Commons Sitting of 30 April 1925

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

PRIVATE BUSINESS.
Southampton Corporation Bill,
As amended, considered; to be read the Third time.
London Electricity Supply (No. 1) Bill [Lords] (by Order),
London Electricity Supply (No. 2) Bill [Lords] (by Order),
Consideration, as amended, deferred till Monday next.
Great Western Railway Bill [Lords] (by Order),
Second Reading deferred till Monday next.
Advocates Widows' Fund (Widowers' Provisions) Order Confirmation Bill,
Read the Third time, and passed.

KILMARNOCK GAS AND WATER PROVISIONAL ORDER BILL,
"to confirm a Provisional Order under the Burgh Police (Scotland) Act, 1892, relating to Kilmarnock Gas and Water," presented by Colonel Sir JOHN GIL3IOUR; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 166.]
ORAL ANSWERS TO QUESTIONS.
  NAVAL AND MILITARY PENSIONS AND GRANTS.

    VOLUNTARY FUND.
    Captain BOWYERasked the Minister of Pensions what steps he is taking to increase the Voluntary Fund at his disposal?
    The MINISTER of PENSIONS(Major Tryon): Small sums by way of donation
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    or bequest are still from time to time contributed to the Voluntary Funds referred to, but no active steps have been taken by myself, or by my predecessors, to solicit contributions to those funds, nor do I consider that it is within my province to do so.
    Captain BOWYER: Is the right hon. Gentleman not aware that this fund has diminished considerably during the last year; and is it not a fact that many cases can only apply to this fend for help through the Ministry; and in view of that will he make efforts to get. it increased?
    Major TRYON: Yes, Sir; but I do not think it. is the duty of the State to collect money to compensate men from charitable funds. Any contributions that may arise would he welcome, but I do not think it is any part of the duty of the State to collect money for charitable purposes.
    Captain BOWYER: Is it not a fact that the right hon. Gentleman is the only individual in the country who disposes of this fund?
    Major TRYON: This is so, but its origin must necessarily be spontaneous.
    Mr. T.KENNEDY: Would it not be better that the State. should discharge its obligations in this respect?

    EDUCATIONAL GRANTS.
    Mr. TREVELYAN THOMSONasked the Minister of Pensions whether he will recommend the Special Grants Committee to have greater regard for the child's ability to learn, rather than for the amount of the parents' earnings, when making educational grants to ex-service men's dependants in the future?
    Major TRYON: The ability of the child is already one of the factors which the Special Grants Committee take into account in determining whether a grant in respect of secondary education shall be made. I could not, however, adopt the hon. Member's suggestion so far as to make this factor the determining one, as he would appear to desire, without a fundamental alteration of the principles upon which supplementary grants are payable by the Committee. I am not satisfied that such an alteration would be justifiable.
    Mr. THOMSON:Is the right hon. Gentleman not aware that parents vary in the sacrifices they will make for their children, and will he have regard to the maximum sacrifices that might be made although the income is comparatively small?

    MEDICAL BOARDS (NOTIFICATION OF RESULTS).
    Captain BOWYERasked the Minister of Pensions whether he is aware that in some cases there is undue delay in notifying results of medical boards; and will he take steps to remedy this?
    Major TRYON:Under the instructions of the Ministry the decision upon a case following a medical examination is conveyed to the claimant as promptly as possible. In a very few cases, as my hon. and gallant Friend will understand, expert opinion or additional evidence may have to be obtained, and some unavoidable delay may occur. I have, however, recently taken active steps to secure that the speediest decision possible is arrived at on all outstanding cases.
    Mr. MARCH:Does the right hon. Gentleman think that four months is an unavoidable time to take to give a decision in a case of this kind?
    Major TRYON:I am glad to say that from the figures I received this morning it is evident that these cases are, as a whole, being decided far more rapidly now than they were even a short time ago.
    Mr. T. WILLIAMS: Is the right hon. Gentleman not aware that cases have been known where following a medical board a decision has not been announced because a second board has been asked for; and before the examination of the second board has been carried through it has been found that the second board was outside the seven years' limit, while the first hoard was inside that limit, and a pension has been refused on the ground that it was Lot within the seven years' limit?
    Major TRYON: Such a case is not within my experience. There are, of course, cases where it has been necessary to obtain expert opinion in order that the best possible decision should be arrived at.

    PENSIONS INCREASE WARRANT, 1921.
    Captain BOWYERasked the Minister of Pensions what steps he has taken, or is taking, to make widely known the terms of the Royal Warrant raising certain percentages of increase under the Pensions Increase Warrant, 1921; and are all pensioners who might benefit there under dealt with automatically, or is each expected to make personal application?
    Major TRYON:As the hon. and gallant Member will be aware, the great majority of men likely to benefit under the new Warrant are already in receipt of increase under the earlier Warrant. These cases are being dealt with automatically, without the necessity of personal application. Personal application is only necessary in the case of the few men not now in receipt of the increase who may have been or may hereafter become eligible owing to a change in their circumstances. The Ministry can not identify those who fulfil the conditions of the new Warrant, but these conditions will be automatically applied to any fresh applicant, and copies of the new Warrant are being circulated to all local offices of the Ministry.

    WIDOWS' PENSIONS.
    Mr. HAYESasked the Minister of Pensions whether, seeing that pensions are only granted under Article 17 of the Royal Warrant of 1924 to the widows of men whose death is certified as materially hastened by the. lingering effects of war service, he will issue instructions to the chief area officer and other officials in the local area offices that they should inform all widows making application for pensions under this article of the nature of the medical certificate required?
    Major TRYON:In deciding claims under Articles 17A and 17B of the Royal Warrant referred to, I am bound, by the terms of the Warrant, to have regard both to the circumstances of the man's death and to all other conditions of the case. I am satisfied that the existing facilities afforded to a widow to supply full information and evidence in support of her claim furnish material for a fairer judgment on the claim than would be derived solely from a partial certificate of the kind suggested.

    PETER S. HUNTER, SPRINGBURN.
    Mr. HARDIEasked the Minister of Pensions if he will take into consideration the case of Peter S. Hunter, 72, Ayr Street, Springburn, who has been penalised because certain medical reports over which the men had no control had been mislaid?
    Major TRYON:In the short time available I have not been able to obtain the man's papers from Scotland, but I will look into the facts of the case and communicate later with the hon. Member.
    Mr. HARDIE:May I draw attention to the fact that this is a case in which the papers have been twice reviewed and yet when we bring the question up in the House we are told to send on the papers; and now we are again told to wait until the papers are produced?
    Major TRYON:If the papers are in Scotland they ought to arrive at the Ministry before I can be expected to give an answer.
    Mr. HARDIE:This case has been put before the Ministry twice within the last two months.

    FRESH CLAIMS AND APPEALS.
    Mr. LANSBURYasked the Minister of Pensions the number of persons who applied during the year 1925; the number of ex-service men and of disabled or partially disabled ex-service men or their dependants who applied to have their cases reopened; the number of such cases reopened, and to whom pensions or grants were allowed; those whose applications were rejected; and how many, on appeal to the final appeal court, were rejected on the grounds of being out of time or for any other reason?
    Major TRYON:During the year ending 31st March last about 50,000 fresh claims (including claims by applicants already in receipt of compensation) were decided by the Ministry with the result that in some 17,700 cases awards were made. During the same period about 46,570 appeals came before the Pensions Appeal Tribunals of which 24,500 were disallowed.
    Mr. LANSBURYasked the Minister of Pensions the number of pensions granted during the years 1920, 1921, 1922, 1923, 1924 and 1925, ending 31st March of
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    each year; and the total number of men, women, and children in receipt of such pensions?
    Major TRYON:As the answer comprises a number of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The number of first awards of pensions granted to claimants not previously in receipt of compensation from the Ministry, and the number of beneficiaries in each of the years mentioned is as follows:

    Financial Year ending.

    Pensions Granted.

    Beneficiaries at end of year.

    March,1920

    …

    680,000

    3,315,000

    March,1921

    …

    128,000

    3,366,000

    March,1922

    …

    40,000

    2,882,000

    March,1923

    …

    19,000

    2,503,000

    Marc,1924

    …

    12,000

    2,215,000

    March,1925

    …

    11,500

    2,037,000

    In addition to the pensions granted a considerable number of Awards of Gratuities and Final Weekly Allowances were made.
    Mr. ERSKINE:Can the right hon. Gentleman say what would be the actual cost of answering a question like this?
    Major TRYON:Not without notice.

    MINISTRY OF PENSIONS (AREA OFFICERS).
    Mr. OLIVERasked the Minister of Pensions what proportion of chief area officers and deputy chief area officers will receive permanent appointments; and whether, seeing that special qualifications are necessary for the successful filling of these posts, such officers who receive permanent appointments will carry their present rates of pay, as will be the case with the medical officers of the Ministry who have or are about to receive permanent appointments?
    Major TRYON:The question as to the number of temporary salaried officials, including chief area officers and deputy chief area officers, to whom it may be possible to give permanent non-pensionable posts is at present engaging my attention. The officers selected to fill such

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    appointments would continue to be paid their existing salary as adjusted from time to time, in accordance with the rules of the public service, but the salary would be subject to revision either up or down in accordance with that appropriate to the post in which they may from time to time be employed.

    FATAL ACCIDENTS.
    Commander FANSHAWEasked the Secretary of State for the Home Department the percentage of fatal accidents to the total numbers employed in

    The following statement shows for each of the years 1922 and 1923 the percentages of (a) seamen employed on trading vessels, (b) railway servants and (c) persons employed in mines under the Coal Mines Regulation Act, killed by accidents in the course of their employment, together with the percentages of those injured by accidents, so far as particulars are available:—

    —

    Killed.

    Injured.

    1922.

    1923.

    1922.

    1923.

    Per cent.

    Per cent.

    Per cent.

    Per cent.

    Seamen employed on Trading Vessels

    0.316

    0.278

    (Particulars not available.)

    Railway Servants

    0.034

    0.036

    2.35

    2.78

    Persons employed in mines under the Coal Mines Regulation Act.

    0.095

    0.106

    15.95

    17.39

    These figures necessarily- take no account of variations in the numbers employed within the year or of differences in the daily period during which workpeople in the various industries were exposed to risk.

    The statistics of injuries to railway servants include accidents causing persons to be absent from work for at least one whole day, while these for miners relate to accidents disabling the persons injured for more than seven days.

    Statistics of accidents to Tug and Lightermen are not available.

    PRISONERS (LEAVE).
    Colonel DAYasked the Home Secretary whether his attention has been drawn to the recent release of a prisoner from His Majesty's Prison, Wormwood Scrubs, in order that he should attend his son's funeral in Kent; and whether, in view of the success of this experiment, he will cause the practice to be extended so as to allow prisoners serving sentences in the second degree opportunity of leave under similar circumstances?
    The SECRETARY of STATE for the HOME DEPARTMENT(Sir William Joynson-Hicks): The release of the prisoner in question for a few hours to attend the funeral of his son was by no means the first case of the kind. It is the practice to concede this in exceptional
    the following professions: mercantile marine, tug and lightermen, railways and coal mines, respectively; and if he will state the percentage of other accidents to the total numbers employed in the four professions mentioned?
    Mr. A. M. SAMUEL(Secretary, Over seas Trade Department): I have been asked to reply. The answer contains a table of figures, and my hon. and gallant Friend will perhaps not object to it being circulated in the OFFICIAL REPORT.
    Following is the answer:
    cases when circumstances allow of it being done without undue risk of the con cession being abused.

    FACTORIES BILL.
    Mr. HERBERT WILLIAMSasked the Home Secretary if he can now state the date of the introduction of the Factories Bill?
    Mr. ROBINSONasked the Home Secretary whether any decision has been come to with respect to the promised Factories Bill; and whether it is intended to introduce the Bill without delay and pass it this Session.
    Sir W. JOYNSON-HICKS: I regret that I am not yet in a position to state this.
    Lieut. - Commander KENWORTHY:Will this Bill be introduced before Whitsuntide?
    Sir W. JOYNSON-HICKS: I still live in hopes.
    Mr. NEIL MACLEAN: That is not a very nourishing diet.

    WORKMEN'S COMPENSATION ACT.
    Mr. LEEasked the Home Secretary whether he can inform the House as to the amounts paid during 1924 under the Workmen's Compensation Act to injured workmen in weekly compensation and to relatives in cases of fatal accident, respectively, comparing each amount with that paid in 1923 and giving the number of accidents in each case?
    Sir W. JOYNSON-HICKS: I regret that the figures for 1924 are not yet available. All the returns are not yet in, and it will be some time before the tabulation of the figures is completed.

    TRADE UNIONS(POLITICAL FUNDS).
    Mr. MACKINDERasked the Home Secretary if he will inquire as to the method adopted by the Chief Registrar in arriving at the number of trade unionists claiming exemption under the political fund rules; and is he aware that in a Return published recently the National Union of Distributive and Allied Workers were stated to have 4,916 members claiming exemption, whereas the actual number was 211?
    Sir W.JOYNSON-HICKS:The method has been to include in the form of Annual Return a question asking for the number of members exempted from contributing to the political fund. This number was given by the union in question in the Return for 1923 as 4,916. The union has since, in answer to a request by the Chief Registrar for further information, stated that this figure includes members who were more than three months in arrears with their trade union contributions and that the proper figure was 211.

  EDUCATION.

    TEACHERS' SALARIES.
    Mr. WINDSORasked the President of the Board of Education what steps are being taken by his Department to ensure that local education authorities pay wages in accordance with the Burnham award; and whether it is proposed to reduce the State grant to those education authorities who pay less than the Burnham scale of salaries?
    The PRESIDENT of the BOARD of EDUCATION(Lord Eustace Percy):I am, and shall continue to be, in communication with local education authorities on this subject, and I should prefer to make no statement at this moment which might interfere with their deliberations or deter them from discussing the matter freely with the Board.

    ESPERANTO.
    Mr. DENNISONasked the President of the Board of Education whether he will include in the curriculum for elementary schools the teaching of Esperanto or some other international language for at least two hours in each week?
    Lord E. PERCY: No, Sir.

    ELEMENTARY SCHOOLS.
    Lieut.-Commander KENWORTHYasked the President of the Board of Education in how many areas elementary schools designed to accommodate children up to the age of 16 plus are in course of being provided; and what is the anticipated addition to the aggregate number of such places available by 31st March, 1926?
    Lord E. PERCY: I have not the information necessary to answer either part of this question. Provision for the purpose suggested may be made in various ways, e.g., by the adaptation of existing schools, and it is not possible to say what number of places will be made available by such means.
    Mr. HARRISasked the President of the Board of Education the number of public elementary schools in which the Board has authorised the giving of instruction to children up to the end of

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    the school term in which they reach the age of 16; and what are the numbers of boys and girls, respectively, in average attendance at these schools?
    Lord E. PERCY:During the year ended 31st March, 1924, the Board authorised, under Section 26 (1) of the Education Act, 1921, the continued instruction beyond the normal age-limits of certain individual scholars in 263 boys' departments, 194 girls' departments and 275 mixed departments. The total number of children in average attendance in the departments referred to were:

    Boys

    …

    …

    …

    77,076

    Girls

    …

    …

    …

    54,340

    Mixed

    …

    …

    …

    70,707

    Separate figures of the average attendance of boys and girls, respectively, in the mixed departments are not available.
    Mr. HARRIS:Do these figures include central schools, or do they only apply to ordinary elementary schools, where the usual age is 14?
    Lord E. PERCY: I should like to have notice of that question.

    SECONDARY SCHOOLS.
    Colonel DAYasked the President of the Board of Education if he is aware that it is the custom of local education authorities, when filling up vacancies in their secondary schools, to do so by examination; that free-placers and fee-paying students are examined at one and the same time; that the children doing best are selected for the free places and the remaining places are filled by asking the parents of children, not securing free places, in rotation; and that many parents, because of their lack of means, are compelled to refuse fee-paying places and, that being so, the last name on the list may secure entry; and will he, in the light of securing the best pupils, enable the local education authorities to adopt free secondary education?
    Lord E. PERCY: The arrangements vary in different areas, but I believe that in some areas the position is generally as stated. As regards the last part of the question, if proposals for the abolition
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    of fees in secondary schools are included in the programmes of education development, which I have asked local authorities to submit, they will be considered in relation to other parts of the programmes.
    Colonel DAY: As the present system appears to militate severely against the children of poorer parents, will the Noble Lord consider revising the Regulations so as to give all children an equal opportunity?
    Lord E. PERCY: I do not think the assumption on which that supplementary question is based is really accurate. I do not think it discriminates against the children of the poor.
    Mr. ERNEST EVANSasked the President of the Board of Education whether he has any information as to the probable effect of the withdrawal of the Board's grant of £3 for every free place in excess of 25 per cent. upon the educational policy of local authorities?
    Lord E. PERCY: I have no specific information on the point to which the hon. Member refers, but I have no reason at present to think that the effect will be material.
    Mr. HAYESasked the President of the Board of Education the number of pupils in secondary schools on the 31st March, 1925, and the number of free places held by scholars at that date?
    Mr. RUNCIMANasked the President of the Board of Education what was the aggregate number of places available for boys and girls, respectively, in secondary schools; and the number of free places included in this total on each of the following dates: 31st March, 1914, 31st March, 1922, 31st March, 1923, and 31st March, 1924?
    Lord E. PERCY: As the reply to these two questions contains a number of figures, I will circulate it in the OFFICIAL REPORT.
    Following is the reply:
    For convenience I give figures for the 1st October in each school year, as this is the date to which the returns furnished to the Board relate.

    —

    Total Number of Pupils.

    Free Places awarded under Article 20 of the Regulations.

    Boys.

    Girls.

    Total.

    1st October,1913

    …

    99,997

    87,650

    187,647

    61,266

    1st October,1922

    …

    186,997

    176,720

    363,717

    129,505

    1st October,1923

    …

    186,230

    172,301

    358,531

    128,156

    1st October,1924

    …

    188,268

    171,176

    359,444

    128,500 (approximately).

    I cannot state exactly how many of these free places were awarded to boys and girls respectively, but the numbers would be about equally divided.

    DEFECTIVE CHILDREN.
    Mr. HARRISasked the President of the Board of Education the number of urban and rural local education authorities in which no provision exists for the education of defective children?
    Lord E. PERCY:No certified special schools for defective children of any type exist in the areas of 27 county authorities and 102 non-county authorities. I would, however, remind the hon. Member that the majority of local authorities in whose areas no special schools exist make arrangements for the attendance of defective children at special schools in other areas.
    Mr. ROBERT MORRISON:
    Is the Noble Lord yet in a position to say whether the circular on this subject, which was sent out some months ago, has had any effect?
    Lord E. PERCY:Yes, I think that local authorities generally are devoting more and more attention to this matter.

    MAINTENANCE ALLOWANCES.
    Mr. HARRISasked the President of the Board of Education to what extent maintenance allowances granted by local education authorities to scholars in attendance at secondary schools are eligible for a grant from the Board.
    Lord E. PERCY:I may refer the hon. Member to Article 6 of the Board's Grant Regulations No. 14 (Maintenance Allowances, Higher Education), a copy of which I am sending him.

    WELSH LANGUAGE.
    Mr. E. EVANSasked the President of the Board of Education whether he has
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    received any communications protesting against the non-inclusion in the personnel of the Committee appointed to inquire into the position of the Welsh language in the educational system of Wales of teachers at present engaged in Welsh schools; and whether, with a view to securing their assistance and the benefit of their experience and knowledge, he can see his way clear to provide that they shall be represented on the Committee?
    Lord E. PERCY:I have received some such communications, but they seem to be based on the erroneous idea that the Committee is intended to be composed of representatives of the various interests concerned. This is not the case. I have selected as members of the Committee per sons who, I believe, are best qualified to bring an impartial mind to bear upon the evidence which will be submitted to them. The Committee will have the advantage of the experience and knowledge of teachers now engaged in Welsh schools in the evidence which will be submitted to them by such teachers, and I am sure that they will give full weight to that evidence.

    TEACHERS' TRAINING (REPORT OF COMMITTEE).
    Mr. TREVELYANasked the President of the Board of Education whether the Committee inquiring into the training of teachers has yet reported; and, if so, how soon the Report may be expected to be published?
    Lord E. PERCY: I am happy to inform the right hon. Member that the Committee have reported. I have authorised the Report for publication, and expect that it will be published in about a fortnight.

    LOCAL AUTHORITIES' SCHEMES.
    Mr. RUNCIMANasked the President of the Board of Education what

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    local authorities have submitted schemes to the Board under Section 1 of the Education Act, 1918, or under Section 11 of the Education Act, 1921; which of these schemes have been approved by the Board; and which of them are In operation?
    Lord E. PERCY: As the reply to this question is rather long, I will, with the right hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    Schemes under the Sections referred to have been submitted by the following authorities of counties and county boroughs:
    Counties:

    Bedfordshire.

    Buckinghamshire.

    Cornwall.

    Dorset.

    Durham.

    Gloucestershire.

    Huntingdonshire.

    Kent.

    Lincolnshire (Holland).

    Lincolnshire (Kesteven).

    Lincolnshire (Lindsey).

    London.

    Middlesex.

    Norfolk.

    Oxfordshire.

    Rutland.

    Scilly, Isle of.

    Somerset.

    Staffordshire.

    Suffolk, East.

    Sussex, West.

    Warwickshire.

    Wight, Isle of.

    Yorks (North Riding).

    County Boroughs:

    Barrow-in-Furness.

    Bath.

    Birmingham.

    Bootle.

    Bristol (partial scheme).

    Burton on-Trent.

    Chester.

    Coventry.

    Dewsbury.

    Eastbourne.

    Grimsby.

    Huddersfield.

    Ipswich.

    Kingston-upon-Hull.

    Liverpool.

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    Norwich.

    Oldham.

    Oxford.

    Southampton (partial scheme).

    Stoke-on-Trent.

    Wallasey.

    West Ham.

    York.

    In view of the financial position existing at the time of the submission of these schemes, the Board did not feel justified in giving statutory approval to any of them and thereby making it obligatory upon the authorities to give effect to them; but the fact that the Board have felt bound to refrain from giving statutory approval to schemes does not mean that the authorities have been thereby debarred from taking up particular proposals included in their schemes, or that particular items of schemes have not been approved individually by the Board from time to time when submitted by an authority.
    The right hon. Member is, no doubt, aware that I have recently requested local authorities to submit to me practical programmes of educational development covering a period of three to five years.

  HOUSING.

    SMALL DWELLINGS (VALUATION).
    Mr. GROVESasked the Minister of Health whether he is aware of the considerable hardship imposed upon many of the persons who take advantage of the powers of the Acquisition of Small Dwellings Act, inasmuch as the price demanded of the purchaser is frequently £100 in excess of the amount decided by the surveyor of the local authority to be a fair market price, and that therefore the would-be purchaser has to decline the undertaking or spend probably his life's savings; and whether, as owing to the housing shortage numerous ex-service men, in order to get a home for their dependants, are commuting their pensions, which money is being used as deposit, he will consider what steps he can take to ensure that undue advantage will not continue to be taken by persons desirous of selling their property in such way, but that the price demanded shall be only equal to the amount determined

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    by an impartial surveyor to be a reasonable one?
    The MINISTER of HEALTH(Mr Neville Chamberlain): The hon. Member appears to be under some misapprehension. Valuations for the purpose of the Small Dwellings Acquisition Acts are not made with a view to fixing a fair market price for the house, but for determining the value as security for a loan. Advances by local authorities are limited to 90 per cent. of the value as so fixed, and in present circumstances that value is generally something less than the cost of the house. The continued growth in the amount of the loans applied for by local authorities, and now amounting to nearly 11` millions under the Acts and Section 5 of the Housing Act, 1923, indicates how greatly they are appreciated, and does not suggest that the amount of deposit required commonly gives rise to hardship.
    Mr. GROVES:Am I to understand that the price fixed by the surveyor, say, of West Ham, as security for a loan, has no relationship to the market value of the house? Is not there some definite connection between the two prices?
    Mr. CHAMBERLAIN: I think the hon. Member will understand that, in estimating the value of a house for the purposes of security for a loan, the valuer must take into consideration the probable trend of prices in the future during the currency of the loan.

    BUILDING TRADE (APPRENTICES).
    Mr.T.THOMSONasked the Minister of Health the total number of apprentices in the building trade that have been enrolled under the schemes for the augmentation of skilled labourers in the building trades instituted since the 1924 Housing Act was passed?
    Mr. CHAMBERLAIN:The Building Industry Committee, who are advising me on matters relating to the augmentation of the skilled ranks of the building industry, are not yet in a position to furnish the information required. The committee are, however, endeavouring to obtain Returns for the period ending 30th June, and they hope that when these Returns have been received full information on this matter will be available.
    Mr. THOMSON: Meanwhile, is the right hon. Gentleman stimulating local
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    authorities to move in the direction of the augmentation of labour on these lines?
    Mr. CHAMBERLAIN:Yes, I have asked local authorities to make it a condition of their contracts.

    DWELLING-HOUSES (CONVERSION INTO OFFICES, ETC.).
    Colonel DAYasked the Minister of Health whether, in view of the continued aggravation of the housing shortage by the conversion of existing dwelling-houses into offices, garages, clubs, and other purposes, he will consider the advisability of introducing legislation in order that no further diminution of the present number of dwelling-houses shall take place?
    Mr. CHAMBERLAIN: I would refer the hon. and gallant Member to the reply given by the Prime Minister to a similar question by the hon. Member for Middlesbrough West on the 28th instant.
    Mr. THOMSON:Has the right hon. Gentleman received representations from local authorities that such powers should be given them, and what reply is he making?
    Mr. CHAMBERLAIN: I have received some representations of the kind and I have replied that I do not see any need for any further legislation.
    Colonel DAY:Will the right hon. Gentleman consider introducing the Regulations which were in force during the War to prohibit luxury building?
    Mr. CHAMBERLAIN: I cannot add anything to the answer already given.

    PRIVATE BUILDING (RESTRICTION).
    Mr. SMITHERSasked the Minister a Health whether, in view of the short age of houses and the consequent suffering and inconvenience caused thereby, he will consider the advisability of obtaining powers to make a Regulation that any person or persons desirous of erecting a building, other than one intended to be used wholly as a dwelling-house, must apply to the Ministry of Health for a permit to build, and that such permit shall only be granted if such a building is deemed to be essential to the public interest, and that such Regulation shall remain in force until such time as the supply of houses shall have caught up any reasonable demand?
    Mr. CHAMBERLAIN: I have considered the suggestion of the hon. Member, but I do not propose to introduce legislation on the lines indicated by him. I may perhaps add that the National House Building Committee appointed by my predecessor advised against any restriction of private and commercial building.

    STATISTICS.
    Mr. T. THOMSONasked the Minister of Health how many houses have been erected up to date under the Chamberlain and Wheatley schemes, respectively?
    Mr. CHAMBERLAIN:Up to the 1st April, the latest date for which figures are available, 70,421 houses had been completed under the Housing Act of 1923, and 2,486 under the Act. of 1924.

    NEW HOUSES (RENTS).
    Colonel PERKINSasked the Minister of Health if he will give the usual rent demanded for new houses built under any of the subsidy schemes in all the chief towns of the country with populations of over 160,0001?
    Mr. CHAMBERLAIN:My approval is not required to the rents of houses provided under the Acts of 1923 and 1924, and information on this subject is not available. I will, however, make enquiries of the local authorities concerned and communicate again with my hon. Friend.

  POOR LAW.

    MESSING ARRANGEMENTS.
    Mr. GROVESasked the Minister of Health whether he is aware that it is still the common practice in the poor-houses of the country to use tin mugs for the partaking of tea and enamel plates for the dinner and other meals; that meals are partaken from bare tables; and whether he will consider the issue of circulars to all hoards of guardians urging the abolition of these old-time methods, the introduction of covered tables for meals, and the use of earthenware vessels?
    Mr. CHAMBERLAIN: I think that these are matters which must be left to the boards of guardians, who are respon
    310
    sible for the administration of the in stitutions, and I should hesitate to issue instructions on such matters of detail. I understand that, as a matter of fact, the use of tin mugs is not common.
    Mr. GROVES:Does not the right hon. Gentleman feel that the time has come when his Department should issue instructions to boards of guardians that will not march with the ordinary progress of civilisation?
    Mr. CHAMBERLAIN: In certain cases where I have considered that the conditions were not satisfactory, I have communicated with the boards of guardians, but I do not think the question of tin mugs is one which calls for the issue of special instructions.

    CASUAL WARDS.
    Mr. GROVESasked the Minister of Health if he will consider, in view of the present degree of unemployment and the possibility of men moving from one town to another, the withdrawal of the Order that persons seeking shelter in casual wards twice in the same month shall be restricted from departing for three days; and will he issue circulars to all boards of guardians that men moving about the country in search of work, and compelled through lack of means of subsistence to apply to the, casual wards, shall not be compelled to perform the tasks but shall be given every facility to leave early to obtain freedom to seek work?
    Mr. CHAMBERLAIN:The period within which a casual is entitled to discharge himself is prescribed by Statute, but under the Casual Poor Relief Order, 1925, guardians are empowered to allow the discharge of a casual before the expiration of the prescribed period of detention in the circumstances referred to in the latter part of the question. I do not think that there is any need for the issue of a further circular in the matter.
    Captain WEDGWOOD BENN:Has the right hon. Gentleman recently authorised a new oakum picking as one of the tasks of casual applicants?
    Mr. CHAMBERLAIN: That does not arise out of this question.
    Mr. R. RICHARDSONasked the Minister of Health (1) what profit was made in the Unions

    311
    of Farnham, Canterbury, Milton, Droxford, Exeter, Bath, Bridge, Mailing, Hailsham, Fordingbridge, Honiton, Wellington, Somerset, out of the task of stonepounding, without reckoning the cost of maintenance of the casuals, in the latest year for which he has or can obtain information; taking all the unions together, what is the profit for one day's work of a casual at stonepounding; whether there were any age limits above or below which stonepounding could not be prescribed; and will he abolish stone-pounding as a task;
    (2) whether he is aware that work on the land and in the garden, washing of garments, towels and other materials pro vided by the guardians for the casual ward, scrubbing and cleansing the ward, and chopping wood, which tasks he stated on 9th April were in common use in the casual wards, were not mentioned among the tasks prescribed for male casuals in Schedule C of the Casual Paupers Order of 1882, or mentioned in the printed copies of the tasks of works which were directed by Article 15 of that order to be posted in conspicuous places in the casual wards and in the yards or rooms where the casual paupers were set to work; will he make inquiries as to who is responsible for these omissions; whether he will amend the Casual Poor (Relief) Order, 1925, by mentioning work on the land and in the garden, washing, scrubbing and cleansing, and chopping wood among the tasks prescribed for males, and also require that these tasks shall be posted in the casual wards in accordance with Article 17 of the new order; whether he will suspend the power to impose oakum picking and stonepounding as tasks until he has made inquiry what pecuniary profit has been made in the use of them: and whether they have been contributory causes towards starvation cases and prosecutions?
    Mr. CHAMBERLAIN:I will make inquiries as regards the profit, if any, made out of the task of stone-pounding. If the hon. Member will read Schedule C of the Regulations of 1882 he will see that among the alternative tasks prescribed for males are digging or pumping or cutting wood or grinding corn, and for females, washing, scrubbing and cleaning or needlework, and these alternatives are reproduced in the Casual Poor (Relief)
    312
    Order, 1925, which also enables other tasks to be prescribed with my approval. While I am prepared to consider any representations with regard to the tasks of oakum picking and stone-pounding, or any alternative proposals submitted by a board of guardians, I do not, as at present advised, think there is ground for suspending this part of the Order. The proviso to Article XI of the Order of 1925 provides that a casual shall be excused from the whole or any part of such task of work if it shall appear that the task is not suited to his age, strength or capacity.
    Mr. RICHARDSON:Is not the right hon. Gentleman aware that sometimes after the stone is pounded and sold it is sold for less than it originally cost, and would he not advise guardians to take into consideration anything rather than this brutal work? Also will he ask the guardians to reconsider the whole matter with a view to ending this system?
    Captain BENN:Does the right hon. Gentleman really think it is right to perpetuate such degrading tasks as oakum picking and stone-pounding?

    GATESHEAD UNION (BELIEF OF DISTRESS).
    Mr. JOHN BECKETTasked the Minister of Health what is the total amount spent on the relief of distress in Gateshead by the board of guardians since the Armistice?
    Mr. CHAMBERLAIN:From the date of the Armistice of the 31st March, 1924, the guardians of the Gateshead Union had expended in all on the relief of the poor in the Union £859,392. Figures as to the expenditure since 31st March, 1924, are not yet available, but the information in my possession suggests that there has been a large reduction since that date in the yearly rate of expenditure.
    Mr.BECKETT:
    Considering the enormous amount spent. on relief and the condition of the town, could not the right hon. Gentleman empower guardians to use the money in productive works?
    Mr. CHAMBERLAIN: I must have notice of that question.

    WILD BIRDS PROTECTION.
    Colonel APPLINasked the Home Secretary whether his attention has been

    313
    drawn to the sale of game and other wild birds during the breeding season in our shops; and whether, in view of the cruelty this practice must cause, even in the case of birds from foreign countries, and the waste of valuable bird-life, he will introduce legislation to prevent the continuation of this practice?
    Sir W. JOYNSON-HICKS: Yes, Sir; my attention has been called to this matter, and the Home Office Advisory Committee have had it under consideration, and would, I understand, be in favour of some further measure of protection being adopted in the direction suggested. The Bill for the amendment and consolidation of the Wild Birds Protection Acts, which I introduced before the Recess, will afford my hon. and gallant Friend an opportunity of raising the question.

    FILM CENSORSHIP.
    Captain ARTHUR EVANSasked the Home Secretary if, in view of the fact that the present British Board of Film Censors has no responsibility to any authority other than the members of the industry, and in view of the number of foreign films shown in this country since the War the subject-matter of which is detrimental to the best interests of public morals, safety, and good order, lie will consider the desirability of setting up a Censorship Board responsible to his Department?
    Sir W. JOYNSON-HICKS: I have had no complaints showing that the present system of censorship fails to secure, on the whole, an adequate standard, or that there is any general demand for a change; and, in these circumstances, I cannot take action as suggested by my hon. and gallant Friend.
    Captain EVANS: Is it not the case that the whole question of the manufacture and presentation of films in this country is being considered by a Government Departmental Committee, and, if that be so, would the right hon. Baronet see that this suggestion, and the question of the importation of films generally, is considered by that Committee?
    Sir W. JOYNSON-HICKS: I do not think it is a Committee that I have' appointed.
    Captain EVANS: Was not a statement to that effect made in another place only yesterday, the Department being, I think, the Board of Trade?
    Sir W. JOYNSON-HICKS: I am afraid I must ask for notice of that question. I have not yet had an opportunity of reading the Debates in the other House.
    Lieut. - Commander KENWORTHY: Is not the question whether films are detrimental to public morals a question for the Home Office?
    Sir W. JOYNSON-HICKS: As I have said, I have not had any complaints. I have not time to go to see these films myself, but if any complaints are sent to me I will go into them.
    Lieut.-Commander KENWORTHY:
    I am not complaining at all, but it is in the question of the hon. and gallant Member.
    Sir HARRY BRITTAIN: Is not this a matter for the right hon. Gentleman the Member for the Scotland Division of Liverpool (Mr. T. P. O'Connor)?
    Captain GARRO-JONES: Does not the question of foreign propaganda come within the purview of the right hon. Baronet's Department?

    RUSSIAN IMMIGRANTS.
    Mr. RA I NEasked the Home Secretary what is the number of Russian subjects admitted into the United Kingdom during the year ending 31st March, 1925, and what number was refused admission?
    Sir W. JOYNSON-HICKS: The number of Russians who were given leave to land in the United Kingdom during the year ended 31st March, 1925, was 8,741, and the number who left the United Kingdom during the same period was 8,747. The number refused leave to land was 55.
    Mr. MACKINDER: Is not the large number due to the fact that the major proportion of them travel right across the country from Grimsby to Liverpool, and re-embark?
    Sir W. JOYNSON-HICKS: No, those are not included. Transmigrants are not included in these figures.

    PRISONERS (CLASSIFICATION).
    Mr. CADOGANasked the Home Secretary whether the experiment tried in Wakefield Prison by which prisoners sentenced to terms of six months and over are divided into three classes, for each of which a new system of stages has been devised with decreasing supervision according to conduct, and by which they are given better facilities for education and recreation, has proved a success; what are the numbers since the experiment was started of those who have undergone the new treatment and who have been reconvicted; and whether, if it has proved successful, there is any prospect of adopting the system else where.
    Sir W. JOYNSON-HICKS: The experiment at Wakefield has so far proved successful. The information given on pages 16 and 17 of the Commissioners' Annual Report for 1923-24 (Command Paper 2307) includes the latest figures so far collected. Figures for the year 1924-25 are not yet available. The extension of the system is under consideration.

    RATING OF MACHINERY.
    Mr. H. WILLIAMSasked the Minister of Health if he can now announce the decision of the Government as to the proposals in the Inter-Departmental Committee on the rating of machinery?
    Mr. CHAMBERLAIN: I would ask my hon. Friend to await the circulation of the Bill, which I hope will be available on Saturday next.

    SUEZ CANAL (BRITISH DIRECTORS).
    Mr. JOHN BECKETTasked the Prime Minister what Members of the House, if any, represent the Government on the directing Board of the Suez Canal; what are their emoluments and their duties; and what is their record of attendance at meetings?
    The FINANCIAL SECRETARY to the TREASURY(Mr. Guinness): No Member of this House represents the Government on the Suez Canal Board.

    RECREATION GROUNDS.
    Captain GARRO-JONESasked the Minister of Health whether he contemplates any Departmental activities for the encouragement of athletic sports, especially among poor young people in town and industrial areas?
    Mr. CHAMBERLAIN: I am always prepared to consider proposals from local authorities for the acquisition of recreation grounds. Extended powers to local authorities are proposed in the Public Health Bill, which received a Second Reading on the 20th of March last, and I hope that those proposals will be passed into law.

    INVESTMENTS ABROAD.
    Mr. GRUNDYasked the Chancellor of the Exchequer the amount of British capital invested abroad in the 12 months ending 31st March, 1925; and the amount invested in the Dominions and various foreign States, separately'?
    Mr. GUINNESS: No official statistics on this subject are available. The hon. Member is no doubt aware of the calculations of capital issue in London for overseas published in the Press (particularly in the "Statist" and the "Economist "), which put the total at approximately £110 millions.
    Mr. H. WILLIAMS: Are these public issues or private?
    Mr. GUINNESS: I am not responsible for the figures, and I must refer my hon. hon. Friend to the publications.

    ITALIAN DEBT TO GREAT BRITAIN.
    Captain GARRO-JONESasked the Chancellor of the Exchequer whether the Italian Government has now taken any step in furtherance of its expressed desire some months ago to initiate discussions on the subject of its debt of £550,000,000 to this country?
    Mr. GUINNESS: It is not possible to add anything to the reply which the Chancellor of the Exchequer gave to the hon. and gallant Member on the 24th February.
    Captain GARRO-JONES: Does the right hon. Gentleman recollect that the

    317
    Chancellor of the Exchequer stated that the Italian Government had signified their intention six months ago to initiate discussions, and, if those discussions are initiated by the Italian Government, will some steps be taken by the British Government?
    Mr. GUINNESS: I do not think it unreasonable to allow the Italian Government a fair margin of time to consider the matter.
    Mr. JOHNSTON: Has the right hon. Gentleman not reason to fear that the gratuitous cancellation of £287,000 of debt due to the Treasury by the British-Italian Corporation may set a precedent in this case?

    OPIUM TRAFFIC (ADVISORY COMMITTEE).
    Mr. FORRESTasked the Prime Minister, in view of the fact that the Central Board to be established under the last Anti-Opium Conference at Geneva is not likely to come into operation for some time, whether the Advisory Committee on Opium Traffic is still in existence; whether it will hold its annual meeting this year, and, if so, when; and what is to be the policy of the British Government in respect of it?
    The UNDER-SECRETARY of STATE for the HOME DEPARTMENT(Mr.G.Locker-Lampson):
    I have been asked to reply. The Advisory Committee, whose function is to assist and advise the Council of the League in dealing with any question that may arise in connection with the League's supervision of the drug traffic and to promote the fullest possible international co-operation in regard to the matter, is still in existence and will, so far as I am aware, continue to exist. I understand a meeting of the Committee will be held as usual this year, some time before the meeting of the Assembly in September, but the Government has not yet been informed of the date. I am not in a position to make any statement of policy, as the agenda for the meeting has not yet been settled.

  NATIONAL HEALTH INSURANCE.

    ROYAL COMMISSION (REPORT).
    Mr. OAKLEYasked the Minister of Health, in connection with the Royal Commission on National Health Insur
    318
    ance, if he can give an approximate date when the Report of the Commission will be presented to Parliament?
    Mr. LOCKER-LAMPSON: I have been asked to reply. I understand that satisfactory progress is being made with the hearing of evidence by the Royal Commission on National Health Insurance, but I am not in a position to say when their Report may be expected.

    COUNTY COMMITTEES (EXPENES).
    Mr. OAKLEYasked the Minister of Health if he will consider an alteration of the Regulations governing the payment for loss of time of the members of county insurance committees in their attendance on same, and put the member who is in business on his own account and loses his time, and has to pay a substitute, on the same scale as the employed member who gets paid for his loss of remunerative time?
    Mr. CHAMBERLAIN: No, Sir. As at present advised I am not prepared to authorise any departure from the present practice, but the question which my hon. Friend raises would come within the reference of the Royal Commission and will doubtless be considered by them.

    TRADE AND INCOME TAX.
    Mr. HARDIEasked the Chancellor the Exchequer what was the volume o' our trade in 1913; the amount of money brought under the review of the Income Tax Commissioners in that year; and the corresponding figures for the years 1924-25?
    Mr. GUINNESS: As the answer contains a number of figures, I will, with the Len. Member's permission, circulate it in the OFFICIAL REPORT.
    Mr. HARDIE:Can the right hon. Gentleman give me the totals?
    Mr. GUINNESS:There are a great many figures, and it would take a long time and would exhaust the patience of the House.
    Mr. HARDIE: When a question is put asking for totals, why are not these totals given, instead of all this formality of going through a mass of figures which are not asked for? I should like to press for an answer, because it is most important

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    for business, if this House is to be run on business lines.
    Mr. GUINNESS: I am sorry if my answer gives more information than is

    External Trade of the United Kingdom.

    Class of Trade.

    1913.*

    1924-25† (to 31st March).

    As declared.

    As declared.

    At average values of 1913.

    £000.

    £000.

    £000.

    Imports

    768,735

    1,330,068

    852,287

    Exports (U.K. produce and manufactures)

    525,254

    810,736

    429,295

    Re-exports of imported merchandise

    109,567

    140,825

    102,640

    *The figures relate to Great Britain and Ireland.

    †The figures relate to Great Britain and Northern Ireland.

    The gross income brought under the review of the Inland Revenue Department, and the actual income liable to tax (before deduction of personal allowances, etc.) for the years 1913-14 and 1923-24 are as follows:

    —

    1913–14.

    1923–24. Estimates.

    £

    £

    Gross income brought under review.

    1,167,184,229

    3,050,000,000

    Actual income

    951,040,487

    2,300,000,000

    Actual income means the statutory income of taxpayers, estimated in accordance with the provisions of the Income Tax Acts, excluding the income of individuals with a total income not exceeding the exemption limit, namely, £160 in 1913-14 and 2135 of assessable income in 1923-24.
    Corresponding figures for 1924-25 are not yet available.

    FIXATION OF NITROGEN.
    Mr. J. BECKETTasked the Chancellor of the Exchequer the personnel of the Government Commission which was sent to the German factory for fixation of nitrogen?
    Mr. GUINNESS: I regret that I am unable to add anything to the reply which I gave to the hon. Member on the 7th April.
    desired. The complaint is usually the other way.
    Mr. HARDIE: It is not a question of quantity. It is totals for which I ask.
    Following is the answer:
    Mr. BECKETT:In view of the fact that ex-Members of this Commission are taking part in newspaper correspondence upon the matter, would it not be as well to publish the names?
    Mr. GUINNESS: It is entirely contrary to precedent to give the names of members of these Commissions, because the members go out, not as individuals, but as representatives of the Government, and they are entitled to the same protection as civil servants in remaining anonymous in connection with these functions, for which the Government are responsible.
    Mr. HARRIS: Are we to understand that members of Commissions have no right to use information for newspaper articles or otherwise?
    Mr. GUINNESS: I have not seen the newspaper passages to which the hon. Member for Gateshead (Mr. Beckett) referred.
    Mr. BECKETT:The passage referred to is the letter to the Press Association by Lieut.-Colonel Pollitt.

    CURRENCIES (STABILISATION).
    Mr. BOOTHBYasked the Chancellor of the Exchequer whether, in view of the restoration of the gold standard, he will take immediate steps to facilitate the summoning of an international financial conference, to include representatives of the central banks, with a view

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    to the further stabilisation of currencies on the lines contemplated by the Genoa resolutions?
    Mr. GUINNESS:What was contemplated by the Genoa Resolutions was not action by Governments in the first place, but a conference of central banks, I doubt if the time has yet come for this, but the hon. Member may rest assured that co-operation between central banks is increasing.

    SUGAR BEET PURCHASES(CANTLEY FACTORY).
    Mr. RUNCIMANasked the Minister of Agriculture how many tons of sugar beet were bought by the Cantley beet-sugar factory during the manufacturing season 1922-23 covered by the balance-sheet dated 11th October, 1923?
    Major Sir HARRY BARNSTON(Comptroller of the Household): I have been asked to reply. The amount of washed and topped beets purchased by the Cantley factory during the manufacturing season 1922-23, covered by the balance-sheet dated 11th October, 1923, was 52,993 tons.

    IRISH FREE STATE (BRITISH CLAIM).
    Mr. H. WILLIAMSasked the Secretary of State for the Colonies when the British claim under Article 5 of the Irish Treaty will be presented to the Government of the Irish Free State?
    The UNDER-SECRETARY of STATE for the COLONIES(Mr. Ormsby-Gore): A memorandum was forwarded to the Free State Government recently setting out the British claim in a form which is intended to serve as the basis of discussion between the two Governments under Article 5 of the Treaty.
    Lieut. - Commander KENWORTHY: Can the hon. Member say what is the amount of money claimed?
    Mr. ORMSBY-GORE: I must ask for notice of that question.

    SERPENTINE (ISLAND ENLARGEMENT).
    Mr. ERSKINEasked the Under-Secretary of State for the, Home Department, as representing the First
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    Commissioner of Works, if he will state the cost of enlarging the island in the Serpentine, in Hyde Park; how many men were employed; and what proportion were drawn from the ranks of Westminster unemployed?
    Mr. G. LOCKER-LAMPSON: The cost of the works at the island in the Serpentine was about £1,000, and employment was given to 12 men for about 20 weeks. It is not known what proportion of the men employed were drawn from Westminster.
    Mr. ERSKINE: Would it not be fair to employ Westminster men on a Westminster job?
    Mr. LOCKER-LAMPSON:As the money paid is from State funds, those outside Westminster have also a right to be employed. As a matter of fact, in future hands will be engaged through the local Employment Exchanges.

    CENOTAPH (NATIONAL FLAGS).
    Captain GEEasked the Under-Secretary of State for the Home Department, as representing the First Commissioner of Works, whether he is aware of the condition of the national flags used on the Cenotaph, apparently caused through the colours running into one another; and, if so, does he propose to have them replaced by others more worthy of the dignity of their position?
    Mr. LOCKER-LAMPSON:The flags on the Cenotaph are changed at regular intervals. Fact set is cleaned a few times before being finally discarded. The present flags were put up only a few days ago after cleaning, but are now being replaced by another set.

    ENEMY AIR RAID CLAIM.
    Rear-Admiral SUETERasked the President of the Board of Trade whether his attention has been drawn to the case of Olive Stone, deceased, daughter of Mr. William Stone, Vicarage Road, Stan-stead Abbotts, Herts, who died on the 26th March, 1924, from the result of an enemy aircraft raid that took place 7¼ years previously; and whether any re paration can be paid to assist the family

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    in the expense incurred in nursing the child 7¼ years and the cost of medical attendance over that period, considering that there are seven in the family of Mr. William Stone, the family being in humble circumstances, and during the period having only had an average wage of £2 5s. per week?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE(Sir Burton Chadwick): No grant has been made to the father in respect of the medical and other expenses incurred by him, for the reason that no conclusive evidence has been produced connecting the illness and disability of his Child directly with acts of the enemy. Having regard to the fact that the child was not born until three months after the air raid occurred, it would seem almost impossible to obtain such evidence.

    HYLTON COLLIERY, DURHAM(STRIKE).
    Mr. RAINEasked the Secretary for Mines whether his attention has been called to the strike at Hylton Colliery, Durham, caused by the refusal of the management to dismiss all men employed at the colliery who are not willing to subscribe to the funds of the Durham Miners' Association; and what steps he proposes to take in order to endeavour to effect a. settlement?
    The SECRETARY for MINES(Colonel Lane-Fox): I am aware of the circum stances to which my hon. Friend refers. My intervention has not been invited, but I understand that the management have given every encouragement to the men to join the union, even to the extent of advancing to them the funds necessary to pay up arrears of contribution. In the circumstances I do not think that intervention by me would serve any useful purpose.

  ROYAL AIR FORCE.

    BOMBING OPERATIONS, IRAQ.
    Lieut. - Commander KENWORTHYasked the Secretary of State for Air how many times the Royal Air Force has been in action during the present year; what were the casualties suffered; if there is any estimate of the casualties inflicted;
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    and whether on all occasions warning is given before dwellings are bombed in order that non-combatants may be moved to a place of safety?
    The UNDER-SECRETARY of STATE for AIR(Major Sir Philip Sassoon): The answer to the first part of the question is five times; to the second, two casualties; to the third, that as in at least one case the bombing supervened on inter-tribal fighting and the casualties due to the one cause or the other could not be distinguished, no estimate under this head can usefully be given; to the last part of the question, that explicit warnings were given in all cases, except where the air action was taken in defence of Iraqi tribesmen who were being raided by invading and looting tribesmen.
    Lieut.-Commander KENWORTHY: In the latter case were any dwelling houses bombed? I am not asking the tribes that were attacked in the field, but whether any dwellings were bombed?
    Sir P. SASSOON: The latter case applies to invading tribes coming from a great distance and having to be dealt with summarily many hundreds of miles from their homes.
    Lieut.-Commander KENWORTHY: My question refers to dwellings being bombed. Is it a fact that in all circum stances warning was given before dwellings were bombed?
    Sir P. SASSOON: Yes.

    AIRSHIP R.33.
    Sir H. BRITTAINasked the Secretary of State for Air whether he can see his way to suggest that some special mark of recognition be awarded to Flight-lieutenant Booth for the efforts of himself and his crew which resulted in the successful return of the R.33 to Pulham?
    Sir P. SASSOON: I assume that my right hon. Friend will in any case be considering this matter on his return.
    Sir H. BRITTAIN: Will the hon. and gallant Gentleman do all he can to suggest that some really tangible recognition should be given not only to the lieut.-commander but to the entire personnel for the splendid British exploit which has thrilled this country and the whole world?
    Sir P. SASSOON: I will tell my right hon. Friend.
    69. Mr. WELLSasked the Secretary of State for Air if he can state the cause of the accident to the Airship R 33; and, if so, what steps are being taken to minimise accidents of this nature in the future?
    Sir P. SASSOON: An inquiry is at present being held into the cause of the accident, and until the investigating committee has reported, I am unable to make any statement on the subject.

    AIRMAN'S DEATH, IRAQ.
    68. Major HORE-BELISHAasked the Secretary of State for Air whether he will give particulars of the recent disaster in Iraq in which a Devonport woman lost her husband; and whether he will state what arrangements have been made to provide this woman with a widow's pension?
    Sir P. SASSOON: In reply to the first part of the question, the hon. and gallant Member will now have received from me, in reply to inquiries made by him personally, a letter in which I have given the particulars of the airman's death, so far as they are known to the Air Ministry. When any further details are received, I will communicate further with him. As regards the second part of the question, I regret that the widow is not eligible for a pension as the airman's death is nut attributable to conditions of Air Force service, but I have brought the case to the notice of the Royal Air Force Memorial Fund in ease that fund may be able to render some assistance.
    Major HORE-BELISHA: Is the hon. and gallant Gentleman aware that in such a case it is rather a callous practice to stop a woman's allotment within 48 hours of her husband s death and cast her upon charity, particularly, as in this case, where the woman is expecting a child?
    Sir P.SASSOON: As the hon. Member knows, it is a question of the King's Regulations, which apply to all the Services.
    Major HORE-BELISHA: Will the hon. Baronet consider the matter in the light of stopping the allotment so quickly?

    UNEMPLOYMENT BENEFIT (INFRINGEMENT OF REGULATIONS).
    Sir CLEMENT KINLOCH-COOKEasked the Minister of Labour whether his
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    attention has been called to the frequent views expressed by Judges and other public men with regard to infringements, both in letter and in spirit, of the law governing the receipt of unemployment benefit; and will he consider the advisability of setting up a. committee to examine and report on the work of the agencies at present entrusted with the duty of administration?
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR(Mr. Betterton): My right hon. Friend has seen from time to time reports of such expressions of opinion from certain Metropolitan police Magistrates and others. I may add that his daily letter bag largely consists of representations, many of them from Members of this House of all parties, that benefit has been wrongly, or harshly, refused in individual cases. The whole question of unemployment insurance is occupying my right hon. Friend's close attention, both as regards current ad ministration and as regards the proposals which it will be necessary to bring before Parliament before the end of June next year, at which date, under existing legislation, payment of unemployment benefit comes to an end: but he cannot say at present whether it will be desirable to institute a formal inquiry.
    Sir C. KINLOCH-COOKE: Is the hon. Gentleman aware that the construction put upon the words "suitable employment," more especially by women, is resulting in an abuse of the unemploy ment benefit, and, if so—
    Mr. SPEAKER: That is in the nature of an argument.
    Sir C. KINLOCH-COOKE: Oh, no! [HON. MEMBERS: "You were reading it! "] I was not reading it. I was asking, Is the hon. Gentleman aware that the construction put upon the term "suitable employment" is an abuse of the unemployment benefit? Is he prepared to make inquiry into the matter?
    Mr. BETTERTON: My right hon. Friend is always ready to make inquiry into any matter relating to unemployment. He is aware that different constructions are placed on the term "suitable employment" by different people, but he is always prepared to consider any matter which is brought to his notice.
    Mr. BATEY: Can the hon. Gentleman say what is the percentage of the cases of infringement compared with a large number of people who are receiving benefit?
    Mr. BETTERTON: Perhaps the hon. Member will put that question on the Paper.

    BENGAL REGULATION III (1818).
    Mr. THU RTLEasked the Under-Secretary of State for India, whether it is the intention of the Government now to repeal Bengal Regulation III of 1818, in view of the fact that the Bengal Criminal Law Amendment Act, 1925, is now part of the criminal law of India?
    The UNDER-SECRETARY of STATE for INDIA(Earl Winterton): The reply is in the negative.
    Mr. THURTLE: Does the Noble Lord think that this Regulation now serves any useful purpose by being on the Statute Book, and if not will he have it removed?
    Earl WINTERTON:The fact that the Regulation is on the Statute Book does not necessarily mean that it is going to be. used either widely or at all. There are many similar enactments directed against sedition on the Statute Book of this country which are infrequently used.

    CHINA (INLAND MISSIONS).
    Mr. ERSKINEasked the Secretary of State for Foreign Affairs whether he is aware of the growing danger to the inland missions in certain districts of China,; and whether he will instruct His Majesty's Minister in Pekin to issue a warning?
    The SECRETARY of STATE for FOREIGN AFFAIRS(Mr. Austen Chamberlain): The answer to the first part of the question is in the affirmative.
    Warnings have been issued to the missionary bodies concerned from time to time both by His Majesty's Minister at Pekin and by the Foreign Office in London.

    PASSPORTS AND VISAS.
    Sir H. BRITTAINasked the Secretary of State for Foreign Affairs whether
    328
    His Majesty's Government has received a communication from the United States Government with regard to the abolition of visa fees on passports; and whether he can see his way to agree to the proposal put forward by the American Government?
    Mr. CHAMBERLAIN: A communication has been received from the United States Government and is under consideration.
    Sir H. BRITTAINasked the Secretary of State for Foreign Affairs whether, following the example of the Government of the United States, His Majesty's Government will put- forward proposals to the Governments of the various European States, which have not yet agreed to the elimination of the visa, with the suggestion that this formality should be done away with if possible, and failing this, that a visa should be given without cost to the traveller?
    Mr. CHAMBERLAIN: As the hon. Member has already been informed, the United States proposals are being considered. In the opinion of His Majesty's Government it would be inopportune to make representations to other Governments on the lines suggested.

    OSMAN DIGNA.
    Mr. JOHNSTONasked the Under-Secretary of State for Foreign Affairs whether Osman Digna, who after under going solitary confinement for 22 years was allowed to go on pilgrimage to Mecca in May of last year, has since his return again been placed under restraint; whether he can give the date when the order for the military guard over Osman Digna was rescinded by the Sirdar; and if he can see his way to allow this old prisoner of war to end his days free from military surveillance?
    Mr. CHAMBERLAIN: I -am unaware of the arrangements made by the Sudan Government to ensure the safety and comfort of Osman Digna since his return from Mecca last August, but I know that the surveillance previously imposed had only this object in view.
    M. JOHNSTON:Does the right hon. Gentleman not consider that it would redound to the honour and dignity of the

    329
    British Government if we allowed freedom to this old man, who is now over 100 years of age?
    Mr. CHAMBERLAIN: I do not think that the hon. Gentleman caught my answer. He gave me very brief notice of this question, and I have been unable, since it appeared on the Paper, to get any information. I said that I am not aware of what arrangements are made now to ensure the safety and comfort of Osman Digna, but I know that the surveillance previously imposed had always that object in view.

  ROYAL NAVY.

    GERMAN FLOATING DOCKS.
    Lieut.-Commander KENWORTHYasked the First Lord of the Admiralty whether it is proposed to sell any of the floating docks handed over by Germany under the Treaty of Versailles; if so, what is the reason for the disposal of this property; and why, if it is possible to sell these docks, is it necessary to build new docks at Singapore?
    Mr. AMMONasked the First Lord of the Admiralty whether the Government have decided to sell the floating dock of the German navy surrendered to this country; and why is the dock no longer to be utilised for Singapore?
    The FIRST LORD of the ADMIRALTY(Mr. Bridgeman): I would remind the hon. Members that four large floating docks were handed over to this country by Germany. One was sold. Two will be utilised at Malta and Singapore respectively. The fourth is surplus to present requirements, and it is therefore in the interest of economy to dispose of it.
    Major HORE-BELISHA: Could not the right hon. Gentleman find some use for one of these docks, or for the two of them, in an English dockyard, seeing that there is no dock large enough to take a battleship?
    Mr. BRIDGEMAN: I have considered that, and I am satisfied that the best course is to dispose of them now. I shall be very glad to talk to the hon. and gallant Gentleman if he wishes to ask any further questions.

    SOUTH AFRICAN EBTABLISHMENT.
    Captain BRASSasked the First Lord of the Admiralty whether he can state what is the annual cost to His Majesty's Government of the naval establishment in South Africa, and of the ships based upon that station?
    The PARLIAMENTARY SECRETARY to the ADMIRALTY(Mr. Davidson): The cost of the naval establishment is approximately £133,100 and of the ships £490,200, making a total of £623,300.

    HIS MAJESTY'S SHIP "BACCHTJS (MOTORBOAT COLLISION).
    Major HORE-BELISHAasked the First Lord of the Admiralty, with reference to the collision between the "Bacchus" arid a motor barge in the Medway in which six lives were lost, whether he can make a statement upon the circumstances of this disaster?
    Mr. DAVIDSON:The facts are that the motor boat of the Roy-al Fleet Auxiliary "Bacchus," proceeding up the Medway late on the night of Easter Monday, attempted to pass a barge under sail. She was 'hardly clear of the sailing barge when she was run into and sunk by a motor barge proceeding down stream, which the sails of the sailing barge had obscured from view. The Admiralty have not taken their decision as to responsibility for the accident; but the coroner's inquest on one of the victims recorded a decision of accidental collision, exonerating all parties from blame. I regret that six members of the crew of the "Bacchus" were unfortunately lost, notwithstanding the fact that the two other vessels concerned used every effort to recover the crew and passengers of the sunk vessel.
    Major HORE-BELISHAasked the First Lord of the Admiralty, with reference to the collision between His Majesty's ship "Bacchus" and a motor barge in the Medway in which six lives were lost, whether he can state how many of the men who were killed had dependants, to whom they were making allotments; if he can explain why these allotments were stopped within 48 hours of the disaster; and whether he will undertake that in future arrangements are made to pay pensions to similar dependants?
    Mr. DAVIDSON: Four out of the six men lost had dependants to whom they were allotting. These men were employed by the Admiralty on an ordinary mercantile basis, i.e., they were civilians, and it was consequently necessary, under the Regulations, to stop payment of the allotments from the date of the disaster. As the men were civilians, their depend ants are not entitled to pensions, but statutory provision is made under the Workmen's Compensation Act in such cases, and any claims will be dealt with under the Act accordingly.
    Major HORE-BELISHA: Would the hon. and gallant Gentleman undertake to look into the Regulations with a view to stopping this harsh practice of ceasing the allowance within 48 hours of the death of the breadwinner of a family?
    Mr. DAVIDSON: As I explained in my answer, these were civilians.
    Major H 0 RE-BELISHA: That does not matter. Will the hon. and gallant Gentleman look into the Regulations, as they are very hard?

    YOUTHFUL PRISONERS (NUMBERS).
    Mr. WARDLAW-MILNEasked the Home Secretary what numbers of prisoners at present in gaols in Great Britain are of ages from 16 to 20; and what percentage they form of the total number confined?
    Mr. LOCKER-LAMPSON: Excluding Borstal institutions, there are 463 prisoners aged from 16 to 20 in England and Wales, forming 6 percent, of the total number confined, namely, 7,596. There are also seven convicts out of a total of 1,586. As regards Scotland, I would refer my hon. Friend to the Secretary for Scotland.

    VAGRANCY ACT, 1824 (FLOGGING).
    Mr. RYEasked the Home Secretary if he will institute legislation to prevent flogging being imposed on persons convicted of offences committed against the Vagrancy Act, 1824?
    Mr. LOCKER-LAMPSON: No, Sir
    Mr. RYE: May I ask whether the attention of the hon. Gentleman has been drawn to a recent conviction at the Monmouthshire Quarter Sessions by the Justices who sentenced one Joseph Jenkins, who was convicted of being an incorrigible rogue, to three months' imprisonment with hard labour, coupled with six strokes of the birch? Does the hon. Gentleman, with knowledge of those facts, think that mercy was blended with justice?
    Mr. LOCKER-LAMPSON: I do not think that I can add anything to the answer which I have already given.

    AYR TRAMWAY (WAGES AGREEMENT).
    Mr. PALINasked the Minister of Labour whether he has received a report of the terms of settlement of the Ayr tramway strike, 28th February, 1925; whether he is aware that the conference at which the settlement was reached was convened by representatives of his Department; whether it has been reported to him that the Ayr Corporation now decline to carry out the arrangements entered into; in view of the association of his Department with the settlement of the dispute, what action he now proposes to take?
    Mr. BETTERTON: The facts are substantially as stated by the hon. Member. The union have represented to my Department that there has been a violation of the agreement arrived at, and we are in communication with the corporation. In these circumstances the hon. Member will realise that it is not desirable for me to say more at present.

  BOLSHEVIST PROPAGANDA.

    RUMOURS OF PLOTS.
    Captain FOXCROFTasked the Home Secretary whether in view of the continuous Bolshevist propaganda still employed against this country, and in view of recent assassinations in Sofia and murders in France, His Majesty's Government will consider the advisability of deporting such Russian Communists as are known plotters against the peace of this country?
    Mr. LOCKER-LAMPSON:My right hon. Friend the Home Secretary very much regrets that he has had to leave the House to keep an important appoint ment, and he has asked me to reply.
    Recent happenings abroad have not been overlooked, and the Home Secretary is in constant touch with my right hon. Friend the Secretary of State for Foreign Affairs. My hon. and gallant Friend may be assured that the situation is being carefully watched, and that all necessary steps are. being and will be taken to safeguard the interests of this country.
    Captain FOXCROFT:Does the hon. Gentleman understand that the country is very exercised in mind about this matter, and very keen for the deportation of these people?
    Mr. MACKINDER:May we ask the representative of the Home Office if it is not time some information was given to the House as to whether there is any real evidence to support these alarmist rumours of plots reported in the newspapers?
    Mr. LOCKER-LAMPSON:My right hon. Friend is specially anxious to answer any further questions himself, and he has asked me to say that any further questions on the subject should be put down on the Paper.

BUSINESS OF THE HOUSE.
Mr. RAMSAY MacDONALD:May I ask the Foreign Secretary what business it is proposed to take next week?
Mr. A. CHAMBERLAIN:On Monday we propose to take the Gold Standard Bill, Second Reading and the Committee stage of the necessary Money Resolution; the China Indemnity (Applica
tion) Bill, Report and Third Reading, and the Forestry Bill, Adjourned Debate on Second Reading.
Tuesday: Gold Standard Bill, Report stage of the Money Resolution and Committee of the Bill; Rent and Mortgage Interest (Restrictions Continuation) Bill, Report and Third Reading; Merchant Shipping (International Labour Conventions) Bill [Lords], Second Reading; Therapeutic Substances Bill [Lords], Second Reading.
Wednesday: Gold Standard Bill, remaining stages; Administration of Justice Bill, remaining stages; Criminal Justice Bill [Lords], Second Reading. and at 8.15 Private Members' Motions.
Thursday: Report stage of the Budget Resolutions.
Lieut.-Commander KENWORTHY:Can the right hon. Gentleman state when it is proposed to proceed with the Wireless Bill?
Mr. CHAMBERLAIN:I cannot make any statement at present.
Captain BENN:How much time is the right hon. Gentleman able to allow for the Report stage of the Budget. Resolutions?
Mr. CHAMBERLAIN: One day, Sir.
Captain BENN: For all the Resolutions?
Mr. CHAMBERLAIN: Yes, Sir.
Motion made, and Question put,
" That other Government Business have precedence this day of the Business of Supply, and that the Proceedings on the British Empire Exhibition (Guarantee) Bill be exempted from the provisions of the Standing Order (Sittings of the House)."—[Mr. A. Chamberlain.]
The House divided: Ayes, 283; Noes, 132.

Division No. 77.]

AYES.

[3.47 p.m.

Acland-Troyte, Lieut-Colonel

Balniel, Lord

Bowyer, Captain G. E. W.

Albery, Irving James

Barclay-Harvey, C. M.

Boyd-Carpenter, Major A.

Alexander, E. E. (Leyton)

Barnett, Major Richard W.

Brass, Captain W.

Allen, J. Sandeman (L'pool.W. Derby)

Barnston, Major Sir Harry

Bridgeman, Rt. Hon. William Clive

Applln, Colonel R. V. K.

Beamish, Captain T. P. H.

Briggs, J. Harold

Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

Beckett, Sir Gervase (Leeds, N.)

Briscoe, Richard George

Ashmead-Bartlett, E.

Betterton, Henry B.

Brittain, Sir Harry

Astbury, Lieut.-Commander F. W.

Bird, E. R. (Yorks, W. R., Skipton)

Brocklebank, C. E. R.

Astor, Maj. Hn. John J. (Kent.Dover)

Bird, Sir R. B. (Wolverhampton, W.)

Brooke, Brigadier-General C. R.

Atholl, Duchess of

Blades, Sir George Rowland

Broun-Lindsay, Major H.

Atkinson, C.

Blundell, F. N.

Brown, Maj. D. C. (N'th'I'd, Hexham)

Balfour, George (Hampstead)

Boothby, R. J. G.

Brown, Brlg.-Gen.H.C.(Berks,Newb'y)

Buckingham Sir H.

Harvey,G.(Lambeth,Kennington)

Perkins, Colonel E. K.

Bullock, Captain M.

Harvey, Major S. E. (Devon, Totnes)

Peto,Basil E. (Devon,Barnstaple)

Burgoyne, Lieut.-Colonel Sir Alan

Haslam Henry C.

Peto, G.(Somerset,Frome)

Burton, Colonel H.W.

Headlam, Lieut.-Colonel C. M.

Philipson, Mabel

Butler, Sir Geoffrey

Henderson, Capt. R.R. (Oxf'd, Henley)

Plelou, D. P.

Cadogan, Major Hon. Edward

Henderson, Lieut.-Col. V. L. (Bootle)

Pliditch, Sir Philip

Campbell, E. T.

Heneage, Lieut.-Colonel Arthur P.

Pownall, Lieut.-Colonel Assheton

Cayzer, Sir C. (Chester, City)

Henn, Sir Sydney H.

Preston, William

Cazalet, Captain Victor A.

Hennessy, Major J. R. G.

Price, Major C. W.M.

Chadwick, Sir Robert Burton

Henniker-Hughan, Vice-Adm. Sir A.

Radford, E. A.

Chamberlain, Rt. Hn. J.A. (Birm.,W.)

Herbert, S. (York, N.R.,Scar. & Wh'by)

Ralne, W.

Chamberlain, Rt. Hon. N. (Ladywood)

Hilton, Cecil

Ramsden, E.

Chapman, Sir S.

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

Rawson, Alfred Cooper

Charteris, Brigadier-General J.

Holbrook, Sir Arthur Richard

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

Christie, J.A.

Holland, Sir Arthur

Remnant, Sir James

Churchill, Rt. Hon. Winston Spencer

Homan, C. W. J.

Rhys, Hon. C. A. U.

Churchman, Sir Arthur C.

Howard, Capt. Hon. D. (Cumb., N.)

Rice, Sir Frederick

Clarry, Reginald George

Hudson, Capt. A.U. M. (Hackney, N.)

Richardson, Sir P. W. (Sur'y. Ch'ts'y)

Clayton, G. C.

Hudson, R.S. (Cumberl'and, Whiteh'n)

Roberts, E. H. G. (Flint)

Cobb, Sir Cyril

Huntingfield, Lord

Roberts, Samuel (Hereford, Hereford)

Cochrane, Commander Hon. A.D.

Hurd, Percy A.

Robinson, Sir T. (Lancs., Stretford)

Cockerill, Brigadier-General G. K.

Hutchison, G.A.Clark (Midl'n & P'bl's)

Ropner, Major L.

Cohen, Major J. Brunei

Inskip, Sir Thomas Walker H.

Russell, Alexander West (Tynemouth)

Cooper, A. Duff

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

Rye, F. G.

Cope, Major William

Jackson, Sir H. (Wandsworth, Cen't)

Salmon, Major I.

Couper, J. B.

Jacob, A. E.

Samuel, A. M. (Surrey, Farnham)

Craig, Capt. Rt. Hon. C. C. (Antrim)

James, Lieut.-Colonel Hon. Cuthbert

Sandeman, A. Stewart

Craig, Ernest(Chester, Crewe)

Jephcott, A. R.

Sanders, Sir Robert A.

Cralk, Rt. Hon. Sir Henry

Kennedy, A. R. (Preston).

Sanderson, Sir Frank

Croft, Brigadier-General Sir H.

Kidd, J. (Linlithgow)

Sassoon, Sir Philip Albert Gustave D.

Crooke, J. Smedley (Deritend)

King, Captain Henry Douglas

Savery, S. S.

Crooksbank, Col. C. de W. (Berwick)

Kinloch-Cooke, Sir Clement

Scott, Sir Leslie (Liverp'l, Exchange)

Crookshank, Cpt.H.(Llndsey, Galnsbro)

Knox, Sir Alfred

Sheffield, Sir Berkeley

Curzon. Captain Viscount

Lamb. J. Q.

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

Dalkeith, Earl of

Lane-Fox, Colonel George R.

Skelton, A. N.

Davidson, J.(Hertf'd, Hemel Hempst'd)

Leigh, Sir John (Clapham)

Slaney, Major P.Kenyon

Davles, A. V. (Lancaster, Royton)

Locker-Lampson, G. (Wood Green)

Smlth-Carington, Neville W.

Davies, Maj. Geo.F.(Somerset,Yeovil)

Locker-Lampson, Com. O.(Handsw'th)

Smithers, Waldron

Davies, Sir Thomas(Clrencester)

Loder, J. de V.

Somerville. A. A.(Windsor)

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

Looker, Herbert William

Spender Clay, Colonel H.

Dean, Arthur Wellesley

Lougher, L.

Sprot, Sir Alexander

Doyle, Sir N. Grattan

Lucas-Tooth, Sir Hugh Vere

Stanley, Col. Hon.G.F. (Wlll'sden, E.)

Drewe, C.

Luce, Major-Gen. Sir Richard Harman

Stanley, Hon. O. F. G. (Westm'eland)

Eden, Captain Anthony

Lumley, L. R.

Steel, Major Samuel Strang

Edmondson, Major A. J

Lynn, Sir R. J.

Stott, Lieut.-Colonel W.H.

Edwards, John H.(Accrington)

MacAndrew, Charles Glen

Strickland, Sir Gerald

Elliot, Captain Walter E.

Macdonald, Capt. P. D. (I. of W.)

Styles, Captain H. Walter

Ellis, R. G.

Macdonald, R. (Glasgow, Cathcart)

Sueter, Rear-Admiral Murray Fraser

Elveden, Viscount

McDonnell, Colonel Hon. Angus

Tasker, Major R. Inigo

England, Colonel A.

Maclntyre, Ian

Thompson, Luke(Sunderland)

Erskine, Lord (Somerset, Weston-s.-M.)

McLean, Major A.

Thomson, F. C.(Aberdeen, S.)

Ersklne, James Malcolm Montelth

Macmillan, Captain H.

Thomson, Sir W. Mitchell-(Croydor), S.)

Everard, W. Lindsay

McNeill, Rt. Hon. Ronald John

Tinne, J. A.

Fairfax, Captain J.G.

Macquisten, F. A.

Titchfield, Major the Marquess of

Falle, Sir Bertram G.

MacRobert, Alexander M.

Tryon, Rt. Hon. George Clement

Falls. Sir Charles F.

Makins, Brigadier-General E.

Vaughan-Morgan, Col. K. P.

Fanshawe. Commander G.D.

Malone, Major P. B.

Waddington, R.

Formey, Lord

Manningham-Buller. sir Mervyn

Ward,Lt.-Col. A.L.(Kingston-on-Hull)

Fleming, D.P.

Margesson, Capt. D.

Warrender, Sir Victor

Forestler-Walker, L.

Marriott, Sir J. A. R.

Waterhouse, Captain Charles

Forrest, W.

Meller, R. J.

Watson, Rt. Hon. W. (Carlisle)

Foxcroft, Captain C. T.

Meyer, Sir Frank

Watts. Dr. T.

Fraser, Captain Ian

Milne, J. S. Wardlaw-

Wells, S. R.

Fremantle, Lieut.-Colonel Francis E.

Mitchell, S. (Lanark, Lanark)

Wheler, Major Granville C. H.

Ganzonl, Sir John

Mitchell, W. Foot (Saffron Walden)

Williams, Com. C. (Devon, Torquay)

Gates, Percy

Mitchell, Sir W. Lane (Streatham)

Williams, C. P. (Denbigh, Wrexham)

Gault, Lieut.-Col. Andrew Hamilton

Moore, Sir Newton J.

Williams, Herbert G. (Reading)

Gee, Captain R.

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

Wilson, Sir Charles H. (Leeds,Central)

Cllmour, Lt.-Col. Rt. Hon. Sir John

Moreing, Captain A. H.

Windsor-Clive. Lieut.-Colonel George

Glyn, Major R. G. C.

Morrison, H. (Wilts, Salisbury)

Winterton, Rt. Hon. Earl

Goff, Sir Park

Morrison-Bell, Sir Arthur Cilve

Wise, Sir Fredrlc

Greene, W. P. Crawford

Nall, Lieut.-Colonel Sir Joseph

Womersley, W. J.

Greenwood. Rt.Hn.Sir H.(W'th's'w, E.)

Nelson, Sir Frank

Wood, B. C.(Somerset, Brldgwater)

Gretton, Colonel John

Neville, R. J.

Wood, Rt.Hon.E.(York,W.R.,Ripon)

Grotrian, H. Brent

Newman, Sir R. H. S. D. L. (Exeter)

Wood, E. (Chest'r, Stalyb'ge & Hyde)

Guest, Capt. Rt.Hon.F.E. (Bristol, N.)

Nicholson, William G. (Petersfield)

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

Guinness, Rt.Hon. Walter E.

Nield, Rt. Hon. Sir Herbert

Woodcock, Colonel H. C.

Gunston, Captain D. W.

Nuttall, Ellis

Worthington-Evans, Rt.Hon. Sir L.

Hacking, Captain Douglas H.

Oakley, T.

Yerburgh, Major Robert D. T.

Hall, Capt. W. D'A. (Brecon & Rad.)

O'Connor, T. J. (Bedford, Luton)

Hammersley, S. S.

Oman, Sir Charles William C.

TELLERS FOR THE AYES.

Hannon, Patrick Joseph Henry

Ormsby-Gore, Hon. William

Commander Eyres Monsell and

Harland, A.

Penny, Frederick George

Colonel Gibbs.

Harrison,G. J.C.

Percy, Lord Eustace (Hastlngs)

336

337

NOES.

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

Hall, G.H. (Merthyr Tydvil)

Ritson, J.

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

Hardle, George D.

Roberts, Rt. Hon. F.O. (W. Bromwich)

Ammon Charles George

Harris, Percy A.

Robinson. W. C. (Yorks, W. R., Elland)

Attlee, Clement Richard

Hartshorn, Rt. Hon. Vernon

Runciman, Rt. Hon. Waiter

Baker, J. (Wolverhampton, Bilston)

Hayes, John Henry

Scurr, John

Barker, G. (Monmouth, Abertillery)

Henderson, Right Hon. A. (Burnley)

Sexton, James

Barnes, A

Henderson, T. (Glasgow)

Shaw, Rt. Hon. Thomas (Preston)

Batey Joseph

Hirst, W. (Bradford, South)

Shlels, Dr. Drummond

Beckett, John (Gateshead)

Hore-Bellsha, Leslie

Short, Alfred (Wednesday)

Benn, Captain Wedgwood (Leith)

Hutchison, Sir Robert (Montrose)

Simon, Rt. Hon. Sir John

Bowerman, Rt. Hon. Charles W.

Jenkins, W. (Glamorgan, Neath)

Sinclair, Major Sir A. (Caithness)

Briant, Frank

John William (Rhondda, West)

Smith, Rennle (Penistone)

Broad, F. A.

Johnston, Thomas (Dundee)

Snell, Harry

Bromfield, William

Jones, Morgan (Caerphilly)

Snowden, Rt. Hon. Philip

Bromley, J.

Jones, T. I. Mardy (Pontyprldd)

Spencer, George A. (Broxtowe)

Brown, James (Ayr and Bute)

Kelly, W. T.

Spoor, Rt. Hon. Benjamin Charles

Buchanan, G.

Kennedy, T.

Stephen, Campbell

Cape, Thomas

Kenworthy, Lt.-Com. Hon. Joseph M.

Sutton, J. E.

Charleton, H. C.

Kenyon, Barnet

Taylor,R. A.

Clowes, S.

Kirkwood, D.

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

Clynes, Rt. Hon. John R.

Lawson, John James.

Thomson, Trevelyan (Mlddlesbro. W.)

Compton, Joseph

Lee, F.

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

Connolly, M.

Lowth, T.

Thurtle, E.

Cove, W. G.

Lunn, William

Tinker, John Joseph

Cowan, D. M. (Scottish Universities)

Mac Donald, Rt. Hon. J. R. (Aberavon)

Trevelyan, Rt. Hon. C. P.

Crawfurd, H. E.

Mackinder. W.

Varley, Frank B.

Dalton, Hugh

MacLaren, Andrew

Vlant, S. P.

Davies, Rhys John (Westhoughton)

Maclean, Nell (Glasgow, Govan)

Wallhead, Richard C.

Day, Colonel Harry

Macpherson, Rt. Hon. James I.

Walsh, Rt. Hon. Stephen

Dennison, R.

March, S.

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

Dunnico, H.

Maxton, James

Webb, Rt. Hon. Sidney

Evans, Capt. Ernest (Welsh Unlver.)

Mitchell, E. Rosslyn (Paisley)

Wedgwood, Rt. Hon. Joslah

Fenby, T. D.

Montague, Frederick

Weir, L. M.

Garro-Jones, Captain G.M.

Morrison, R.C. (Tottenham, North)

Welsh, J. C.

Glbblns, Joseph

Murnln, H,

Westwood, J.

Gillett, George M.

Naylor, T.E.

Whiteley, W.

Gosling, Harry

Oliver, George Harold

Wignall, James

Greenall, T.

Owen, Major G.

Williams, David (Swansea, E.)

Greenwood, A. (Nelson and Colne)

Palln, John Henry

Williams, T. (York, Don Valley)

Grenfell, D. R. (Glamorgan)

Paling, W.

Wilson, R. J. (Jarrow)

Griffiths, T. (Monmouth, Pontypool)

Pethick-Lawrence, F.W.

Windsor, Walter

Groves, T.

Ponsonby, Arthur

Young, Robert (Lancaster, Newton)

Grundy, T. W.

Potts, John S.

Guest, J. (York, Hemsworth)

Richardson, R. (Houghton-le-Spring)

TELLERS FOR THE NOES.—

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

Rlley, Ben

Mr. Warne and Mr. Charles

Edwards.

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

MEMBERS' SPEECHES.
Captain GEE:I rise, Mr. Speaker, to ask your advice and your ruling on a point of Order of which I have given you private notice. I wish to ask whether it is in accordance with the rules of Debate of this House that Members should bring forward in Debate and make reference to matters which are awaiting adjudication by a. -Court of Law. The specific case which I have in mind is a speech made. recently by the hon. Member for Balham (Sir A. Butt) in the course of the Debate on the Second Beading of the British Empire Exhibition (Guarantee) Bill. In the course of that. speech the hon. Member dealt at some length with matters which were then and still are awaiting trial in the High Court. I wish very respectfully to ask you, Sir, whether, had you, like the hon. Member, been aware that these matters were awaiting trial, you would have allowed the hon. Member to have made that speech?
Mr. SPEAKER: There is no Standing Order of the House dealing with this matter, but hon. Members who study Erskine May will find there a very good maxim, which seems to me to reproduce accurately the practice of the House in this regard, to the effect that matters which are awaiting adjudication in a Court of Law should not be raised in Debate on the Floor of the House. Had I been aware at the time that the matters referred to were awaiting trial, I should certainly have drawn the attention of the hon. Member for Balham to that fact, and asked him not to raise the matters until a decision had been given by the Court of Law.

ADMINISTRATION OF JUSTICE BILL [Lords].
Reported, with Amendments, from Standing Committee A.
Report to lie upon the Table, and to be printed.
Minutes of the Proceedings of the Standing Committee to be printed.
Bill, as amended (in the Standing Committee), to be taken into consideration upon Monday next, and to be printed. [Bill 165.]

MESSAGE FROM THE LORDS.
That they have passed a Bill, intituled," An Act to empower the Mayor, Aldermen, and Burgesses of the borough of Ipswich to provide and work trolley vehicles; to make further provision with regard to the health, local government, and improvement of the borough; and for other purposes." [Ipswich Corporation Bill [Lords.]
Also, a Bill, intituled," An Act to provide for the transfer of the under taking of the Hoylake and West Kirby Gas and Water Company to the urban district council of Hoylake and West Kirby; to authorise the council to supply gas and water in and in the neighbour hood of their district; and for other purposes." [Hoylake and West Kirby Urban District Council Bill [Lords.]
Also, a Bill, intituled, "An Act to empower the Corporation of Scarborough to construct street improvements and to provide and work lifts on the cliffs of the borough; to make further provision with regard to public gardens, pleasure grounds, and other lands in the borough and the neighbourhood thereof; to make further and better provision for the improvement, health, and good government of the borough; to provide for the consolidation of the rates of the borough; and for other purposes." [Scarborough Corporation Bill [Lords.]
Also, a Bill, intituled, "An Act to empower the Lord Mayor, Aldermen, and Citizens of the city and county of Kingston-upon-Hull to construct a street improvement; to enlarge the borrowing powers for the purposes of their water undertaking; to make further provision for the prevention of floods; and for other purposes." [Kingston-upon-Hull Corporation Bill [Lords.]
And also, a Bill, intituled, "An Act to empower the London, Midland, and Scottish Railway Company to construct
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railways and works, and to acquire lands; and for other purposes." [London, Midland, and Scottish Railway Bill [Lords.]
Moneylenders Bill [Lords],
That they have appointed a Committee consisting of three Lords to join with a Committee of the Commons to consider the Moneylenders Bill [Lords], and request the Commons to appoint an equal number of their Members to he joined with the said Lords.
Ipswich Coroporation Bill [Lords],
Hoylake and West Kirby Urban District Council Bill [Lords],
Scarborough Corporation Bill [Lords],
Kingston-upon-Hull Corporation Bill [Lords],
London, Midland, and Scottish Railway Bill [Lords],
Read the First time; and referred to the Examiners of Petitions for Private Bills.

CHAIRMEN'S PANEL.
Mr. WILLIAM NICHOLSON reported from the Chairmen's Panel; That they had appointed Sir Robert Sanders to act as Chairman of Standing Committee B (in respect of the Roads Improvement Bill), and Mr. Short (in respect of the Mer chant Shipping (Equivalent Provisions) Bill [Lords]); and Major Barnett to act as Chairman of the Standing Committee on Scottish Bills (in respect of the Public Health (Scotland) Amendment Bill).
Report to lie upon the Table.

SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE B.
  Mr. WILLIAM NICHOLSON reported from the Committee of Selection; That they had added the following Fifteen Members to Standing Committee B (in respect of the Roads Improvement Bill): Colonel Ashley, Mr. Batey, Sir Henry Cautley, Major Crawfurd, Mr. Gosling, Mr. Groves, Sir Harry Hope, Mr. Lamb, Lieut. - Colonel Moore - Brabazon, Mr. Hugh Morrison, Mr. Robert Morrison, Sir Douglas Newton, Mr. Alexander Reid, Major Ropner and Mr. Robert Smith.
  Mr. WILLIAM NICHOLSON further reported from the Committee; That they

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  had added the following Ten Members to Standing Committee B (in respect of the Merchant Shipping (Equivalent Provisions) Bill [Lords]: Mr. A. V. Alexander, Mr. Sandeman Allen, Sir Henry Cayzer, Sir Philip Cunliffe-Lister, Lieut.-Commander Kenworthy, Lieut.-Colonel McDonnell, Captain Macmillan, Sir Malcolm Macnaghten, Mr. Sexton and Colonel Woodcock.

  STANDING COMMITTEE C.
  Mr. WILLIAM NICHOLSON further reported from the Committee; That they had added the following Ten Members to Standing Committee C (in respect of the Allotments Bill): Lord Balniel, Captain Bourne, Brigadier-General Clifton Brown, Sir Henry Cautley, Mr. Fenby, Mr. Lamb, Sir Douglas Newton, Mr. Sutton, Colonel Wedgwood and Mr. Edward Wood.
  Reports to lie upon the Table.

ORDERS OF THE DAY.

  WAYS AND MEANS.
  Considered in Committee. —[Progress, 29th April.]
  [Mr. JAMES HOPE in the Chair.]

  AMENDMENT OF LAW.
  Question again 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."
  4.0 P.M.
  Mr. PETHICK-LAWRENCE: As one of the earliest pioneers of widows' pensions, I congratulate the Chancellor of the Exchequer that it has fallen to his lot to announce this reform in this House, but I cannot congratulate him upon the method which he has chosen to implement this proposal. Hon. Members opposite seem particularly enamoured of the contributory method of pensions of all kinds, and the Government have gone so far as to announce that, so far as old age pensions are concerned, the non contributory method will be brought gradually to an end. I cannot see the justification for this attitude. So long as hon. Members desire the advantage of industry, it seems to me that they are taking a wrong course in seeking to put the burden of these schemes upon industry rather than upon wealth. The Chancellor of the Exchequer said yesterday that he was going to give at least an equivalent relief to industry, and at the close of his speech he contended that he had done SD by reducing the Income Tax, but I suggest that that is not equivalent relief to industry in the smallest degree. Let me give two illustrations. Let me take, in the first place, the instance of the mines. As most Members of this House are aware, there has been in the case of the mines an agreement as to the sharing of the profits between the owners and the workers. Will his contribution of 4d. per man be taken after this division between profits and wages, or will it be taken as part of the costs of the industry before this division takes place? I do not think that there is the
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  least doubt that it will be put upon the costs of the industry and that the division will take place afterwards. There fore, the Income Tax relief will go to the owners, where as the contribution for insurance will fall upon the costs of the industry.
  Let me take the case of the railways, and here I think the position is still more marked. Let me take the case of a large railway company like the London, Midland and Scottish. They employ, I believe, something in the neighbourhood of 300,000 men. Roughly speaking, the cost which will fall upon that company owing to the employers' contribution towards this new scheme will be 2250,000 a year, and that will, in the first place, be a burden upon the costs. Now let us see where the Income Tax relief goes. The capital of that company is, roughly, divided in these proportions: £100,000,000 ordinary shares, and £300,000,000 debentures, preference shares, and guaranteed stock bearing a fixed rate of interest. The burden which this scheme places upon the industry will not fall upon the fixed interest bearing stocks, because they will be entitled to their rate of interest and to the advantage that they get out of the reduction of the rate of Income Tax quite independently of this burden. The Chancellor of the Exchequer asks us to believe that two years hence, when the chairman of the company comes to make his statement to the ordinary shareholders, he will be able to argue in this way. "Because two years ago there was taken off Income Tax amounting on your capital to about one-tenth percent. and because it was taken off also on that going to the preference shareholders and the others, therefore you must consent to pay the whole cost of this scheme." I venture to suggest that the ordinary shareholders will not look at that proposal at all. They will say either that the reduction must come out of wages or that it must be made up by additional charges to the public. Therefore, I say that in both those instances it is demonstrable that this contributory scheme will place a burden upon industry which will either be reflected in reduced wages or in increased cost to the consumer. Consequently, those who are really desirous of benefiting industry always prefer a non-contributory to a contributory scheme.

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  There are other grave disadvantages as well. There is the case of the poorest paid workers, who have great difficulty in finding even the small amounts, as they seem to members of this House, that are imposed as their share of the contribution; and there is the case of those men and women who are outside the Health Insurance scheme. I shall be very interested, as no doubt will other members of this House when the Bill is printed, to discover what provision is made for those humble persons who happen to be outside this scheme, and to see what is done for those wives whose husbands, though still alive, are incapacitated from work and who therefore are every bit as much entitled to this pension as the widows of men who have actually died.
  I now turn to the protectionist proposals of the Chancellor of the Exchequer. To do the right hon. Gentleman justice, he neither attempted to defend the principle of these taxes nor his own consistency in the matter. In, fact, he is one of those who rather believe in the principle of rising
  " On stepping stones Of their dead selves to higher things."
  And for that reason his own past weighs very little with him except as a means to the future. I may venture to remind him of what he wrote during an election in my constituency some 18 months ago, when I had the honour of opposing him. He then said:
  " The Liberal party is now united in lefence of Free Trade. It is upon this great party that I rely to defend at this juncture the interests of the State and of the mass of the people against the quackeries of extremists at either end of the political system."
  I am doubtful whether the Liberal party were any more united in those days than it is to-day, but of course the right hon. Gentleman was then still being taken to the bosom of his adopted family. He has passed away from all that to-day, and offers no defence for the new attitude which he now adopts. We shall have other opportunities of going in greater detail into these protectionist proposals, and therefore I do not propose to deal with them further now.
  I should like to say one word with regard to the duties which he proposes
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  to put on silk. It may be that the right hon. Gentleman is quite right in thinking that real silk is a luxury, but he is entirely mistaken in supposing that artificial silk is a luxury. No doubt in the lofty circles in which he mixes the women of his acquaintance do regard silk as a luxury, but, if he had allowed himself to question women of humbler means, he would have discovered that articles made of artificial, silk are quite as cheap as articles made of cotton and of wool, and that, so far from. that part of the tax being a tax upon luxuries, it is a tax upon the clothing of quite ordinary people paying ordinary prices. Even if he did desire to put a tax upon those things, it was entirely-unjustifiable to put it on at a flat rate, and he certainly ought to have taxed artificial silk at a lower rate and possibly have had an ad valorem duty to deal properly with the situation.
  I am glad to pass from that point of disagreement to one on which I can express hearty approval, at any rate in principle. He said that it was his desire to transfer taxation from income to capital. I think he will not very seriously disagree if I put it in a slightly different way and say the transfer of taxation from exertion to passive wealth. So far as he has done that in the matter of increasing the allowance for earned income, we on this side of the House will thoroughly support his proposal. But when it comes to taking it off Super-tax and putting it on to Death Duties the principle becomes rather different. I would much more willingly have supported him if it had been definitely a tax upon capital rather than a tax in the shape of Death Duties. I was rather surprised to see that in this respect I had an unexpected ally in the editor of the "Morning Post," who yesterday expressed a similar sentiment in the columns of his paper.
  That brings me to the final point that I desire to put before the Committee, namely, the question of the relief from taxation. I venture to suggest that the Committee must realise that, whatever may be the ultimate contributions of the State towards this pension scheme—and until we get the Bill we cannot tell exactly what they may be—in this current year 1925-26, there is no contribution demanded from the State to float this scheme at all, and the whole relief from taxation does therefore go to the Income

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  Tax and Super-tax payers. There are many men of very considerable means in this House, but I do not propose to take the case of some of the wealthiest of them. I suggest that we might reasonably take the case of some man of what to-day is regarded as moderate wealth, the case of a man in receipt, say, of £5,000 a year who has already retired from business. Those men are not confined to one party; they are to be found in all parties. What is the case of such a man? He is not contributing to the active industry of this country. Everything that he gets, every thing that he gains from this Budget is therefore withdrawn from what goes to the rest of the community. Such a man gains by the remission of Income Tax about £110 a year, and by the remission of Super-tax he gains about £140 a year. If he has no children, he can disregard any increase in the Death Duties. He therefore gains definitely in Income Tax and Super-tax £250 a year.
  That is not all. I was pointing out last night that the result of the restoration of the gold standard must or probably will be a deflation amounting to over 5 per cent. A man with a fixed income already gains very considerably from the deflation which has taken place since 1920, and, if there be a further deflation and a further fall in prices amounting to 5 per cent—and I venture to think that that will be the result of the restoration of the gold standard—it means that a man with an income of £5,000 a year will gain, in effect, £250 a year. Therefore, such a man will be making anything from £250 to £500 a year as the result of this Budget. I am not one of those who want to set class against class or who preach a class warfare, but I do suggest that anyone in that position must feel a little ashamed if he is going to gain at least £250 a year and possibly the equivalent of £500 a year at the cost of other people in this country and to the injury of the prospects of the country in other ways at a time when the country is in such distress and the condition of the people is as bad as it is. I do not propose to take up any further time of the Committee, but I do put that as my last point, not as an attack but as a suggestion, that there will be men in this House who will feel a little ashamed if they are able to take advantage of that result of the Budget.
  Mr. RLYNCIMAN:The hon. Gentleman who has just sat down has expressed views on the gold standard, or hinted at them, which are not in strict conformity with those held by the late Chancellor of the Exchequer, who is, I understand, a root-and-branch gold man. If there be any division in the Labour party on that subject, may I say it is paralleled by a similar division of view in each of the other parties? I do not agree, for instance, with my right. hon. Friend the Member for Carmarthen (Sir A. Mond) in his criticism of the efforts which are being made to return to the gold standard, and on Monday, I have no doubt, it will be made clear that, not only on this side of the House but on the other side, the division of view on this subject will not proceed on party lines, but will follow the peculiar economic beliefs and doctrines, and the teachings and experience of individual Members.
  So far as I am concerned. I think the steps that have been taken by the Chancellor of the Exchequer for an early return to the gold standard appear to be both cautious and well safeguarded. I trust that they will prove effective, and that by the beginning of next year we shall find ourselves, if not entirely in the position which we occupied before the War, at all events so strongly established that London will he unchallenged, and unchallengeable, as the financial centre of the world. I believe that can be done without throwing undue burdens upon the poorer classes or undue burdens in the way of the trading community. If I thought it would do one or the other, I should not regard the return to the gold standard as a necessary or desirable step.
  Another feature of the right hon. Gentleman's Budget which I wish to commend is his adhesion to the debt redemption principles of his Prime Minister. The Prime Minister two years ago—and I think he repeated it last year —stated quite clearly that he regarded a large and steady redemption of debt as the only sure foundation on which to build British credit. Whatever adhesion may be given to those views in the future, will be the measure of the success which the right hon. Gentleman and his successors will have in the conversion of our debt on an economical basis. The Consolidated Fund charges will certainly show the results of that financial virtue.

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  The third feature of the right hon. Gentleman's Budget of which I wish to express approval, is what he has done with regard to small incomes. To that extent., I think he deserves full praise from every quarter of the House. Small incomes are to be relieved at a total cost to the Exchequer of some millions, and that is all to the good. But, having mentioned those three features of the Budget, I hope the right hon. Gentleman will not think me unduly partisan if I say I find it easy to criticise nearly every other aspect of it. It undoubtedly is a Budget which favours, to a large extent, if not the whole of the rich classes of this country, at all events, the rentiers. It is a rentiers' Budget. I do not like importing a. French word into an English discussion, but it is perfectly clear what is meant by that. This is a Budget which will grant relief to those who are dependent upon interest for their income, who draw incomes without necessarily doing anything to deserve them, except the possession of property. For the general trading community, for those actually engaged in industry, the Budget gives no relief in any one direction, and, in my opinion, a great opportunity has been lost of giving relief to the very industries which, at the present moment, are most depressed.
  It is in these circumstances that I wish this afternoon, not to deal with the Budget in detail but to apply to it throughout what I may call a trade test. 1 make no apology for doing it, because every class in the community is dependent, sooner or later, on the success or failure of British industry and commerce, and if British industry and commerce be injured, on if even the burdens left upon British industry and commerce are not reduced, it will not only be the manufacturing class and the investing class, but the working class also who are bound to suffer. Therefore this is a national, and not a class test. What effect is the Budget going to have on industry and commerce? So far as industry and commerce as a whole are concerned, I have no hesitation in saying it will give us no relief. Not even the reduction in the standard rate of the Income Tax by 6d. is gong to give us relief, for the total amount which will be taken out of industry and commerce under the heading of Income Tax will remain pretty much
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  the same as it was before. The burden will not be reduced in any respect. £800,000,000 will have to be found by this country for the right hon. Gentleman's Revenue. £800,000,000 was found last year. All that the right hon. Gentleman has done has been to re-arrange the burdens. He has shuffled them about, but the load to be carried is identically the same. It is £800,000,000 at the end of his Budget, as it was £800,000,000 at the beginning of his Budget. How he can say that will give any relief to industry and commerce passes my belief. In what other way, then, has he given relief to industry and commerce? I am sure he will be the last to say that the Imperial Preference which he is now commending to the House will give relief to industry and commerce. There has been no suggestion from any quarter of the House that we are to receive assistance there.
  I notice that yesterday the right hon. Gentleman the Member for Hillhead (Sir R. Home) once more acclaimed the McKenna Duties as a method by which the motor industry and the like were to receive a fillip. He was the first Chancellor of the Exchequer who ever appeared at that Box for 60 years advocating a duty on purely Protective lines, and I have no doubt he is quite consistent, and still thinks the McKenna Duties will do something for trade. Let us see. During the period when the McKenna Duties were off there was the largest expansion in the manufacture of motors this country has ever known. The number of men engaged in the industry went up by thousands. It is one of the very few industries where the number of employed actually went up in the course of the last 12 months. There is another aspect of the motor trade. We not only make motors: we use them. The user of the motor-car is just as much entitled to consideration as the gentlemen who make the motor-cars. Not only have we those who use the motor-care, but we have those who live by the repairing of them, the garage men, the chauffeurs of various grades, not only the aristocratic and the luxurious chauffeurs, but the men who drive the wagons and the Ford cars which are used for distribution purposes. There, I venture to say, you have a far larger volume of employment than you have actually in the manufacturing trade

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  itself, and whatever burden you may place on the purchaser of the motor-car will undoubtedly tend to diminish the extension of that source of employment more than you aid employment in the manufacturing trade. Moreover, the motor vehicles provide not only an absolutely necessary part of the equipment of a great many trades, which will find that the expense of their raw material of motors will be affected by a return to the McKenna Duties, but it also provides the right hon. Gentleman with a very large source of revenue. Let him beware lest he injures the Motor Vehicle Duties at the same time that he puts on these McKenna Duties. He is expecting to get £17,500,000 in the coming year from the Motor Vehicle Duties, a far more productive means of revenue than are ever likely to be provided by the McKenna Duties.
  A wise and far-reaching Chancellor of the Exchequer would have taken the trouble to look at every item of his balance sheet at the same time that he was considering the political advantage of restoring the McKenna Duties. The restoration of the McKenna Duties is not a Revenue change at all, but a purely political change. That being so, we are entitled to ask whether the Government can enter on this change with clean hands. I know how easy it is for Members of this House to say, whenever a Free Trader discusses this subject., that he is guilty of pedantry. Pedantry does not lie in one quarter only. What I am dealing with is not a pedantic point, but one of honour in the Government. They gave an undertaking at the last General Election that they would not embark upon Protection. Their Lancashire supporters in particular hold that view very strongly, and it was because of the declarations on Protection that a large number of people in Lancashire, who usually vote Liberal, and I dare say there might be, for all I know, a certain number who usually vote Labour, who voted for Conservative candidates because of assurances given in Lancashire that there was to be no return to Protection. I am not stating this purely on my own authority. We have the assurance of Lord Derby on this subject. He is a Lancashire man, devoted to the interests of Lancashire, and he protects their
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  political interests. This is what he made quite clear at the last General Election. He said:
  " Protection is no part of this party's policy at this Election. if returned to power, the Conservatives will keep their promise not to introduce Protection as well and as faithfully as Mr. Bonar Law kept the promise he gave in 1922."
  The right hon. Gentleman, however, does not hold the same view. He regards it as a very good joke that he should, in the course of his Budget speech, say he has returned to naked and unabashed Protection, although in a very small form, with regard to hops. That is not the undertaking given by Lord Derby in Lancashire, but the right hon. Gentleman rejoices in this return to Protection. How far is the Government itself free in this matter? Mr. Bonar Law took a prominent part in the imposition of these duties. They were put on during the War, as everybody knows, largely with the object of preventing the use of tonnage space from America, at a time when we were sadly short of shipping, and of pre venting, also, the payment of money to America when our exchanges were adverse. Mr. Bonar Law regarded the whole thing as temporary. He looked forward to the duties being imposed only for a matter of months. In September, 1915, he said:
  " The only ground on which, I think, I can see any question of opposition to these duties from the point of view of the fiscal controversy, is the idea that they will lead to something else."
  He was quite right in his foresight: they are leading to something else. He went on:
  " Duties of this kind would never be continued under any circumstances when the War was over—I mean duties on this scale."
  I have heard Mr. Bonar Law again and again say that no sensible Protectionist would believe that duties of 33i per cent. would ever be imposed on this country. He continued:
  " These are sumptuary taxes, and you may perhaps object to them on the ground that it is not worth while making a change for all that you get out of them either in the way of exchange or revenue."
  As regards Excise, he said:
  " Is it not really driving pedantry to the last extreme. When you impose duties of this kind on imports not for the sake of Protection, but for the purpose of helping ns to carry out what we are teaching with

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  regard to economy, to insist on putting up Excise Duties for six or nine months—I hope it will not be longer— "
  That was the extent of his anticipation—
  " is to carry pedantry to an extreme."— [OFFICIAL REPORT, 29th September, 1915; cols. 913-14, Vol. 74.]
  It is not only what was said by Mr. Bonar Law, but what has been said by the present Prime Minister himself. He also gave a pledge. The right hon. Gentleman is a straightforward Protectionist. He believes that Protection is necessary for the welfare of this country. He thinks that we are not likely to see a return to prosperity until Protection is adopted as our fiscal policy. At the last election he gave very clear under takings as to what he meant by the policy of his Government. In the Debate on the Address in December last, I remember very well hearing him say:
  " So far as the protection of any industry goes in this Parliament, the only avenue open to theta is the avenue through the new Safeguarding of industries Act."— [OFFICIAL REPORT, 17th December, 1924, col. 1064, Vol. 179.]
  The only avenue. The right hon. Gentleman the Prime Minister had to sit by the side of the Chancellor of the Exchequer only a few days ago and hear the Chancellor of the Exchequer discover another avenue, the old avenue, a return to the McKenna Duties—this in spite of the solemn pledges given before the election, in spite of the pledges given at the hustings, in spite of the pledges given by that great leader of the Conservative party, Lord Derby—with all the influence attaching to him—and in spite of the pledges given by the Prime Minister himself. Whatever may be said of the fiscal aspect of the McKenna Duties, it is quite clear that politically they were a breach of the pledge given inside and outside this House. I cannot, therefore, under stand how the Prime Minister, who is so punctilious in these matters, should have 'allowed his right. hon. Friend to stray so far from the path of rectitude. If there is to be no relief by way of preference for the trade and industry of this country—and there is to be practically none in the long run, so far as I can see—probably the reverse—in regard to the McKenna Duties, what has the right hon. Gentleman done in any other direction for trade and industry?
  The Trade Facilities Act will certainly not, in my opinion, lead to an expansion
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  of the trade and commerce of this country. It is only a temporary expedient to alleviate immediate distress. It only creates undertakings on the future. There is no provision in the Budget for any other substitute for this scheme. If there is nothing to be got by way of relief in these new schemes, how far does the right hon. Gentleman suppose that lowering the Super-tax is going to help industry and commerce? Of course, we are all well aware that large incomes are very largely reinvested in industry and commerce. The right hon. Gentleman, however, makes no distinction between classes of incomes, between the income of the rentier or that of the business man. The amount which is to be returned to these gentlemen, or which is to be left in their pockets, may or may not fructify for industrial purposes. It may be, as the late Chancellor of the Exchequer suggested in his speech the other day, that to a large extent the money will be spent. either in frivolity or extravagance or in that sort of expenditure which brings no fruitful return. I give the right hon. Gentleman full credit for what he is leaving in the pockets of the Super-tax payer; but is it to be imagined that that necessarily is going to be invested in industry and commerce I give the right hon. Gentleman full credit for it, and full credit for the drop in the Income Tax of 6d. Yet, after all is said and done, I come back to the main point which I made at the beginning of my speech, that the total burden to be borne by the country still remains at £800,000,000. He has juggled, he has rearranged it; he has put the burden on to some fresh shoulders, and he has taken it off some of those quite capable of bearing it; at the end there is the £800,000,000 to be provided by the Government in order to enable the right hon. Gentleman to square his accounts.
  Let us now turn to the one adventure of his own which he has made into the region of industry and commerce. I refer to silk. The right hon. Gentleman spoke of Silk Duties as though they were sumptuary duties. There is no doubt that a certain amount of silk used in this country might be dispensed with. But I do not think the right hon. Gentleman, from the point of view of the Exchequer, is anxious that the consumption of silk should be reduced. From the point of

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  view of the Exchequer he wants revenue, and he wants the silk to be imported. I do not know whether he has collected the French views on the subject. I dare say he has. He is well aware of the fact that the three main exports of France, by which alone she will ever permanently be able to restore her exchanges, are wines, silks and motor-cars. He is going to do his best to prevent motor-cars coming in. By his new duties he will either impose a very heavy extra burden upon, the consumers of French silk in this country, or he will keep the silk out. As for the wines, he leaves them alone except for Empire purposes. If you take into account Empire Preference, I dare say that some slight harm may be done to the export trade of France in wines. I do not know how far Australian wines are likely to take the place of French wines. I am not a good authority on the subject. I am quite certain, however, that the right hon. Gentleman, in his adventure in the taxation of silk, will not make him self more popular in France. Will it make him more popular in England, for he is a good enough Free Trader to know that this duty is to be paid by the con-Burner here? He knows that perfectly well. He would never deny it. So that the very classes who use the silk are going to have the extra burden placed upon them. How much is it to be? Four millions this year, and £7,000,000 in a full year. That is the burden to be placed.
  That is not the whole question. The Silk Duties are going to be an added confusion to the textile trades. I do not knw how far the right hon. Gentleman has kept up-to-date in his Lancashire knowledge, but if he knows what is going on in that county he will know that in a great many districts in Lancashire, the cotton and mill people are either adapting their machinery to the production of artificial silk or are considering the problem with which they are faced to-day. and the tendency to turn over from the making of cotton to the making of artificial silk is increasing as time goes on. The depression in Lancashire has added greatly to a desire—and the necessity—on the part of these people owning our great spinning mills in Lancashire to turn to the manufacture of silk rather than to," speed-up" their cotton machinery. The right hon. Gentleman knows as an ex
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  Free Trader that the rise in price of a commodity reduces the demand for it. I have heard him say so, and he is quite right. The demand for artificial silk is going to be reduced, and that is all the comfort that he can give to Lancashire on this subject. The comfort is that they will have a somewhat doubtful protective duty, and that on the whole the consumers will have to pay more for their artificial silk; and if they pay more the extent of their custom will be reduced. Where will be the finish of this? The tax is put on. After all the disadvantage which admittedly comes to the trade and commerce of the country, the consumer will have to pay. Then what is the right hon. Gentleman going to do with regard to the export trade? He will find himself in a real maze of complications. It is not merely the question of giving the drawback on the total amount of artificial silk. This does not come in in one bundle, or in one commodity. A great many of the garments which are manufactured, spun and woven here, and put together, are partly cotton, partly wool, and partly silk. I, myself, have seen many a time on the coast of Africa men wearing long white robes, with long slashes of silk woven into them to distinguish, to beautify, or to decorate them. These are produced to a very large extent in Engand. These will be the kind of garments about which the Customs officers will have a task to find out how much is wool, how much is silk, how much is artificial silk, and how much is cotton. I should like to know how the right. hon. Gentleman is going to keep out of all the confusion that will come in the matter of the drawbacks in the Customs? There is one thing quite certain. If he and his officials are ingenious enough to get over these difficulties, there will yet be great obstacles in the way of the trade itself, and the work and trouble given to the textile industry will certainly not add to the popularity of the right hon. Gentleman in Lancashire, Cheshire, and Yorkshire.
  Let me now go to another aspect of the question. and apply the same test which I have endeavoured to apply to the Budget of the right hon. Gentleman. It is true that this country is suffering from an almost unprecedented trade depression. The right hon. Gentleman is well aware, as came out the other day, in his

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  unfolding of the Budget, of the remarkable fact that in spite of the depth of the depression, in spite of the great problem of the unemployed, the yield of Income Tax has actually gone up. The right hon. Gentleman did not give an explanation to the Committee of that fact. Perhaps he will do so on some future occasion. He has information at his command which we do not possess. I cannot understand how it is possible for the Income Tax to go up unless a great many industries are a great deal more prosperous than the coal, iron and ship building industries.
  Mr. SNOWDEN: That is the explanation !
  Mr. RUNCIMAN: I dare say it is. It is quite clear that the retail trades had such a year last year as they have never had since the War. Can he get the extra yield out of them? I mention this fact principally to draw attention to this feature of our national organisation. While we are suffering from tremendous depression at the present time it is to be found mainly in the export trades and mainly in those three heavy trades to which I have already referred. These are the trades which employ the largest amount of labour in proportion to their turnover. If the depression had been in the other trades, what would the right hon. Gentleman have done?
  I admit it is not good enough to criticise the Budget and to say it has done nothing whatever for trade and commerce. That is the main charge, but what could he have done? The right hon. Gentleman surely does not think that he is going to give any impetus this year either to trade or commerce by the insurance scheme he outlined in the course of his Budget. There will be nothing this year to help industry and commerce. I hold, and have held the view, that money distributed over a very much larger proportion of the population more often accrues to the benefit of the staple trades of this country, and in a far greater proportion than the sacrifices made by the contributions towards the scheme. I think that is a true and a sound proposition. But this year there will be no distribution over trade and industry. These will remain very much as they are. They will receive no assistance from the insurance, and when
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  it does come into operation, the right hon. Gentleman has adopted the very method which is going to place a burden upon industry and commerce, which 1 venture to say in a great many trades they cannot bear. We all know how easy it is in prosperous times for industry to say that they cannot bear any additional burden. The right hon. Gentleman knows—no one better than he—that at the present time many of these heavy trades are not living on profits at all. They are year by year having large losses. It is because of the heavy loss-s in the iron trade, in the coal trade, and particularly in shipbuilding, that there are going on at the present time conferences between those who control these industries and those employed in them, to see if they cannot find a way out of their difficulties. Let me give an illustration of exactly what I mean by suggesting that this insurance scheme, so far from helping industry will, on the basis described and explained to us, actually throw new burdens upon it.
  Let me take the case of a shipyard, an industry with which I have some practical acquaintance. I can give the exact figures. It is the case of a shipyard which has built 28 or 30 ships for my firm, and the proprietors have been good enough to give me an insight into their costs. They were spending on National Insurance in 1915 a sum of L'1,500. They were then turning out six ships a year. That cost worked out at £250 a ship. I have no hesitation in saying that it was £250 well expended. At all events, but for the expenditure of those years we should not have been able to keep our unemployment benefits up to the present level. What about 1924? In 1924 their costs rose from £1,500 to £4,2:00; that is to say, that as they were then turning out only three ships a year—they were very lucky to get orders for three—they were actually having to provide in the costs of these ships £1,400 a year for insurance alone on each ship. Now the right hon. Gentleman comes along with his scheme of insurance. As far as I can understand it, it amounts to this: that there will be a further charge thrown upon that yard of £1,100 a year. That is to say, if they can go on with their ordinary output of three ships a year, there will be a further charge thrown on those ships of £379 each. In other words, the total amount, when the right hon. Gentleman has had his way

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  and this contributory scheme is in full swing, will be £1,780 in the case of each vessel. And so far as the industry is concerned the scheme will not give it a penny piece of benefit.
  This is really a duty which ought to be performed by the country as a whole. It is a general service, and the burden should not have been thrown on the least active trades. If you are giving benefits to the rentiers, throw some of the burden of this on people like the gentleman who sits at home with three or four servants in a flat in St. James's. Do not let those of us who have no industrial concerns pay merely on the number of our domestic servants, but on the basis of the wealth that we command. That would be a reasonable basis on which to build up a scheme. But that is not all. Industry has to bear the employés quota as well. Make no doubt about it. In the conferences that are now going on between employers and employed, both sides are taking these facts into account. The men say, "What is the good of £2 15s. a week for engineers in the shipyards, if a certain amount has to be taken out of that payment for insurance? We mast take that into account, for it reduces the value of the wages." With this new charge added it will come to is. 6d, a week. You can not leave the employés' contribution out of account. If you add the two together, so far from this giving an impetus to industry, it is placing an obstacle in its way. The right lion. Gentleman could have framed his Scheme on a non-contributory basis; he might have used some of the millions at his disposal for that purpose. That would have been a direct relief to employers and to employed.
  But turn to another side. I forget whether the right hon. Gentleman was in the House when we discussed the rating burdens which are now carried by great industrial concerns, although I know that the Financial Secretary to the Treasury was present. Let me repeat what was said on that occasion. I believe it is not incorrect to say that, so far as steel is concerned, the rates of a typical concern on Tees-side worked out before the War at 1s. per ton of steel produced. In 1924 in that same concern the rates work out at over 6s. per ton of steel produced. That is for rates alone. Mark this, that what has happened on Tees-side is typical
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  of what has happened elsewhere. The worse the trade the larger the burden thrown on the rates, and the larger the burden the less is it possible for steel works to produce steel in competition with Continental competitors. You go in a circle where bad becomes worse and worse becomes worse still.
  Turn, again, to the case of a shipyard. I am going to build up a case by taking steel into the calculation as well as the rates which are borne by shipyards alone. In the shipyard to which I referred just now, the rates before the War came to £3,300 a year. On six ships that worked out at £550 per ship. In 1924, owing to the burdens that are now borne by that locality, and borne mainly by the great producing establishments, the rates are £13,240. That sum is spread over the three ships to which I have referred, so that the rates have increased from £550 to £4,400 per ship. Then, if you allow for the fact that the. raw material which has to go into the ship includes a similar rise in the rates at the steel works, there is a further £900 to be added, making total extra cost per ship of not less than £5.300 a year. Yet hen. Gentlemen and the wiseacres in the Press wonder why it is that British shipowners are obliged to build ships in Holland or in Germany. Neither the Dutch nor the Germans are such fools as to burden their shipyards in the way that we do under our present rating system. The Chancellor of the Exchequer might have done something to remedy the state of affairs in the distressed areas of this country. Not a penny piece in his Budget goes to that object.
  It is not only the case with the steel works and the shipyards. There are the railways. The railways are complaining now that they cannot make ends meet. They have to draw on their reserves. That is the reason why the right hon. Member for Derby (Mr. J. H. Thomas) is sitting day after day in conference with the railway managers. The managers say, "We cannot do it: it is impossible for us to bear the wage burdens." The rise in the rates is one of the explanations. The Chancellor does nothing to help. The coal mines are in the same plight; they are suffering severely. The rates go on whether the mines are prosperous or depressed, and in many concerns, where the mines are with difficulty being kept open, the burden is not reduced. The

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  right hon. Gentleman offers to these industries, to steel, shipbuilding, and coal, 6d. off the Income Tax. Why, they have not any incomes from which to pay the tax. You are actually giving the benefit, which you say is to give employment, to a different set of people altogether.
  I do not want to exaggerate by saying that nothing is being made out of coal, but I qualify that by exactly the same statement as I made earlier in my speech, inanely, that it is the export trade that is suffering most, and you are giving it a qeid pro quo when you take 6d. off the Income Tax; you are not giving to the export trades the same benefit as to the person who lives at home on dividends from Government stock. You are leaving them in the same plight as at present, with an increasing burden, and, as the depression becomes greater, with a load which many of them will not be able to carry for many months more. The right hon. Gentleman had millions to play with. Why could he not have used some of those millions to solve these pressing problems? It was not necessary to produce now this want. Insurance scheme in order that the Conservative orators might say that the Conservative party were the friends of social reform. The Government could haw waited until their third or fourth year until a little nearer an election. The Chancellor of the Exchequer is a first-rate electioneerer. I have seen him in that capacity from many points of view. But my right hon. Friend was not looking to the necessities of the immediate future whet he framed his Budget. He was looking further ahead. Yet it is the immediate necessity which is our main concern.
  The real root of the matter is this: The fight hon. Gentleman would reply to all these speeches that he has had not more money to deal with, that he has done tie best he could with the money at his disposal. He might have had more if he could have taken a stricter view about rational expenditure. It is not good enough for the right hon. Gentleman to say that during the period that he has been in office, during that very busy season, was impossible for the Estimates of the Departments to be overhauled. Ho has now been in office for just as long as the Labour party was in office altogether, and he certainly has had
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  every opportunity of resisting some of the Departments in the Estimates, to which exception has already been taken. He certainly could have made a cut in the Army Estimates if he had been so minded, if he had been prepared to face it out. I do not think that he need have been nervous about it, for the country would have been behind him if he had under taken to cut down the Army Estimates. Both parties on the Opposition side of the House have already pointed out some of the items in the Army Estimates that might well have been dispensed with. No justification has yet been given for the very large expenditure on cavalry. There is no justification for the size of the War Office Staff. The whole trend of expenditure in that Department has not yet been tackled with a ruthless hand, or with the same sort of spirit that business men apply to their own concerns.
  When we turn to the Navy, we find that the right hon. Gentleman has failed in his bout with the Navy. I am aware that some of the money which he has to provide is to pay for the five cruisers for which the Labour party were responsible. But the right hon. Gentleman might have put on the brake in many directions. The First Lord of the Admiralty is squeesing £4,700,000 more out of him this year than was obtained last year. When I turn to some other items in the expenditure, not large in themselves, but all having a cumulative effect., I do not forget the grant made to Northern Ireland. The right hon. Gentleman could not resist the demand which was made on him for a gratuitous grant to Northern Ireland. It was not worth his political life if he had resisted it; it would have made him more un popular with the people who had already condemned him for having had any part in the framing of the Irish Treaty. The fact was that he had to sweeten the acerbities of political antagonism by a lavish display of generosity. The right hon. Gentleman has been equally lavish in consenting to the payment of subsidies for sugar, for the British Empire Exhibition, and so on. He cannot afford these things at the present time. If he tells us that he has not more money to play with, the reply is that it is very largely his own fault. He would have received the support of the country if he had applied a most ruthless axe to any of the fighting

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  Departments or to any of the extraneous Departments that ask, for political purposes, to dip their hands into the nation's pocket.
  I end with the statement with which I began my speech. Looked at from the point of view of industry and commerce, this Budget will do no good to the country. I do not agree with the statement that it is a rich man's Budget. I think it is a rentiers' Budget. It is a Budget which has been drawn by the right hon. Gentleman with admirable skill. It is artistic as well as artful. That was displayed with a command of language which everyone in the House must envy, and which we all admire. The one thing we are quite certain of is that at the end of this financial year he will have left the country no richer, and he will have left it no richer because he began by extracting £800,000,000 from the pockets of the tax payers and he ends by a claim for exactly the same amount.
  5.0 P.M.
  The FINANCIAL SECRETARY to the TREASURY (Mr. Guinness): The right hon. Gentleman has given the House a very wide review of the financial arrangements of the year, and has criticised from various aspects, not only the remissions of taxation which the Chancellor of the Exchequer has seen fit to propose, but also channels of expenditure such as the new insurance scheme, which is to be founded by this Budget. He was not very definite as to what he wished to see in connection with this insurance scheme. I gather that he does not approve of the financial proposals that have been brought forward, and at the end of his remarks on this subject he said that we might have dealt with this on a non-contributory basis. He nods his head, and I think the House will be interested to gather that he shares the view of those who sit above the Gangway that we ought not to have had a contributory scheme, but that we ought to have involved the Exchequer in a great and growing burden for these new pensions proposals. It is very interesting that we should have had the suggestion from the right hon. Gentleman this afternoon, because his right hon. colleague the Member for Carnarvon Boroughs (Mr. Lloyd George), who has just come to sit beside him, told us the other night that he was in favour
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  of this matter being dealt with on a contributory basis. We know the advantages to any particular party, when dealing with a new proposal, of keeping the door open, of sitting on the fence as long as possible, but when we have had two different proposals like those I think we are entitled to know from the responsible leaders of the Liberal party whether they are for a contributory scheme or whether they are not. Are we right in undersanding that the right hon. Gentleman prefers this last alternative, that the State should bear the whole burden? Is that the alternative he wishes to press upon the House? Anyhow, he does not deny that he wants a non-contributory scheme, and I think we may draw oar own conclusions that, whether permanently and on principle, or merely for political purposes at the moment, the Liberal party, through, at any rate, one of its leaders, has confessed the demand for a non-contributory scheme.
  But I do not want to deal with these main criticisms of the Budget, because the Chancellor of the Exchequer vill speak later and will deal with these larger questions of policy. My purpose is rather to take up certain misunderstandings of facts which have emerged during the Debate. First, I must refer to what the right hon. Gentleman (Mr. Runciman), who has just sat down, said about the inconsistency, and indeed the breach of faith, of the Conservative party in the matter of Protection. He sad we brought in a purely protective tax on hops. He forgot to say that we were substituting a protective tax for the far more protective method of embargo, under the Hop Control. which was brought in not only by hon. Members sitting on this side of the Hors?, but by Members of the Liberal part with whom the right hon. Gentleman is associated. Then he came to the question which is always a red rag to a certain number of Members of this House, the McKenna Duties. He said Heir reimposition was a breach of faith that the duties were protective, and he actually misquoted Mr. Bonar Law in his sup port. He did not tell the Horse that in the passage to which he referred Mr. Bonar Law was talking abort a fiscal change, and was saying that. is he were to introduce Protection, this vas the last

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  kind of duty he would choose for the purpose That was the really relevant part of what Mr. Bonar Law was arguing. He went on, it is true, from this fiscal standpoint, to give his own private opinion that in all this fiscal controversy, after the War had ceased, it was not likely that this tax would continue. But it is an astounding twisting of Mr. Bonar Law's words to pretend that he argued that these taxes were protective in their character.
  Mr. RUNC I MAN: Would the right hon. Gentleman allow me to read from the OFFICIAL REPORT? Mr. Bonar Law said:
  "Duties of this kind would never be continued under any circumstances when the War was over." —[OFFICIAL REPORT, 29th September, 1915; col. 913, Vol. 74.]
  That is in col. 913 of the OFFICIAL REPORT of 29th September, 1915. The paragraph to which the right hon. Gentleman has referred was earlier than that, and it did not contradict it in any respect what ever.
  Mr. GUINNESS: It is quite true that he expressed his personal opinion that they would be withdrawn, but the words to which I referred were in the paragraph just two sentences before what the right hon. Gentleman has read:
  " Obviously it is the very last "—
  That is the tax of 33⅓ per cent. —
  " that would be imposed by a Government really trying to introduce a fiscal change in this country."
  In the previous paragraph to which the right hon. Gentleman refers, he said:
  " If I were merely to consider this question from the fiscal point of view and if I were considering how it would help us when the War is over in carrying on the controversy in which we were so interested, I should say at once that these duties are the very last which I would impose myself" —[OFFICIAL. REPORT, 29th September, 1915; col. 913, Vol. 74.]
  How can the right hon. Gentleman quote Mr. Bonar Law as suggesting that these duties were protective in their character? I may, perhaps, refer to what the right hon. Gentleman the late Chancellor of the Exchequer said, though he contradicted himself very considerably on this subject yesterday. In the Budget Debates last year he said, talking about the McKenna Duties on motor-cars:
  " The effect of these duties has, in my opinion, ceased to be protective."
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  I can give the rest of the passage if he wants it, but. those were his words, which he does not dispute. Last year he was of opinion that these duties had ceased to be protective. A lot of these arguments about Protection and Free Trade cancel themselves out, as is usual as between one speech and another; but what is a little exceptional in these Debates is that so many speakers, like the right hon. Gentleman the Member for Colne Valley (Mr. Snowden), cancel their arguments out in their own speeches. The right hon. Gentleman had a very difficult task yesterday, which he achieved in a very brilliant fashion. He was, no doubt, exercised to divert the attention of his party from their present situation, which if, indeed, it is paved with good resolutions is, anyhow, roofed with lost opportunities. He is a man of extraordinarily kindly disposition, but we all know that- when he gets on to this subject of Free -Trade and Protection he develops the fanaticism of a witch finder. The House will remember the history of witch finding in the seventeenth century, how harmless old ladies who either did not know or were too frightened to repeat the Lord's Prayer, or were seen walking against the sun, were singled out for ostracism and revenge. The right hon. Gentleman's tests are equally arbitrary. He is absolutely unwilling to argue on any matter where the odour of the fiscal question comes in. It is because of that that we on this side are not, perhaps, as much worried as we might be when he says that he commits his party from the start to the immediate repeal of these McKenna Duties and Silk Duties when they get the chance. We are not worried, because we know that there is a new leaven working. Anyhow, a new leaven will have to work, in view of development in public opinion, before that promised day arrives when the right hon. Gentleman will be in a position to carry out his pledge. It may well be that when that time comes he will find, though Silk Duties when they get the chance. the fate of so many of those who raise up fanatical opinions, the fate of Matthew Hopkins, the leading witch finder, and that he will be condemned by those whose fanaticism he led.
  It is not really a question now of theory whether these duties are protective or not. Owing to the remissions last year we

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  are now in a position to judge them in the light of experience, and I want to show that experience has proved that the duties were free from that Protectionist element which has been so freely attributed to them. What is the chief objection which the Free trader always urges against protective duties He points out that non-protective duties, revenue duties, are entirely paid by the consumer for the benefit of the Exchequer, but that whet. you get to protective duties side by side with what the consumer pays to the. Exchequer is a heavy tribute which he pays to the home producer. That is a very strong argument. If that can be shown to be true of any duty, whether you call it Protectionist, or whether you call it Free Trade, I agree with hon. Members opposite that it is a ground for its removal.
  We can test these duties by that criterion. Let us try motors. If the consumers were, indeed, paying this duty, if they were paying a subvention to the home producer under the shelter of a protective duty, when the duty was taken off the price ought to have dropped by the full extent of, or, anyhow, by a very large amount of, the duty. What were the facts? Taking at random 59 types of British cars, in the seven months from last April to October, we find that in 31 cases there was no change in price, in nine cases there was an increase in price, and in only 19 cases was there any reduction. Therefore, as regards two-thirds of these types of cars there is no suggestion, in the view of subsequent experience, that any of these Free Trade prognostications have been fulfilled.
  What about importations? If it is true that the home consumer was paying this tax its removal should have been accompanied by a corresponding drop. In the ease of tea and sugar, as the right hon. Gentleman told us yesterday, the drop did in fact take place. With motors it did not. Taking, again at random, 34 types of foreign cars where reductions of price took place—in some cases there were increases—but taking those where there was a reduction, the benefit of the remission of 33? per cent. was not passed on. The average reduction in price was only just over 10 per cent. The right hon. Gentleman made out yesterday that luxurious cars were not affected by the McKenna Duties. He could not
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  avoid the temptation of manufacturing a little class jealousy, but he forgot that there were foreign cars at a very high price, cars with chassis which were selling when the duties were taken off at prices ranging from £1,400 to £1,500 apiece. I will take two of these cars, the Hispano-Suisa and the Isotta Fiaschinie. In these. two cases, although they were two luxurious cars which the right hon. Gentleman said were not affected by the duty, they came down in price by exactly the same average of between 10 and 11 per cent., and as they came down by the same fractional percentage of the remission it seems to me that there is no foundation for the right hon. Gentleman's suggestion that in putting on these duties we are only thinking of the rich man's car and that the rich man's cars are not going to pay in exactly the same way.
  I will not pursue these facts, but I could put before the Committee, if necessary, corresponding details about other articles. [An HON. INIEMBE: "What about pianos? "] Yes, in the case of pianos, the duty has not been passed on to the consumer. The same also applies to the watch and clock industry, where, far from passing on the duty to the consumer. the abolition of these taxes has been followed by an increase in price, not only of component parts which are imported but also in regard to the finished article as well. Either these duties were non-protective taxes or if they were protective taxes then hon. Members opposite must, in the light of experience. change their views of Protection because protective taxes do not act in the way that they have foretold.
  The right hon. Gentleman yesterday made a very surprising statement as to how we had by the remission of these taxes increased the export trade in British-made motors. The right hon. Gentleman, however, gave us no arguments in favour of that contention. I have made inquiries as to what conceivable connection there might be between what is asserted and the remission of this taxation. I asked if it could he accounted for by any reduction in price. The figures given to me are quite startling. Taking touring cars, the average f.o.b. price for export during the seven months before the remission of the tax was £260, and after the remission of the tax it was £257

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  —the price only went down by £3. It is very curious that, in a far larger trade in chassis, far from this export increase having been brought about by a reduction in price, it has been accompanied by an increase in price of £3, which is the exact equivalent of what was shown in the small decrease on touring cars. There fore, I am absolutely at a loss to follow the boast made by the right hon. Gentleman the Member for Carmarthen (Sir A. Mond). Then the right hon. Gentleman the Member for Colne Valey dealt with silk, and he told us that in this commodity we were looking after our friends, and he gave the case of a great firm of silk producers who said, "Look at the boom in our shares.' I think the right hon. Gentleman was a little premature, because I understand that the boom in the shares which was so useful to the right hon. Gentleman in attempting to stir up a little class feeling, has been followed by a more than corresponding slump.
  Mr. SNOWDEN: The right hon. Gentleman evidently does not realise that that is the effect of my speech yesterday.
  Mr. GUINNESS: As a matter of fact. it had taken place before the right hon. Gentleman sat down. I would remind him that the Stock Exchange closes before the Debates in this House begin.
  Mr. MARCH:Is that why we start so late?
  Mr. GUINNESS: The right hon. Gentleman suggested that these duties were protective, but there he differs from an authority in the Free Trade party, namely, the right hon. Gentleman the Member for Carmarthen, who stated yesterday that these duties would hamper and restrict the silk industry. Of course, he appreciated—what I could imagine anybody would have appreciated— that these duties can in no sense be brought into the old Procrustean bed of protective duties, because there is an Excise to countervail them. The unfailing test of a revenue duty is that you accompany your import duty with a countervailing Excise, and the tax is put on merely for revenue purposes. It is rather curious that the right hon. Gentleman himself, when he was talking about the McKenna Duties, said: "If they are not protective duties, why do you not put on an Excise duty?" The right hon. Gentleman accepts the
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  presence of an Excise duty as a test for a protective duty in one case, but he very conveniently ignores it in the other case. We defend this tax, firstly, because it is placed upon a luxury, and, secondly, because it is an extremely strong industry which we believe can bear this new system. The artificial silk industry has more than doubled itself in the 10 years from 1913 to 1923, and according to American, German and Italian experts, it has doubled itself again between last year and this year. Therefore, I think it is perfectly reasonable that there should be an element of preference in the turn to the British Empire manufacturers when this new system is brought into force, and in that there is absolutely nothing inconsistent with the stricter school of fiscal doctrine which has been applied for many years before the War.
  The Committee will remember that in the case of tobacco, ever since the Boer War we have given a turn to the home producer quite apart from the heavy preferences which are now enjoyed and have been enjoyed, even when the right hon. Gentleman the Member for Colne Valley was in control at the Treasury, under the Imperial Preference arrangement. Not only is there this turn on cake tobacco like Cavendish, but for many years past a luxury sur-tax has been imposed against the foreigner and for the benefit of the home manufacturer on cigars and cigarettes. These are not isolated articles; I could give a good many more instances such as spirits, sugar and other articles. I think it is not unreasonable, in view of the slight loss on demand in the home market that the home producer should get a little turn in his favour as against the foreigner in the same way as other commodities in parallel conditions and we should leave him in the same position which he now enjoys.
  The right hon. Gentleman asked why there were no countervailing Excise duties upon tissue containing artificial silk. The answer is that that tissue has paid its specific duty on the raw yarn and there is no opening at all for any specific Excise duty. Unlike the case of raw silk, which all comes from abroad, the whole of the artificial silk has been taxed either at the port or in the workshop in this country. The right hon. Gentleman went on to say that silk was not a luxury, and

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  that it had taken the place of wool and cotton. I am informed by those in a position to judge in this trade that most certainly silk is a luxury in this sense that there is no necessity for any body to use silk, and it is mixed in with wool and cotton because it adds to the attraction of the article and makes it more readily saleable. There is no doubt that silk is less strong, less durable, and less good value from that point of view to the poorer classes than cotton and wool. I think that is shown by the fact which I saw stated in the papers last night in regard to the popular quality of stockings with the Lisle top and foot. It is just because cotton is more durable that ladies prefer to have the foot and the tops of the stockings, to. which they attach their suspenders, made of cotton.
  In connection with the mixture of silk and wool and cotton the right hon. Gentleman the Member for Carmarthen asked how it would be possible to work a rebate system in connection with a composite, complicated, complex subject of this kind, but I am advised that no difficulty whatever will arise. The arrangements are being worked out, but the expert advisers will be very glad to discuss the question of drawback, and the exact arrangements for working the new system with the least possible inconvenience to all parties concerned, if those interested in the silk trade will get into touch with them.
  The rates of drawback will be shown in the Finance Bill, and the reason why we anticipate no difficulty in the case of these mixed fabrics is, firstly, that no tracing of the ingredients will be necessary in order to find out what differing rates of ad valorem,duty may be paid, because the whole necessity for that is removed owing to the fact that a specific duty is imposed by weight; and secondly. because exporters, very generally, are obliged to disentangle the various ingredients of their fabrics when, for export purposes, they have to inform the foreign consumer of the proportions of silk, cotton and wool that may be included. Another reason which leads us to expect far less trouble in this connection than is feared by the right hon. Gentleman the Member for Carmarthen, is that, unlike the case of fine chemicals, which he probably had in mind, there will, in this case, be no untaxed supply,
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  and the rebate will, therefore, be on an absolutely uniform basis. The right hon. Gentleman made rather an alarming prophecy. He said that a pair of stockings, which to-day cost 3s., is in future going to cost 4s. I must say that that was a very startling figure. The Committee, no doubt, saw alarming visions of the disappearance of the silk stocking, and the lengthening of female apparel to hide its absence. I immediately made inquiries, and I was assured that there was no foundation for the very large price increase suggested by the right hon. Gentleman.
  Mr. COMPTON:By whom?
  Mr. GUINNESS:I was so informed by the experts of the Board of Customs, and I will give the Committee the very sure ground upon which they base their assurance. The duty being charged by weight, it is very easy to get at the silk value represented by weighing any particular article composed either of pure or of artificial silk. In the case of the stockings referred to by the right hon. Gentleman the Member for Carnarvon, he said they were 3s. stockings, and talked of them as pure silk, but I gather that pure silk stockings are not generally bought for that price. They are more likely to be artificial silk stockings, at what is generally known as "two and eleven-three." Taking his round figure of 3s., the duty value of the raw artificial silk yarn represented in the weight of these particular "two and eleven-three" stockings, is 3d. In the case of real silk stockings of medium weight, our advisers tell us that the duty value represented is about 6d., and I find that figure confirmed in an evening paper of last night, which said that in that range of stockings, which varies in price from 3s. 11¾d. to 7s. 11¾d. the increase which may be brought about by the duty will be from 5d. to 6d. I do not believe that this duty will have any appreciable effect on the British silk industry. I believe, however, that it will be found to be a duty which is very convenient to collect and of great advantage to the revenue.
  The only other point to which I desire briefly to refer is the point that has been made by various speakers, that this Budget, in its remission of direct taxation, is unfair as between one class of the community and another. The late Chancellor of the Exchequer said that in

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  the case of the Super-tax it was very wrong to make this remission, and that it was a matter of robbing Peter to pay Paul. I do not think that that metaphor is at all applicable. It is allowing Peter to bear the same burden of tax that he bears at the present time, in a manner more convenient to himself. Super-tax payers have been showing signs of incipient sore back, and, surely, it does not matter to other classes of taxpayers if they re-adjust their saddle to prevent the sore back becoming serious, without in any way shedding any part of the heavy burden which they are now carrying. The hon. Member for Keighley (Mr. Lees-Smith) went further, and said that the tax remission was unfair because the poorer section of direct taxpayers got the smallest absolute remission. That, of course, is inevitable. In any Income Tax reduction, naturally, the people who are paying very little must get a smaller relief than the people who are paying very much, and the only fair way to judge of the relief is by looking at the proportional reduction in the effective rate as between one class and another. If hon. Members will study Table X in the White Paper, they will easily be able to work out for themselves the fact that the highest proportion of relief is to be found in the lowest categories of Income Tax payers.
  The hon. Member for Keighaley talked about the man with £500 a year, but surely it is not unreasonable that he does not get the same absolute reduction, seeing that his total Income Tax would only come to £25 a year. What really matters is that he gets a large proportion of reduction, namely, £6 out of £25, or 24 percent. If the scale is worked out, leaving out the Super-tax—which really does not come into remission of taxation at all, because it is a readjustment, and there is only a corresponding transfer of burden to the same man—if one goes from the man with £500 to the man with £1,000, one finds that lie, it is true, gets relief amounting to £27 a year, but then he is paying a larger tax. Instead of £25, he is paying £126, and his relief works out at a smaller proportion, namely, 21 per cent. If one goes up to £2,000, one finds that the proportion drops still further, to 14 per cent., and the higher one goes the nearer one gets to the flat-rate reduction
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  represented by 6d. on 4s. 6d., namely, 11 per cent.
  I think there is no doubt that there is a great advantage in this remission of taxation, in that it will more directly reinforce the capital fund than remission of indirect taxation. I think it is obvious that, the wider the margin between income and absolutely necessary expenditure, the greater will be the proportion that goes to saving as opposed to consumption. If the remissions are very small in amount, and if the hon. Member for Keighley is right in saying that the widow or the person of small means will not use this remission for increasing the wages fund, I can only say that his party cannot have it both ways, and they ought to be satisfied to think that in that case it will satisfy the demand of the late Chancellor of the Exchequer, who, earlier in the afternoon, said that what was really needed was to increase the purchasing power of the community. There is no doubt that the remissions of direct taxation must replenish to a great extent the capital fund, and must also become reproductive to a large extent in creating further wealth and further employment, which is so urgently needed. The right hon. Gentleman ended his speech by saying that the glamour of this Budget will very quickly disappear. I suppose he was thinking of his own sad experience of what he considers to be the ingratitude of the electors, who had so soon forgotten the evanescent advantages, quickly lost in the haggle of the market, which he offered to them.
  Mr. SNOWDEN: The right hon. Gentleman has said that the advantages which I gave in the Budget last year were quickly lost in the haggle of the market. I say that that statement is not true.
  Mr. GUINNESS: I should have thought the right hon. Gentleman would have agreed that the advantage in connection with the tea duty, which, as he said, was passed on at once, has since disappeared. I do not, however, press that point at all; it is not material to my argument. I only want to say that it does not follow, because the electors forgot the evanescent advantages, as I considered them, which the right hon. Gentleman gave last year, that they are going to forget the advantages which the present Budget offers. I believe that in the pension scheme this Budget will enjoy a,

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  monument more lasting than brass, and, if there has been so little criticism of its main conception, it is because the sound political instinct of all parties in the House tells them that such criticism might be adversely remembered by the half-million widows and children and the hundred thousand new old age pensioners who will enter into their benefit as the advance guard of a mighty army on the appointed day.
  Mr. WILLIAM GRAHAM: I am sure that the Financial Secretary will not think I am lacking in courtesy if I turn at once in this Debate to some of the other aspects of the Budget statement. We have the advantage this afternoon of surveying our financial situation at the distance of more than six years from the Armistice of 1918, and I think the Chancellor of the Exchequer will agree that the future is not going to be determined by the discussion of a great mass of com paratively minor proposals, but by the broad policy that we intend to pursue. So for a few minutes I ask the consideration of hon. Members for one or two of what appear to me to be the important elements in our post-War finance. On Monday afternoon there will be a discussion of the Gold Standard Bill which the Government. has introduced, and one cannot at this stage do more than make a general reference to that subject, but there is a very close connection between the decision which the Chancellor of the Exhequer has taken in the preliminary steps to a return to a gold standard and the policy of fiscal restriction and Protection which the present Government is building up.
  If I may state the case as it is popularly put from the side of the masses in this country, they have a very grave suspicion of the deflation which has been true of the past three or four years. They remember generally the terms of the Cunliffe Committee's Report, and they know the speculation and high prices that the. policy of inflation involves, but they have a strong feeling that we have pursued the policy of deflation a little too severely, and that we have gone strongly in the direction of building up our credit, forgetting that credit. is, after all, a relative term, and that the most tragic feature of this policy has
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  been represented at the highest point of 2,000,000 people unemployed, and a quarter of a million who have been out of work for very nearly two years. I do not entertain an inflationist view, but when we come to our discussion on Mon day, we shall be compelled to remember that the Cunliffe Committee laid down in its Report certain conditions which in its judgment were closely bound up with this policy and which they thought this country should pursue, and one of the conditions it laid down was the desirability of the freest interchange of commodities throughout the world. One of the tragedies of our post-War economic condition in this and other countries has been the growth of tariff restriction, and if hon. Members consider the state of affairs in Europe and other parts of the world, they will think it is rather curious that many countries which we did a great deal to help during the crisis of the War have been almost the very first to build up against us tariff walls of one kind or another. But that does not justify us in pursuing a similar policy, and I do not think it will be difficult to prove that we have everything to lose, as a great exporting country, by falling into the economic error to which they have apparently committed themselves in recent times. The Prime Minister stated that the present Government would not embark upon a general tariff, and that appears to be his policy, but if I were a Protectionist I should say at once that it would be far better to have a scheme of that kind than the curious and contradictory collection of Protective devices which we are adopting under existing conditions.
  I doubt whether hon. Members realise the extent to which this policy has gone during the last two or three years. There is not only the decision to-day to re-impose the McKenna Duties. but there is the prospect of a certain amount of tariff restriction under the Safeguarding of Industries Act, there are the Clauses which have been introduced into certain Acts of Parliament, of which the sugar subsidy was one illustration, which introduce another and a minor form of protection for certain classes of machinery, there arc the new proposals regarding silk and hops, and there is the Protectionist element which is suggested in at least some part of the preference scheme So that by one route or another we are

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  building up a rather chaotic tariff system, and there is not the least doubt that the cumulative effect of that is to undermine progress towards the free interchange of commodities which is essential to the success of a return to the gold standard in this country and other countries with which we trade. No one will deny that, taking the Report of that Committee which has been submitted within the past few days, this at best is an experiment, attended with very great risk, which we can only allow to proceed on conditions which give it the very greatest chance of success. This economic policy of the Government on the other side militates directly against that chance of success. Many of us on these benches quite frankly are not interested in the barren controversy as between Free Trade and Protection. I say that with candour, not because I in any way belittle the importance of a Free Trade fiscal policy, but simply because I express the views of my colleagues in the faith that. this does not get anywhere near the heart of the disease in our economic system, arid we look to a. very much larger and deeper cure. But there cannot be any doubt at all in our minds that on balance it. is the better policy for this country, and of course the cumulative effect of all this legislation, which is to be extended in succeeding years, must in our judgment he directly against the economic interest of our country.
  I turn, in the second place, to one subject. which enables us to cover a large part of the important ground we have under consideration. I refer to the expenditure of £801,000,000 which the Chancellor of the Exchequer asked Parliament to sanction in this Budget statement. The expenditure can be quite simply divided, and I think very easily remembered, if we group it first of all under the heading of Consolidated Fund services, and in the second place under Supply services as we find them to-day. It is rather curious that the Chancellor of the Exchequer should have looked for his saving of a progressive £10,000,000 per annum in expenditure to the Supply services, because, after all, though important, they are not nearly so important a part of our national expenditure as the Consolidated Fund burden. Let us take the case of war past, and it may be for all we know, provision for war prospective, which we find in this Budget. We are providing within the
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  present financial year £350,000,000 in the service of the debt, and of that there is only £50,000,000 by way of Sinking Fund redemption. We are finding £120,000,000 for armaments, at a distance of six years from the War, and we are providing £66,000,000 for War pensions and disability. So it is perfectly accurate to say that of the £800,000,000, which we are finding from the taxpayers, £530,000,000, or thereabouts, is attributable to the burden of war, and the legacy of disablement and debt that war involves, and to this large scale provision, apparently, for wars to come. That is the sphere which must be analysed by the policy of any party in power, and it is in that sphere that we are going to find a large part of our reduction in annual expenditure.
  Let us look for a minute at the position of the debt. I sometimes wonder whether this country realises the extraordinary financial revolution which was brought about by the events of 1914-1918 and later. A recent authority pointed out that in the six years between 31st March, 1914, and 1920, the total expenditure of the country was greater than for the whole of 2l centuries, back to the Revolution of 1688. That was a very remarkable statement. The same authority reminded us that the War cost Great Britain at least £10,000,000,000, exclusive of the contribution which was made by the Colonies and Dominions. That is a serious enough state of affairs in all truth, but it is the annual burden with which we are concerned at present, and on that dead weight debt of £,7,700,000,000 we have to find very nearly £1,000,000 a day under existing conditions. The country has turned down our proposals in the past for dealing with this enormous burden. We made a definite effort to convert the electors to the view that it was eminently fair and just that those who had done well out of the War should make a definite contribution to the reduction of the debt, and the result of that defeat has been that we find ourselves now with only a Sinking Fund provision of £50,000,000, and the prospect of more than a 100 years of effort at the very least, if we do not borrow another copper, before we wipe out that debt. Yet in these circumstances we have hon. Members in different quarters of the House suggesting that we are doing too much in debt redemption, and that

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  apparently we should leave to posterity a larger part of the load than we are inclined to do to-day. I believe that argument to be absolutely mischievous from every point of view.
  Over and over again during the Coalition Government, not of blessed memory as the Chancellor of the Exchequer said, but of miserable recollection, the present. Secretary for Foreign Affairs, when Chancellor of the Exchequer, said it was a sound principle to try to get rid, by way of repayment, of as large a portion of this debt as we possibly could, as near as possible to the depreciated conditions in which we borrowed it. That statement is as true to-day as it was then, and, of course, since that time there has been appreciation, and we are giving hack to the holders of the debt not merely the sums they lent, we have provided them not merely with the interest to which they were entitled, but we are giving them a bonus in terms of the appreciation which has been brought about by the financial policy of the country in recent years. I adhere to the view which we have very often expressed from these benches, and which has been supported by many people not of our political or economic faith, that it will remain one of the greatest tragedies of our war-time finance that, with the exception of the doubtful device of the Excess Profit Duty, which after all was very largely weakened in operation, and the extent to which we taxed during the War, we have allowed people who did remarkably well during that time to a considerable extent to escape. Could there be any more damaging indictment of war-time financial policy and any mere complete reply to the suggestion that we should in any way weaken the steps we are taking for debt redemption?
  6.0 P.M
  I will endeavour to press one or two other considerations which I find put forward in perfectly orthodox financial quarters. The Chancellor of the Exchequer has increased the scale of the Estate Duties. I do not mind confessing that I shared the enthusiasm of my right hon. Friend the ex-Chancellor of the Exchequer, when that announcement was made. But we ought to have known better. A little later in the speech that benefit was very largely nullified by the concession in the Super-tax. The Chancellor of
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  the Exchequer appeared as a kind of Paul Cinaquevalli dealing with the finances of this country and keeping the two balls in 4the air with complete success. A perfectly orthodox financial writer like the author of the City column in the "Times," lays down the proposition that if we are going to increase the Death Duties in this country to yield not £56,000,000 but £66,000,000 per annum we ought to earmark that, at the very least, for debt redemption. In other words, we should put that £16,000,000 to the £50,000,000 which we are finding for the Sinking Fund, and set it aside automatically year after year.
  It would be unfair to the Committee to disguise the fact that there are certain difficulties for any Chancellor of Exchequer in a device of that kind. No Chancellor of Exchequer likes to bind himself to what will be in the nature of assigned revenue. Above all, no Chancellor of Exchequer likes to encourage the view in any section of the community that they and they alone are reducing the dead-weight debt. I suppose that is the view that would be held by people on their death beds when they contemplated the use to which their Death Duties would be applied. Apart from that., it does not weaken the validity of the argument that we have to increase and not to diminish the amount for debt redemption.
  Many of our critics seem to suggest that there is no real burden in a National Debt. There can be no difference of opinion in this House as to the reality of the burden as far as the debt externally held is concerned. In regard to the £5,500,000,000 of debt that is held within the State there is a very real burden, and I have never been able to agree with the suggestion that it is not a definite load upon the great masses of our people. It is an obligation on all the people to a section of the people year by year, and it requires to be raised from annual taxation. As our industrial conditions stand to-day, with to a very large extent conditions of monopoly, combine and trust, there is a very definite power to pass on much of the burden to the masses in their capacity as consumers. We shall resist every proposal and every attempt -o weaken debt redemption, and while I cannot in any way forecast what the Cunliffe Committee is going to recommend in the way of treatment of debt, it is a sound policy to cut the debt down as

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  rapidly as we possibly can, and call upon those, however late the date, to pay who did well in war conditions.
  Now I come to the item of £120,000,000 in the service for Army, Navy and Air Forces. With the debt provision there is a sum of £470,000,000 out of this Budget in these items. It is perfectly useless for any Chancellor of the Exchequer to talk about reducing the expenditure in this country unless he is prepared to deal drastically with that problem. That problem depends more or less upon the attitude of the Government towards other countries, upon the view which they take of militarism and of possible future war, and considerations of that kind. The industry and commerce of this country are not going to revive if we are going to impose upon them year after year in the name of a security which it does not pro vide, as experience has shown, this enormous burden of largely unproductive expenditure. So far the Chancellor of Exchequer has made no direct reference to that,' beyond the fact that he has provided this year £5,000,000 or £6,000,000 more than was provided by his predecessor. What is the policy of the Government and what do they intend to do to get rid of the £120,000,000, or such part of it as they can reduce, of what is admittedly unproductive expenditure and what is to-day more than half the total pre-War revenue of Great Britain.
  Now I come to the second side of the expenditure of £800,000,000. It is found in what we call to-day, excluding certain other services, the Supply Services, or the Civil Services. In round figures we are appropriating £250,000,000 for that sphere. Let us remember that this is largely the sphere of what we may call social reform. It is in that sphere that the Chancellor of the Exchequer apparently hopes to find this progressive £10,000,000, which I take to be the probable outcome of the work of his Committee to deal with recurrent expenditure. In the Public Accounts Committee, and in other bodies with which many hon. Members are connected, there is week after week either immediate or post-mortem analysis of expenditure.
  The Chancellor of the Exchequer is committed to certain additional expenditure for the new old age and widows' pensions. We cannot resist the call from the local authorities and from other urgent social needs of the community.
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  1f the Chancellor analyses the £250,000,000, he will find that it is very largely governed by the level of prices. There is not very much prospect of prices falling in this country in the years that lie immediately ahead. I take the view that in a time of recovering industry and commerce the tendency will be for prices, within probably narrow limits, to rise. If that is true, the Chancellor of the Exchequer will find that he is very largely tied up in that class of expenditure and he will require to depend upon other devices if he is going to effect a reduction of expenditure. There is one suggestion, of a constructive character, I hope, which the Committee ought to consider.
  We cannot impose greater burdens upon the local authorities under existing conditions. There are already in this country a considerable number of distressed districts which have reached the end of their borrowing powers and which have been compelled to get loans from the State on such conditions as we could offer. It is plain that we cannot increase their obligations, but I am satisfied that we could do a great deal to improve the mechanism which connects the State with the local authority in our financial arrangements. The Geddes Committee made a rather wild attack upon the percentage grants. But a year of investigation by the Meston Committee showed that in the opinion of the majority of the members of that Committee that attack was very largely unjustified. If by any scheme we could work out the unit of cost in the different services between the locality and the State, we should not in any way reduce what we are giving to the local authorities at the present time —I do not recommend that —but we should get a very much larger return in the locality for the assistance which we are giving. That would be true economy in that sphere, and to that extent we might liberate millions in the course of time for other purposes.
  It is one of the regrets of recent financial experience that no practical steps have been taken in that important sphere. The Meston Committee has not reported, and there is no proper statistical data for a unitary basis, and so we are tied in this Department to £250,000,000 without, I am bound to confess, getting anything like a full return for the money we place at the disposal of the locality.

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  I have raised these issues, which in this subject are largely non-controversial, because they ought to be remembered during this Debate. The Committee must make up its mind to have an annual expenditure of approximately £800,000,000 unless it is prepared to face drastic steps in the Consolidated Fund Services, and unless the Government have some policy, whatever it may be, as regards national debt, armaments and services of that kind. There is only a very limited sphere in the second department, in what I would call the social services sphere, and one of the indictments of the Chancellor of the Exchequer's statement is that, while he tackles taxation by imposing something here, and taking away something there, he says practically nothing about the £470,000,000 which are expended in burdens attributable to war, the overwhelming part of which cannot be described as productive in any shape or form.
  Sir FREDRIC WISE: I should like, first of all, to congratulate the Chancellor of the Exchequer on his speech. I hope that anything I may say he will consider to be constructive, and that he will consider the various points I put before him in that light. I consider that this is a great, although a most difficult, Budget. The right hon. Member for Colne Valley (Mr. Snowden) called it a rich man's Budget, and the right hon. Member for Swansea, West (Mr. Runic man) called it a rentiers' Budget. I think I can safely call it a people's Bud get. I should like to congratulate the right hon. Member for Colne Valley on his close estimating in his Budget of last year, and if I criticise it at all, it is in its increase of expenditure. Not only did his Budget increase expenditure —I understand the reason —but the Budget which we are now discussing also increases expenditure.
  The right hon. Member for Central Edinburgh (Mr. Graham) dealt with the National Debt. I agree with a great deal of what he said. A country can only stand a National Debt according to its productivity. A point which was left out in the speech of the right hon. Member for Central Edinburgh was the amount of our debt per head of the population. If the figures are worked out, it will be seen that our debt represents £160 per head
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  of the population, compared with a National Debt of only £37 per head of the population in the United States of America, and a National Debt of only £2 Os. per head of the population in Germany. That will be an argument for the right hon. Member for Swansea West in regard to the question of the unfair competition which we have to face at the present time.
  We have an internal debt and an external debt. I am not afraid of our internal debt. [Laughter.] Well, we have it among ourselves. Our external debt, which, roughly, is £1,000,000,000, is a drain on this country, and the charge for it works out, roughly, at from £33,000,000 to £34,000,000 a year. The difference between an external debt and an internal debt is that the internal debt we produce and consume, but the external debt we produce but do not consume. It is a big point. I am glad that the Chancellor has increased the sinking fund to £50,000,000.
  There was also reference made to the Allied debts. The Allied countries can not pay —with the franc varying between 60 to almost 120 francs in the year —until they get stabilised. Until something definite happens you cannot expect to see a return from the Allies at the present time. The Chancellor of the Exchequer referred to the rise in British funds. During the last three or four years we have had a big rise, and it has benefited holders who took a certain amount of risk at that time, and who supported the credit of the country when that credit was not as good as it is to-day. Take the 5 per cent. War Loan. That fell to 82½, and it has been up to 103¾ but I do not see why the person who invested his money at 8½ should not get the benefit of that rise. I agree in this with the right hon. Member for Central Edinburgh, that during the War our finances were not carried on quite as they should have been. They were slipshod.
  Now, in regard to taxation, the main thing is to have fair taxation. In every country taxation questions are daily assuming greater importance. On the one hand the State's functions and charges are heavy and, on the other hand, the citizen is obliged from his income or capital to provide the necessary funds. It is a bad day when a citizen has to sell capital to supply the needs of the nation.

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  The Income Tax is our sheet anchor, and during the last seven years between Income Tax and Super-tax payers, who number, I understand, between them about 2,500,000, they have paid £2,488,000,000 to the Exchequer. That is a wonderful thing, whatever the Labour party may say of the capitalist system. The hon. Member for Keighley (Mr. Lees-Smith) stated last night that he did not believe in the reduction of sixpence in the Income Tax, and that it was not going to strengthen or stimulate our trade, and he referred to the position of elderly ladies living in suburbs who held debentures. If those ladies get a reduction they either spend it or save it. If they spend it and buy British goods that is a benefit to the State. If they buy foreign goods the position, according to the Liberal party, is that for everything which you send across the water some thing comes back, so that that is also benefiting trade. If they save it and put it into War Loan, does not that put up the credit of the country, and, if they put on deposit in a. bank, the bank lends it to industry, and I contend that this relief of sixpence must stimulate trade.
  The main thing, I agree with the right hon. Member for Central Edinburgh, is the enormous amount of our debt. We really do want some lightening of that debt. It can only be done, I contend, in two ways; (1) by a reduction of Government expenditure, and (2) by the conversion of loan. I am not going to refer to the reduction of Government expenditure, but I do think that a Cabinet Committee is not quite strong enough for the purpose because they probably have not the time to give to it. The hon. Member for Central Nottingham (Mr. Bennett) gave some very useful figures last night, which I recommend hon. Members to consider, as to the directions in which it is possible to reduce Government expenditure. But with regard to number (2), conversion of loan, we have maturing in the next four years £1,000,000,000, and if you add to that the 5 per cent. War Loan, which it is at the option of the Government to redeem in 1929, it comes to £3,000,000,000, a vast amount. There can be a great saving if only some big conversion scheme can be carried out.
  I am not a believer in conversion into what is called the 3½ per cent. Modern
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  Consols. The right hon. Member for Colne Valley, when he converted Government stocks, did not convert into the 3½ per cent. Conversion Loan. He issued 4½, per cent. stock at a price of 07 or 98, Which is far more advantageous to the country than to issue 3½ per cent. stock at 61½ percent. The first issue took place at 61½ per cent. and yielded £5 15s. percent., the second issue was made at 68½ per cent., the third at 73½, per cent., and the two conversion issues which have been made by the present Chancellor of the Exchequer have both been treated as a 3½ per cent. Conversion Loan. What does it mean? We increased the nominal amount of our debt, by issuing at a discount an amount of £243,000,000. I contend that it is far better to issue a stock nearer par, even if we have to give a little more interest. This scheme of the issuing stock at a discount was carried out years ago. The North Administration of 1782 gave for every £100 issued £150 of stock, and William Pitt who followed—perhaps the Chancellor of the Exchequer is his shadow—made the same mistake. For every £100 3 per cent. Pitt issued £150 of stock. Pitt matured his financial ability later, but he never carried out that operation again. I contend that the issue of Government stock at a big discount is not advantageous from the point of view of the country.
  Now I come to a far more important point, that. is, in regard to the gold standard. I am in favour of a return to the gold standard by degrees. It is a most difficult subject, and it reminds me of the story which was told of Mr. Goschen when he was Chancellor of the Exchequer. A friend asked him if he could tell him exactly how the exchange worked, and the reply of Mr. Goschen was, that the only person who really understood the exchange was now in a lunatic asylum. The gold question is more difficult even than the exchange. The hon. Member for Leicester (Mr. Pethick-Lawrence) last night described it as a gamble. I do not think that he is far wrong. My hon. Friend the Member for Stroud (Sir F. Nelson) referred to a text-book definition last night, but really a gold standard is a language of values, and I feel that it affects us all, Members of Parliament, men, women and children in this country. I believe in

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  what the Member for Leicester said, that in many ways this is a gamble. I well remember when the Act of 1920 was going through the House under the guidance of the present Prime Minister. It was the Liberals who insisted on the period of the Bill being limited to five years, and the Act comes to an end on the 31st December this year.
  There have been various conferences. The Brussels Conference in 1920 stated that it was highly desirable that countries should have an effective gold standard. In 1920 to think of a gold standard was a farce, but there was a farce in the whole of Europe, except in this country, and the theme of the farce was inflation, and paper money was issued by trillions. The Genoa Conference in 1922 suggested the same thing, but still Budgets yawned and the trillions of paper money continued to be issued. Now I come to the Report of the Committee on the Gold, Standard which the Chancellor of the Exchequer was kind enough to hand to Members after his speech. Honestly, I do not think very much of that report. There were very few people called before the Committee, and I feel that in many respects the report is not up to the standard of a gold standard report.
  If you look at Clause 12 you will see that they say we are paying interest and sinking fund on our debt to America. Of course we are, but we are in a very much weaker position to-day than we were in pre-War days. The Committee seem to think that we are not weaker. They seem to forget that we sold £1,000,000,000 of American securities during the War, and they seem to forget that the Fordney tariff has been set up since the War, and it is indeed difficult to keep up the payment of interest and sinking fund on that debt except by gold. I notice that in Clause 23 they recommend that a general licence should be given to the Bank of England. Who is getting the benefit of that general licence? Is the taxpayer? I should like very much for the Chancellor of the Exchequer to answer that point. Cambists can make big profits and this should go to the taxpayer. In Clause 32 they refer to the British experience of the restoration of the gold standard after the French Wars of 100 years ago, and they go on to say:
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  " We believe that on this point history will repeat itself."
  I cannot understand that being put into the report. I wonder if the Chancellor of the Exchequer has read the bullion report of 1810. Perhaps the Financial Secretary to the Treasury has. It is a most important report and it was not until 1819 that this country, or the members of this honourable House, appreciated that there was something in that report. Peel insisted upon a Committee being set up and it was acted on, but it was acted on in a very different way from the way in which we are acting in regard to this gold standard. Peel produced convertibility at a premium, and the Bank of England delivered gold of 60 oz. in exchange for notes at 81 shillings per ounce, the mint price being 77s. 10½d. Full convertibility 00k place in 1923. Prices dropped 60 percent., but the difference was that in those days we had no external debt and it is a big difference.
  From criticising the report of the Committee I may go on to what the Chancellor of the Exchequer said in his very able speech. He said that we have no immediate heavy commitments across the Atlantic. I am always glad to hear this. He has bought 166,000,000 dollars to provide for the payments of interest and sinking fund in June and December. I fully realise you cannot buy 166,000,000 dollars in a day or two, but surely it would have been better for the right hon. Gentleman to have waited. He knew there was going to be a gold standard and it would have been better for the taxpayer if he had waited a little, at any rate for part of the money. This honourable House cheered the right. hon. Gentleman for having bought these dollars, but I contend he has cost the country several thousands of pounds by having bought them at too early a date.
  Next I come to another very important point. The Chancellor states he will be in a position to obtain a credit for 300,000,000 dollars. Are we paying for this option? If so, how much? That will increase our external debt. If there is one thing we do not want, it is to borrow money, and I contend that this is not proper finance. If you borrow for exchange purposes it is not legitimate borrowing, and it recoils back upon you later on when this sum has to be paid off. I was indeed pleased to hear the Chancellor say that there is no isolation.

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  I am pleased that the Empire is working with him. I am pleased that countries like Holland and the Dutch Indies are working with us. We do not want to have isolation. I interrupted the right hon. Gentleman when he was making his great speech with the word "India." I apologise for the interruption, but surely anybody who understands the Indian position must know that it is a big kernel of the whole situation. Who are the people who are buying gold? India and the United States. India bought £30,000,000 of gold last year. Why? Because the rupee, being higher on the pre-war level than the dollar over sterling, the international prices in India in gold and sovereigns was lower than it had been for 30 years. Naturally, India bought gold, and will continue to buy gold if the rupee keeps up at 1.5⅞ or 1s. 6d.; but I sincerely hope when the Viceroy and Sir Basil Blackett are here some arrangement will be made in regard to a gold standard.
  The Chancellor made a reference to Sweden. Sweden has gone on the gold standard as from April, 1924. This is quite a good example to us, although we live in a country which is very different to Sweden. Sweden found that gold went out of the country. She had to get credits in New York. She had to get 10,000,000 dollars on Swedish Treasury Bonds take n there besides 25,000,000 dollars floated on the ordinary market. What happened? It is the uncertain that happens when you have not a precedent. The Swedish financial people found that India was buying in Stockholm at 8d. an ounce above the New York parity and Germany was also buying in Stockholm against the dollar loan in New York. These things may happen again. I am sorry for being technical, but this is a very technical as well as a very critical and difficult subject. There is a great man in Sweden named Professor Gustave Cassel. I understand this eminent Swedish economist is to contribute to an international banking number of the "Times Trade Supplement," and I quote from the "Times" of last week an extract which was published from his article. He writes with regard to the gold standard:
  " The story is instructive enough. Many countries have hesitated to restore the gold standard fearing that they will thereby be exposed to enormous gold demands. The
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  reality which lies behind that fear has shown itself in the case of Sweden. Certainly extraordinary demands for gold occurred in 1924, but there is no reason why they should continue in the future. Besides all demands have been supplied liberally from the United States."
  Does Great Britain want to be any more in the hands of the United States? Are we going to allow ourselves with these gold standard credits to be actually at the command of the United States. The argument of Professor Cassel may read very well as far as Sweden is concerned, but we as a country do not want to borrow any more from the United States, and we certainly do not want to be in their hands. There is one big point, which is not often made or is not made often enough, and it is that the United States, which was a debtor country in 1913, is now a creditor country. A creditor country must import and a debtor country must export, subject to investments in foreign countries. As hon. Members know, the United States has made large foreign investments ever since the Dawes Report, up to about £200,000,000, and I contend in that way she has rectified her self in regard to creditor nations being importers, but she is saturated with gold. She has, as one hon. Member said two days ago, over £300,000,000 of gold beyond her reserve. Roughly, since 1915 the United States has imported £775,000,000 of gold. Naturally she wants us to go on the gold standard so that she may get rid of some of it, and the greatest possible caution is required because it will affect us all if we make a false move at the present time. Mr. Walter Leaf, chairman of the Westminster Bank, said last June or July that a rise in the Bank rate might be sufficient to enable us to go on the gold standard. Conditions have altered since then, but the report of the Sound Currency Association, which I believe was sent to the Chancellor of the Exchequer, shows that the bankers themselves did not agree as to whether the policy was the right policy, or whether this was the right time. When the bankers do not agree, we should have all the more caution and care in this House.
  There is one very important point which I should like to raise, and it is in reference to our adverse trade balance, all affecting the gold standard. The gold standard is greatly affected by that. In 1922 we had an adverse trade balance of

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  £180,000,000. In 1923 it was £212,000,000, and in 1924 it was £341,000,000. We paid for that by our invisible exports, and the balance after the adverse trade balance had been paid for was in 1922, £155,000,000; in 1923, £97,000,000, and in 1924 only £29,000,000. That is an additional risk especially as our overseas investments have averaged for the last three years £134,000,000. If you overinvest what happens? In the ordinary course your exchange goes down or you will have to meet that with gold. So you will now have to meet possibly your adverse trade balance with gold, and you will have to meet possibly your external debt with gold. Last year £30,000,000 were sent across to pay our external debt out of £33,000,000 or £34,000,000. Our reserve of gold at the present time is just over £150,000,000. Compare that with pre-War days. The reserve at the Bank of England in July, 1914, was only £38,500.000. but we had all the currency behind us—the gold of the sovereigns and half-sovereigns which we carried, about instead of paper money. That was behind us and that saw us through then, but we have not got that at the present time.
  We are still a creditor nation, and I contend that to be a creditor nation is a very great asset. but unless we were a creditor nation we could not possibly consider the gold standard at all. I fear that the Chancellor of the Exchequer has not carried out all the recommendations of the Cunliffe Committee. I am a believer in that Committee, and I think anybody who reads the Reports made by it in 1918 or 1919 must agree that it. is sound and that the Committee almost carried out what it was intended to carry out, namely, to find a means for improving the credit of this country. I feel myself that fiduciary issue might be more elastic but that is only a big detail, and, taking the Report as a whole, I wish the Chancellor of the Exchequer would give it full effect. The amount of speculation that is going on or has been going on in dollars is large, and I have heard enormous figures mentioned in this connection. How will that affect us? It will only affect us in one way. You cannot prevent a man taking his profit if he takes his risk, and it means possibly that gold may have to be found. It is a very uncertain thing and so, in conclusion, while I apologise for having
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  been so technical, may I say I feel confident that if the Chancellor puts his ear to the ground he will hear the shout of economy, but he will also hear the shout that our citizens want to be protected from any possibility of getting further into the hands of the United States.
  Captain F. E. GUEST: In the very few minutes during which I propose to occupy the time of the Committee I may be permitted first to express my congratulations to the Chancellor of the Exchequer upon the admirable form and presentation of his great Budget, though it is for another reason that I venture to trespass upon the attention of hon. Members. I feel that the issues involved in this Budget are so wide that anyone who represents more than himself or his own vote, however small that representation may be, is bound to express the opinions which he and his friends hold. In this connection I wish to express as briefly as possible a Liberal view. It may not be the same Liberal view as that which was expressed this afternoon by the right hon. Gentle man the Member for West Swansea (Mr. Runciman). [HON. MEMBERS: "Why not go over to the other side'? "] Because I am anxious to express a Liberal view, and I am emboldened to remain here because I have found in the course of the Debate very sharp differences between my right hon. Friend the Member for Swansea and my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). One apparently wants the pensions' scheme to be on a contributory basis, and the other wants it to he on a non-contributory basis.
  The Liberal point of view that I wish to express is this: The Budget, taken as a test of the Government's good faith, in broad outline, in my opinion, justifies the belief that some of us Liberals sitting in the House to-day placed in the Prime Minister's words given at the election in November last. In its broad outline, he has succeeded, through the mouthpiece of his Chancellor of the Exchequer, in carrying out the four great objectives of his general programme. He has, in this Budget, disregarded to a certain extent the great vested interests which rank behind him, he has kept his promise to the country not to impose a general tariff, he has not imposed, and his Chancellor has not imposed for him, any new taxes upon food, and the scheme goes further, in that a. large measure of security has

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  been afforded to the workers at home, and a large measure of encouragement, as I think will be shown in the next few months, has been given to industry. I cannot yet make out how strong the opposition to the insurance scheme part of the Budget is going to be. I gathered from the speech delivered by the late Chancellor of the Exchequer that the Labour party intend to impose it, but I cannot yet make out what the Liberal party, or other sections of it than that for which I speak, intend to do. Some of them, as I have indicated before, have differing opinions about it, but it seems to me to he nothing more nor less than political pettiness to oppose a scheme of this magnitude and importance in continuance of the efforts that the State, within seven years of the most homeric struggle the world has ever had to bear, is making to succour the most deserving of the great mass of our population.
  I will keep the Committee hardly a minute in criticism of the Budget, but I wish to say a word or two on behalf of the Liberals whom I have the honour to represent. [An HON. MEMBER: "All of them? "] Although they may be few in number, I believe the weight of their votes in the Lobby is as heavy as the weight of the votes commanded by the right hon. Member for West Swansea. If a Division had taken place on the main Resolutions which have been put before the Committee in the last two days, I think the votes of those Members of the Liberal party—eight in number—for whom I speak would have gone in support of the Chancellor's proposals. The new duties and the McKenna Duties, from my point of view, are not obnoxious, and I cannot understand how they can be so from the point of view of anybody on the Labour Benches. There is no necessity to pay them unless one wants to. They are purely taxes on luxuries and not upon necessaries, and I think that, when fault is found with them, it is peculiar that it should come from those ranks. I do not see very much difference, either academically or economically, between a duty on natural silk and a duty upon tea. Neither of these commodities can be found within our Islands, and it is obvious, therefore, that the great volume of the tax goes to the revenue, and if it is fair to put it on tea, I dd. not see why it is not fair to put it on silk.
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  Anybody who adheres too rigidly to the economic tariff principles of the pre-War days has failed to appreciate that we are living in a different world. Those of us who were rigid in the past would be foolish to remain so now, and I think that might truly be said of both sides of the House. The direct taxation, certainly, cannot be described as vote-seeking proposals, and the Government is free from any accusation of that nature. The re-adjustment of the burdens between the direct taxpayers, I think, will be advantageous to both sections. I was glad to read, in a speech delivered by the right hon. Member for Hillhead (Sir R. Horne), that, in his view—and in industrial matters I am very nearly as much influenced by his views as by those of the right hon. Member for West Swansea—the relief obtained by the tax payer to the disadvantage of inheritors will accrue to the advantage of industry. I think his explanation appeals to common-sense people who are dispassionate in this matter. It is surely obvious that it is better that. a man between 50 and 70 years of age, who has acquired a fortune by means of his brains and of his knowledge of industrial difficulties and trade perplexities, should have at his disposal larger funds than he had before this Budget, which he can turn over again, with all the science and knowledge he possesses and has acquired over those many years. I think he will make more with that money even if the increased burden falls upon his successors. After all is said and done, you can better afford to insure for your successors than you can go without the money which industry needs to-day. If you give money to industry, you give employment at once, and if that were the only argument, it seems to me to be a very strong one in this connection.
  There is one section who, I am sure, will show their gratitude to the Government for this Budget, and very little has been said about them. I refer to what I call the middle professional classes, who have borne a very heavy burden since the War. First of all, they have no trade unions to defend them, and, secondly, they come from that class of society which has to keep up appearances, perhaps, even more so than almost any other class in the, community. They have uncomplainingly put up with the increased cost of

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  living and tried to make a good show on it, and I am glad to see that the great mass of the clerks and the small professional classes, with incomes ranging between £300 and, say, £1,200 a year, have, under this Budget, get real relief, and I am convinced that they will show their gratitude to this Government when the time comes. In conclusion, if there had been a division on these Resolutions, my friends and I would have supported the Government on the main proposals of the Budget. They, however, have very naturally asked me to say that they retain their freedom on details to vote as they think fit. In my case, I go further than that. I am not prepared to be mean or niggardly in my attitude to this Budget. I believe it is the greatest effort of social reconstruction that has been advanced in recent years by any Government., and I am pleased and proud to try to help it through.
  Captain MACMILLAN:In addressing the Committee for the first time, I am sure I can claim the indulgence which is always afforded to a new Member on such an occasion. I should not venture to do so, except that I feel that there has been, perhaps, too much consideration given to rather minor details of this Budget and not enough consideration to its major aspects. We have had from the late Chancellor of the Exchequer a speech full of his usual skill and with a full amount of the acerbity with which he is wont to speak. I am not blaming him for that, because I think it is not unnatural that, under the circumstances in which this Budget was introduced, he should feel a little bitterness in the matter. While the Chancellor of the Exchequer was unfolding his proposals, one of the most interesting things was to see the expression upon the faces of some of the hon. Members opposite. First of all, they had to listen, of course, with interest to what the Chancellor was going to say, but the interest turned rapidly to surprise at the audacity and the magnitude of his proposals, and finally, I think, to horror and disappointment when they thought of the way in which these proposals would be received in this country. Possibly it added a little to the bitterness of this disillusionment to think that all this, from their point of view, miserable state of affairs is very largely their own fault.
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  We should expect from the late Chancellor of the Exchequer rather more bitterness than he usually shows, because, after all, poison always irritates more in a wound which is self-inflicted, and it may have occurred to his mind that if it had not been for the wasted opportunities of his period of office, very largely, I think we may say, due to the activities of the late Under-Secretary for Foreign Affairs, he would have had an opportunity of being in office at this time and of producing in a Budget some of those things which have been so long promised by the Labour party. With regard to the McKenna Duties, it was, I think, natural that both the Labour party and the Liberal party should resent their reimposition. The right hon. Member for West Swansea (Mr. Runciman) said that the reimposition of the McKenna Duties was not an economic but a political change. If I may, I will venture to remind him that the taking off of the McKenna Duties was a political move which was due to an attempt to solidify the. not too solid coalition which existed at that time between the Liberals and the Labour party. It was due partly to political considerations, mixed with a certain element of economic pedantry.
  If it be not impertinent for me to say so, the late Chancellor and many others who have spoken have thought it necessary to use the very ancient method of making up for a certain weakness in argument by a certain vigour in statement. He really had the temerity to say that this was a rich man's Budget. When you think of the remissions of taxation, remissions which he supported, affecting most of all the poorer classes of Income Tax payers, I think that is a monstrous statement to have been made in this House, but I fancy that the real explanation is a certain feeling of disillusionment and disappointment. The late Chancellor said, with regard to the remissions on the lower scale of Income Tax, that it was a proposal which had always been made by members of the party sitting behind him, and he was sure that they would not be in a position to oppose the proposal, which had their sympathy while in office. That is where the shoe pinches. If these proposals had been made by the members of the party sitting behind him when they were still in office all would have been well. They

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  had their sympathy, but never their practical support, and it is the same throughout the whole of this Budget. This Budget is not to be debated on its real merits, but is to be treated in a very petty spirit, due largely, in my view, to the disappointment of the party opposite.
  7.0 P.M.
  I should like, if it be not impertinent, to say this. The Leader of the Opposition, in remarks made during the Recess, made an appeal to some of the younger and more progressive Members of the Conservative party to range themselves under Ms flag. I well understand that the General of an Army, half of which is reputed to be in mutiny, and the other half in a state more or less of passive despair, should wish to find some new recruits, but I can assure him that I belong very much to that body of the younger Members of the party, and that, if he thinks that we are either so young or so inexperienced as to be caught by a trap so clumsy as his, it shows that he totally misunderstands the moral principles and ideals of democratic Toryism. He has no conception of what those ideals and principles mean to us. If he thinks that he and his party have only to offer us as the true socialism a kind of mixture, a sort of horrible political cocktail, consisting partly of the dregs of exploded economic views of Karl Marx, mixed up with a little flavour of Cobdenism, well iced by the late Chancellor of the Exchequer, and with a little ginger from the Member for Gorbals (Mr. Buchanan) —if he thinks that this is to be the draught given to our parched throats and that we are ready to accept it, he is very much mistaken.
  There will be many points of detail to be made, and many criticisms to be made, but I venture to think that throughout the whole country, without distinction of party, the Bill introduced into this House and passed through this House, will be remembered by the people of this country when some of the criticisms have long since died away. They will be remembered far longer than hon. Members opposite may now imagine. Hon. Gentlemen opposite are in a dilemma in this matter. They are not quite certain whether to take the line that we have been stealing their clothing while they very incontinently went to bathe in the muddy waters of Russian intrigue, or
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  whether they are to say the clothes are no good anyway. They have not made up. their minds, but the people of this country have made up their minds that these proposals are to their benefit, and I am quite certain of this, that for myself, and for many others who have the same views as I have, although we are but young, newly arrived, and inexperienced members of the party, it has been, to have a Budget like this, an immense encouragement. and we claim it as a sign of what Conservatism can do and has always done, when it is true to itself.
  Mr. J. H. WILLIAMS:Having listened to the Debate and having heard various debators who were half-heartedly in support of this Budget, and others halfheartedly against it, it is quite refreshing to hear a live enthusiastic supporter. I, as a humble member of the Labour party, regard the Budget as bad altogether. It is bad because it differentiates between the excessively rich and the poor. Take the Income Tax. To the lower portion of the Income Taxpayers, the Chancellor of the Exchequer gives some £6,000,000. To the better class of Income Taxpayers he gives £28,000,000. Let me refer to the fact that since 1922 the party opposite has given to the rich classes of this country £100,000,000 sterling. They always give to the rich for nothing. When they give anything to the poor, they make them pay for it. Then, again, with regard to the Super tax. Had the Chancellor of the Exchequer retained £10,000,000 on the Super-tax, with an increase of £10,000,000 on the Death Duties, he would easily have reduced the Income Tax Is. in the £, and that would have been far better than what he has done. The Super-tax has been taken off, and the Death Duties have been increased. If that be not a species of financial juggling, then I do not understand what is.
  Again, the Budget is reactionary. It is a true Tory Budget. You will find in the reimposition of the McKenna Duties the cloven hoof of Protection. The McKenna Duties have been reimposed without any necessity. The significant fact in connection with the repeal of the McKenna Duties was this. The person who made the greatest stir in the matter, the maker of the Morris Cowley cars, immediately after the repeal of the duties, extended his works, got new

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  plant installed, increased his employés, decreased his prices, and increased his output. He got such a large profit that a few months ago he bought up the Leom Bollee Motor Car Works in France, and is now manufacturing the Morris Cowley car with the money that has been made in England. Could not the Chancellor of the Exchequer do something to prevent capital made through British workers being invested in foreign countries to compete with British workers, and thus increase our employment? Why cannot the Chancellor of the Exchequer retain the capital created in this country at least within the Empire?
  Then there are the duties which are acknowledged by the Chancellor of the Exchequer to be Protectionist duties pure and simple. I thought we had long left the time when people really believed that tariffs could protect. Disraeli, 60 or 70 years ago, said that Protection was not only dead but damned, but it seems to be revived within the present Parliament. Take the things that have been taxed: silk and artificial silk. Silk is taxed because, we are told, it is a luxury. Why could not the Chancellor of the Exchequer tax, for example, diamonds and pearls and precious stones and things of that kind if he wishes to tax luxuries? The fact of the matter is that he is going to do a great injury to a trade which is beginning to get set upon its feet. Then his tax on hops, I suppose, may increase the price of beer. As far as I am concerned, it is a matter of indifference.
  I now come to the only part of the, Budget worth mentioning at all, and that is the social reform part. We on this side will oppose this with all the power we possess, because we do not believe in a contributory system. As the right hon. Gentleman for Carmarthen (Sir A. Mond) very rightly said, old age pensions have now been in existence for a considerable number of years past on a non-contributory basis. Why should that be changed? There is no actual reason why it should be changed, except that you have in power a reactionary Government The imposition of the contribution upon trades which are already overburdened is sure to cause a crippling of industry.
  Take the mining industry, for example. It will mean an increase of £800,000 per
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  annum, and probably another £800,000 or £1,000,000 in contributions from the workers. That will undoubtedly be the last straw which will break the camel's back as far as the mines are concerned. In Wales and various parts of England mines are closing every day. The total burden placed upon industry in this country is £20,000,000. Why, we ask, should industry be expected to shoulder sole responsibility for social reform in this country? Why should not the landlords take a share of the burden, and the financiers, and the royalty owners? We maintain that the only solution of the whole question of securing these various pensions on a non-contributory basis, is to nationalise the land, and get at the source of all the wealth. That is why we oppose the Budget. As a humble Member of the Labour party, and one who is, perhaps, not well versed in the intricacies of finance, in my opinion the return to the gold standard is of very grave concern to industry in this country, especially the working classes. We are binding our selves hand and foot to the United States, and the result eventually will be that the workers of this country will have to accept lower wages and work longer hours. That is why I shall vote against this Budget.
  Sir JOHN MARRIOTT:It very rarely falls to one of the older Members of this House to be in a position to congratulate his two immediate predecessors on their successful first speeches in the House, and I am sure that all Members, without distinction of party, will very cordially congratulate my hon. and gallant Friend the Member for Stockton-on-Tees (Captain MacMillan) on his very brilliant contribution to this Debate. If I may be allowed to say so, it was not only a brilliant individual contribution to the Debate, but I believe it. reflects quite accurately the best mind of the younger members of the Conservative party in this House and outside, and I believe that what he has said in regard to the substantial instalment of social reform promised in this Budget will be re-echoed throughout our party, and, indeed, throughout all parties in this country. With regard to the speech which has just fallen from the hon. Member opposite, I should like to say that he addressed to the Committee some very well seasoned arguments. He addressed them, I am certain, with very great sincerity, and

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  anyone who speaks in this House with sincerity, from whatever quarter, will always obtain, I believe, a respectful hearing.
  I want to pass, if I may, to some few remarks with regard to the Budget. I suppose that this, and every other Budget, may really, and ought to be regarded from two points of view—first, from the point of view of pure finance, problems of expenditure and revenue, and, secondly, from the point of view of the reaction which finance is bound to exercise upon social well-being and upon industrial prosperity. My first impression of this Budget, from the point of view of pure finance, is that it does not quite possess that character of broad simplicity which distinguished some of the great Budgets of the 19th century: which distinguished, for example, the great Budgets of Peel between 1842 and 1846, and which distinguished, in a pre-eminent degree, the Gladstone Budgets of 1853 and 1860. There is riot the same massive simplicity about this Budget that there was about those, but we are bound to remember, I think, that the conditions under which this Budget was unfolded are by no means so simple as those which confronted the great financiers of the past. It is a commonplace to say that the times by which we are confronted are times of enormous difficulty from every point of view, financial, industrial and social, and I think the Chancellor of the Exchequer is to be congratulated on having produced a Budget which, from the point of view of pure finance, is at least extraordinarily ingenious; but that financial ingenuity has been combined, as almost every speaker has noticed, with a very bold and, I venture to say, a very impressive attempt to envisage our social and industrial structure as a whole, and, for the weakest point in that structure, t o devise a remedy which, I believe, will prove to be workable.
  I want to say to-night only a very few words with regard to that remedy. I do not want to deal in detail with the scheme of social insurance, in the first place, because most of us, I think, want further time to study it, and, secondly, because we shall have an opportunity of discussing it at a very early date with fuller knowledge and in more detail. But I would say just two things by way of
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  quite preliminary comment on that scheme. In the first place I hope the Chancellor of the Exchequer will not think me impertinent if I express my personal regret that no single word of recognition fell from his lips for the unwearying and self-denying labours of one who was recently a Member of this House, and to whom this scheme owes whatever popularity it has so far enjoyed in the country, I mean Mr. Broad, the late Member for the Claycross Division. I am perfectly well aware that the scheme which the Chancellor of the Exchequer has adumbrated is not what is called the Broad scheme. I am well aware that actuarial calculations have tended to dissipate the simplicity—the attractive, but perhaps rather dangerous and delusive simplicity—which characterises the scheme put forward by Mr. Broad. But I very greatly doubt, whether, but for his preliminary and devoted labours, we should have had this scheme adumbrated in the Budget this year, and I wish personally, as one who is greatly interested in these schemes, to pay my tribute. to Mr. Broad's work.
  As to the scheme itself, I do most cordially congratulate the Government on having put, at any rate, an instalment of this social insurance scheme into the first Budget that they have produced, for I am in a position to know, I think perhaps as well as any Member of this House, how profound would have been the disappointment in the country if there hail been no attempt to implement pledges which were so freely given in the autumn. For three years past I have been a very close student of this scheme, and I have personally fought three elections mainly upon it. My postbag day by day testifies to the fact that the scheme has excited, and is exciting, an enormous degree of interest in the country at large. But from the first I have always personally insisted that any such scheme must be, in the first place, contributory; in the second place, compulsory; and, in the third place, must be comprehensive. So far as I have been able to gather the opinions expressed during the past two days, the point of attack upon this social insurance scheme will be from the point of view of its contributory character. I am not clear whether that is the point of attack from the Liberal party. I gather that there is some little division of opinion among them, hut, my impression

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  is that the right hon. Member for Carmarthen (Sir A. Mond), and, I think, also the right hon. Member for West Swansea (Mr. Runciman) joined hands with those above the Gangway in denouncing the contributory character of this scheme.
  I listened this afternoon to the right hon. Member for West Swansea, as I always listen to anything that falls from him, with very great attention, and I listened to the speeches of the right hon. Member for Carmarthen and the right hon. Member for Hillhead (Sir R. Home) yesterday. What was the burden of two out of three of those speeches? I do not think the point was entirely absent from the third. It was that this scheme will lay an unjustifiable burden upon industry But if the argument which we constantly hear from these right hon. Gentlemen is sound, all taxation is a burden upon industry. Any scheme which you can devise, and however you distribute the burden, must ultimately come upon the industry of the country, and if all taxation is ultimately a burden on industry, then it seems to me to take much of the sting out of the argument put forward in the speeches to which I have just referred. Does not the existing scheme of old age pensions, which is a non-contributory scheme. represent a great burden upon industry? Are not the poor rates a terrific burden upon industry? The right hon. Member for Hillhead knows, as I know, something of the railway industry. Has he ever figured out, I would like to know, the burden imposed by poor rates alone upon that industry?
  I confess that nothing impresses me so much in those actuarial reports that I have seen as the point disclosed by the Chancellor of the Exchequer in regard to the increment which we may anticipate in the burden of a. non-contributory old age pensions scheme. The Chancellor of the Exchequer told us that to-day that burden represents £27,000,000 a year, that in 10 years' time it will represent £36,000,000 a year, in 20 years' time £46,000,000 a year, and in 50 years' time no less than £60,000,000 a year. I am speaking of the old age pensions scheme on its existing basis. I wonder very much whether the right hon. Members for West Swansea and Carmarthen had sufficiently considered that immensely significant.
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  and, to my mind, very menacing revelation. I know the reply which they will probably make when we come to debate this matter in detail, arid I am perfectly prepared to meet it, but I think it. is important not to let criticism of such great masters of industry as the right hon. Member for Carmarthen and the right hon. Member for West Swansea to get too long a start. I, therefore, refer to it for a moment to-night.
  There is another point which, I think, has been quite insufficiently noticed. If this scheme, as outlined by the Chancellor of the Exchequer, comes into prompt operation, one effect of it will be—and I venture to impress this part of the scheme upon hon. Members opposite; I do not know whether they have sufficiently realised it—to get the older men of 65 out of industry on to pension, and to make room for the younger men in industry.
  Mr. WALLHEAD: They cannot live on 10s. a week.
  Sir J. MARRIOTT: I am not suggesting that. That is a point of detail which is of great importance, but that is not my immediate point. My immediate point is—and I do not think that this can be controverted by hon. Members opposite—that if this scheme works in the direction in which it is anticipated to work, the effect. of it will be to make it a rule in industry for these younger men—for whom hon. Members opposite are so solicitous—doubtless that is absolutely genuine--to come in—and that is a point of immense significance.
  Mr. WALLHEAD: May I—
  Sir J. MARRIOTT: The hon. Gentleman, I am sure, will have an opportunity later but if he wants for the moment to deal with the particular point I am making I will give way to him, but not on the size of the pension.
  Mr. WALLHEAD: What I desired to say was that in all probability there are very few men in industry now at 65. They are probably under the Poor Law.
  Sir J. MARRIOTT: The hon. Gentleman probably knows—I give him credit for knowing—that the industrial age is steadily on the increase. Every trade unionist must know that—I regret to say, to its financial cost. However, that is a point which I suggest is not of very great

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  importance. There is another point in the scheme of very great importance, which seems to me to have been entirely missed in the criticism of the two right hon. Gentlemen opposite, to whose speeches I referred to a little while ago: that is that the whole essence of this scheme of social insurance is to restore to our wage-earners, and to those who are coming in, some sense of economic security. I believe that nothing has done more to depress industrial output in this country, nothing has done more to contribute towards that low rate of productivity which on every hand is deplored, than this sense of economic insecurity. If we can once restore economic security, then I believe we shall have gone a very long way to solve the problem of productivity which is at present grievously militating against the possibility of our power to compete in the neutral markets of the world. There are other Members anxious to speak, and I am not anxious to detain the Committee at any length, but I want, before I sit down, just to say a few words on the other side of the Budget —on its purely financial aspect; and for a reason which I think the Committee will be good enough to appreciate when I mention it.
  I cannot help feeling that in regard to that direct taxation which now represents so large a proportion of our revenue, that the Chancellor of the Exchequer has manifested very great ingenuity. What is the broad outline of the Budget in that respect? The Chancellor of the Exchequer is going to relieve income at the expense of capital. [HON. MEMBERS: "No l"] That is the broad effect of the proposal. I am not such an enthusiastic advocate of the taxation of capital as hon. Members I see opposite. I object very strongly to the taxation of capital on purely economic grounds. I realise, however, that human nature being what it is, the manipulation of direct taxation which we have in this Budget is likely to have a good effect upon industry. I think it will be popular, therefore—I was going to say somewhat illogically—sound. I think on the whole, in view of the immediate industrial situation by which we are confronted, that this manipulation is justifiable. I desire to say that, in my opinion, it is only justifiable as an expedient, and as a much-needed encouragement of the industries of the country. Like other
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  speakers, I, being in the position of touching industry at a good many points, view with the very greatest apprehension the industrial situation to-day. I hold that any Chancellor of the Exchequer is, under the circumstances, justified in going a little away from the strict path of economic orthodoxy in order to hold out an encuraging hand to industry. But I am very much afraid—and I say it with great regret—that the net result of this Budget will be, in some quarters at any rate, not to dissipate, but to intensify the apprehension with which the economic industrial situation is regarded. For this reason I hold with the hon. Member who spoke from the opposite side this after noon, that the only effective encouragement to industry at the present time is a drastic, reduction of national expenditure. The Budget represents an expenditure of some £800,000,000. I suppose there will be no point in my reminding the Committee, but I may be permitted to remind the Chancellor of the Exchequer, that if his distinguished father had not" forgotten Goschen" he would have introduced to this House a Budget representing an expenditure of £87,000,000.
  Two years ago the present Prime Minister budgeted, if I remember aright, for an expenditure of £788,000,000. Two years later we are budgeting for an expenditure of £800,000,000, an increase of £12,000,000 in two years. I think that is by far the most serious feature in this Budget. I am perfectly well aware of the explanation which the Chancellor of the Exchequer offered to this Committee. He said he had not been long enough in office to investigate expenditure. I cannot, however, help thinking that if he had investigated a little more closely, he might have done something to relieve the apprehension, which is so generally felt, that we are spending a very great deal more than we can afford to spend. Think of a national Budget of C800,000,000, taken in conjunction with a local Budget of £160,000,000, representing £960,000,000
  —nearly £1,000,000.000! That is a burden under which industry may well groan. I have spent the greatest part of my Parliamentary time for the last eight years—I was going to say in a rather futile attempt to curtail national expenditure. But I cannot help feeling that the Committee over which I have the

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  honour to preside, the Estimates Committee, represents a very zealous and a very hard-working attempt—not too successful—to restrict national expenditure. I have, indeed, long since reached the conclusion that the only one effective way by which the Chancellor of the Exchequer can restrict national expenditure is by rationing the Government Departments, by assigning to each a maximum of expenditure, and by compelling them to keep within that limit. I am sorry to have detained the Committee so long, but these are the two points upon which I desire to insist. First of all, the point in regard to expenditure, and, secondly, in regard to the immensity of the character of the scheme of social insurance outlined in the Budget by the Chancellor of the Exchequer. These two points I have for long made a serious study, and I hope the House will forgive me for having imposed my views upon them in regard to these matters.
  Mr. DALTON:We listened two days ago to a very striking Budget statement fortified, to use a favourite word of the Chancellor of the Exchequer, with a strong oratorical flavouring. During the two days of Debate we have seen a gradual dispersion of the mists of rhetoric; it has been replaced by a certain amount of what I may call atmospheric deflation. Hardly a single hon. Member on the other side has whole heartedly supported the Budget. I had thought that until towards the end of his speech the hon. Member for York (Sir J. Marriott), who has just sat down, was going to give a strong support to it, but he ended his speech with criticism on the ground of the failure of the Chancellor of the Exchequer to bring expenditure within bounds. I am less concerned with what I have ventured to term "atmospheric deflation" than I am concerned about that other kind of deflation which is a very important feature of the Chancellor's Budget pronouncement. I refer to the return of the gold standard. No cheers whatever greeted that announcement. Here, again, with, I think, the solitary exception of the right hon. Gentleman the Member for West Swansea (Mr. Runciman), no strong support has been given to the decision of the Chancellor of the Exchequer on that point.
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  I should like, if I may for a moment, to dwell upon the effects of that decision as I, at any rate, anticipate them. The present Prime Minister, when he was Chancellor of the Exchequer a couple of years ago, announced in reply to a question that he was not an inflationist, nor was he a deflationist, but he said he was a non-flationist. That was, I think, typical of the practical wisdom of the Prime Minister. That, however, is a position much too colourless and too little sensational to suit the present Chancellor of the Exchequer. He is going to plunge as a deflationist. We on these benches will hold the Chancellor of the Exchequer strictly to account, and strictly responsible if, as we fear, there should be a further aggravation of unemployment and of the present trade depression as the result of his action, and should it work out that men who are employed lose their jobs as a result of this deflation. Should that be so, we will explain who is to blame.
  There are two difficulties to face. In the first place you have over-valuation of sterling—which has been admitted—on the exchanges. Sterling is worth more in terms of foreign currencies than in terms of goods and services in this country. That means that, for the time being, you have a special handicap imposed upon all British export trades and a special advantage given to our foreign competitors. That, in itself, is bad enough: but what, perhaps, is even worse is that you cannot get away from that very unsatisfactory position except by raising the value of sterling in this country to the higher value which it holds on the exchange—in other words by forcing down prices here by deflationary action which will force down, not only prices, Frit will lead to an attempt to force down wages which, in its turn, may have very serious industrial consequences. The Chancellor of the Exchequer. in his Budget statement, told us that "now is the appointed time "—striking a dramatic attitude—to deflate wages and prices in this country, when already you have 1,200,000 men out of work, 154,000 more than at this time last year when the Labour Government was in office—now is the appointed time to do something which is almost certain to add to this exceed- kingly heavy burden of trade depression and unemployment. I do not wish to

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  spend the time of the Committee in any academic discussion of the matter. I wish only to point out that in the Report to which the Chancellor referred, the Report of the Committee on the Currency and Bank of England Note Issues, in several places it is pointed out that just these results to which I have referred are likely to follow. It is stated on page 5 of the Report:
  " The effective gold standard could thus be restored without further danger or in convenience than that which is inevitable in any period of credit restriction and falling prices."
  They anticipate that such a period will result from this action. They repeat else where:
  " We must be prepared to face a fall in the final price level."
  And they say:
  " A temporary increase in the bank rate may be necessary."
  We are familiar with the fact that the effect of an increase in the Bank Rate is to put a damper on trade revival. There fore, if we are to anticipate an increase in the Bank Rate to six or seven per cent., to protect the gold standard, we may equally anticipate a considerable aggravation of unemployment. The Chancellor of the Exchequer took great credit to himself for having, as he said, discreetly accumulated a large stock of dollars. Lest the House or the country should be misled by his self-complacency in that respect, let me suggest that no accumulation of dollars will do more than help him to maintain the exchange. It is going to do nothing to prevent deflation. It is going to do nothing to prevent the raising of the Bank Rate, and, indeed, merely by 'maintaining the exchange it is going to make both those results more certain to follow. It is not our business to prescribe alternative policies for the Government, but it is quite consistent with the wish to return to the pre-War gold standard at any rate to have waited a little longer until the end of the year, when the embargo on gold exports was due to expire, and then to decide whether in the light of trade and employment at that time the moment had arrived when we could safely remove the embargo, I submit that there was no necessity what ever for, and that no solid advantage will accrue from, rushing the return to the gold standard. As I have said, we will hold the Chancellor and his party
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  responsible for the effects upon trade and employment that may follow.
  I turn from that subject to the question of insurance, the all-in insurance scheme—a policy designed to cover also the seats of hon. Members opposite, since it is apparently thought that the scheme will be popular in the country. I have my doubts about that—when the scheme is. properly understood. There is no Member on the Labour Benches who does not welcome the principle of widows' pensions and old age pensions at an earlier age. In fact, had it not been for the activities of the Labour party, probably widows' pensions would never have been thought of by the Tory party. In 1919, when this subject was first raised in this House in a Motion moved by the late Mr. Tyson Wilson, seconded by the hon. Member for Houghton-le-Spring (Mr. R. Richardson), it was rejected by a. solid Coalition Vote, and on a subsequent occasion the same thing occurred. But the Labour party kept the question to the front, and it has at last been introduced, but in a manner which is most inadequate and unsatisfactory, in a. Budget statement. I do not propose to go into any details, but I will offer three critical commentaries on the outline of the scheme. The first is the inadequacy of the sums which are offered—10s. a week for a widow, 5s. for the first child, and 3s. for the second child, which are less than the poor relief given in most parishes now and quite inadequate as a. means of support. Secondly, there is the very restricted scope of the benefits, which are to accrue only to people who are within the ambit of National Health Insurance. Great numbers of people who need a provision of this kind are not and never will be within that ambit. Thirdly, there is the contributory principle.
  What is called the contributory principle —it has a pleasant sound— really means collecting the money, very largely, from those who will benefit, and by taxation of wages and employment, and taxation in a very special sense on industry. In my judgment these are the worst possible ways in which to raise funds for a scheme of this character. The right way to raise this money is by general taxation adjusted to individual ability to pay and to the wealth of the individual taxpayer. Further, I am of opinion that a widows' pension scheme, very much more generous than this miserable pit

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  tance, could have been financed on a non contributory basis out of the 6d. taken off the Income Tax and the reduction of Super-tax, the benefits which the Chancellor of the Exchequer has conferred upon the direct taxpayers. If the Super tax had been left where it was and the Death Duties put up—I welcome that provision—and if the Income Tax had not been reduced by 6d., there would have been enough money to have made a very good beginning with a, widows' pension scheme, with perhaps double the benefits now offered, and on a non-contributory basis.
  These reductions in Super-tax and Income Tax are to cost the Treasury £30,000,000 this year and £42,000,000 in a full year. That would have been sufficient to make a substantial start in the financing of the scheme. Instead of that we have had these enormous doles given to the wealthier members of the community. I admire the courage of the Chancellor of the Exchequer in compiling Table 10 on page 14 of the White Paper. It will be invaluable in the country. I have collected one or two typical instances. The marginal millionaire who has invested at only 5 per cent. and so gets only £50,000 a year, receives a dole under this arrangement of £1,600 a year, although there is no pretence that he is performing any more service, if any, to the community. The 20,000 a year man will get a dole of £900. The £1,000 a year man gets only £30 more, and when we come down to the poor widow at the bottom of the Table, with £250 a year derived from the savings of a lifetime, we find that she is to get an additional, not £6, but 6s., a year out of these tax reductions. Of course, the great majority of the population, apart from the 2,400,000 who pay Income Tax, get nothing at all. It is the Biblical analogy.
  " For he that bath to him shall be given; and he that bath not, from him shall be taken even that which he hath."
  We are told that the object of these doles to the rich is the encouragement of trade. Several of my hon. Friends have already demonstrated the hollow delusion of that belief. These doles, as distinguished from the unemployment benefit, are unconditional; they are not conditional upon the reinvestment of
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  the money or even upon" genuine and honest attempts to find profitable investments," to adopt the analogy with "genuine and honest attempts to find work," which are required of the claimant to unemployment benefit. There is no penalty upon the squandering of these doles; there is nothing to prevent their being squandered in any form of luxurious or profligate living which may appeal to the minds of some of the recipients. May I suggest that the right way, if you want to encourage saving, is not just to throw money at rich people indiscriminately, regardless of their inclination to thrift or otherwise, but to increase your provision for debt redemption.
  You may be sure that if you increase your Sinking Fund and repay a larger amount of your debt, the greater part of the money repaid will be reinvested. Practically all of it is likely to be reinvested. But the Chancellor of the Exchequer has not adopted that plan. He is content with raising the Sinking Fund to £50,000,000 a year, as provided by the Prime Minister in his scheme. But even that is too much for some financial experts like the right hon. Member for Carmarthen (Sir A. Mond), who would like to see the whole of the Sinking Fund suspended in order to increase the subsidy which he desires to see given to captains of industry. Here is a simple matter of arithmetic. With a Sinking Fund of 150,000,000, which is to be the maximum, it will take 150 years to pay off the National Debt. In the phrase of the Chancellor of the Exchequer, that indicates a peak which we shall never scale together. I cannot think that the people of this country are prepared to make progress at such a snail's pace in the removal of a burden which now presses exceedingly heavily upon the taxpayers and the workers of this country. It is true that the Colwyn Committee is sitting, and it is perhaps reasonable to await its Report before going into any great detail; but I am certain that the people will demand a very much more vigorous handling of this debt than is provided for in a Sinking Fund which will take 150 years to pay off the debt.
  8.0 P.M
  Some of us have made suggestions in the past as to various kinds of vigorous handling which might be effective. When

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  the Colwyn Committee has reported perhaps we shall have more to say on that subject. The right hon. Gentleman who represents Hillhead (Sir R. Horne), and who, according to common opinion, is regarded as the mouthpiece of the massed industrial interests in this country, was dwelling yester day upon the martyrdom of the direct taxpayers at the present time. When we consider the burdens of taxation we must also remember the benefits of the expenditure. I would like to remind the Committee that the direct taxpayer did not come out of the War with empty hands. He came out of the War with his hands bulging with War Loan script. My right hon. Friend the Member for Colne Valley (Mr. Snowden) pointed out in his remarkable speech yesterday, when taking account of the interest received on War Loan, that whereas before the War the Income Tax and Super-tax together covered the total debt charges nearly twice over—£47,000,000 was received from Income Tax and Super-tax in the last pre-War Budget, and we had to pay away only £25,000,000 on debt charges, including a sinking fund which was bigger in proportion to the total debt—now the Income Tax and Super tax, according to the Estimates for the current year, will bring in 325,000,000, as against a debt charge of £355,000,000. It is reasonable to make allowance for the American Debt, which is not received by British taxpayers; but when you have done that, the fact remains that the receipts of Income Tax and Super-tax are only practically equal to the debt charge. In other words, after we have met our debt charges, we are getting nothing from the Income Tax and Super-tax towards meeting the other expenses of the country.
  One would never suppose that was the state of affairs, judging by speeches such as that we listened to from the right hon. Gentleman the Member for Hillhead (Sir B. Horne) and others. The net burden upon the wealthy people of this country is exceedingly small. What they pay with one hand they, to a great extent, receive back with the other. The Chancellor of the Exchequer operates for their benefit, though this is not always clearly understood in the country, a gigantic penny-in-the-slot machine. You put in
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  your Income Tax and you pull out your War Loan interest. When that is taken into account, I do not think it can be contended, regard being had to the size of the debt burden, that direct taxation is in any way too heavy. On the contrary, it may be maintained that if we are to get back to pre-War relations, with the debt charge only a little more than half the total receipts from Income Tax and Super-tax, we would require to have an Income Tax of a standard rate of about 9s. in the £. I am not advocating that that should be done, but I am pointing out that that would give a fair comparison with the pre-War situation.
  In the bombardment of the last two days, to use a military metaphor so dear, as a mode of expression, to the Chancellor of the Exchequer, much of the firing has come from the benches on the other side of the Committee. If I may pursue the military metaphor a little further, there have been a certain number of "shorts "from the benches opposite which have fallen on the front line trench on that side, particularly criticism with regard to the gold standard; and I think when this military action is carried a little further, when we send out our bombing planes to drop bombshells of truth and revelation on the electoral strongholds of Members opposite, and when we have shown what this Budget really means to the great mass of the population, then I have no apprehension of what the ultimate effect of this campaign will be. To vary the metaphor, I think the amount of gilt which has been knocked off the ginger bread in two short days is astonishing; and when this Budget has been further considered in this House and outside the public at large will realise that my right hon. Friend the Member for Colne Valley was right when he declared it to be the worst rich man's Budget which has been introduced within living memory.
  Lord ERSKINE:In addressing this House for the first time, I would crave that indulgence which is always given to new Members. I have been longer in this House, without venturing to address it, than many other hon. Members, and as I may claim that I have at any rate helped the Whips to get through their business, they may look upon me with more favour than they do on certain other more garrulous Members on the Government side

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  I would just offer one comment on what has fallen from the hon. Member who last spoke. He said we were paying off our debt at a very slow rate, that we were only paying it off at the rate of £50,000,000 a year, and that at that rate it would be very many years before the National Debt was discharged. That is a perfectly true calculation, but if we look back to the time of the Napoleonic War we must feel that the great National Debt which was built up at that time must have appeared to the people of that day to be just as large and just as terrifying as our great National Debt of £7,000,000,000 looks to us. By 1900 we had not really paid off very much of that debt, it remained about the same, but the great increase in the national wealth, the Brea-t increase in the national income, made that debt look a very much smaller burden than it was at the time when it was incurred. We may not be so optimistic as to say that at the end of another 100 years our national wealth will have increased at the same ratio as it did during the last century, but at any rate we may hope that we shall be more able to bear this burden.
  I think we are following the canons of sound finance in having this large Sinking Fund. Many hon. and right hon. Members of this House, many of them belonging to the Liberal party, say we are paying off too much of the debt, but it seems to he more generally agreed by economists on all sides that the best way of reducing taxation is to reduce debt, getting the benefit by that means. The Chancellor of the Exchequer pointed out in his Budget speech that since the Armistice we have reduced the interest on the National Debt by £70,000,000. Surely that is no mean achievement. It has been attained by keeping to the canons of sound finance and paying off debt, and not going in for a policy of inflation such as certain Members in various quarters of the House would like us to pursue.
  The main reason why I have risen to speak in this Debate was to call attention to one particular matter on which my view may not, perhaps, receive the assent of hon. Members opposite. The point I wish to call attention to, in a Budget which, taken on the whole, I believe to be a good Budget, one which provides the great boon of social insurance and which reduces taxation, is
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  that I do not believe it is a good thing or a canon of sound finance to relieve the Super-tax at the expense of the Death Duties. I do not believe that a capital tax is a good tax. I know that many hon. Members opposite will not agree with that. Personally, I should have preferred to see the Death Duties and the Super-tax left as they were. What I wish to draw attention to is the effect these increased Death Duties will have on agricultural estates. Hon. Members opposite say the dead pay the tax, but that is hardly a correct way of putting it. The Death Duties are paid by the living, very much so, and particularly in the case of large agricultural estates. What the Conservative party have to put before them is this: Do they desire to see large agricultural estates retained in this country; do they believe in the large agricultural estate as an economic unit; or do they desire to see estates split up? I think I may say that most Members on this side of the House agree that the large estate is the best economic unit for agriculture, though I know the right hon. Gentleman the Member for the Carnarvon Boroughs (Mr. Lloyd George), when he was in office, imposed these large Death Duties on landed estates because he wanted to break them up.
  What happens when you break up a large estate? In the first place, it has got to be sold in order to pay the duty, and that means that the farmers have probably got to buy their farms at inflated prices, at very high prices. They are on the horns of this dilemma, that they have either to clear out of the farm or to buy it. There is also this great difference between property in land and property in stocks and shares, that the one brings in a far higher income than the other. I think most owners of landed estates will agree that if they get 2 per cent. on their capital they are doing very well out of a landed estate; but gentle men who own stocks and shares think they are not doing too well if they get, perhaps. 5 percent. I would like the Chancellor of the Exchequer to consider whether he cannot agree to the proposal put forward the other day by the Central Landowners' Association in their letter to the Minister of Agriculture, in which they asked that estates should be valued as a whole for Death Duties, and not in small lots. It would

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  make a very great difference to the capital value of an estate. If an estate or bits of an estate, were sold later, it might be possible to make up the difference in the Death Duties. What I believe to be the very heavy Death Duties are the tragedy of the countryside; they put many hundreds of men out of employment; they force many farms to be sold; they break up estates and break up associations which have lasted for many generations on the English countryside; and we are putting forward a method of assisting agriculture which I do not believe to be as good as the old method whereby the landlord used to provide the, capital for agriculture. If we are going to increase the Death Duties in any way —they are heavy enough now in all conscience—we shall be accelerating the break-up of big estates, and when those estates are broken up the state of the countryside will be worse than it is at present.
  I would also like to say a word on the great scheme of social insurance which is included in the Budget. The late Chancellor of the Exchequer was rather, I thought, kicking against the pricks yesterday. I think hon. Members opposite are rather decrying our scheme because they are a little sorry for themselves that they did not introduce something of the sort. My own view is that this scheme of contributory social insurance will in future years redound to the credit of the Conservative party, and I think that is probably the view taken by hon. Members opposite, and is the reason why they do not altogether like it. I welcome this scheme because it is a contributory one, and I also welcome it because it does eventually sweep away, after 80 years, non-contributory old age pensions. I know hon. Members opposite will not agree with that, but I do not believe myself that you can get something for nothing; that is not possible. Even if those who receive these benefits do not contribute directly to them, they do so indirectly, because these benefits are provided out of the taxes. We are told that high taxation causes unemployment, causes wages to fall, and puts up the cost of living, and although the effects of these movements are not apparent to everybody, or felt directly, they are indirectly a tax imposed upon industry and the rest of the population. Most economists agree that
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  all taxation inevitably hits the lowest class of the community. I believe that the scheme which has been produced by His Majesty's Government will, when it has been properly discussed and thought out and passed into law, prove to be one the greatest boons that any Government has ever given to this country.
  Mr. C0MPTON: I wish in the first place to offer my congratulations to the Noble Lord who has just spoken upon ids first attempt at addressing the House. I feel sure, after the speech which we have just heard, that when the Noble Lord on a future occasion rises to address this House he will be listened to with very great interest. I wish to draw attention to two statements made by the Chancellor of the Exchequer in his Budget speech on Tuesday last. In the first place the right hon. Gentleman in the earlier part of his speech dwelt upon economy, and he complained that he had not had sufficient time to get a thorough grasp of the details of the various Government Departments to effect the economies which were dear to his heart. He also dwelt upon what he termed the twin supreme objectives of his Budget, namely, the security of the home of the wage-earner against exceptional misfortune, and the encouragement of enterprise, through a relief of the burdens resting upon industry. I propose in my humble way to show the right hon. Gentleman where he can effect economy even in the Department over which he has the honour to preside.
  In regard to the question of the security of the home of the wage earner, he said that the circumstances of their lives, the problems of existence, and their regular daily work have not left them with the strength or the means or the foresight or habit of making such pro vision. With the sentiment contained in that statement I feel sure that every hon. Member of this House will be in entire agrement. I also feel sure that every effort made by the wage-earners of this country to make the provision which the Chancellor of the Exchequer said was lacking will also receive the encouragement and support not only of every section of the politicians in this House but of every section of the community outside.
  That is the question with which I propose to deal. In the North of England especially efforts are made by the wage earners to make provision for something

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  in the nature of that which the Chancellor of the Exchequer proposes to provide in his Budget. We have in Lancashire a Thrift Fund, and a Holiday Savings Fund. I feel sure that the Chancellor of the Exchequer will appreciate what is meant by holiday savings clubs, or what are called Wake savings clubs because, and I am sure the Member for Oldham appreciates the fact that prior to the cotton industry of Lancashire going on its annual holiday the workers have made provision for their holidays to the extent of between £450,000 or £500,000. What applies to Oldham applies to every industry in the whole county of Lancashire and generally in the North, and there are hundreds of thousands of workers in Lancashire to-day who are thoroughly alarmed at the proposals of the Chancellor of the Exchequer, made through the Board of Inland Revenue, to tax those holiday savings funds. This is something that has never been attempted in the past and something which is thoroughly alarming to the workers in the cotton industry in that great county. I do not want to deal generally with the situation, but I wish to bring to the notice of this Committee and the Chancellor of the Exchequer the state of affairs and the alarm which it has created during the past few months.
  I want to take one specific case affecting a section of a large works in the constituency in Manchester which I have the honour to represent—I allude to the Gorton Division of Manchester, which is known as an engineering constituency. There we have the works of what used to be the Great Central Railway, but which is now a section of the London and North Eastern Railway. Inside those works we have a holiday savings fund and a thrift fund, and one section of the works received in November last a demand from the inspector of taxes for a copy of the rules of the savings club. The secretary was invited to explain the nature of the club, and he did so, and as a result he received a communication again from the tax department stating that the taxing authorities were determined to have a thorough investigation, and they demanded to know the date on which the fund was established, where it was administered, what dates the annual
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  accounts were made up, and they asked for a statement of the accounts for each year from the commencement of the fund.
  Not satisfied with all this they demanded a list of the members of the club, their names and addresses, and their check numbers in the works. This information was supplied, but in addition to this a further demand was made upon the secretary of the savings club to attend at the Headquarters of the Inspector of Taxes in the Manchester district, a sort of "star chamber," with regard to the information which the taxing office desired. In addition to that officers from the Income Tax Department attended at the works where they held an examination of the hooks and the wages lists, and they spent, I am informed, the better part of two days investigating the concerns of a club of less than 100 members. This particular club was connected with the machine shop inside the works which I have already mentioned. I want members of this Committee to try and imagine the position of affairs in calling a man away from his work in a well-organised shop where the machines are doing a particular class of work. This not only upset the whole department, but it involved a loss of wages to the individual concerned of something like 5s. or 6s. for loss of time. In addition to that, on advice, the secretary of this club asked the Inspector of Taxes why this information was desired, and, on the 22nd April, a further letter was sent to him as follows:
  " With reference to your letter of the 18th instant, enclosing a list of your members, I beg to state that my inquiries and requests for particulars were issued in accordance with the instructions of the Board of Inland Revenue in cases of holiday clubs and thrift funds."
  That is very definite, that the Board of Inland Revenue are at the present moment raising taxation on the interest of these holiday savings clubs, and one must try to picture what many of these unfortunate thrifty people must feel who are earning incomes that are not taxable, and, in order to provide holidays for themselves, their wives and their families, are stinting themselves and their families for many weeks in advance, when they find that the little interest to which they are entitled at the end of the year is going to be saddled with Income Tax payments by the Board of Inland Revenue.

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  I feel sure that, if the Chancellor of the Exchequer or his Department persists in this method of raising revenue, the reaction will come on the first opportunity that the workers of the great county of Lancashire have, and that that will react on the political party to which the right hon. Gentleman belongs. In this case the information given was of such a nature that, after spending two or three days in investigation and two months in correspondence, and after upsetting the works by forcing the men to go away to attend at the tax office, it was found that the small amount of interest was not worth taxing, but, as the letter says:
  " In order that it can be ascertained whether there is any liability to tax on the club for 1925-26, I shall be obliged if you will state the amount of bank interest received or credited for the year 1924."
  I think it is rather unfortunate that this method of taxation has been adopted by the Department since the present Government came into office. In the course of the investigation it has been definitely stated that individuals have no right to claim rebates, but that rebates can only be claimed by the secretary of the club.
  I hope that the Chancellor of the Exchequer will take into consideration the actions of his own Department so far as economies are concerned, if they are going to continue these efforts to find out the actual position of the workers with regard to their holiday savings. They must be wasting hundreds of thousands of pounds without receiving a penny in return, and without being likely to receive anything. They may tax the holiday savings of the cotton trade in Oldham and other districts, where they pay out £400,000 or £500,000 at this period, but they will be doing something which is not going to bring in very much revenue, but which will involve tremendous difficulties and waste of money in collection, and will react to the detriment of the Government itself. it has been computed that the workers paying into these clubs for 11 months out of the 12 receive on the average, at the end of 11 months, between 6s. and 7s. in interest. If that is to be considered worth taxing, I am afraid we are going to be in for some difficulty in Lancashire.
  One other matter to which I desire to refer is the question of the widows who come under the insurance scheme from the
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  1st January, 1926. In his remarks the Chancellor of the Exchequer said:
  " The widows of those who have contributed have the pension for life as widows, but the widows of those who have not contributed, and, in the nature of things, never can contribute, are only pensioned when they are widowed mothers." —[OFFICIAL REPORT, 28th April, 1925; col. 80, Vol. 183.]
  There are many thousands of workmen is the country to-day who for many years had been under the National Health Insurance scheme, but who are not under it now owing to an arrangement made by the Conservative Government of 1923, shortly after coming into office, enabling local authorities under certain conditions to allow their workers to contract out of the National Health Insurance scheme. Various offers were made to the work-people. As a matter of fact, rebates on insurance payments as high as £18 were offered by local authorities to their workpeople in their endeavour to induce them to contract out, and many thousands of workers at that period and since have contracted out of the insurance scheme. What will those workers say to the Chancellor of the Exchequer and those associated with him, when they find that, should they be suddenly called away, being now outside the insurance scheme, their widows will be left unprovided for, and they themselves will be passed over? If this is the policy of the Conservative party, after having made that change possible—if, in 1925, they are going to hold over the heads of these unfortunate men the proposal that, if they are suddenly called away, their widows will be unprovided for owing to the policy of the Conservative party 18 months or two years before—I say that such a policy is not consistent with the welfare or industrial peace of this country, it is not consistent with the betterment of the country as a whole, and I appeal to the Chancellor of the Exchequer, through the Financial Secretary, to reconsider the position and try, if possible, to bring in these men, who, unfortunately, have contracted out through the efforts of the Conservative administration in the past, so that the widows of any of them who should be called away shall not suffer through the short-sightedness, not of the unintelligent workers, but of the Conservative Government of 1923.
  Mr. DEAN: I am sure I shall receive the indulgence which the House usually

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  accords to a Member making his first speech. I should like, first of all, to congratulate the Chancellor of the Exchequer upon his Budget. I know that many criticisms may be made upon it, that many faults may be found with it, but I honestly believe that the Budget as a whole will be received with the good wishes of the whole country. I should like, speaking as the representative of a large agricultural district, and agriculture being an industry in which I have had a lifelong interest, and of which, I believe, I have considerable knowledge, to say something with regard to the Budget as it affects agriculture. I am rather disappointed, and I am sure that many more agriculturists throughout the country will be disappointed, that there is not something more in the Budget with regard to agriculture. I am also personally disappointed that, in a House such as this, we have not heard more voices on behalf of agriculture. I shall confine myself to-night to two or three subjects only. The first is the Beer Duty, and the second is with regard to barley.
  As we all know—I, perhaps, better than many people—the agricultural worker has always looked upon beer as his national beverage. It is an admitted fact that the agricultural worker is paid less wages, under the conditions of trade in which we are working, than the worker in almost any other trade in this country. The beer tax is, as I think we all admit, more or less a War tax, and I think it is grossly unfair that we should ask the worst-paid worker in the country to contribute so much to a tax necessary to meet the expenditure of the nation. I know it will be argued by some that beer is not a necessity, but I think those people who understand the agricultural workers and who see them working in the fields in summer time in the hot sun, will know that it is a necessity, and that at the present time the worker is not able to get that beer. I noticed that even the Chancellor of the Exchequer, when making his long and brilliant speech, took some little refreshment. I believe that little refreshment contributed something to the Excise Duty of the country, and, if I am not mistaken, he became far more brilliant after it. I can assure him that what applies to him in this House applies
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  equally to the agricultural worker in the fields.
  I am going to ask him to see if he cannot do something for the agricultural worker, with which I am quite sure all parties will be in sympathy. We have had a little offered to us on behalf of agriculture. We have had the proposition that we should have a small duty upon hops, but hops are grown only in a very small area of the country. I know there is sympathy for agriculture on both sides of the House. It was shown us in the last Parliament, when hon. Members opposite agreed to assist us with a subsidy on sugar beet. We have had some thing offered us with regard to hops. I am going to ask for something further. I know it is the wish of this Parliament and of the nation that agriculture should be prosperous. It is also the opinion of the country, with which I quite agree, that we should not tax the food of the people, and we have to look to see how we can do something which will assist agriculture without taxing food. We have the sugar subsidy for a comparatively small area of land. You have large tracts of light land which are on the verge of becoming derelict unless something is done to assist them. I know it is suggested you can grow sugar beet upon them, but I have sufficient knowledge to know that on those very light lands sugar beet cannot be grown profitably. I also know that it is not suitable to grow hops on, but there is one thing for which it is suitable. It is suitable to grow barley, and I am going to ask the Chancellor most seriously to consider putting a duty of 10s. per quarter upon all barley imported into the country for the purpose of malting or of distilling. With regard to all the barleys which are imported for the purpose of making meat—pork—or for the workers consumption that should be allowed to come in free.
  I should like to congratulate the Chancellor of the Exchequer on one thing, in particular, which, in my opinion, is worth all the rest. He has done away with the thrift disqualification for the old people of the country. I have considered it to be a shame ever since the old age pension was given, and I am indeed proud to be here to congratulate him on letting us know that we have seen the last of it. One other word I want to say with regard to the Death Duties. I

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  know they fall heavily on all estates, but they fall most heavily of all on landed estates. We have not so many large landowners as we had a few years ago. The land is still there, but you have many smaller owners, and there is very great difficulty in paying the Death Duties because they have no liquid assets. It is a very different thing if you have your capital in funds or shares or something of a marketable value. If your capital is locked up in an estate, possibly let or possibly on hand, you have to put it on the market, and it is a very doubtful question what you can make of it. The assessor comes along and values it for Death Duties and asks you to pay a certain sum. I am going to ask the Chancellor if he will seriously consider in such cases that the owner of the estate shall have the opportunity of saying, "If you value it at that price will you accept it?" The result of that will be either that the Government will possess land, which they can let out for small holdings, for which many people are most anxious, or at all events it will give the owners of the property an opportunity of getting a fairer assessment for Death Duties, which they otherwise would not be able to do.
  Miss WILKINSON:I should like to congratulate the hon. Member who has just sat down on a very sincere and appealing maiden speech, and still more on the fact that he was able to make the first part of it at any rate in the absence of the Noble Lady the Member for the Sutton Division (Viscountess Astor). Dealing with the Chancellor's Budget speech, in the first part of it he turned to us with a disarming air and said the women also would have some share in the Budget. We were duly flattered, but when we got to the end of the Budget speech and began to consider the terms of the Budget we wondered why it was that the Conservative party had felt it necessary to place one woman expert at the Board of Education and to leave the Treasury without that valuable assistance.
  The Chancellor of the Exchequer has been referred to as a mediæval knight in armour. He wanted something to tax, and when he decided to impose the duties on silk it is fair to say that that showed that he had a very mediæval mind which had not kept pace with modern conditions.
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  He has taken us back to the sumptuary laws of Edward IV, when it was decided to tax silk because the wives of the burgesses were adopting the manners of the Court. I would remind the representative of the Treasury that that was a very long time ago. In the modern world with which the Labour party more than the Conservative party have to deal, we are faced with the fact that almost every woman, except perhaps the ladies in superior society, would have been able to inform the Treasury that artificial silk to-day enters into the very cheapest fabrics, and that this tax is going to have a most unfair incidence on the working woman.
  I do not wish to enter into a discussion regarding the more intimate garments of women's wear, but I would like to point out how this tax affects one simple garment that is a necessity of almost every working girl. I allude to the knitted or crocheted artificial silk jumper. In case the Financial Secretary has the same bewildering ignorance of silk and of women's wear that his chief has shown, may I explain that a jumper is an over blouse. It is an article of wear that has been of immense benefit to the working girl, because she is able to knit it herself and it saves a great deal of laundry charges. Artificial silk has become so cheap that it is possible to buy one pound of it, at any rate in the London stores, for 2s.
  11¾d. One pound will knit a girl's jumper. Let me say 3s., because we cannot expect the Financial Secretary to the Treasury to worry about farthings.
  The sum of 3s spent in artificial silk will make this indispensable article of attire for the working girl. It is not an article of attire which she can do without, because it would have to be replaced by something more expensive. It is the very cheapest kind of garment that she is able to make for herself. A tax of 3s. per lb. on artificial silk means that the working women of this country are going to be charged a tax of 100 per cent. on that necessary article of attire, and then the Chancellor of the Exchequer turns round and says that this is something that we can do without. The ladies with whom the Chancellor of the Exchequer and the Financial Secretary to the Treasury are no doubt better acquainted will pay somewhere about 30s. a yard for silk. The tax on that is 4s. per lb. It would be a very

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  beautiful and very heavy silk that weighed more than half a pound to the yard. That is to say, that while the working girl's material is taxed 100 per cent. the material of my lady in the circles in which the Chancellor of the Exchequer and his friends move will only be taxed 6⅔ per cent. Then the Chancellor of the Exchequer says this is a people's Budget.
  Regarding silk stockings, hon. Members have shown a certain temerity in dealing with them. I agree with the Financial Secretary that the cost of the tax was a little exaggerated by the right hon. Member for Carmarthen (Sir A. Mond). The Financial Secretary suggested that the tax would be about 6d. per pair of stockings would be the more likely. It is possible in London shops, I believe, to pay one guinea or two guineas for a pair of silk stockings. If you are going to pay that sum, it is a matter of indifference to you whether the tax upon them is 6d. per pair, but it is a different matter if you are trying to buy the very cheapest article of hose to-day on which you go to work, because you cannot afford to buy woollen stockings. You can get artificial silk stockings for Is. 6½d. a pair. While the tax is nothing to the rich ladies on their silk hose, it amount to a tax of 33⅓ per cent. on the artificial silk stockings, and this has to be paid out of the miserable wages of the working girls of this country.
  With regard to made-up goods I know that the tax is to be an ad valorem, tax and that it will be very much heavier on Paris creations. The price of the Paris creation bears no relation whatever to its cost of production. It is an article of fashion, and the price is just as much as the ladies of the Gentlemen opposite feel that it is possible to persuade their husbands to pay. Those who wear the Paris creation are merely concerned as to the house from which it comes and the fashion, and they are completely unconcerned about the price. But the artificial silk made garment of the working girl is to be taxed 33A per cent. I suggest to the Chancellor of the Exchequer that he has been very badly advised if he really believes that artificial silk is an article of luxury.
  A very pathetic part of the whole thing is this, that artificial silk has been a substitute on the part of the working girl for
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  the wool that she cannot afford to buy. What the Treasury has done is to tax even the substitute that our working women have used in order, if possible, to eke out their miserable wage. I do not know whether it is possible at this late hour to make an alteration, but I do appeal to the Treasury to see whether there is not some other article to tax, if they must raise the money. They have reduced the Super tax and the Income Tax, and I would ask whether they cannot see their way to drop this particular tax. I can assure them that it really does affect most hardly the women with whom I am supremely concerned.
  While we are considering the tax upon working women, I would like, briefly, to indicate what is going to be the effect of the widows' pension scheme on the working woman. When the Bill comes forward I hope to be able to speak in more detail. There is one point that I would emphasise now, and that is the effect upon the single woman. Upon the woman who is not married, in addition to the heavy burden of the National Health Insurance contribution, the unemployment contribution and the 2d. levy for dependents, which she is still paying, though it is the single woman who gets very little benefit, if anything, from that dependents 2d. levy, she is to pay 2d. for the widows pension. According to what the Chancellor of the Exchequer said, the woman who is a widow, even if she has no children, will, if she has paid for a couple of years, he able to draw a widow's pension. It is possible, there fore, for a woman to marry and to be a widow at 21 or 22 arid then, according to the Chancellor of the Exchequer's scheme, she will be able to draw a pension of 10s. a week for the rest of her life. [HON. MEMBERS: "Until she Marries!"] My point is, that if she does not remarry, she may he left a widow at 21 or 22 and she can draw a pension of 10s. a week for the rest of her life. That is not enough to keep her out of industry. She will come into industry and compete with the girl who is not married, and she will have the advantage of this subsidy on her wages of 10s. a week; and the working girl who is not married goes on working until she is 40 or 50, or whatever the age may be, paying the pension for the widow, not a woman who has children to bring up, and

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  who should therefore be outside the labour market looking after the children, but for a childless woman in perfect health, and just as capable of earning her living as the other woman who has to face this subsidised competition. Therefore, from the woman's point of view this Budget is going to be strongly criticised. We want widows' pensions. We want them because we know that they are needed in industry at the present time. But I feel that this scheme is not one which working women at any rate can endorse, and I hope that, in the various stages through which these Finance Bills will have to pass, some of these matters will be taken into consideration.
  Major KINDERSLEY: I hope that it will not be considered as wanting in modesty on the part of a back bencher for me to express my opinion that the speech in which the Chancellor of the Exchequer introduced his Budget was worthy of the greatness and importance of the subjects with which he dealt. I wish that I could say the same about most of the criticisms which have come from the benches opposite. I am afraid that I cannot find it in my conscience to do so. It seems to me that to describe this as a rich mans Budget can be possible only to those who are blinded by class prejudices. After all it is the people of this country who are going to decide this question, and especially the old people who are not getting the old age pension and who will get it, and the widow and the orphan and the others who will benefit by the new pension scheme. Those are the people who will give their verdict on the Budget, and I am certain that hon. Members opposite will find that it will be a very favourable one.
  9.0 P.M.
  The fact. is that hon. Members opposite are rather bitter because they are afraid that the people of this country will find that they have been able to gather very refreshing fruit from that capitalist tree which hon. Members opposite want to dig up by the root, whereas, when they got a closer view of the Socialist tree during last year they found that it bore very little but the leaves of promise. It also seems to me a most extraordinary thing that the late Chancellor of the Exchequer spoke of the burdens which this pension scheme would throw on industry, which, presumably, as now organised, is part
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  of the capitalist system. One would think that it would suit the book of the right hon. Gentleman opposite that this scheme should end in the suicide of that system, but it is still more strange when we find the late Chancellor of the Exchequer and the right hon. Member for Hillhead (Sir R. Horne) taking the same view, and I can only reflect that adversity makes strange bedfellows. I wish now to say a word about the gold standard. As the hon. Member for Ilford (Sir F. Wise) said, the gold standard is more difficult. to understand than foreign exchange, and there is no doubt that in returning to the gold standard there are certain obvious risks.
  The Treasury has taken certain steps which, I believe, minimise very much those risks. The chief reason why there is any risk is that at the present moment there are in the City of London very large American credits. It is impossible to say how large those credits are, or what proportion of the total of foreign deposits they represent, but I should think that they represent at least something over 50 per cent. of the foreign deposits in the city to-day. It is possible that that fact tends to conceal the existence of the adverse trade balance against this country which would other wise be reflected in a lower exchange, and the danger is that, if these deposits should be suddenly withdrawn to any very large amount, that would create a sudden demand for dollars, and it would send down the exchange value of the pound sterling. You might see a drain of gold, and if that began we should have to put up our Bank rate. I may point out that that does something more than cripple industry, owing to dearer money. It also does this. We have to-day an enormous floating debt, and it increases the amount of interest which the country has to find on that debt. In this way it might also upset the calculations of the Chancellor of the Exchequer for the coming year, that, to my mind, is the real difficulty, but I think that the pre cautions which the Government have taken have very largely eliminated that risk.
  I am rather loth to cross swords with the hon. Member for Ilford in financial matters, but I disagree entirely with his criticism of the Chancellor of the Exche

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  quer for having purchased the 166,000,000 dollars to pay interest and sinking fund on the debt to America before we went or to the gold standard, because it is clear that if he had waited until we were on the gold basis, and had then gone into the market to purchase dollars to the amount which I have mentioned, the result would have been to depreciate the sterling exchange, and to cause that which we want to avoid. True it is that he did buy those dollars at a worse price than the price of to-day, but if we consider the alternative it might have been more expensive to the country. Therefore I must protest against the criticism which my hon. Friend, who is usually very wise in these matters, has levelled against the Chancellor of the Exchequer.
  The point is that we have got certain risks, though I believe that they have been largely eliminated, but what advantages are we going to gain by taking those risks, and are these advantages worth it? I personally believe that it is worth taking the risks involved such as they are. Supposing we had not done this, but had decided to continue the Act which prevents the export of gold it would have been to some extent a blow to our national credit. It would have meant that we did not feel strong enough to face the situation and holding the position that we do in world finance, I think that would have been a pity. It would have reflected ultimately upon our position. Secondly, there is no doubt that it is impossible to exaggerate the value of a stable exchange to international trade. We are great international traders, and we shall gain enormous benefit from the stabilisation of the exchanges. Thirdly, by going back to the gold basis we eliminate to a large extent the speculator in exchanges. The speculator in exchanges is a curse, and is very largely the cause of the great fluctuations which occur. Fourthly, if other countries follow our example we shall get that most desirable result, the stabilisation of wages throughout the world on a common basis. The Chancellor has told us of at least two countries who will follow us, and as soon as we have gone back to the gold basis the tendency will be for other countries to imitate that example. That will be of enormous benefit to our industry. The fact that there was no common
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  basis on which to compute wages led to much of the unfair competition which we have had to meet from other countries. If we get everybody back to the gold basis there will he a common basis for the computation of wages, and it will tend to a levelling-up.
  Fifthly, the Bank rate will once again bear a direct relation to the actual economic position of this country, and we shall be faced with the not altogether pleasant necessity of cutting our coat according to our cloth. We shall be bound to pay either in goods, service or gold for what we buy. We shall eliminate—we have eliminated, as a matter of fact—at a stroke, the managed currency, the managed exchange, the managed Bank rate. All those things tend to conceal from the country its true economic position. It is true that circumstances can be imagined in which that might he a. somewhat drastic remedy, but I believe it is better for the country to he able to see by the fluctuations of the Bank rate its actual economic position than to live in a fool's paradise. For that reason also I welcome the decision of the Chancellor. So much for the question of the gold standard, and I hope the Committee will forgive me if I have spoken in technical terms upon it. I know there is a great division of opinion and I do not wish to put my judgment against the judgments of those who are more competent, but in so far as I am able to judge, as a practical business man, I believe that the advantages which the country will gain from a return to the gold standard quite justify the risk which is being taken, and I believe the steps taken by the Government have very largely eliminated that risk.
  On the subject of the Death Duties I would appeal to the Chancellor to use the whole of the product of the Death Duties in the redemption of debt. There can be nothing more unsound, whether for an individual or for a nation, than to use capital as income, and that is what we are doing. One has only to state the fact and anybody can see that it is absolutely unsound finance. I know that other Chancellors have done it, but I am certain the present Chancellor might set an excellent precedent by seeing that money raised by Death Duties, which represent a capital tax, is used in the redemption of debt. I think I heard the

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  late Financial Secretary to the Treasury make a similar appeal to the Chancellor. On the question of the Death Duties as against the Super-tax I think the fact that the Chancelor has added to the Death Duties, and reduced the Super tax bears hardly on older people who are not able to make provision for the extra duties, but taking the balance of ad vantage with disadvantage I believe it is sound to reduce the Super-tax and increase the Death Duties because it will tend to force those who are still young enough to do so to make provision for these extra Death Duties, either by saving or by insurance which is another form of saving. That saving goes to the great pool of credit from which our industry is financed. Therefore I rather welcome than otherwise this change.
  In connection with the insurance scheme, various speakers have referred to the great burden which this will place upon industry. We all know the position of industry is very difficult, but no speaker, so far as I have heard up to the present, has emphasised the point that we are to-day, according to the White Paper, spending £34,000,000 a year of rates on poor relief. The Income Tax is a tax on the profits of industry. We are an exporting nation and have to sell our goods in competition with other people, and our great trouble to-day is the high cost of production and our over head charges. One of the chief items in the cost of production is represented by local rates. I am perfectly certain that this scheme will immediately make some reduction, and will ultimately make an enormous reduction in the £34,000,000 which we have at present to find for Poor Law relief and that will be a direct lessening of the charges on our cost of production and ought to give great relief to trade and enable us to compete on better terms in the markets of the world. Therefore, I do not think it is fair to say, in regard to this charge of 4d. which the manufacturer or the employer has to contribute on behalf of his workmen, that there is nothing to set against it. It may not be much at the moment, but it will be an increasing amount to set against it in the saving that he will make in local rates.
  I cannot help just mentioning a matter which an hon. Member opposite mentioned, namely, the subject of silk stockings. Which seem to have raised the 1re
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  of the Chancellor of the Exchequer, and I would only like to put this point of view, that if silk stockings become mere expensive, perhaps ladies will make their skirts longer, and, therefore, give more employment to the cotton and the woollen trades. I should also like to say this, if I might, to the ladies, that many of us think it will considerably add to their attractiveness. For my own part, I welcome this Budget as thoroughly in the line of true Conservatism, and I believe that it is laying the sure foundation of a happier, a more contented, and a more prosperous democracy, which is the thing for which the party to which I have the honour to belong stands.
  Mr. J. RAMSAY MacDONALD:regret very much that I have had to get up and slaughter a good many undelivered speeches, but I think the time-has come when this part of the Debate must be wound up and the Committee finish its work. There will be many other opportunities, during the passing of the various stages of the Budget proposals, for us to examine them in detail, and all that one can do to-night, in beginning to summarise and to wind up the Debate thus far, is to deal with one or two of the more general propositions and ideas upon which the Budget has been devised. The Debate has been a rather unusual one, and the speech with which the Chancellor of the Exchequer opened his Budget was also a very unusual one. It was a Budget speech, but a great deal more. As a matter of fact, with that true dramatic and political instinct which has always characterised my right hon. Friend through all the varieties of. his political opinions, he understands-what is expedient and what is necessary for political effect. Therefore, when he was rehearsing his periods before they were delivered, and when he was going over the field that he was going to wander across when the moment came for him to unfold his Budget, he felt, and I can. imagine him saying to himself. "This Budget will not do. If I confine myself-to a proper Budget speech, my reputation will be considerably diminished, and the political prospects of my party will be considerably reduced." He knew that his right 'hon. Friend the Minister of Health had a scheme for pensions up his sleeve, and he decided to go to the Minister of Health and to ask that Minister if, for the purpose of

  443
  appearances, he would allow him to borrow his laurels.
  So my right hon. Friend appeared the other day in a double capacity. He appeared as the Chancellor of the Exchequer, and he also appeared as the Minister of Health, and it has been very curious, and to us on these benches, very interesting to notice that every speaker, so far as I have heard them—and although I cannot pretend to have heard them all, I think I have heard well over 90 per cent. of the speeches which have been delivered in this Debate—who tried to repel the perfectly accurate description of this Budget by my right hon. Friend the late Chancellor of the Exchequer as a rich man's Budget did so, not by defending the Chancellor of the Exchequer, but by anticipating the laurels that the Minister of Health was going to have thrown at his head next week or the week after. I have heard speech after speech in which a phrase like this occurred: "The great scheme for social insurance provided for in this Budget." There is not a brass farthing provided for it in this Budget. Then the right hon. Gentleman opposite, I think perhaps, in a somewhat unconscious way, suffering from the trouble that the last speaker confessed he was suffering from, a troubled conscience, said he had to do something on account of his conscience One after another in a somewhat dreary repetition, said: "We are only making comments upon this magnificent scheme because we are afraid of the political results that may arise from it "—remarks that, much against my will, made me reflect upon this, that if these words are so often on the lips, that hope must be very much in their minds, and that explains why the first benefits under their new, great, social scheme are going to be paid in that year when, on the most extravagant estimate, they believe they have got to go to the country and ask for a new mandate. They are going to bribe and appeal. Well, we will see. So far as this great social scheme is concerned, we will await the production of the details. I have observed in my lifetime many hens cackling loudly before they laid a most disappointing egg.
  Mr. MACQUISTEN: Hens do not cackle until after they have laid.
  Mr. MacDONALD:My hon. Friend's farmyard knowledge is much more extensive than mine, but I was talking of the political hens—[Laughter]—whose sociological habits differ somewhat from the hens my hon. and learned Friend seems to be acquainted with. I observe I was interrupted by the interjected laughter of the occupants of the Front Bench. They are willing to confess that they are not any better in that respect than they assumed we were ourselves; a very considerable addition to the flatteries that, now they are in office, they seem to be inclined to throw at 116 now that we have left office. Our position is a perfectly simple one. We have asked for it for years. We have asked this House to pass Resolutions in favour of it. Hon. Members opposite have voted against it.
  When the Government produce their scheme in the course of a fortnight we shall certainly give right hon. and hon. Members an opportunity of saying precisely what they mean when they declare that they are in favour of an effective and generous scheme of social pensions. We will give hon. Members a chance, not merely of making speeches about it, but of walking into the Lobby. If they defeat us on improving the foundations of the scheme, then we will set about improving the details, and they will have plenty of opportunity for improving the social condition of our people, of keeping widows away from the workshops—[HON. MEMBERS: "Workhouses! "]—it is quite natural that the workhouse should spring into hon. Members' minds—to enable widows with children to do their duty by their children at home without having to go to the factory in order to supplement an inadequate and demoralising dole— demoralising because it is inadequate. I wish no misunderstanding with regard to that. We shall give hon. Members opportunity after opportunity of saying who shall be the recipients under this scheme, how much they should receive, what is to be the measure of the value of the money to be received, what terms of life should adequately be met by the terms in cash put into the provisions of the Bill, and we will give them an opportunity of considering who ought to find the money for it. There is one thing regarding this scheme which is germane to the Budget, although not a

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  halfpenny is provided for in the Budget finance scheme. It is this question of who should find the money for it. My right hon. Friend follows precedent. He finds a social insurance scheme, health and unemployment. He says, I will amplify its scope; the same sections who subscribe, the employer, the workpeople and the State, without consideration, I will draw upon, for the new extensions that the Minister of Health is going to propose in the course of a few days. Could any thing be more unscientific and unjustifiable? These levies of so much per head on workmen and workwomen employed and so much per week of wages are taxes. It is no use talking about a contribution, not a voluntary one but a compulsory one, and imagine that that in essence is different from an Income Tax. Of course it is nothing of the kind. As a matter of fact, from the point of view of business it may be more vicious than an Income Tax.
  From the point of view of the extension of industry, from the point of view that the Chancellor had very prominently in front of him, before he made up his mind as to one item in his Budget he should have considered as a whole the real needs of industry in this country. I could imagine the Chancellor of the Exchequer coming to a decision that it would be better to put up the Income Tax by one shilling than to impose fourpence per head per person employed in order to provide an extension of certain insurance funds now in operation. That is a direct burden upon industry. You cannot get away from it. If you employ two men, your work is charged 8d. per week extra cost of production. If you employ 20 men, the charge on the cost of your production is increased by 80 pence per week, and so on. There is no way of getting away from it. You cannot possibly get away from it; it is a direct and definite increase in the cost of production. The Income Tax, as I contend, is not a direct increase in the cost of production. It never has been so regarded by any economist who considered the matter. If that be so, then a Chancellor of the Exchequer who surveyed the needs of British industry at the present moment, particularly in relation to the critical condition in which we are, the very doubtful outlook ahead of us, would realise that they called for very careful budgeting and very careful exploration of causes and consequences stage, after
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  stage. The Chancellor would pause very often before he proposed to impose the cost of an insurance like this directly on the cost of production. We will there fore, when the time, comes, give hon. Members opposite an opportunity of proving their genuineness in two respects; first, are they anxious to relieve the cost of production of this country. We will give them a chance of not only speaking about that, but of voting. We will also give them a chance of voting whether the amount, of the pension is going to be such an insignificant thing in relation to life's necessities that it becomes demoralising, or whether they are going to make it more satisfactory.
  My right hon. Friend, in a very early speech he delivered here, when he was rather in a virgin frame of mind, gave us to understand that when he delivered his first Budget speech he was going to make a great survey of the relation between taxation and industrial costs. I do not think he has done it. I do not know whether he found it inconvenient, or what, but he has not done it. But. I pause in what, of course, must be a controversial speech to say how heartily I join with my right hon. Friend the Member for Colne Valley (Mr. Snowden) when he associated the Chancellor of the Exchequer not merely with his own achievements but with the achievements of one who went before him, as for whose memory those of us who have read the splendid biography he has written know how deeply he holds it. But still I con fess I came down here the other day expecting to receive from my right hon. Friend a great survey such as he led me to believe he was going to make—a survey which is overdue. We are still talking a great deal about canons of taxation, which were up-to-date in 1789, and not very much out-of-date in mid-Victorian times, when Gladstone produced his great Budget in the middle of last century. Those. canons have gone. The conditions which made them wise have passed away, and there is a very great opportunity for a Chancellor of the Exchequer who has time. Unfortunately, my right hon. Friend the late Chancellor of the Exchequer never had it, because if the right hon. Gentle man opposite complains that he had not time to do what he wanted, coming into office in November, how much less was our time, coming into office at the end

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  of January and the beginning of February. However, this survey is required, and, unfortunately, the right hon. Gentleman has not given it. What he has tried to do was very well described in that most interesting speech delivered this afternoon by the Financial Secretary to the Treasury. The Financial Secretary says, "Why not shift the incidence of the taxation? Why not take 4d. out of one pocket and put it in the other? It is far more convenient to the rich to pay it out of the, right pocket than out of the left, and you have no business to challenge us for doing that."
  He considers that a great achievement, and illustrated it by the new rate of Death Duties as balancing the new rate of Super-tax. Who can imagine what was in the right hon. Gentleman's mind. An increase in a certain scale and a certain part of a scale of death duties is overdue, and has been long overdue, on its own merits or demerits. The friends of the right hon. Gentleman knew perfectly well that that readjustment was going to be made on its own merits, and without relation to any other changes that were made upon the incidence of taxation. Although it was anticipated, he goes and says to the Super-tax payer, or to the Death Duty payer, "You must not blame us. We are increasing your Death Duties, but we are easing you of your Super-tax," and when anyone com plains about the easing of the Super-tax, he goes to the people, as he calls them, the masses, and says, "Yes, we have taken off the Super-tax, but we have put it on the Death Duties.' What a magnificently scientific way of Budgeting, so that you can please both sides, provided that one is absent when you are explaining yourself to the other.
  That is one of the things which mark this as a rich man's Budget. A necessary change in the incidence of the Death Duties is counterbalanced by a reduction in the incidence of the Super-tax. I was very much interested in the argument of the Financial Secretary to the Treasury. He says it is far better to take taxes from capital on Death Duties than on income. Did hon. Members observe what tribute that was he paid to us? He is in favour of a Capital Levy, and I was not at all surprised, in view of the sort of arguments he used in other parts of
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  his speech, that the right hon. Member, who to-day is in favour of the principle of the economics of a Capital Levy, was the very Gentleman who moved a Resolution against it last year. That is the position. At everything he said to-day about Death Duties I smiled, because I had in my mind how magnificently he was approaching to an understanding of the virtues of a Capital Levy.
  There is this other point. I want to know, really, how hon. Members regard the McKenna. Duties. Some say they accept them because they are Protection. An hon. Member was praising them the other day because they were the beginning of Protection. The right hon. Gentleman who spoke to-day as the official spokesman of the Government, said they are nothing of the kind; they were not at all Protection. He proceeded to quote a large number of figures, but the figures were no doubt supplied by the Treasury.
  The CHANCELLOR of the EXCHE QUER(Mr. Churchill): The Board of Trade.
  Mr. MacDONALD: The right hon. Member for Hillhead (Sir R. Horne) yesterday told a story of a certain marine logician who was asked by some stranger off the Coast of Deal to explain why the Goodwin Sands were there, and the explanation he gave was that all his life there had always been Tenterden Church steeple and the Goodwin Sands, and that, therefore, one was the cause of the other. The right hon. Member for Hillhead applied the story to the speech of my right hon. Friend yesterday, but the right hon. Member opposite is the most magnificent exponent of the marine logician I have ever come across. If the whole of Hansard since it was published were ransacked for an example of that kind of reasoning, I doubt if a better example could be found in its columns than that to which I had the profound pleasure of listening from the mouth of the right hon. Member to-day. He said that certain cars, after the McKenna Duties were taken off, were not reduced in price to the full extent; therefore the Duties were not protective Duties. Nay, more, he said certain cars after the McKenna Duties were taken off were actually increased in price. Is the logical

  449
  deduction from that a justification for the McKenna Duties being reimposed now, in order to reduce the price of cars?
  Of course, it is Protection. More than that, if it is not Protection, does he throw the whole of his party overboard in its position of last year My right hon. Friend the Prime Minister warned us last year that 75 per cent. of the motor car companies were in the hands of the banks, and that if we pursued our evil policy of taking off the McKenna Duties, what was going to happen? Was the Prime Minister right last year [HON. MEMBERS: "Yes ! "] Then what about the speech which has just been delivered by the Financial Secretary They were both right, it seems. It shows the sort of confusion of mind of the Tory party, which is very miraculous, but not unexpected. The case is a perfectly simple one. It is not merely the duty that enters into the price of things subject to a duty. I suppose that is one of the most elementary propositions laid down by those who have ever defended Free Trade or defended Protection, but, apparently, it has not yet dawned on the mind of the Financial Secretary to the Treasury. Before the Bill gets to Committee, I hope the hon. Gentleman will understand the arguments for and against Protection. It is a protective duty, and is meant to be so. It is pot on. not to get revenue for the Chancellor of the Exchequer, but to pacify, those who would otherwise not be pacified by this Budget. Moreover, what about this silk tariff? Is that Protection or is it not?
  Mr. CHURCHILL: It is a sound revenue duty.
  Mr. MacDONALD: The Chancellor of the Exchequer says it is a sound revenue duty. He has put it forward, whatever damage it may do to our own trade. Supposing, however, that this new artificial fabric bad not been called artificial silk but had been called artificial wool Would it have been taxed to-day? It is not silk. It has nothing to do with silk. It used to he wood. That may sound terrible, but it is known as silk to every body, and that is why it is called a luxury. It is not the price of it that makes it a, luxury, because it is cheaper than wool. The right hon. Gentleman for once in his life has become subjected to his own prejudices. He is in favour of a sumptuary
  450
  tariff. Why? Is he a mild, gentle, unostentatious, thrifty-living person who would never spend a sixpence if he could save it? The thing appears to have happened because he came into a company where there were rich and costly brocades, and highly-dressed ladies, and his great imagination brought before him a picture, and he said: "This material is called silk and it is bound to be a luxury." As a matter of fact, it is only wood. [An HON. MEMBER: "It is 6s. 6d. a pound."]
  Mr. REMER: Is the right hon. Gentleman aware—[HON. MEMBERS: "Order, order ! "]
  Mr. MacDONALD: Does the hon. Gentleman really think that because this is 6s. 6d. a. pound—
  The CHAIRMAN: I would ask hon. Members on both sides to allow the right hon. Gentleman to speak without interruption.
  Mr. MacDONALD: It is not inconvenient to me. This, however, is a very serious point—that this thing is to be taxed on account of its name. I put it to bon. Members opposite: Why should not the people, working girls and others, like this stuff which is most economical for reasons explained by an hon. Gentleman who is a practical man, and who addressed the House a short while ago. It has cheapness. It has prettiness. [HON. MEMBERS: "Why not ! "] Yes, why not. Why should the great mass of our working women be compelled to be dowdy and frowsy? Why should they not be allowed to cultivate artistic intelligence like other people? I could have wished that the Chancellor of the Exchequer was inclined rather to subsidise than to tax it. The fabric is one which has come into existence on account of its polished surface, its hard surface, and it is called the name of the old natural fabric that it is most like—that is silk. You put a tax upon this wood which is called silk. It is going to he taxed all through a mistake on the part of the Chancellor of the Exchequer, or the Board of Trade, or the Treasury, or whoever else it was. Perhaps, however, we had better wait and see the Schedules of the Bill, and then we shall see what the description is. What is going to happen? We all know that trade is very much disturbed. I believe hon. Members, like myself, have received telegrams—I do not know how

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  widely scattered they have been, but they are from a very reputable organisation, otherwise I would not have ventured to read the copy I have in my hand. This is from the Leek Manufacturers' and Dyers' Association. It reads:
  "The Leek Manufacturers' Association protest strongly against any tax upon raw silk and silk waste, these being raw materials which cannot be produced in England, and which are not taxed in any other country. The proposed duty will ruin the sewing silk industry, which is not a luxury trade, and the reduced consumption thereby entailed will still further increase unemployment, already serious in Leek."
  I could admire the financial probity of the Chancellor of Exchequer if, simply for the sake of getting income, he is prepared, I will not say to ruin, but very seriously to damage and upset the equanimity of a very sensitive trade like the silk trade of this country. But there is still a further serious consideration which I do not think has been advanced in the speeches which have been delivered, the question of what is the effect upon Income Tax provided the major part of the yield of the tax is spent within the country itself—what is the effect of the Income Tax upon the cost of production? According to the speeches of some hon. Members the effect of the reduction of the Income Tax by sixpence is likely to be colossal. There are two ways in which you can benefit industry. The one way is by a relief of the rates. If we make profits we pay the rates. If we do not make profits we have to pay the rates or go into the bankruptcy court. The rates we pay when we have made profits are precisely the same as the rates we pay when we have made no profits at all. If we extend our business and in crease the capital of the country the rates are increased against us. Every pound spent upon industry, of the nature of capital, which goes into stone and lime, into extending land occupation, into more machinery, is a. permanent and definite and unshiftable charge on the cost of production in this country. Not a word about that. Indirectly, when this scheme of insurance comes into full operation in 1928, it is hoped that there will be enough payments to enable boards of guardians to reduce the amount of relief. That is the relief. Two years it is to take to operate.
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  If that. is the Conservative contribution to an immediate solution of our industrial difficulties, I am rather surprised. The second alleviation is this. We have never yet considered how far it is possible to accommodate the burden of our taxation to the necessary capital reserves that have to be accumulated, especially in industries that have rapidly wasting 'assets. There it is. These are two ways which the Chancellor of the Exchequer undoubtedly could pursue with such a balance as the right hon. Gentleman has—the field is clear—the reduction in the Income Tax, the tax on earned incomes, and further exploration of how the cost of production could be reduced by the readjustment of any land taxation. But nothing of the kind has happened. There is no case, from an industrial point of view, for a reduction of Income Tax—absolutely none. When it was reduced some years ago there was no industrial response. Figures at the time, some of which I quoted in this House, showed that there was no industrial response. During the last year there was no feature in our industrial problem, no department of our industrial difficulties, that could be attributed to a high Income Tax. High rates, yes; high Income Tax, no.
  The capital of the country is increasing in a normal way. There is no sign that capital is leaving the country, except for more profitable investment abroad than here. There is not a single indication that there is insufficient capital being retained in this country to meet this country's industrial demand. In 1913 home investments were 236,000,000. In 1923, deducting the Government's own loans, they were £56,000,000. In 1924 they were 270,250,000. There is no case there for the argument that a lower Income Tax is going to be a spur upon industry. There are various other points which could be raised but they can 10.0 P.M. wait for the Second Reading or the Committee stage of the Finance Bill, We have a Budget which warns the industrial sections of the country that for years and years there is very little prospect of a substantial diminution of burdens. That is a perfectly fair statement. We have a Budget which frankly warns the working classes that in all future social schemes of amelioration they themselves will have to find the bulk. Even such a harmless, such a humane thing surely might be a general

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  charge, but the old age pension is to be terminated now as a voluntary contribution of the State to the old man and the old woman who have reached an age which entitles them to it.
  This we were told was going to add 100,000 tc the pensioners. Are all the people who are now qualified for pensions, will everybody who would now be qualified, receive an old age pension under the new scheme when it comes into operation? If I do not misunderstand the. statement of the Chancellor of the Exchequer, that is not so. But there is a general obligation, the recognition of a general obligation emphasised and exemplified in a non-contributory old age pension scheme. Even that is going to be taken away in order that hon. Members opposite may say, "We are the authors of a great and comprehensive social reform scheme." That is the second defect that this Budget shows. It deals with a great deal of undisclosed expenditure. What about the Naval Votes? They have still to come out. I am not going to say anything against replacements. A great deal of nonsense is talked about that. Everybody under stands that there is a fundamental distinction between replacement and expansion; replacement is one thing and expansion is a totally different thing. But in this Budget, so far as I have been able to gather from my right hon. Friend's speeches, he does not even make provision for replacement. He says, "Wait until we get the Report of this Committee." We will wait. Where is his Budget then? Where is his balance? Where is next year's balance? There is Singapore; there is the development of the air—savings counter-balanced with extra expenditure. That is not a prospect that the country will look upon calmly. A Budget which is simply to slip money out of one pocket into another pocket, and that tells the people that it is more convenient to pay out of that pocket than out of this, is neither a people's Budget, nor a democratic Budget, nor an economic Budget, nor an industrial Budget. It may be a political Budget. It certainly is a rich man's Budget, and as such I oppose it.
  Mr. CHURCHILL: The right hon. Gentleman the Leader of the Opposition has spoken on this subject with his
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  accustomed moderation. I have nothing to complain of in the manner in which he has addressed himself to the formidable task of marshalling the protests of socialistic democracy against the most flagitious Budget of modem times. For myself, I thank him for his courteous and graceful personal references, which I greatly appreciate, and I thank him also for the restraint he has observed in the arguments he has used. But that is all I thank him for. I do not thank him very much for illuminating our financial perplexities by the interesting opinion that high taxation has no effect upon production.
  Mr. MacDONALD: I did not say so.
  Mr. CHURCHILL: According to the evidence I have almost immediately received from my ears, the right hon. Gentleman said a high Income Tax had no effect upon industrial production.
  Mr. MacDONALD: I added the very essential qualification, provided its pro ceeds are spent altogether within the country.
  Mr. CHURCHILL: Even with this no doubt significant, but certainly somewhat obscure qualification, I cannot feel that our approach towards final truth and definite knowledge in these complicated matters has been greatly facilitated by this contribution.
  The right hon. Gentleman's contribution to the discussion of the widows' pensions scheme, has been even more exiguous. What is his contribution? A promise of and approval of widows' pensions, pensions at 65 and so forth; but in the period—I quite. recognise that it was a brief period—in which he had control, no effective effort, no notable step towards the performance of this promise. Now that another Government has introduced a Measure dealing with this subject the attitude of the right hon. Gentleman has been clearly exposed. He will not oppose the scheme in any direct manner upon principle, because that might not be popular. What he will do is to say We will give the authors of the scheme the opportunity of testifying to their sincerity by asking them—no doubt at every stage in the Bill—to perform what are known to be impossibilities, to put the whole cost on the Exchequer, to raise the

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  benefits to what is considered to be a generous level, to bring this scheme into operation on a non-contributory basis. And then, while this process is going on, he will take every opportunity, by raising these impossible positions and questions, of forcing the Government to vote for what is, after all, common sense and a practical line of policy. And then he and his supporters and friends and colleagues will get out of their difficulties and out of their promises by the very cheap and easy method of going off to the country and saying, "Oh, what a much more beautiful scheme we would have given you."
  We are quite ready to accept honest criticism and constructive aid from any quarter. Honour will come to all who really give honest help and sincere and instructive assistance. Reproach will lie upon those who by obscurantist obstruction, or by endeavouring to carry things to an absurdity, pushing the whole matter into unpractical regions, have really shown themselves to be the opponents of this great social reform. I am not at all discontented with the progress of these opening Debates upon the Budget. Indeed, I must not be disappointed that a scheme which has so many different aspects should have encountered only detached, disconnected, contradictory, mutually destructive, disorganised, sporadic criticisms from different parts of the House. The very variety of the criticisms is the justification for the scheme.
  The right hon. Gentleman the late Chancellor of the Exchequer threw a doubt upon the estimate which I put forward for the Special Receipts, and it is my duty to say one word upon that. I should not like to let the Debate close without referring to it. He said he was astonished that I could budget for as much as £30,000,000 from Special Receipts, that he had gained the impression a year ago that Disposals were completely exhausted, or something to that effect—or nearly so—I do not wish to misquote him. Disposals are a very small part of the Special Receipts. I will give the main details. We expect £9,500,000 from reparations. We are justified in doing that under the Dawes plan, so much to the credit
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  of the party opposite, under the London settlement—

  £

  India

  1,000,000

  Disposals

  7,000,000

  Liquidation of Shipping

  4,000,000

  Food Liquidation

  1,000,000

  Balances from the Trading with the Enemy Act

  6,000,000

  There are minor items, and the total is £30,000,000. I am advised that in 1926, although I must expect a reduction, the receipts from this quarter will still be substantial.
  My right hon. Friend the Member for Hillhead (Sir R. Horne) made what I think is the most friendly and almost the most serious criticism of the Budget. He drew our attention to the effect of the burden which is placed upon employers and employed, particularly employers, in the great productive industries by the new contributions to the pension scheme. We have had this in mind from the very beginning, and if we had not made proposals for mitigating and modifying that burden at the present moment, it is not because we are not actually concerned with such proposals. Where ought one to look first of all? At the present moment, during the deficiency period of unemployment insurance, the employer is paying 10d. and the workman is paying 9d. Those payments go on over the whole vast 11,000,000 area of unemployed insurance. When the deficiency period ends, then, by law, both the contributions of the employer and the workman drop from 10d. and 9d. respectively to a common 6d. That is to say, when the deficiency period passes away, the additional burdens of the new pensions scheme will be assumed both by employers and employed, without any appreciable addition to the contributions they are now paying.
  It becomes a matter of supreme importance, therefore, to ascertain when this deficiency period is likely to pass away, and I do hope that we may approach that inquiry and discussion upon a thoroughly non-partisan basis. The Unemployment Fund was rapidly approaching solvency, and the end of the deficiency period was rapidly being reached when the late Minister of Labour introduced his various 'improvements and indulgencies. It fell from £15,000,000 to £5,000,000 hut it is

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  now beginning to turn upwards again —not at an alarming rate, but at a steady and unsatisfactory rate, and whereas five months ago one's hopes were that the deficiency period might have passed away through the fall of unemployment to 1,000,000 or 900,000, and finally to 800,000, while we had hoped that this might have taken place in a very short space of time, the rate of unemployment continues to keep very curiously high, and it is growing.
  Undoubtedly it is a very strange thing that it should be growing. Take, for instance, the first three months of this year. We have the Board of Trade figures, and they show that the exports of manufactured articles in those three months were substantially greater than in the corresponding period of the previous year and yet there are far more unemployed than there were before. I agree that there have been certain modifications, but I would like to say to the Opposition that this really is not a matter between the Exchequer and the unemployed. The Exchequer only contributes £13,000,000 as against £36,000,000 subscribed by trade unionists and the employers in the producing industries. It is in the interests of trade unionists, who are long-established contributors, as well as the employers in industries, to make sure that there is not growing up a certain habit of learning how to qualify for the unemployment insurance. [HON. MEMBERS: "Shame!" and "You ought to with draw!"]
  The CHAIRMAN: I hope hon. Members will allow the right hon. Gentleman to proceed.
  Mr. CHURCHILL: Are we really not to have free speech in this House? [HON. MEMBERS: "Withdraw ! "] I do not withdraw it for one moment. On the contrary, we intend to probe it. [Interruption.]
  The CHAIRMAN: The right hon. Gentleman has not said anything more provocative than has often been said by others, and I must ask hon. Members to hear him patiently.
  Mr. CHURCHILL: I really have a right to speak on this matter. I devised the original scheme of Unemployment Insurance, which was introduced into the
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  House of Commons before the hon. Gentleman who has been calling upon me to withdraw was here, and 1 do say that—[Interruption.] I really was not aware that this was such a sore subject. [HON MEMBERS: "Withdraw ! "] What am I to withdraw?
  The CHAIRMAN: The right hon. Gentleman may have made a suggestion which is unpalatable to hon. Members, but he has said nothing that is out of order, or that I could ask him to withdraw.
  Mr. SCRYMGEOIJR: On a point of Order. I should be satisfied if the right hon. Gentleman would recognise that the trade unions are not in any way encouraging or inculcating the conception of actually becoming adapted to unemployment. That was an aspersion upon a body of people who are contributing to Unemployment Insurance.
  The CHAIRMAN: I did not gather that the right hon. Gentleman made any reference to trade unionists at all.
  Mr. CHURCHILL: I am very glad that the hon. Gentleman (Mr. Scrymgeour) rose, because it is perfectly clear that there was a complete misapprehension. [HON. MEMBERS: "No! "] How do hon. Members know that there has not been a misapprehension? I have said that I consider that, in the interests of the long-established trade unionists that have been contributors to this Fund, great care ought to be taken that people are not getting on it who were not contemplated. [HON. MEMBERS: "Withdraw! "] I will not withdraw a word of it. We on this side of the House have had to listen to very hard and wounding things which are said by the representatives of the Labour party. Are they really incapable of listening to a debating retort? There is no great body of English or Scottish working people who would ever take the responsibility of allowing their representatives to come forward, and accuse the Government of the day of a "mean rich man's Budget," and not allow the, Chancellor of the Exchequer to reply.
  Mr. D. GRENFELL: Is the right hon. Gentleman entitled to defend himself at the expense of calumniating the working classes?
  An HON. MEMBER: Do you withdraw it?
  Mr. CHURCHILL: I withdraw nothing, if I were never to speak another word in this House.
  Mr. VARLEY: If the right hon. Gentleman will not withdraw, will he explain what he means by the phrase he used?
  Mr. CHURCHILL: I mean that there is a considerabe number of people who, it is suggested, have now found out a way to obtain the qualifications to receive the unemployment benefit, which was really intended for the trade unionists of the country, and are definitely obtaining those qualifications in one way or another. All I say is that this ought to be inquired into, and, after the feeling which has been displayed to-night, it is perfectly clear that it is a matter which is in everyone's mind, and that it ought to he inquired into. [Interruption.] We did not interrupt your leaders.
  Mr. MACKINDER: Our leaders did not insult your people.
  Mr. CHURCHILL: The late Chancellor of the Exchequer said the whole spirit of our policy was "for the Tory party to help the rich." Are Members of the House of Commons to say things like that, and not allow liberty of Debate? Let me continue my argument. [HON. MEMBERS: "Withdraw!" "Divide! "]
  The CHAIRMAN: I understand that the right hon. Gentleman has said no more than that he believed that there may be certain people who are misusing the unemployment benefit. There is no reason to call upon him to withdraw.
  Mr. LANSBURY: There are 50,000 miners —
  Mr. CHURCHILL rose—
  Mr. NEIL MACLEAN: Divide!
  HON. MEMBERS: Name!
  Mr. CHURCHILL: I am perfectly content to sit down. [HON. MEMERS: "Withdraw !"] No, I will never withdraw. I am perfectly content. [HON. MEMBERS: "Divide !"] I am perfectly content to sit down if the Committee wish the Debate to come to an end, and if, after having lavished taunts and insults upon the Government, the leaders of the Labour party are not able to restrain their followers—
  Mr. MACKINDER: You insulted the unemployed !
  Mr. CHURCHILL:—not able to restrain their followers, and secure for the representatives of the Government a fair hearing—
  Mr. MACLEAN: Divide!
  An HON. MEMBER: Will the Opposition leaders not keep their men in Order?
  Mr. CHURCHILL: Of course—
  Mr. MACLEAN: Divide, divide!
  HON. MEMBERS: Name!
  Mr. CHURCHILL: Of course, it is always possible for individuals to interrupt when they are—
  Mr. MACLEAN: Divide!
  HON. MEMBERS: Name!
  The CHAIRMAN: I would remind hon. Members on the Opposition side that it will be impossible to maintain order for their own spokesmen if they do not allow right hon. Gentlemen opposite to proceed with their speeches.
  Mr. MACLEAN: Is not the interruption that I am snaking a perfectly valid and Parliamentary one? Has it not been held to be so by previous Speakers of this House.
  Mr. CHURCHILL rose.—
  Mr. MACLEAN: Divide! divide!
  Mr. CHURCHILL: The Government will defer to the wishes of hon. Gentlemen who do not wish the Debate to continue, or to allow me to continue my argument. Therefore, the Government will offer no opposition to an immediate division.
  Mr. SAKLATVALA rose—
  HON. MEMBERS: Divide'
  Mr. CHURCHILL rose in his place, and claimed to move, " That the Question be now put," but the CHAIRMAN withheld his assent, and declined then to put that Question.
  Mr. SAKLATVALA: The Chancellor of the Exchequer—[Interruption]—has brought about this disorder, and it fails upon a revolutionary Communist to restore order. The right hon. Gentleman, in his effort to make an effective answer

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  to the various criticisms offered against his Budget, has departed from the usual course of offering an answer to these criticisms, and has intentionally put forward a suggestion which, in the opinion of hon. Members on this side of the House, is a cowardly suggestion. It was on that account that this side of the House has very effectively asked him either to prove what he has said or to take it back, and his silence is a consent to take it back.
  This Budget and its author claim to be somewhat out of the ordinary, as compared with previous Budgets and previous Chancellors of the Exchequer. Listening to the opening statement of the Chancellor, I have felt, that it was an excellent game of what was known a couple of years ago as "put and take." It was a Budget which was aiming at putting in revenue, and taking it back again. We are told that a Budget has been formulated which adds no burdens to the taxpayer, and leaves the revenue intact. But, coming to details, the Chancellor has introduced a system of duties on raw silk which is a new departure, even in the province of protective duties on manufactured articles. Since the Chancellor of the Exchequer is ready to investigate all questions on this matter, I would like to know if he will be ready to publish a list of shareholders, with the addresses of their political clubs, in the artificial silk industry in this country, for whose benefit a duty on raw silk is introduced.
  The Chancellor has also modified the Super-tax. As far as I understood his reason for doing so, it was to benefit the industrial position so as to minimise unemployment in this country. May we ask the Chancellor at this stage if he has investigated this question and if he has ascertained that there are owners of factories and mines and other places of industry who have closed up those places of industry because, not only are they dissatisfied with the ordinary incomes which they are making, but, they are not even satisfied with the super-incomes which they are making, and they are reluctant to give a portion of those super-incomes in the shape of Super-tax. If that be so, and if unemployment arises from the fact that owners of industries are closing down those industries because
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  they are not satisfied with ordinary incomes, then the right place for those owners is in the prison house, and it is not the right remedy to remove the Super-tax. If we understand from the Chancellor of the Exchequer that unwillingness on the part of these owners to pay Super-tax induces them to close down mines, factories, and other places of work, then an honest Government ought to take drastic measures to secure possession of those places and to continue the industries. The remedy of submitting to the super-income owners is not the right remedy.
  We are asked to conclude that the Chancellor is increasing the Death Duties and removing the Super-tax in order to give greater stability to industry. We can only infer that he proposes to give stability to the credit of those parties who own certain industries, and the argument appears to be that the owners of large wealth are in possession of credits which go to support, strengthen and stabilise industry. When a rich man dies and his heirs and successors inherit industries we are told by the Chancellor that they can afford to pay higher Death Duties. That means that the heirs and successors are called upon to maintain that industry with a lessened credit as compared with the deceased owner. If the heirs and successors can maintain and support credit after paying the larger Death Duties, why is it that the existing owner of an industry cannot maintain the same credit after paying the higher Super-tax? That we fail to understand. The Chancellor of the Exchequer claims sincerity, righteousness and justice as his qualities and he has imposed duties on certain articles described as articles of luxury which nobody is bound to use and for indulgence in which the users ought to pay the nation. I put it to the Chancellor that if his sincerity is clear his intelligence appears to be very incomplete. having regard to the way in which he has explained this matter. He has talked of articles of luxury, but he has confined himself to levying a duty on certain manufactured articles only, and those manufactured articles coming from outside countries.
  If it be the intention of this Committee to consider it just and fair to levy a duty on articles of luxury, I should think that even little school children would consider

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  that the first duty in that sense would have been a duty on pearls, diamonds, rubies, and other precious stones coming into this country, but no such duty is proposed. Then we are told that, because there is going to be a duty on luxuries, therefore there will be a duty on the American Ford car, but there will be no duty on the British Rolls-Royce car. Why is this so? If we are going to levy a duty on articles of luxury, the country of manufacture should not enter into the question at all. It is only a popularity-hunting phrase to call these protective duties for the benefit of a few select shareholders duties on articles of luxury. We are told that these articles of luxury in this country give a special employment to the working classes, but, as far as the working classes are concerned, articles of huge consumption are as productive as articles of luxury. The wages are fixed according to the fighting power of the trade unions to which the workers belong, and after these wages are fixed, the man who works in producing the milk float is paid the same rate as the man of that trade who is working in a Rolls-Royce factory, and the working classes do not have any special production from articles of luxury. If the Chancellor of the Exchequer is really sincere in taxing articles of luxury, he must tax them irrespective of the country of origin and of particular selections.
  To come to the much debated point of the pensions, I agree with some of the criticisms levelled against the Opposition by the party opposite. It looks in a measure like a wail over a lost opportunity. It looks in its outward appearance like a mere tug-of-war between the methods of introducing the Measure rather than any fundamental attack upon the Measure. I, as a member of the Communist party, also perceive in it. a certain substratum of capitalist manœuvre from all sides. When we examine the question of the widows' pensions or the improvement in the old age pensions, we see, in the claims made by members of the late Socialist Government and of the present Tory Government, both sides contending oil certain fine and delicate touches of difference. This is a clear example of what we, from our party, would maintain as being a very thin partition between what is called Tory Democracy
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  and Capitalist Socialism. It is quite true that a scheme wrapped up in a dark blue tissue paper and the same scheme wrapped up in a light pink paper is the same scheme, after all. While I agree with the criticism of my Socialist Friends that, under the present system of Society, a contributory system of pensions is a wrong system, and that a non-contributory system should be introduced, I refuse to accept the view that by exempting the workers merely from paying, openly and directly, their 4d., the late Socialist Government would have devised a non-contributory scheme.
  The real working-class point of view is that all wealth is primarily produced by the workers. It is allocated afterwards in separate and different banking accounts under a capitalist system. Whatever source it secondarily comes from, it primarily is a contribution of the workers every time. As society works out, we would find out that if, for instance, the workers were not made to contribute, and if a Capitalist-Socialist Chancellor of the Exchequer would have put the entire burden upon the employers, even then the employers would, in some way or another, contrive to reduce the wages and get it out of the workers all the same. Even if we go further and allow the Capitalist-Socialist Chancellor of the Exchequer to argue that he would not have put any contribution with the word contribution attached to it on, he would have paid it out of the revenues produced from an Income Tax, even then we in the Communish party and we in the non-capitalist Socialist party would refuse to believe it to be a genuine non-contributory scheme. It is again the same story that the rich tax payers could not pay an Income Tax unless they made the income, and they cannot make the income without robbing the workers who produce the goods. Even when, for satisfaction's sake, we call it a non-contributory scheme, it would be contributory all the same. We see this form of contribution going on to-day.
  What is the difficulty? What is the real problem? What is the real struggle? There is genuine complaint that the onwers of industry are unscrupulous and relentless in enforcing reductions in wages. Why? Because they say that all the owners of industry are so over

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  weighted with taxes that they cannot afford to pay taxes and full wages at the same time. We of the Communist party entirely disagree with the idea that certain schemes as put forward by the Capitalist-Socialist Government are really non-contributory. They are as much contributory as the present scheme put forward by the Government. In that respect I do realise that between democracy and what is practised as Capitalist-Socialism there is very little difference. I put it to the Committee now, my friends, if we are agreed—
  The CHAIRMAN: The hon. Member must not address the Committee as "my friends.''
  Mr. SAKLATVALA: I apologise for having indiscriminately described them all as our friends. If the Committee agree that a contributory scheme is a burden upon the working classes, and that a non-contributory scheme alone is really helpful to the working classes, then I submit that the remedy does not lie in this camouflaged indirect contribution, which must come from the working class people, and then come from the pockets of the rich as additional contributions towards the maintenance of these pensions. We maintain that all source of wealth is the work directly done by the manual and mental workers of this country, and it is futile to try to draw an imaginary line between a contributory and a non-contributory scheme. There is no such thing as a non contributory scheme so far as the workers are concerned within a capitalistic system. If Socialist Members of this House really mean to introduce a non contributory scheme, they must make up their minds to introduce Socialism.
  There has been reference to tea taxation. We were told that if the Tea Tax had not been reduced, it was quite possible for the prices to rise, as they have risen. [Interruption.] What we find is that actually the profitmakers can always profit by the lowering of the taxes. We find to-day in the "Daily Herald," the official paper of the Labour party, an article from Dr. Marion Phillips, saying that the entire Tea Tax was swallowed up by the profiteers, and that is perfectly true. The profiteers have it both ways. Suppose we try to regularise their profits here, the. large
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  tea merchants will invoice their own teas from abroad at a higher price, and then maintain that they make very little profit. If the Chancellor of the Exchequer has got such a disgust for people who develop the habit of qualifying themselves for unemployment insurance dishonestly, at least he should have a disgust for those who profiteer in the same way. [Interruption.]
  The PRIME MINISTER(Mr. Baldwin)rose in his place, and claimed to move, " That the Question be now put."
  Question,
  " 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,"
  put accordingly, and agreed to.
  Resolution to be reported To-morrow.
  Committee to sit again To-morrow.

  BRITISH EMPIRE EXHIBITION (GUARANTEE) BILL.
  Not amended (in the Standing Committee), considered.
  Mr. THOMAS: I have only risen to say that, whatever differences there might be a few moments ago, there will be no difference of opinion on the subject which we are now about to discuss—
  Mr. SPEAKER: There is no Question at present before the House. It is necessary, before the right hon. Gentleman can proceed, that the new Clause on the Paper in the name of the hon. Member for West Islington (Mr. Montague), should be formally moved.
  NEW CLAUSE. —(Fair wages to be paid to persons employed in connection with the British Empire Exhibition.)

  (1) The wages paid by any employer to persons employed by him in connection with the British Empire Exhibition shall, except where paid at a rate agreed upon by a joint industrial council representing the employer and the persons employed, not be less than would be payable if the employment were carried on under contract between a Government Department and the employer containing a fair wage clause which complies with the requirements of any resolution of the House of Commons for the time being

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  in force applicable to contracts of Government Departments, and if any dispute arises as to what wages ought to be paid in accordance with this Section it may be Deferred by the employer or persons employed to the industrial court for settlement.

  (2) Where any award has been made by the industrial court upon a dispute referred to that court under this Section, then as from the date of the award or from such later date as the court may direct, it shall be an implied term of the contract between every employer and worker to whom the award applies that the rate of wages to be paid under the contract shall, until varied in accordance with the provisions of this Section, be in accordance with the award — [Mr. Montague.]

  Brought up, and read the First time.
  Mr. MONTAGUE: I beg to move, "That the Clause be read a Second time."
  Mr. LUNN: I beg to second the Motion.
  Clause read a Second time.
  Mr. THOMAS: I beg to move, in line 10, to leave out the words "employer or persons employed," and to insert instead thereof the words "Minister of Labour."
  I am able to announce that as a result of the negotiations on both sides the Clause, which my hon. Friends have formally moved and seconded, will be accepted, as amended, by the Government. It is only fair to say that while we on this side of the House are mainly concerned in securing that the Fair Wages Clauses should he accepted by the contractors and sub-contractors at Wembley, that the Government are in the unfortunate position, which we here fully recognise, of not being able to give effect to it. After all, they are only in the position of certain guarantors, but they have accepted a general principle on which there is no disagreement, and it is my duty to pay tribute to my hon. Friend the Secretary to the Overseas
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  Trade Department for the very frank way in which he endeavoured to get over this difficulty. I understand that the Government are prepared to accept the new Clause so amended, and I hope the moral effect of its unanimous acceptance by the House will be a warning to all those contractors and sub-contractors who are not playing cricket, and, above all, that this Bill will now pass through all its stages. Seeing that the exhibition opens on Saturday week, I hope we shall have no more criticism in the House of Commons of the exhibition, and that the Ministers will all be congratulated on the wonderful success that I know it is going to be.
  Mr. A. M. SAMUEL(Secretary, Overseas Trade Department): I am greatly obliged to my right hon. Friend the Member for Derby (Mr. Thomas) for having helped us over a difficulty. As is well known, we have said all through the Debates that we are en tirely in favour of the principle of the Fair Wages Clause. Upstairs we all disliked voting against the Clause as then proposed, but, in the amended Clause now before the House, a golden bridge has been made which enables us to get over the difficulty.
  Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.
  Proposed words there inserted.
  Proposed Clause, as amended, added to the Bill.
  Bill to be read the Third time To-morrow.
  The remaining Orders acre read, and postponed.

  ADJOURNMENT.
  Resolved, "That this House do now adjourn." — [Commander Eyres Monsell.]
  Adjourned accordingly at Eleven Minutes after Eleven o'Clock.