt that: this will be a popular measure as far as those who are interested in beer are concerned although whether it will be so from other points of view, I am not quite clear.
    I wanted to ask two questions of the Chancellor of the Exchequer, but, before doing so, I should like to say that, although I have heard a large number of Budget speeches, I do not remember one which has been put so clearly and simply to the Committee, or in which the points have been so easy to follow as compared with the difficulties we have sometimes had. With regard to the arrears of Income Tax last year, the right hon. Gentleman mentioned that the arrears of Income Tax and Super-tax were £99,000,000 and £23,000,000, respectively, at the end of the financial year, That was a scandalous sum, as I said at the time. The Chancellor of the Exchequer did not mention to-day what the arrears are this year, but it is a material point for us to know. It shows, firstly, how much of the increase in the amount collected in Income Tax this year is due to the collection of arrears, and, secondly, it shows whether those arrears are going on continuously. That leads me to a suggestion which I ventured to make before, namely, is it not possible for the Chancellor of the Exchequer to make some concession to people who pay their Income Tax and Super-tax, say, by the 15th December in each year? If a remission of 2½ per cent. were given to everyone who paid his Income Tax and Super-tax by, say, the 15th December—I do not bind myself to the particular date then, seeing that large sums of money are paid out by way of interest on War Loan at
    1810
    the beginning of December, it might be an inducement to people who are prepared to pay to pay at once, which might result in a considerable saving to the Government. I have been an Income Tax Commissioner for a good many years, and know that certain rich people put off payment every year till the last possible moment; in fact, I have had to sign warrants before the amount has been paid. They have every intention of paying, but year by year the Government is kept waiting in this way.
    Surely, whatever our views are about taxation, it is pretty plain that we all wish to tax luxuries rather than necessities, and that is one of the reasons why I am afraid I agree heartily with the Entertainments Duty, because, putting aside the sort of thing we say here, one knows perfectly well that, if you have enough money to go to a theatre, you are rather better off than if you have not, and if you are asked to afford a few pence when you take that luxury, it seems to me that you have not very much to complain of. These agitations are got up by cinema proprietors and other people, and are pressed upon the House at every possible moment. There are other sources of taxation which have not yet been properly looked after. The Chancellor of the Exchequer, of course, has only been in the saddle for three months, but the Treasury has been there for a long time, and I am afraid I cannot bow down to the Treasury officials on questions of finance. I used to do so, but, since the trouble we had over the Controller and Auditor-General passing certain accounts two or three years ago, I cannot help feeling that we ought to look very carefully after Treasury officials and see that mistakes are not made. Therefore you have to look at it. This question of a tax on betting has been before the House year after year. I have never yet heard a really strong case against it, and I hear with delight the suggestion of the Chancellor of the Exchequer that a Committee shall be set up to inquire into such taxation. It is taxation on a matter which no one can suggest is a necessity, and which probably most people will agree is a luxury That huge sums of money pass in betting no one can doubt. If you bet on the Stock Exchange there is a contract note, on which you pay a tax. If you bet in other ways there is no means of dealing with it. No one is

    1811
    more probably strongly opposed to betting than I am. Teetotalers, I am afraid, are very strongly against me and I am strongly against them on that subject, but on this I am almost inclined to be as intolerant possibly as they are. Even teetotalers, not a very logical class, do not object to taxing beer and spirits as much as possible, and they do not imagine that by doing that in any way they legalise or encourage the drinking of whisky or beer. In the same way if you tax betting you will not be in any way legalising or encouraging betting. At present betting is not illegal in the sense of being a crime. There is no way of preventing people betting, of course within the limits of the law, and therefore if a tax is put upon that it is a matter which must be to the good of the country. Such taxes as the Corporation Profits Tax and Income Tax affect industry and it is a great thing to have some other source of taxation.
    10.0 P.M
    There is another hardy annual which the Treasury should look into more carefully than they have done. All over London you have advertisements on every hoarding. You have them in every kind of variety. What good 'do those advertisements do to the trade of the country? It it not a question of dealing with foreign competition. We want to encourage trade and, I was going to say, subsidise it if necessary against foreign competition. But the advertisements we have here do not affect the volume of trade in the country. Whether you drink So-and so's or someone else's whisky or stout is immaterial to the nation at large, because you pay the same amount of tax on one as on the other. Whether you go to one theatre or another is immaterial from the point of view of the public. Surely no injustice would be done to trade if a tax was put on advertisements. There is no novelty in the idea. It is done in France. Surely the Treasury ought to go into these methods of taxation which would certainly not hear directly upon trade as far as foreign trade is concerned and which would make some sort of alleviation of the present very unimaginative system of taxation. The real difficulty is that in a Government office, if you keep to the ordinary lines, you do not get into trouble. If you carry out any new idea there is a certain amount of difficulty. The one new tax which has been
    1812
    put on since I have been in the House was the Entertainments Duty, which Mr. McKenna dealt with, and in spite of criticisms made upon it. it is one which certainly showed some imagination, and was useful and did not tax trade or necessaries as the case may be. A great deal has been said about the interest on the National Debt. There is a suggestion I should like to throw out. I have not the means to test it, but is it possible to issue any form of Loan which would be free of Super-tax or Income Tax if necessary, say, on a 2½ per cent. basis, which might attract people for a long or a short time? Is it not possible that such a loan might attract a very large amount of money which you cannot get at present People do not like leaving money on deposit. There is the trouble of making a return, and that deters them from doing it. I believe a large number of people would invest in such a loan as I have suggested. It is a very common thing abroad, and I cannot see why we should not have one
    A good deal has been said about taxing the under dog and the upper dog and all the rest of it. I should like to ask is there any nation in the world which taxes rich people as much as we do? Is there any Income Tax or Super-tax as high as ours in the world? It is said you get it all back. Can you imagine a greater fallacy than that The answer is that the people who lent the money are not entirely English. I am glad to say a good deal of our loans are still taken up abroad, in the Colonies and other places. The mere fact that when anyone chooses to lend you money you have to pay interest applies to every other country. Every single country which borrows money has to pay as much as we do for the loan. There is no other country that I know of, with the possible exception of America, which is borrowing any more cheaply than we are at present. There is something to be said for our system of taxation. It is not Utopian. It is not Russia. It is not South America. It is not the happy land we shall all get to one of these days. But in the interval it is something to say that our taxation is more severe on the rich than in any other country in the world, and the amount we pay for our loans is not more than any other country at all. I agree that the people with large amounts of money will get the advantage from this remission of Income Tax. Those who,

    1813
    spend it in ostentation and unnecessary luxury have certainly no sympathy from me. We owe that very largely to America and the large number of successful Jews in the country. No one is more keen against extravagance than I am, but I do not think that arises at this moment. No doubt, excessive expenditure and ostentation have grown very markedly since I was a boy, but I do not think for a moment that touches the point. Take the man who has this money and spends it, we will say, on motor cars, After all, that is giving employment if he buys English motor cars, and if he buys a foreign one he will have to pay taxation. Therefore, even in the extreme case the Leader of the Opposition referred to there is this to be said, that if he is living in the country, though he is acting wrongly, as he thinks and as I think, in spending excessive amounts in luxury, he cannot help spending the money in the country, which, after all, gives employment and leads to getting a certain amount back in taxation. I have deviated for one moment from what I meant to say at the beginning. I only desired to say, in regard to the hon. Gentleman's condemnation of people who spend an excessive amount on luxury, that it is, after all, merely a financial objection, and not an objection from another point of view, nor is it so entirely evil as he suggests, because a certain amount of good is done to the country.
    Mr. HARRIS: After the very interesting and, if I may say so, discursive speech of the hon. and learned Member for Cambridge University (Mr. Rawlinson), I am not going to venture to follow him into his defence of a betting tax. The Chancellor of the Exchequer showed very great wisdom in referring this matter to a Committee of the House. This is not the first time gambling proposals 'have been considered by Committees of this House. I think a suggestion was made by an hon. Member who, unfortunately, is no longer with us, for premium bonds. That was referred to a Committee of this House and received a short shrift. I am rather afraid the result of the present inquiry that is to be made will be a similar fate. After all, bets are not yet a contract before the law, and bookmakers have very peculiar ramifications. I know, in the constituency I have the honour to represent, that there is a regular hoard of them. Almost every
    1814
    street has a bookmaker, and if you are going, as I think the Committee will find, to collect taxes on every bet made throughout the length and breadth of the country, you are setting out to undertake a very big task. If I may, I would add my congratulations to those which have come from every side of the Committee to the Chancellor of the Exchequer. I think he is a worthy descendant of the great men who have occupied that position, going back to Peel and Gladstone. He has not shown great imagination in his Budget, but he has had the advantage of extraordinary conciseness and clearness. Every hon. Member could follow his figures and facts, and they were easy to understand.
    I was rather surprised, in the totals that we had the advantage of having before us, the right hon. Gentleman did not make any reference to the loans to the Allies and the Dominions. We had there a sum of over £2,000,000,000, and—I do not know if it were an oversight—he did not say whether, in putting the financial position before us, he has taken into account the possibility of those sums being repaid. Certainly £148,000,000, due to us from the Dominions, can surely be looked upon as an asset, and some of our Allies may be relied upon, some day or other, to make repayments. I was also surprised that the right hon. Gentleman made no reference to Reparations. Are we to wipe them quite out? Are they no longer to be regarded as a possible asset? I am not going to pass judgment. I think the right hon. Gentleman used, on the whole, great wisdom in not putting them on the credit side, but the Committee was entitled to have some reference to this matter, because, after all, it is a very big problem before the world. We have to face the fact, one way or the other, and on an occasion like this, when the financial situation of the country is so vague, I think we might have some reference to the loans due to us from the Allies and the Dominions, and to the payments due from our late enemies.
    It is a remarkable thing, and it is some satisfaction to us, that nearly all the expedients upon which the right hon. Gentleman is relying to make his Budget a success had a Liberal inspiration. The Death Duties came from this side, and I understand the right hon. Gentleman is

    1815
    going to look to them in order to provide a fund to reduce our debt. The graduated Income Tax and the Super-tax are welcome additions to his revenue. Hon. Members opposite now, who denounced the right hon. Member for Paisley (Mr. Asquith) because of his inventive genius and of his method of raising revenue for our national finances, are now ready to accept this as regular revenue. The third item, unfortunately, which owes its inception to this side of the House, is the McKenna Duties. We do not feel the same pride about that particular item of the Budget. After all, they were War duties, and they went to meet the emergency in order to control our shipping. They were never intended as a permanent source of revenue, and I am not prepared to accept them as such. When they come up, at the proper time, on the Report stage, I, and many hon. Members on this side, shall not hesitate to vote against them. They cannot be justified on any grounds, either from the point of view of tariff reform or of revenue. They are unsound in their inception, and were purely put forward as emergency legislation, mainly in order to discourage the use of shipping by diverting a large amount of bulky goods from coming into this country.
    As I see it, the opposition from hon. Members behind the right hon. Gentleman is mainly to Income Tax. The general feeling is that the Income Tax is too large, and that indirect taxation should be substituted therefor. As I understand it, the majority of this House was largely returned on the plea of economy in order to reduce expenditure. I put it to hon. Members opposite that Income Tax payers are invariably economist They have brought home to them the need of finding the money to pay for expenditure. The indirect taxes are never brought home to the taxpayer in the same way. When a man drinks his glass of beer, he is not conscious of paying the tax. The tea-drinker is not conscious of paying the tax, and of being a taxpayer. That is the weakness of all forms of indirect taxation, and encourages extravagance. A year or two ago a Bill passed this House to try and make the ratepayers on the smaller scale pay their rates direct. It has now become law that the amount of rates has to be printed on the back of every rent notice when
    1816
    rates are included, in order to make the ratepayers realise the amount they are paying in rates. The same weakness applies to indirect taxation. The indirect taxpayer does not realise the importance of economy, because he does not directly find the taxes but only does so indirectly. It would be a splendid thing, if it were possible, to do away with indirect taxation entirely and to let all our taxes be met out of the Budget direct. Of course, as an hon. Member has pointed out, it is extremely difficult to collect Income Tax on the lower scales. The small wage earner, the man of small income, finds it difficult to pay a lump sum, and that especially applies to the small tradesman. I suggest that the difficulty might be overcome by introducing what has now become so general in many branches of industry, namely, the finding of money by stamps. We have become so accustomed to insurance stamps and unemployment insurance stamps that my suggestion does not seem so impracticable as it might have done some years ago. I suggest for the consideration of the Chancellor of the Exchequer that the present Income Tax payers on the smaller scale might be allowed to put in a requisition to pay their tax by stamps. It would be worthy of consideration, and might mean that many small Income Tax payers who now find the tax a burden, and very often escape, might pay their tax without difficulty, and thereby bring in more revenue to the Exchequer. This is worth consideration, even if the Exchequer had to pay a little extra in the cost of collection.
    Table 5 of the Blue Paper, which has been circulated, shows the enormous amount of money collected by local authorities in rates, which amounts to £159,000,000—a very large burden on the people of this country. The policy of the Government has been to cut Estimates down to the bone, expenditure on social work, education, public health and other social services, but the expenditure on rates goes gaily on, especially in connection with the relief of the poor, which for England, Wales and Scotland costs £40,000,000. In the Gracious Speech from the Throne a promise was given of legislation to deal with the whole question of rates, but there does not seem to be a prospect of the Government proceeding

    1817
    with that legislation. I am very sorry that the Chancellor of the Exchequer in putting forward the liabilities for expenditure gave no suggestion of relieving the rates in any way. I understand there is some scheme in prospect for helping agricultural rates. The whole of the ratepayers of the country are crying out for assistance. Income Tax is levied on the basis of ability to pay, but rates are largely levied on localities and on property or places of business. The Income Tax falls far more equitably and far more evenly and fairly than the rates can possibly do, and I suggest that the Chancellor of the Exchequer by not facing this problem is shifting the burden and placing the problem of poverty and unemployment on the rates, although he may be relieving the taxpayers. That is one of the points where he has failed.
    I congratulate the Chancellor on the fact that he has the courage not to raid the Sinking Fund, but to provide an adequate sum to meet his liabilities. I am surprised that the right hon. Member for West Swansea (Sir A. Mond) was behind the, hon. Member for Aberavon (Mr. R. Macdonald) on that subject. The hon. Member for Aberavon showed himself a purist, and set a good example to my right hon. Friend the Member for West Swansea. It is the pride of this country that we always meet our financial obligations. The Chancellor of the Exchequer has taken a firm line, though it may not he popular, but it is a. wise one, and he is setting a precedent to Chancellors of the Exchequer which, I hope, will be followed in the future.
    Mr. PRETYMAN: I wish just to ask a question. There might possibly be some misapprehension about the money which has been promised by the Government in relief of agricultural rates. An announcement was made last Thursday that the amount to be given in relief of rates was a little in excess of £3,000,000, including Scotland. I may join other hon. Members in saying how clearly the Chancellor of the Exchequer explained his balance sheet, and that there was not a single Member who did not follow it from beginning to end, but its very clarity made it seem remarkable that there was no reference to this matter in the balance sheet. I do not suggest that there is any doubt that the pledge given on Thursday, which was
    1818
    necessitated by the failure to have the agricultural Debate, wilt be made good, but having been given in that form it has not really penetrated the agricultural mind as clearly as it might do, and the omission of any reference to it in the Budget speech might easily be misunderstood. Therefore, I only rise to ask the Chancellor of the Exchequer if he will make clear that the pledge will he honoured and mention how effect will be given to it, because it does seem pretty clear that in estimating his balance sheet he must make allowance for the sum of money which, as far as I am able to follow, I do not think he did at the time. I do not know whether it means a Supplementary Estimate and how the money is going to be found, but, clearly, it will have to be budgetted for in some form. I hope that the right hon. Gentleman will make clear to the agricultural mind that the money will be given at the earliest possible date during this Session, and tell us how it is proposed to bring it about, and how he proposes to find the money in the Finance Bill of this year.
    Mr. NICHOL: I would like to reply to one or two remarks made by the hon. and learned Member for Cambridge University (Mr. Rawlinson). I do not want to wander along the pleasant garden path over which he led the House, when he spoke of hardly annuals, but one of his arguments is open to very reasonable objection. He argued that the rich of this country are more heavily taxed and pay more taxes than the rich people of any other country in the world. Personally, I am quite prepared to admit the point. They do pay their taxes in a way that' some of our neighbours across the Channel might take example from. But during Ole hon. Member's speech I pointed out in an interjection that while the rich classes of this country do pay very heavy taxes they get every penny of it handed out to them nowadays. That was not always the case, but if you take expenditure and revenue in the statement that was put into our hands this afternoon you will see that that has now become the standard position of British Chancellors of the Exchequer. Indeed, I rather imagine that the only duties which the rich do not get back are the death ditties, and we have not yet had a Chancellor of the Exchequer sufficiently ingenious to hand than back in a form in which the rich could take them with them when they go. I point to that,

    1819
    because the whole Budget appears to dispel the last doubt that we have a real Tory Government in power. If 10 or 12 years ago one had asked for what Toryism stood, the ordinary man in the street would have said that it stood for beer and big business. [HON. MEMBERS: "Hear, hear!"] It still does so, apparently. We have a surplus to dispose of, and the Chancellor of the Exchequer tells us how it is to be done. Beer is to get £16,000,000; in a full year the Income Tax payer will get relief to the extent of £26,000,000 and the Corporation Profits Tax payer will have a remission of £12,500,000. I am dealing with a full rather than a partial year. We have a surplus, after a full year, of £36,000,000, and that is immediately taken, and there is to be handed back in future a total, not of £36,000,000, but of £54,500,000.
    There are certain classes, in whom I and my colleagues are interested, who will not benefit by the share-out of the Government. The housewife, if she reads tomorrow morning's newspaper, will not look very gleefully down the Chancellor s list. The tax that is coming off beer, the only one which will affect working class lives at all, is ostensibly to be taken off for the purpose of encouraging the consumption of more beer. I rather think that the working class housewife, at least in Scotland, will not view that remission with a great amount of glee. it has been said that tea had a look-in last year and, therefore, must get a bye this year. That argument has already been dealt with. It does not seem to apply to Income Tax and certain other things. Cocoa is a purely working class drink or food—it is both. It is not thought to be worthy of the least mention. Coffee is in the same position, and so are dried fruits. Above all, one of the staple foods, particularly of the children, is left in its present heavily taxed form. I refer to sugar. The tax is 11 times what it was before the War, and that tax has enhanced to an enormous extent the cost of thousands of articles, confections and sweets, which form a very large part of the dietary of the normal child I should imagine, if one were to dissect a penny bun, one would discover a dismal tale of the effects of taxation upon that article. A child who buys a penny bun receives a certain amount of flour untaxed, but the sugar used in the baking
    1820
    is taxed. The average number of currants or raisins is three or four to the bun, and the child may be quite certain that each currant or raisin bears its proportion of the taxation of the British Empire. Even the sprinkling of sugar on the top of the bun is taxed, as well as spices and other ingredients. As far as the child is concerned, the present Budget is a dismal failure. Referring to the main argument of the hon. Member for Cambridge University, I notice that the Income Tax, Super-tax, and Corporation Profits Tax will total some £358,000,000. If we omit the £31,000,000 or £34,000,000 going to America in payment of debt interest, about £320,000,000—by far the greater proportion—is going into the pockets, if not of the same individuals, certainly of the same class of the community.
    Mr. A. HOPKINSON: War Savings Certificates.
    Mr. NICHOL: The hon. Member says War Savings Certificates, hut what proportion of War Savings Certificates is there in the £8,000,000,000 of the War Debt? If we are going to argue as to the amount of interest that goes into the increment of War Savings Certificates hon. Gentlemen opposite are going to be on very shaky ground. A knowledge of the Differential Calculus or the Infinitesmal Calculus will be required to get any argument at all out of it. I understand not more than about £20,000,000 is going into working-class homes—using that expression in its very widest sense and embracing the homes of small investors.
    Mr. HOPKINSON: Does the hon. Member suggest that Government Bonds are not held at. all among the working classes?
    Mr. NICHOL: There are very, very few indeed working-class homes nowadays which possess even a single War Savings Certificate. [HON. MEMBERS: "No! "] I have personal knowledge of the district from which T come. The savings made in this way have been swallowed up by the past three years of unemployment.
    Sir WILFRED SUDDEN: Go to Lancashire.
    Mr. NICHOL: I know in many of these districts War Savings Certificates were a very popular form of investment, and I may remark that Glasgow held the record.

    1821
    But if you go down into the working-class homes to-day you will find what I say to be true. I have stood in the General Post. Office in Glasgow and I have seen one clerk come in and buy these certificates to the full limit, and put them down in his own name. I have spoken to him and discovered that it was only a method of getting so much money into that particular form of investment, and that the money did not belong to him at all. A great many of the investors in that form of stock and a great many of the holders are not genuinely working-class holders, but even supposing they were it does not affect my argument. Let us suppose that every penny of War Savings Certificates belongs to working-class holders, even allowing the whole interest on it, the total does not amount to more than £20,000,000 out of £320,000,000. When we come to the question of the remission of Income Tax, we find that the remission is a direct one of 6d. in the £, but there is no question of alleviating some of the problems of the payers of the lower limit of the Income Tax. The lower limit is still being retained at £120.
    Mr. PRETYMAN: £150.
    Mr. NICHOL: I think £120 is the point.
    Mr. PRETYMAN: There are allowances.
    Mr. NICHOL: There are allowances, I admit, but the same minimum before the War—
    Mr. PRETYMAN: The limit is £150, surely, with £135 for earned incomes.
    Mr. NICHOL: That in itself is one of the abatements, but even taking that figure, the pre-War minimum from which we started all abatements was £160, and on the present value of money as compared with 1914, we argue that that minimum should be raised at least to £200, if not to £250. That indeed would be a concession that would affect the lives, not of the stockjobbers, but certainly of a very large number of small professional people and the better-paid working-class people very considerably. In the last Budget the surplus available to the present Chancellor of the Exchequer is indeed one that had a curious origin. The £50,000,000 that he has got extra from the Income Tax was largely due, not to any sodden desire on the part of the Income
    1822
    Taxpayer to pay up arrears, but to a mixture of doubt and uncertainty in the mind of the last Chancellor of the Exchequer that almost amounted, in the closing six months of the year, to something in the nature of financial funk. He started speeding up the payment in every way. All the slack on the Income Tax rope was pulled in last year, and we had the curious effect of people who now had small incomes being asked to pay up small amounts due two or three years back, a method, on a depressed market and a market that was coming down, that affected very adversely a great many small business people.
    The main point, and the last point, with which I wish to deal is the question of the four methods that have been proposed to-day in regard to the reduction of debt. The first of these is hardly a. method—that of the late Chancellor of the Exchequer, the right hon. Member for Hillhead (Sir R. Horne). He did not believe in debt reduction last year, and, from his recent writings, he does not appear to believe in it at the present moment. The fact that the debt was reduced as the result of his Budget was accident rather than intention, and people who are virtuous by accident hardly deserve very much credit. In regard to the £42,000,000 proposed by the present Chancellor of the Exchequer, how long is it going to take to get rid of the debt on that basis?
    Mr. W. GREENWOOD: A 'hundred years.
    Mr. NICHOL: A hundred years would he rather a long period. I think there will be quite a few changes in the next century, and there will probably be a few more wars if the Labour party does not get into power. I suggest that even that matter is not going to get rid of the £8,000,000,000 of debt in anything less than about 150 years. On the other hand, the hon. Member for Ilford (Mr. Wise) proposes a cumulative sinking fund of £50,000,000 a year, but even in that suggestion there is no assurance of anything better than about 130 years of debt payment, because, even although you are building up your sinking fund, and it is gaining in interest, nevertheless you are paying equally in interest, and I should rather think that you are paying a higher interest while the fund is accumulating. From that point of view, nothing less

    1823
    than 130 years, or thereabouts, would seem to be the prospect. So that I feel that we are as a country going to be forced on to something very much more drastic. The Sinking Fund worked for a century. It was a good enough method to get rid of the debt on the Napoleanic Wars, even when added to by the Crimean and some other wars, but it is not going to be a "good enough" method of getting rid of the present incubus hanging over the country. We on these benches suggest that the only method that is going to get rid of the debt within reasonable time, and really lighten industry, is the method of making a levy, not on the capital of companies, but on the individual wealth of holders of the script, and other things that represent wealth, and remove from a certain section of the community what is not a direct form of wealth, what does not produce any wealth in the country, but which is merely going to give them for the next century, or century and a half, a lien, a right, without performing any function at all in society, to live on the wealth yearly created by the work of the nation as a whole.
    Sir CHARLES OMAN: I do not propose to detain the Committee more than ten minutes, because the subject on which I wish to attack the Chancellor of the Exchequer is one dealing with a matter of thousands, and not a matter of those tens of millions which have been whirling round for the last four or five hours. The Chancellor of the Exchequer has produced a very clear Budget, a very sincere Budget, a very cautious Budget, and, I think, a very wise Budget, but we all find omitted some little thing about which we should have liked to have heard a trifle. It is the duty of those Members who feel strongly about small points of the Revenue to make their humble suggestions to the Chancellor of the Exchequer as to how he may produce a little more economy, and thereby give us next year a still more satisfactory Budget than he has given us this year. The particular point I want to bring before him is in his capacity of Master of the Mint, is to suggest that he might bring about some saving by putting an end to a series of very costly and fruitless experiments started by his predecessor but one, and continued by his immediate predecessor,
    1824
    concerning the minting of the silver coinage. We all know that there never has been such a failure as those experiments, which were defensible perhaps so long as silver stood at 88d. in 1920, but which became most unnecessary when silver has sunk to 32d. per ounce. There is no sufficient reason 'for the present abasement. It is, therefore, an absolutely unjustifiable survival. The result is that for the last four or five years a series of most costly experiments have been carried out at the Mint to try to obtain a kind of alloy which will produce a satisfactory coin. Supposing the Mint had produced something at the first that looked like silver, less need have been said about the matter. But, unfortunately, at the first the Mint showed itself incapable of producing a decent white and solid coin. As the right hon. Gentleman is aware from the samples that. I keep sending him, the coinage of the last Minister but one turned brown, and the last Minister's coinage turned, not brown, but a lemon-yellow, and some of the coins broke up into fragments. A demand has been again and again made to remedy this sad phenomenon. It comes from the simple fact that the admixture of alloy for the metal was not understood, and has not turned out satisfactorily; this gave rise to an enormous number of experiments of the highest extravagance and expense. Let us cease to brew hell-broth; to follow all manner of strange alloys. Let us go back, as was done after Henry VIII, to the custom of the production of the old standard silver coinage, against which there was never a word to be said. The experiments have been extravagant because time and again the whole of the alloying has been changed and new experiments tried. These experiments cannot go on for ever and ever. Now we are faced with the misfortune that the predecessor of the right hon. Gentleman coined far too much of this stuff. He had to come to us for a grant to buy back large quantities which the banks declared they could not take. I sincerely hope that the Chancellor of the Exchequer may see his way to withdraw the base coin, and cause a few more dies to be made—because it will not cost a great deal—for the present coinage is really unworthy of this country. The types are abominable and the half-crowns—
    The CHAIRMAN: I am afraid that the hon. Gentleman will not be in order in pursuing that line of argument. The effect of the currency upon national finance would be in order, but not the aesthetic considerations that the hon. Gentleman seems to be following up.
    Sir C. OMAN: I bow to your decision, Mr. Hope. Perhaps silence is the kindest thing on this matter. But there is one thing that we might have had a word upon—that was the "Tax upon a Tax." One may feel no injustice on a Super-tax placed upon money that one has held, but to have a tax upon money that the supposed receiver has never seen is surely most unjust! I hope that in his reply to the various criticisms which have come from sundry people the Chancellor of the Exchequer will have something to say on the "Super-tax."
    Mr. A. J. BENNETT: I should like to join in the congratulations the Chancellor of the Exchequer has received from all quarters of the House on the very sound Budget he has introduced and so lucidly explained, and which, if I may respectfully say so, will enhance in business circles the high reputation he earned by the able and satisfactory manner in which he dealt with the funding of the American Debt. I think the best thing in the Budget speech was the courageous way in which the Chancellor of the Exchequer resisted the popular demand for the reduction of taxation by the raiding of the Sinking Fund. The necessity for an adequate Sinking Fund is more apparent to the business community than to the average taxpayer. We all have our grievances, and I was a little disappointed that the Chancellor of the Exchequer did not refer to the funding of War pensions. It appears to me that pensions are a part of our War debt, and I should have thought it would have been within the four corners of sound finance to fund that debt to the benefit of the expenditure on that item in this year and ensuing years. I am encouraged in that conviction by no less an authority than the present Prime Minister. In May, 1922, he said:
    " Pensions are as much a War debt as the £8,000,000,000."
    He went on to say:
    " Consider what the facts are. I think they are very important. The amount which is estimated for our Pensions in this financial year is, I think, something like £90,000,000.
    1826
    If that were treated, not as a debt to be paid in fifty years, but as something to be paid in proportion each year as long as it lasts, for say forty years, it would mean that we were paying between 40 and 50 millions more this year than would be necessary to be paid off had it been treated in that way."
    Since that time things have altered very considerably, and I doubt if the reduction would be anything like 40,000,000 or £50,000,000. Nevertheless, I think the reduction would have been sufficient to enable the Chancellor of the Exchequer to take another 6d. off the income Tax and thereby benefit trade. I hope the right hon. Gentleman will still be able to give us his opinion on this matter. There is one other point I ask the Government to consider the advisability of reducing the Stamp Duty on bearer securities, which especially affects Foreign Loans. When this tax was increased in 1920 from 1 per cent. to 2 per cent., the situation was quite different from what it is now. There was then a trade boom. Money was dear here, and naturally we wanted to keep as much money as we could for the development of trade, quite apart from Budget considerations. Now money is very cheap and trade is bad, and it is therefore advisable that we should encourage the issue of foreign loans in this country. This high tax is having a very bad effect on foreign. loans. I will refer to only one as an illustration. We lost the Chilian loan, which was floated last year, entirely on account of this 2 per cent. tax. In this case the London price, after deducting the 2 per cent. stamp duty, ¼was only per cent. above the price quoted by New York banks, but that small difference was sufficient for us to lose the loan, and, what is more important still, we lost a good deal of trade besides.
    The Chancellor of the Exchequer must he aware that it has become an increasing practice, especially in America., when loans are floated that there is an understanding that the greater part of the loan shall be spent in that country. This especially applies to loans for railway purposes. There are other loans on the tapis. The Argentine Government, for instance, intends issuing a large loan partly for railway development and it will be little short of a tragedy if we lose that loan through this 2 per cent. Stamp Duty. Before the War the position was quite different. The London market had

    1827
    almost a monopoly of foreign loans. During the War when the London market was closed to foreign countries the American investor became accustomed to foreign loans. To make this small concession, the reduction of this duty to 1 per cent., the loss to the Exchequer would be a very small one. In answer to a question which I asked a few days ago as to what was the amount obtained from the Stamp Duty the reply stated that the amount received from the Stamp Duty on marketable securities to bearer other than to Colonial Governments and municipalities was at the rate of 1 per cent in 1912–13 £825,000; and in 1913–14 £940,000.
    11.0 P.M.
    I now come to what we received on the 40s. tax. In 1921–22 the amount was £650,000. and from April to September, 1922, £350,000, so that it may be said to be £700,000 for the whole year 1922–23. In other words, we find that since the Stamp Duty has been increased the revenue from it, has actually decreased, and I think that that proves my point, namely, that this is not a tax which it is worth the Chancellor's while to impose, especially when, as I think I have proved, it means the loss of a foreign loan and, therefore, loss of trade to this country. I sincerely hope that the Chancellor of the Exchequer will consider this matter this year.
    Mr. S. ROBERTS: I think that, as representing the premier cider-producing county in this country, I ought to thank the Chancellor of the Exchequer for the concession that he has made in this respect. It is not a reduction of the duty by one-half, or by a small percentage, but a total abolition of the duty—a duty that did not bring in much money, was difficult and costly to collect, and caused a great deal of annoyance in the counties where it was collected. I feel certain that the Chancellor of the Exchequer will be thanked by those in the cider-producing counties, and it will be the hope of everyone that the result of this concession will be to increase the production and consumption of this very wholesome beverage. I am rather wondering whether its effect will also be that this beverage may be left outside the scope of the Bill introduced by the hon. Member for Sutton (Viscountess Astor), which is
    1828
    at present being discussed upstairs. I hope that it will.
    With regard to the Beer Duty I want to say one word. A year ago I had the daring to suggest that the Chancellor of the Exchequer of the day might meet the trade and see if there was not some figure between the 30s. which was then asked for in an Amendment moved from the Labour benches and the 15s. which was suggested in an Amendment which I myself put down. I suggested that there might be some figure, less than 30s., and possibly higher than 15s., at which the trade and the Treasury could possibly strike a bargain. That suggestion was very politely smiled at by the Treasury, and still more politely condemned by the brewers, hut I have the satisfaction of seeing this year that it has been taken seriously, and that such a bargain has been struck; and I hope the results will be so satisfactory to the Treasury that the dose may be repeated next year.
    The most unsatisfactory feature of the figures which have been put before us, if I may dare to point to any unsatisfactory feature, seemed to me to be the very small difference between the exact expenditure in the year that is now dead and the estimated expenditure for the current year. The figure for the exact expenditure of last year is £459,000,000, while the estimated expenditure for the current year for Supply only, leaving out the question of debt—is £436,000,000, showing an apparent reduction of £23,000,000; but when one takes into account that last. year £30,000,000 was paid to the railway companies, which will not be paid this year. the present Estimates show an actual increase over the actual expenditure of last year. In regard to that, I think the Chancellor must have—I hope he has—a very large sum of money, if I may say so up his sleeve, and, if it were not for the threat of the betting tax, I should be prepared to speculate a small sum on his having a very large surplus at the end of this year.
    Finally, I would suggest that, as the Chancellor of the Exchequer is setting up, as he has hinted, a definite scheme of debt reduction— £40,000,000 this year. £45,000,000 next year, and £50,000,000 the following year—he should also bring in a provision that any surplus over that amount should not automatically go to the reduction of debt, but should be

    1829
    carried forward, as a commercial concern would do, so that it can be used in a subsequent year, if necessary, to make up a, deficit, or, if a deficit, does not arise, it can be used for the reduction of taxation. When we find these very large surpluses, such as £100,000,000, it has a very bad effect on the country. Not only do people think that there is money overflowing to be used for all kinds of purposes, but it has a very bad effect upon the spirit of economy, the idea getting abroad that there is some very large surplus, and everyone thinks that he has a right to dip his hands into it. Therefore, although one hopes that the Chancellor is pessimistic and that things will turn out better than he doss next year, I cannot help thinking that the policy of budgetting for a large surplus is to be deprecated. It takes money out of the taxpayers' pocket, and it damages trade and the cause of economy. I would seriously suggest, that, if he sets up a definite Sinking Fund of £50,000,000, which will, I believe, mean the repayment of the whole of the debt in 50 years, all the surplus over and above that could be held over for the benefit of the revenue in future years.
    Mr. A. V. ALEXANDER: I want to put two questions to the Chancellor of the Exchequer with regard to the tax on sugar. Is it a fact that the first suggestion made with regard to his statement that the tax relief would not be for the consumer came from the promoters of the British beet sugar industry? That is the impression we gather from the Press. That seems to indicate to those who desire the continuance of a purely Protectionist measure with regard to home-produced sugar 'have had some considerable influence with the Treasury and the Chancellor of the Exchequer in their decision in regard to sugar. The other question I want, to ask is, in coming to that point of view, has the right hon. Gentleman consulted those who are in the trades which are dealing in sugar as to the possible effect of a reduction in tax? I and other members of the co-operative movement waited upon the Financial Secretary to the Treasury, because the Chancellor of the Exchequer could not receive us, when we put certain specific information before him with regard to the Sugar Tax that a reduction would not really be an instant relief to the housewife, but would be an actual stimulus to trade in regard
    1830
    to the manufacture of jam and other foods for working-class homes. We are very disappointed with the announcement that has been made, and we hope the right hon. Gentleman will yet give further consideration to this vital question and of the tax on such an important food as sugar, from which he is going to get something over £30,000,000, and we hope between now and the Committee stage of the Finance Bill he will be ready to receive further representations.
    Two different aspects of rating have been referred to. The hon. Member for Bethnal Green referred to the general question, including industrial areas, and the right hon. Gentleman the Member for Chelmsford appealed to the Chancellor of the Exchequer to make some definite statement with regard to the proposed measure of relief for agricultural rating. Those of us who represent industrial areas want to say a word about the rating situation; and not only as regards the mass of ratepayers in these areas, but with regard to those who are actual manufacturers. Take the question of Sheffield, which I have urged again and again. There we have still, I suppose, a larger percentage of unemployed to population, and, even in the industrial area, the rates are so abnormal that those manufacturers who are waiting to reopen the trade in steel have to estimate, when they are giving prices, the enormous charge which the Poor Law and the local rates will throw upon almost every ton of steel which they produce. If, as I gather from the right. hon. Gentleman and the Press, it is the intention of the Government to give immediate relief to the agricultural industry in regard to rating surely these areas which we represent, and whose case has been put before the Government again and again during the last twelve months, have an equal claim to relief with the agricultural industry. It is true that the workers in the agricultural industry are at the present time in a very dire condition and that that industry is suffering very badly. Surely however, the steel industry of Sheffield needs relief as much as the agricultural industry. [HON. MEMBERS: "No! "] If some hon. Members, who do not agree with me now, could go with me to some parts of my constituency and to other parts of Sheffield, and see the distress in those places arising from the condition of the heavy steel industry especially, I

    1831
    think they would give a little more consideration to our claims. If the Chancellor of the Exchequer is going to make any statement about agricultural rating, I hope he will also give us some idea of the position, in regard to the negotiations with the Ministry of Health, in respect to the rating of necessitous areas and say whether he is prepared to make some provision in that regard in the Budget.
    The other point I wish to mention is that raised in the Debate by the hon. Member for Farnham (Mr. A. M. Samuel). He complained that there was no provision in the Budget, or in the Chancellor's speech for an amendment of the taxation for industrial and provident societies. I think that hon. Member has spoken on that subject here on many occasions. I remember, before I was a Member of the House, sitting and listening to his speech in 1921, on the occasion of the defeat of the previous Government on the same question. We who belong to the industrial and provident societies and the co-operative societies are not going to recede from the position that we have no special privileges as citizens and that we desire no special privileges as regards taxation beyond those of any other body in the community. We are continually being told by hon. Members like the hon. Member for Farnham that we have a privileged position. I have yet to learn that Income Tax is anything else but a tax on the industrial income or property, and no member of an industrial or provident society is exempt from paying tax on his or her income or profits. That is the only basis on which that matter can be dealt with. The Royal Commission on Income Tax, to which the Chancellor referred this afternoon in reference to another subject, reported in regard to the matter. While the great majority showed clearly that it would he futile to attempt to place any tax on that portion of the surplus of industrial and provident societies which would be returned to their members as discount on their purchases, they did make a recommendation with regard to a small portion of the rest of their fund, and they went on to say at the end of their recommendations that it would make practically no difference to the yield to the Treasury if such a recommendation were adopted. Therefore the Chan-
    1832
    cellor of the Exchequer has been wise in his generation in letting the position remain as it is. The hon. Member for Farnham told us that he would attack us quite fearlessly, that he was not afraid of the co-operative societies, or words to that effect. He said that, although he had made such an attack in 1921, he had come back with an increased majority of 5,000. He is very happy to be in that position, but that is not the position of many other hon. Members who fought against us in 1921. A Member of the last Government who opposed us on that matter, and whom I opposed at the last election, had a majority of 7,000 at the previous election, but in a straight fight that majority was turned into a majority of 3,300 on the other side. So that we who champion the cause of those who stand for the immunity of savings by the mutual association of working-class people in co-operative and industrial societies, find that we are supported when we go to the constituencies. Therefore the hon. Member's argument does not cut much ice, if it be examined. In election after election members of the Labour party were sent to this House to oppose the point of view which was put forward by the hon. Member for Farnham, and I have yet to learn that the support by the Labour party of the co-operative and industrial provident societies has cost them many votes. On the other hand, it has probably helped considerably to swell our ranks on these benches. I hope the hon. Member for Farnham, at some other time when I shall not be detaining the House at a late hour, will give me an opportunity of debating the matter with him. Those of us who have been co-operators for the greater part of our lives are prepared to meet him and any of the protagonists of his cause, at any time in open Debate in order to settle the matter.

    REBATE ON BEER DUTT (EXCISE).
    Resolved,
    " That there shall, in respect of beer brewed in Great Britain or Northern Ireland on or after the first day of April, nineteen hundred and twenty-three, be allowed the following rebate from the excise duty payable in respect thereof, that is to say:
    In the case of beer brewed by a brewer of beer for sale, for every thirty-six gallons of beer, of whatever original gravity,

    1833
    charged with duty and delivered from the brewery, a rebate of one pound, nr where the duty payable in respect of thirty-six gallons of any beer so charged and delivered is less than two pounds and four shillings, a rebate equal to the amount by which that duty exceeds the sum of one pound and four shillings.
    In the case of beer brewed by any other brewer, for every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees charged with duty a rebate of one pound and five shillings and so in proportion for any difference in quantity.
    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act. 1913."

    REBATE ON BEER DUTY (CUSTOMS).
    Resolved,
    " That there shall in respect of beer imported into Great Britain or Northern Ireland on or after the seventeenth day of April, nineteen hundred and twenty-three, be allowed from the Customs Duty payable on importation a rebate of one pound for every thirty-six gallons of beer, or, where the duty payable in respect of thirty-six gallons of beer is less than two pounds four shillings and threepence, a rebate equal to the amount by which the duty exceeds the sum of one pound four shillings and three-pence.
    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

    REDUCTION Or TABLE WATER DUTY.
    Resolved,
    " That as from the first day of May, nineteen hundred and twenty-three, the excise duty now chargeable on certain table waters at the rate of fourpence per gallon shall be charged at the reduced rate of twopence per gallon.
    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

    CONTINUATION OF DUTIES (CUSTOMS).
    Resolved,
    " That the duties of Customs specified in the first column of the following table, which were imposed by Part I of the Finance (No. 2) Act, 1915, and continued by Section four of the Finance Act, 1922, in the case of the duties on dried fruits until the first clay of August, nineteen hundred and twenty-three, and in the case of the new import duties until the first day of May, nineteen hundred and twenty-three, shall continue to be charged as from those respective dates
    1834
    until the dates specified as regards the said duties respectively in the third column of the said table:

    Duty.

    Section of Finance (No. 2) Act, 1915.

    Date to which Duty continued.

    Additional duties on dried fruit.

    8

    1st Augest.1924.

    New import duties

    12

    1st May, 1924.

    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act. 1913."

    CONTINUATION OF ADDITIONAL MEDICINE DUTIES (EXCISE).
    Resolved,
    " That the additional duties of excise on medicines imposed by Section eleven of the Finance (No. 2) Act, nineteen hundred and fifteen, and continued by Section five of the Finance Act, nineteen hundred and twenty-two, until the first day of August, nineteen hundred and twenty-three, shall continue to he charged as from that date until the first day of August, nineteen hundred and twenty-four.
    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act. 1913."

    INLAND REVENUE.

      CHARGE OF INCOME TAX,
      Resolved,
      "That—

      (a) Income Tax shall be charged for the year beginning the sixth day of April nineteen hundred and twenty-three, at the rate of four shillings and sixpence in the pound, and the same Super-tax shall be charged for that year as was charged for the year beginning the sixth day of April, nineteen hundred and twenty-two; and

      (b) subject to any adaptations or modifications contained in any Order in Council made in connection with the establishment of the Irish Free State, the like provisions shall have effect with respect to the Income Tax and Super-tax so charged as had effect with respect thereto for the year beginning the sixth day of April, nineteen hundred and twenty-two.

      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

      INCOME TAX IN CASE OF ASSURANCE COMPANIES.
      Resolved,
      "That—

      (a) where an assurance company carries on both ordinary life assurance business and industrial life assurance business, the business of each such class shall for the purposes of the Income Tax Acts be treated as though it were a separate business; and

      (b) for the purpose of calculating the relief from Income Tax to which an assurance company is entitled under Section thirty-three of the Income Tax Act, 1918, there shall be deducted from the amount treated as expenses of management (in addition to any other amounts now required to be deducted therefrom) the amount of any profits arising from the business of granting annuities upon human life.

      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

      ASSESSMENT TO INCOME TAX UNDER SCHEDULE E OF LEAVE PAY, ETC.
      Resolved,
      "That—

      (a) Income Tax chargeable in respect of any emoluments, pension or annuity payable by or through any public Department in Great Britain or Northern Ireland, but otherwise than out of the public revenue of Great Britain and Northern Ireland or the public revenue of Northern Ireland, to a person who is or has been employed in the service of the Crown out of Great Britain and Northern Ireland in respect of that service, or chargeable in respect of any pension or annuity so payable to the widow, child, relative or dependant of any such person shall be chargeable under Schedule E, and shall be deducted accordingly out of the emoluments, pension or annuity in respect of which it is chargeable: and

      (b) any deduction on account of Income Tax made at any time before the date of this Resolution which would have been properly made if this Resolution had been in force at the date of -Cue making of the deduction and had referred to the United Kingdom instead of to Great Britain
      1836
      and Northern Ireland or Great Britain or Northern Ireland, shall be deemed to have been properly made under Schedule E.

      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act. 1913."

      ESTATE DUTY.
      Resolved,
      " That where property situate out of Great Britain is bequeathed to or settled on different persons in succession and legacy duty or succession duty is payable thereon, such duty shall for the purposes of Subsection (2) of Section two of the Finance Act, 1894. be deemed to be payable in respect of the property on the death of teach of those persons in succession, notwithstanding that the whole amount of the duty is paid on one death wily as in the case of a legacy to one person."

    GENERAL.

      AMENDMENT OF LAW.
      Motion made, and Question proposed.
      " That it is expedient to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise), and to make further provision in connection with Finance."
      Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.— [Colonel Leslie Wilson.]
      Resolutions to be reported To-morrow.
      Committed report. Progress; to sit again To-morrow.

    COTTON INDUSTRY BILL.
    Read a Second time, and committed to a Standing Committee.
    The remaining orders were read, and postponed.
    It being Half-post Eleven of the Clock,Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
    Adjourned at Half after Eleven o'Clock.