Commons Sitting of 26 April 1926

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

PRIVATE BUSINESS.
Ascot District Gas and Electricity Bill [Lords],
Birkenhead Corporation Bill [Lords],
Darwen Corporation Bill [Lords],
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.
  INDIA.

    CURRENCY RETURNS.
    Sir FREDRIC WISEasked the Under-Secretary of State for India the amount of gold coin and bullion and the notes in circulation in the Indian currency returns to date?
    The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): On the 15th April the figures were as follow:

    Crores

    Rs.

    Gold coin and bullion valued at the present statutory ratio

    22·3

    Gross note circulation

    138·6

    I am circulating in the OFFICIAL REPORT a copy of the currency return from which these figures are extracted.
    Following is the return promised:
    Note Circulation and Form of the Indian Paper Currency Reserve on 15th April, 1926.
    The Note circulation was Rs. 18,858 lakhs.
    The Reserve against it was held in the following form:

    Lakhs of Rs.

    Silver coin and bullion in India

    8,416

    Gold coin and bullion in India

    2,232

    Securities (Government of India)

    5,711

    Securities (British Government)

    2,499

    Total

    18,858

    EMIGRATION TO BRITISH GUIANA.
    Mr. SCURRasked the Under-Secretary of State for India whether he can give the terms of the draft notification recently issued by the Government of India on the subject of the emigration of Indians to British Guiana?
    Earl WINTERTON: A notification published on 23rd March legalises the emigration of Indian families (not exceeding 500, or 1,500 individuals in all) to British Guiana for the purpose of unskilled work, with effect from a date to be agreed upon with the Governor of the Colony, and on certain terms and conditions. The text of the notification, including the detailed terms, is too long to reproduce, but I am sending the hon. Member a copy of it.

    POLICE.
    Mr. SCURRasked the Under-Secretary of State for India whether he will cause an inquiry to be made into the allegations made by the Patuakhali Congress Committee concerning the methods used by the police?
    Earl WINTERTON: If the question relates to an incident which took place about a month ago, when the secretary of the local Congress Committee apparently interfered with the police in the execution of their duty, I see no reason for special inquiry.

    JAIPUR STATE (ADMINISTRATION).
    Mr. PETHICK-LAWRENCEasked the Under-Secretary of State for India whether, seeing that during the minority of the ruler in Jaipur the Government of that State is carried on by the Regent, who is the resident officer, and by a Cabinet of four persons, two of whom are British officials, the Government of India are responsible for administrative acts in that State?
    Earl WINTERTON: The facts are not quite as stated in the question. Certain powers are reserved to the Resident, but generally speaking the administration of the State is carried on by the Council of State, which consists of six members, including a British official as President. It is an accepted principle, to which effect

    1633
    is given by these arrangements, that the Government of India have a special measure of responsibility for the administration of Indian States during minorities; but it is to be borne in mind, especially as regards administrative details, that the Government of India are, during a minority administration, the trustees and custodians of the rights, interests and traditions of a State, and that their general policy is accordingly to leave unchanged in essentials the general system of administration to which the ruler and the people have become accustomed.

    LEGISLATIVE ASSEMBLY.
    Sir GERALD STRICKLANDasked the Under-Secretary of State for India how many times has the Government of India been defeated in the Assembly since the last election?
    Earl WINTERTON: I regret that I cannot give the figure asked for, which could be arrived at only after an exhaustive study of all the proceedings of the Legislative Assembly since the election of 1923. These proceedings are regularly supplied to the Library of the House.

    CIVIL SUIT (RAWALPINDI).
    Mr. LANSBURYasked the Under-Secretary of State for India whether his attention has been called to the fact that certain papers connected with a civil suit brought by Jai Singh against the Secretary of State at Rawalpindi were removed from the file of the senior sub-judge; whether he can state who removed these papers and on what authority; and whether any action has been, or will be, taken in the matter?
    Earl WINTERTON: I have no information on the- subject of the hon. Member's question.
    Mr. LANSBURY: Will the Noble Lord make inquiries? This is a very serious statement, which appeared in the Indian newspapers.
    Earl WINTERTON: If the hon. Member will inform me privately on what he bases his question, I may be prepared to consider whether or not I will make inquiries.

    RIOTS, SATYAMANGALAM.
    Mr. THURTLEasked the Under-Secretary of State for India whether he will give particular of the riots which have occurred at Satyamangalam, on the Madras-Mysore border, and as to the cause of the dispute?.
    Earl WINTERTON: I have received no information, but inquiry will be made.

    CALCUTTA RIOTS.
    Mr. WARDLAW-MILNE(by Private Notice) asked the Under-Secretary of State for India whether he will give the House the latest information available regarding the further outbreak of rioting in Calcutta, and state the number of killed and injured as a result thereof?
    Earl WINTERTON: The latest official report is that on Thursday, Friday, and Saturday there are known to have occurred 19 deaths and 87 cases of injury in the riots which took place on those days. They were caused mainly by sporadic attacks on individuals, but on Saturday there were attacks by the mob. It was necessary for the police to use firearms on all three days. In the disturbed area business is suspended, hut there has been no incendiarism and not much looting. On Saturday armoured cars were called out. Steps have been taken to reinforce the police and to quarter additional police at the cost of the area disturbed. It is anticipated that the special measures taken will provide sufficient reserves, and the situation is in hand. But the isolated murders, committed by hooligans of the two communities, and the strength of communal feeling have produced a difficult position.
    Mr. WARDLAW-MILNE: I am much obliged, as I am sure we all are, for that answer, but may I ask whether, apart from the armoured cars—I do not know whether they are run by military or volunteers—there are troops in readiness in the neighbourhood sufficient, if necessary, to supplement the police force to deal with anything the Government suspect may arise?
    Earl WINTERTON: Yes; the Government of India have informed my Noble Friend that in their belief all necessary reserves are available. I ought to say

    1635
    there is no reason to fear that it will be necessary to call them into operation. The police and other forces on the spot are sufficient to deal with the situation at the moment.
    Major CRAWFURD: Are any of the killed or injured members of the police or military forces?
    Earl WINTERTON: In order to answer that question it is necessary to give the casualties caused by the police; I believe they are very small indeed—only some three or four. Of the casualties caused to the police, I have no exact details at the moment, but I am sorry to say that at least one policeman has been killed and some injured.
    Mr. PILCHER: Have any of the auxiliary forces in Calcutta been mobilised, and is the Noble Lord aware how completely effective the mobilisation of that force was on four or five similar occasions during Lord Ronaldshay's governorship?
    Earl WINTERTON: I do not know whether it has been mobilised in the technical sense, but units of the auxiliary force were used on the earlier occasion during the rioting, and they are available if need arises again.
    Mr. FILCHER: May I ask whether the Goondas Act has been put into operation, which is an Act for the summary expulsion of known bad or dangerous characters, and which has been used in the past in dealing with cases of this kind?
    Earl WINTERTON: I must ask for notice of that question.

  BRITISH GUIANA (EAST INDIAN SETTLERS).
  Mr. JACOBasked the Secretary of State for the Colonies whether he is aware that the British Guiana Planters' Association disapprove of Clauses 11, 15, and 16 for the repatriation of East Indian settlers under the colonisation scheme; and whether he will take steps to meet their objections?
  The SECRETARY of STATE for the COLONIES (Mr. Amery): I have received no information as to the attitude of this
  1636
  association towards these Clauses of the notification in question. The Government of British Guiana. have already decided, with my approval, to accept these terms and conditions.

  BAHAMAS (UNITED STATES REVENUE CUTTERS).
  Mr. JACOBasked the Secretary of State for the Colonies whether the new agreement with the United States permitting American revenue cutters to enter territorial waters of the Bahama Islands for purposes of search, on due notice being given, has received the approval of the local executive council and House of Assembly?
  Mr. AMERY: I would invite my hon. Friend's attention to the reply addressed by my right hon. Friend the Secretary of State for Foreign Affairs to the hon. and gallant Member for Norwich on the 21st April, which makes it clear that he is mistaken in supposing that any such agreement has been concluded. The arrangements outlined in that reply were made with the full concurrence of the Governor of the Bahamas.

  SIERRA LEONE (RAILWAY DISPUTE).
  Mr. LANSBURYasked the Secretary of State for the Colonies whether he is aware that the Governor of Sierra Leone and the general manager of the railways have dismissed or put under notice all the officials of railway workers' union, including Mr. E. A. Richard, the president; that a committee of citizens has taken up the cause of the workers owing to the attitude of the Governor, and many members of the community have taken up honorary membership of the union to express their disapproval of the policy of the Governor and manager and, as the workers returned to work upon his telegraphed promise to consider their grievances, whether he will state what ameliorations have taken place in the conditions of employment?
  Mr. AMERY: The reply to the first part of the question is in the negative. I am aware that a committee of citizens supported the strikers. I have no information that members of the general community have taken up honorary membership of the union. The suggestion in the last part of the question that the strikers returned to work on a promise from me to consider their grievances is inaccurate.
  Mr. LANSBURY: Will the right hon. Gentleman publish his telegram, and allow the House to decide?
  Mr. AMERY: No; I cannot do that.
  Mr. LANSBURY: Seeing that the right hon. Gentleman makes a statement that the latter part of the question is inaccurate, would it not be for the benefit of everyone to have the actual terms of the telegram, so that we may form an opinion? Has the right hon. Gentleman made inquiries as to the dismissal of the men mentioned in the first part of the question?
  Mr. AMERY: I am making inquiries into that. I think the hon. Member must accept the accuracy of my statement.
  Mr. LANSBURY: When shall we get the report which the: right hon. Gentleman promised three weeks or a month ago?
  Mr. AMERY: I hope that the report will be available quite soon.

  PERAK HYDRO-ELECTRIC SCHEME.
  Mr. PENNYasked the Secretary of State for the Colonies whether the Federated Malay States Government accepts any responsibility for the Perak hydro-electric scheme; whether the contract just concluded was first submitted to it; whether the contract received the sanction of the Federal Council; and, if not, why it was submitted to this body?
  Mr. AMERY: It was considered that the grant of this concession within. the State of Perak was a matter for that State, and the agreement was brought before the Perak State Council and not the Federal Council for approval. The Federated Malay States Government. has expressed its willingness to assist, if
  1638
  necessary, in certain respects, in carrying out the scheme, and the question of its participation is now the subject of negotiations. On this matter the Finance Committee of the Federal Council has, I believe, been fully consulted throughout and no doubt the matter will come before the Federal Council in due course.
  Mr. PENNY: Is the right hon. Gentleman aware that action like this will create suspicion in the minds of and a lack of confidence in the integrity of the Government among these public men who carry out these duties? This document was laid before them after it had been signed.
  Mr. AMERY: I understand that the Financial Committee of the Federal Council has been consulted throughout. It is primarily a matter for the State of Perak.

  RHODESIA.

    NATIVE LANDS.
    Mr. CECIL WILSONasked the Secretary of State for the Colonies whether he has received a copy of the Morris Carter Report upon the native land question of Rhodesia; and whether, before taking any action with regard to the recommendations, an opportunity will he provided for discussion?
    Mr. AMERY: The reply to the first part of the question is in the affirmative. The next step contemplated in connection with the Report is that a delegation from the Government of Southern Rhodesia, which is expected to arrive here early in June, should discuss it with me.

    MISSIONARY SOCIETIES (LAND HOLDING).
    Mr. CECIL WILSONasked the Secretary of State for the Colonies whether he can say under what title the missionaries of Southern Rhodesia hold 406,200 acres of land, as sclosed in the Morris Carter Report; whether the natives occupying these areas pay to the missionaries a per capita rent or tax for living on these lands: and for how long have these payments been made?
    Mr. AMERY: I have not the necessary detailed information to enable me to reply to my hon. Friend's question, but I will communicate with the Government of Southern Rhodesia.

  EMPIRE SETTLEMENT.
  Mr. HORE-BELISHAasked the Secretary of State for the Colonies, whether he is aware that settlers, with their wives and children, from this country in Western Australia under the group settlement scheme are housed, in some cases, for two years in cattle-sheds; and whether arrangements can be made for better housing accommodation to be provided for these settlers, in accordance with the promises held out to them before emigration?
  Mr. AMERY: I am not aware that any settlers under the Western Australian Group Settlement Scheme have been housed in cattle sheds. The settlers are usually accommodated in temporary shacks until cottages can he erected, Every effort is made to provide cottages as rapidly as possible, and in certain cases they have been prepared before the arrival of the settlers.
  The representative of the Oversea Settlement Committee in Australia has made a report upon the Group Settlement Scheme in Western Australia which will be published at an early date.
  Sir CLEMENT KINLOCH-COOKEasked the Secretary of State for Dominion Affairs whether his attention has been called to the new system of estimating the annual quota of immigrants to the United States of America to be allowed to each nationality; whether he is aware that the new system will have the effect of increasing the number of immigrants admitted from Great Britain from 34,000 to 85,000; and what special steps, if any, the Government propose to take, in conjunction with the government of the Dominion of Canada, in order to divert immigrants from this country to settle in Canada rather than in the United States of America, and so prevent a repetition of the situation before the War when the number of British emigrants entering the United States of America was greatly in excess of the number entering the Dominion of Canada?
  Mr. AMERY: I have seen a statement in the Press to the effect that the annual quota of British immigrants to the United States is likely to be increased in July, 1927, but His Majesty's Government have at present no official information to this effect. It is the policy
  1640
  of His Majesty's Government to encourage British subjects who proceed overseas to settle within the Empire, and assistance for this purpose is available in suitable cases under the Empire Settlement Act. I would, however, observe that most of the emigrants from this country to the United States are industrial workers for whom there is at present little or no demand in Canada.
  Sir C. KINLOCH-COOKE: Will the right hon. Gentleman exercise his usual foresight in these matters and see that when this understanding does come into force he will endeavour to make some amendment of the Settlement Act which will enable more settlers to proceed to Canada thin is the case at present?
  Viscountess ASTOR: Is it not true that settlers are very anxious to get into the United States, so long as there is no work for them in Canada?

  GOVERNMENT DEPARTMENTS.

    COLONAL OFFICE (CHIEF MEDICAL ADVISER).
    Captain CROOKSHANKasked the Secretary of State for the Colonies what are the functions of the recently appointed chief medical officer in his Department; and whether this is a new permanent appointment or merely a re-allocation of duties.?
    Mr. AMERY: The post to which my hon. and gallant Friend no doubt refers is that of chief medical adviser, whose functions, as the title indicates, will he to advise me generally on all medical and sanitary matters arising in connection with the Colonies and Protectorates, including measures to ensure continuity of policy and co-ordination of progressive action between different administrations. The post is a new appointment, the creation of which has been authorised in the first instance for a period of three years.
    Sir F. WISE: Can the right hon. Gentleman say what is the cost of this appointment?
    Mr. AMERY: The salary of this official is £1,500 a year.
    Colonel WOODCOCK: Can the right hon. Gentleman say whether this officer is already in receipt of a pension?
    Mr. AMERY: That may or may not be the case.
    Lieut.-Colonel FREMANTLE: Is this officer to be in constant touch with the medical advisory committee?
    Mr. AMERY: He will certainly be in close touch with it.
    Mr. HARRIS: How is the appointment made? Is it open to competition, or is it a personal appointment?
    Mr. AMERY: It is an appointment which the Secretary of State makes at his discretion, after carefully considering the merits of the different candidates.
    Mr. MONTAGUE: Is it a full-time appointment?
    Mr. AMERY: Yes.

    MINISTRY OF LABOUR (DISCHARGE OF EX-SERVICE MEN).
    Mr. W. THORNEasked the Minister of Labour whether, without preliminary warning, notices of discharge have been issued to about 50 ex service men employed in the claims and records office of the Ministry of Labour at Kew; whether it is intended to issue further notices weekly until the temporary staff is reduced to an: absolute minimum; whether the dismissals are to take place according to military category; whether relative efficiency, length of service, and domestic responsibilities are taken into consideration; and if he intends taking any action in the matter?
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Betterton): The answer to the first part of the question is in the affirmative, but all the clerks concerned have been given a month's notice. The present staff is in excess of the Estimates for 1926–27 and, in view of the reduction in the number of unemployed persons drawing unemployment insurance benefit, it has been found possible to effect the necessary reduction in staff to approximate to the Estimate. The discharges are taking place according to military category and other matters such as are referred to in the hon. Member's question are taken into consideration within each category.

    MOTOR VEHICLES.
    Sir W. DAVISONasked the Financial Secretary to the Treasury what is the total number of motor vehicles used by the Stationery Office or other Departments under the control of the Treasury, and what number of these are of British and foreign origin, respectively?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill): I would refer my hon. Friend to the full reply given to my hon. Friend the Member for Reading (Mr. H. Williams) on the 8th March.

  IMPERIAL CONFERENCE (AGENDA).
  Sir ROBERT HAMILTONasked the Secretary of State for Dominion Affairs whether the agenda will be made public of the subjects to be discussed at the forthcoming Imperial Conference?
  Mr. AMERY: His Majesty's Government are at present in communication with the Dominion Governments with regard to the agenda for the forthcoming Imperial Conference. Until this correspondence is further advanced it would be premature to make any public statement on the subject, but I hope that it will be possible for such a statement to be made in the course of the next few weeks.

  CANADA (DIPLOMATIC REPRESEN TATIVE, WASHINGTON).
  Mr. THURTLEasked the Secretary of State for Dominion Affairs if he has received any recent information as to the intention of the Canadian Government to appoint its own diplomatic representative at Washington?
  Mr. AMERY: The answer is in the negative.

  CREDIT INSURANCE.
  Mr. HANNONasked the Parliamentary Secretary to the Overseas Trade Department (1) whether he can state the actual amount received by the Insurance Department of Overseas Trade respect of recoveries and salvages; and what is the amount of premiums held by the Department the risk on which has not yet expired;

  1643
  (2) the total amount received in premiums in the Insurance Department of the Department of Overseas Trade since the inception of the scheme; what is the total amount of payments made by the Department in respect of claims received; and how many claims against the Insurance Department are still outstanding?
  Mr. A. M. SAMUEL (Secretary, Overseas Trade Department): As the reply to these questions is necessarily long, I trust that my hon. Friend will give me his permission to circulate them in the OFFICIAL REPORT.
  Following is the answer:
  I presume that my hon. Friend refers to the Guarantees Scheme administered by the Export Credits Department of the Department of Overseas Trade.
  The answers to the questions asked by my hon. Friend are as follows:

  (i) The total amount received in premiums since the inception of the scheme to the 31st March last is £182,718.

  (ii) The total amount of payments made by the Department under its guarantees up to 31st March last is £521,433.

  (iii) No claims against the Department are outstanding. The Department's practice is to make good its guarantee immediately on default, subject to such recoveries and salvage as may subsequently be obtainable.

  (iv) The total amount received in respect of recoveries and salvage to the 31st March last is £290,894. There is every reason to suppose that further sums will be received under this head.

  (v) The amount of premiums held by the Department in respect of guarantees not yet expired is £10,874.

  Mr. HANNONasked the Parliamentary Secretary to the Overseas Trade Department the total sum allocated for the staff and running expenses of the Insurance Department of the Department of Overseas Trade; and what was the profit or loss incurred by that Department for the three years ending January, 1926?
  Mr. SAMUEL: The total sum spent on staff and running expenses of the Export Credits Department since the inception of the Guarantees Scheme in 1921 to the 31st March, 1926, was approximately £40,000. As to the last part of my hon. Friend's question, the Committee on Credit Insurance, in their Report which was recently presented to Parliament, arrived at the conclusion that up to the present time the Department had made neither material profit nor loss.

  EMPIRE PRODUCE (MARKETING).
  Mr. WOMERSLEYasked the Minister of Agriculture if a decision has been arrived at as to whether the fishing industry is to receive assistance from the amount voted for the marketing of Empire and home produce and, if so, to what extent?
  Mr. AMERY: I have been asked to reply, since I shall administer the Vote to which my hon. Friend alludes. I would refer him to the full statement regarding the Empire Marketing Grant which I made on the 31st March, and to the supplementary reply which I gave on the same day to the hon. and gallant Member for Central Hull, who raised a question as to fisheries.
  Mr. WOMERSLEY: Will the right hon. Gentleman send me a copy of this reply?
  Mr. AMERY: Certainly.
  Mr. WOMERSLEY: Will he see that the fishing industry is properly represented on this Committee?
  Mr. AMERY: It is impossible for every industry inquired into to be represented on the Committee, but the point will be kept in mind.
  Lieut.-Commander KENWORTHY: All that the right hon. Gentleman's supplementary answers mean is that the matter can be considered. Cannot he make a further announcement on this question?
  Mr. AMERY: I think my answers go a good deal further than the hon. and gallant Member suggests. I have said that the Imperial Economic Committee, in proper course, will deal with this question, and that this recommendation would also be dealt with

  AGRICULTURE.

    SUGAR-BEET FACTORIES.
    Mr. FORRESTasked the Minister of Agriculture if he has received any returns giving the profits made by the British sugar-beet factories during the past season; and, if so, whether he will state what these profits are?
    The MINISTER of AGRICULTURE (Mr. Guinness): As I informed the hon. Member for South Bradford (Mr. Hirst) on 30th March last, the balance sheets of the factory companies for the 1925–26 season should be available for presentation about the end of June next.
    Mr. A. V. ALEXANDER: Is the right hon. Gentleman aware that one of these companies is now in the hands of the Official Receiver?
    Mr. CECIL WILSON (for Mr. JOHNSTON)asked the Minister of Agriculture whether any of the new beet-sugar factories in Britain have been financed by the Dutch group of financiers which owns the Cantley Factory; and what assistance, if any, these factories have received under the Trade Facilities Act?
    Mr. GUINNESS: I understand that some of the Dutch investors in the English Beet Sugar Corporation,, Limited, which owns the Cantley Factory, are associated with the Dutch Group who have invested in the Ely Beet Sugar Factory, Limited, and the Ipswich Beet Sugar Factory, Limited, which own the Ely and Ipswich factories respectively. None of these companies has applied for or received assistance under the Trades Facilities Act.
    Colonel DAYasked the Minister of Agriculture if, by an agreement with the National Farmers Union and the beet factory owners, unemployed farm workers are debarred from obtaining employment at such factories; and will he take such action as will result in throwing open employment in these subsidised factories?
    Mr. GUINNESS: According to my information, it is the practice of the beet sugar factories, when engaging labour, to give preference to those who are found among the ranks of the genuine unemployed. As regards the last part of the question, I have no authority to interfere with the discretion of employers as to the selection of their workers.

    DONCASTER DRAINAGE COMMISSION.
    Mr, T. WILLIAMSasked the Minister of Agriculture whether he has yet appointed the special Drainage Commission for the Doncaster district, as recommended by the Royal Commission on Mining Subsidence; and, if so, is he in a position to give the names to the House?
    Mr. GUINNESS: Every effort is being made to complete the arrangements for setting up the Special Commission for the Doncaster area, but there are many interests affected and I regret that I am not yet able to announce the composition of the Commission.
    Mr. WILLIAMS: Is the right hon. Gentleman not aware of the already lengthy delay and that any further delay is likely to be very disastrous?
    Mr. GUINNESS: The hon. Member's interest in this matter has already led me to send an important and urgent reminder to other Government Departments concerned.
    Captain CROOKSHANK: How soon is the right hon. Gentleman likely to come to a decision?
    Mr. GUINNESS: We are in negotiation with other Government Departments, and as soon as we get their answers, I shall be able to come to a, decision.

    POWER ALCOHOL.
    Mr. HURDasked the Minister of Agriculture if he can state the decision of the Government regarding the proposal to establish in this country an industry for the production of power alcohol from sugar beet?
    Mr. GUINNESS: I regret that I am not yet in a position to announce the Government's decision on this subject.
    Mr. HURD: May I ask when the right hon. Gentleman will be in a position to answer?
    Mr. GUINNESS: I have received a very technical report from a scientific committee, and am considering it. I hope it will be possible to announce a decision very shortly.
    Viscountess ASTOR: I hope the Government will be very careful to do nothing to increase the production of alcohol.
    Mr. GUINNESS: The Noble Lady is perhaps not aware that this is not for human consumption, but for motor power.

    CANE SUGAR.
    Mr. W. THORNEasked the President of the Board of Trade if he is aware that the cane sugar production for 1926 is being curtailed by the Cuba Cane Sugar Corporation; that the world's estimated production of beet sugar in 1926 will only be half of that of cane sugar; if special efforts are being made to increase the beet sugar supply in this country with a view to preventing further increase in the price of cane sugar; and if he intends taking any action in the matter?
    Mr. GUINNESS: I have been asked to reply. I have seen in the Press a report of a proposal to curtail cane sugar production in Cuba in 1926, and I am also aware that from recent estimates of the world's sugar crops the estimated tonnage of cane sugar is almost twice that of beet. The hon. Member is no doubt aware that., as a result of the British Sugar (Subsidy) Act passed last year, the acreage under beet in Great Britain has been increased from 23,000 acres in 1924 to approximately 128,500 acres this year, and the number of factories from three to 14.

    CARNARVONSHIRE (AGRICULTURAL HOLDINGS)
    Major OWENasked the Minister of Agriculture the number of farms of over one acre in area in the county of Carnarvon; the number of landowners in the county who own agricultural land of over one acre in area; and the number of farmers in Carnarvonshire who own the farms they occupy?
    Mr. GUINNESS: The number of agricultural holdings of over one acre in Carnarvonshire in 1925 was 5,861. The number of occupiers of holdings in that county who stated in 1924 that they owned the whole or the greater part of their holdings was 676. I have no information as to the total number of owners of agricultural land.

    INJURIOUS WEEDS,
    Mr. R. MORRISON (for Mr. BUXTON)asked the Minister of Agriculture the number of cases in which county agricultural committees have used
    1648
    their powers in regard to injurious weeds during the years 1923, 1924 and 1925?
    Mr. GUINNESS: With the right hon. Gentleman's permission, I will circulate in the OFFICIAL REPORT a statement giving the desired information.
    Following is the statement:
    The latest available figures of the number of eases in which County Agricultural Committees have used their powers with regard to injurious weeds are as follow:

    Cases.

    Year ended 30th September,

    1923.

    1924.

    Reported to Agricultural Committee.

    936

    1,481

    Dealt with by arrangement

    917*

    1,426*

    Notices served

    91

    104

    Prosecutions

    Successful

    6

    9

    Unsuccessful

    3

    —

    * Some cases are satisfactorily dealt with by arrangement without the matter being reported to the Agricultural Committee.

    Particulars for the year ended 30th September, 1925, are now being collected and the results will 'ac forwarded to the right hon. Gentleman as soon as possible.

  FRANCO-GERMAN AIR CONVENTION.
  Lieut.-Commander KENWORTHYasked the Secretary of State for Air whether he has information of the aerial convention agreed between the French and German Governments; what is the present position with regard to British commercial aeroplanes flying over German territory; and what is the position with regard to the British flying service from London to Prague?
  The SECRETARY of STATE for AIR (Sir Samuel Hoare): As regards the first part of the question, I am unable to furnish any information regarding the negotiations for a Franco-German air convention. As regards the remaining parts of the question, the position remains as stated in the replies to the hon. and gallant Member on 9th July, 21st and 26th May last, with the exception that

  1649
  the permission to operate the British air service to Berlin and Cologne has been further extended to the 31st May next.
  Lieut.-Commander KENWORTHY: Is the right hon. Gentleman aware that it is reported that this Convention has been actually signed between the French and German Governments, allowing French aeroplanes to fly over German territory?
  Sir S. HOARE: I have no official information on the subject.
  Captain GARRO-JONES: Is he also aware that German air lines are now penetrating into the territory of Portugal, our oldest ally, and will he see whether British air lines can have a look in there as well
  Sir S. HOARE: I must have notice of that question.

  LOCHABER WATER POWER SCHEME (ACCIDENTS).
  Mr. DUNCANasked the President of the Board of Trade whether he is aware that there have been three accidents on the Lochaber water power scheme recently as the result of men working with liquid oxygen as an explosive; whether any investigation or inquiry has taken place to ascertain the cause of such accidents; if so, what is the result of such inquiries; whether he is aware that this explosive is only at present in its experimental stages, and that the men are compelled to work on a bonus system whilst using this explosive; and whether, considering the risks to which the men are exposed owing to the dangerous fumes given off by this explosive, he will take the necessary steps to eliminate the extra risks arising, owing to the fact that the bonus system in operation is an inducement to the men concerned to take risks likely to endanger the health of the workmen so employed.?
  The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Captain, Hacking): I have been asked to reply. There have been three cases of men affected by fumes, none of them seriously. The cause was found on investigation to be that a small quantity of carbon monoxide was given off owing to the inferior quality of some of the materials supplied. Adequate precautions have
  1650
  been taken to prevent a recurrence. I am advised that it is not correct to speak of the process as being in the experimental stage: it has been used successfully abroad for several years. I am not sure what the hon. Member means by saying that the men are compelled to work on the bonus system. According to my information the men are paid the standard rates, and a bonus is given if the weekly progress exceeds a certain figure. There is no evidence before the Home Secretary to show that unnecessary risks are involved.
  Colonel DAY: Will the hon. Member tell us what are the standard rates?
  Captain HACKING: The standard rates are those paid by the Civil Engineering Contractors' Federation.

  BREAD PRICES.
  Mr. W. THORNEasked the President of the Board of Trade if the master bakers have decided to increase the price of bread on and after Monday, 26th April; and whether he intends taking any action in the matter?
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir Burton Chadwick): The increase Follows the recent increases in the price of flour, and is not in excess of the Food Council's scale.

  MARGARINE (IMPORTS).
  Mr. T. WILLIAMSasked the President of the Board of Trade what quantity of margarine was produced in this country in the years 1913 and 1925; the retail price per lb. in each year; and the quantity of margarine imported for the same two years?
  Mr. A. M. SAMUEL: The answer is a long one, and will, if the hon. Member agrees, be circulated in the OFFICIAL REPORT.
  Following is the answer:
  I have no official figures of the production of margarine in the United Kingdom, but I understand that the production 1913 has been estimated to be about 84,000 tons, and in 1925 about 140,000 tons. The average price in

  1651
  July, 1914, of the margarine ordinarily consumed by working-class families as shown by returns collected at that date was 7d. a lb. Returns were not obtained for earlier dates, but from such general information as is available it would appear that the price of margarine during 1913 was not materially different from that in July, 1914. During the year 1925, the price of corresponding grades of margarine at the beginning of each month averaged 7½d. a lb. The total imports of margarine in 1913 were 76,000 tons, and in 1925, 70,000 tons.

  MERCHANDISE MARKS BILL.
  Lieut.-Colonel HENEAGEasked the Prime Minister when the Second Reading of the Merchandise Marks Bill will he taken?
  Lieut.-Colonel ACLAND-TROYTEasked the Prime Minister whether he is aware that considerable apprehension is felt, particularly in agricultural districts, at the delay in proceeding with the Merchandise Marks Bill; and whether he can now give a date for the Second Reading?
  Mr. AMERY: The Government desire to obtain a Second Reading of this Bill as early as possible, but the Prime Minister regrets that he is not in a position at the moment to name a definite date.
  Lieut.-Colonel ACLAND- TROYTE: Will the right hon. Gentleman urge upon the Prime Minister the necessity of taking the Second Reading before Whitsuntide?
  Mr. AMERY: I will certainly represent that to the Prime Minister.

  ESTIMATES.
  Mr. HARMSWORTHasked the Prime Minister whether, in their First Report dealing with the classification of Estimates, the Estimates Committee recommend that, as far as possible, all Votes representing activities controlled by or linked to a particular Ministry should be grouped in the same class, and that the Estimates should indicate which Minister is responsible for such services; and whether he will consider these proposals before the Estimates for 1927–28 are prepared?
  Colonel ENGLANDasked the Prime Minister whether the Cabinet has considered the recommendations of the Select Committee on Estimates, more especially in favour of submitting in future to the House those Estimates hitherto called Civil Service Estimates under the heading of Civil Estimates; and, if not, whether it will do so with a view to making the change at an early date?
  Mr. AMERY: As the Prime Minister has already stated, in reply to a question by my hon. and gallant Friend the Member for Everton on Monday last, the recommendations of the Committee are now receiving consideration.
  Mr. HARMSWORTH: Will the right hon. Gentleman give the House an opportunity to come to a decision on the Report of the Committee.
  Mr. AMERY: I am sure that the Prime Minister is anxious to get a decision as soon as Possible.

  LANE ART COLLECTION.
  Mr. R. MORRISONasked the Prime Minister whether the Committee appointed to inquire into the final custody of the Lane Art Collection has reported; and, if so, when the Report is to be published?
  Mr. AMERY: The reply to the first part of the question is in the affirmative, and, as the whole subject it still under consideration, it has not been thought advisable, so far, to publish the Report.

  POISON GAS (PROTECTION OF CIVIL POPULATION).
  Mr. CECIL WILSONasked the Prime Minister whether since the 10th February any progress has been made in regard to measures to be taken for the protection of the civil population against poison gas, or whether it has been found that no measure can be adopted which will hold out any really effective means of protection?
  Mr. AMERY: The Prime Minister has nothing to add to the answer which he gave to the hon. Member on the 10th February last.

  LEAGUE OF NATIONS (BRITISH DELEGATION).
  Lieut.-Commander KENWORTHYasked the Prime Minister whether, seeing that prior to the 1925 Assembly of the League of Nations the British Government made a practice of appointing as delegates to the Assembly representatives of parties other than the one in office, he is prepared to follow that practice for the next Assembly; and, if so, when does he hope to, be in a position to announce the names of those who will compose the British Delegation.
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Godfrey Locker-Lampson): His Majesty's Government do not propose to nominate delegates to the September Assembly until the time approaches when their services will be required. If the hon. and gallant Member will repeat his question in August my right hon. Friend will endeavour to answer it. The hon. and gallant Member is mistaken as to the general practice prior to 1925. The only instance of a principal delegate being drawn from a party other than the one in office is that of Mr. Barnes in 1920 during the Coalition Government. I do not think that Mr. Barnes could be ranked as a member of the Opposition at that time.
  Lieut.-Commander KENWORTHY: I beg to give notice that I shall raise this question on 3rd August.

  PUBLIC SERVANTS (OATH OF ALLEGIANCE).
  Mr. PENNYasked the Prime Minister whether he will consider the desirability of making it compulsory for everyone holding a position where the salary is paid jointly or severally by the Government and local authorities to take a similar oath of allegiance to that taken by Members of this House?
  Mr. AMERY: The Prime Minister is not prepared to adopt the suggestion of my hon. Friend.
  Mr. PENNY: Will my right hon. Friend keep in mind that all loyal citizens will consider it an honour to take the oath of allegiance?
  Mr. AMERY: Certainly.

  ROYAL NAVY (ELECTRICAL POWER ENGINEERS).
  Mr. HORE-BELISHAasked the Prime Minister whether he has received a letter from the Executive Council of Electrical Power Engineers pointing out the hardship which accrues to electrical station engineers, in view of the operation of Admiralty Order C.E. 194/25, whereby, although their responsibilities remain the same, they have been reverted to the minimum of the scale for their grade, resulting in many cases in a financial loss of £50 a year plus the appropriate bonus; and whether it is proposed to remove the grievance brought about by the operation of this Regulation?
  The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Davidson): I have been asked to reply. The matter referred to has recently been under consideration, and a favourable decision has now been reached. This fact has been communicated to the Electrical Power Engineers' Association in reply to a letter addressed by them as indicated.

  ABYSSINIA.
  Lieut.-Commander KENWORTHYasked the Secretary of State for Foreign Affairs whether the Royal Abyssinian Government is a party to the present discussions regarding spheres of influence in Abyssinia between the British and Italian Governments?
  Mr. LOCKER-LAMPSON: The Anglo-Italian discussions in regard to which informal exchanges of view are in progress with the French Government did not relate to spheres of influence in Abyssinia, but, as I informed the hon. and gallant Member on the 21st instant, had as their object the better definition by agreement of the respective interests of the two Powers under existing Treaties. The Abyssinian Government have been informed of their upshot.
  Lieut.-Commander KENWORTHY: Will the Abyssinian Government be consulted before any final agreement is reached with regard to Abyssinian property?
  Mr. LOCKER-LAMPSON: We are in communication with the Abyssinian Government.
  Lieut.-Commander KENWORTHY: Will the consent of the Abyssinian Government—Abyssinia is a member of the League of Nations—be obtained before any arrangement is made for dealing with Abyssinian property?
  Mr. LOCKER-LAMPSON: Perhaps the hon. and gallant Gentleman will put any further question on the Paper.

  REGIONAL MEDICAL OFFICERS.
  Colonel WOODCOCKasked the Minister of Health how many regional medical officers are now employed and how many were similarly employed in 1918; what salaries do they get and what are their duties; and whether they are entitled to pensions and at what rate?
  The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood): There were no regional medical officers employed in 1918. The present number and salaries of officers on this staff are

  4

  Divisional medical officers at £1,600.

  17

  Regional medical officers at £1,400.

  16

  Regional medical officers at £1,000 by £50 to £1,400.

  13

  Deputy regional medical officers at £800 by £30 to £1,100.

  These salaries are all inclusive of bonus, and the posts are pensionable except for those officers who entered the service at 50 or over (21 in number). The duties are concerned chiefly with the insurance medical service and National Health Insurance Funds bear the appropriate share of their emoluments. The officers act as medical referees regarding the incapacity of insured persons for work, and as consultants in giving second opinions in questions of diagnosis. In addition they are required to carry out certain inspections under the Dangerous Drugs Act, 1920, and the Blind Persons Act, 1920, and, as needed, to inspect Poor Law institutions.

  PROSECUTION (REV. J. BUCKNALL).
  Mr. TREVELYANasked the Attorney-General on what grounds he caused an information to be laid against the Reverend Jack Bucknall, a clergyman of the Church of England at Delabole, Cornwall, in respect of a leaflet stating
  1656
  that an attack would soon be made by the employers on the wages and hours of labour of the working class?
  The ATTORNEY-GENERAL (Sir Douglas Hogg): On application from the Chief Constable of Cornwall, I authorised proceedings for penalties to be taken against this man for printing a leaflet without having printed thereon his name and place of abode or business, as required by the provisions of the Newspapers, Printers, and Reading Rooms Repeal Act, 1869. I have since been informed that the defendant pleaded guilty, and was fined the sum of three guineas and £4 7s. costs.
  Sir HENRY SLESSER: Is it not a fact that this priest did state on the leaflet the name of an unincorporated guild, and that the sole ground on which the Attorney-General granted the information was that the guild whose name was on the leaflet was an unincorporated body and not an incorporated body
  Viscountess ASTOR: Considering that this priest's job is to preach peace on earth and goodwill to all men, does the right hon. and learned Gentleman not think that he got off pretty lightly?
  Mr. BARR: Will the right hon. and learned Gentleman consider also that a priest's job is to preach righteousness?
  The ATTORNEY-GENERAL: In answer to the last supplementary question, I am glad to say that my responsibility is not to keep a priest's conscience. In answer to the first supplementary question, the pamphlet in question had imprinted on it "Published and printed by the Guild of St. John and St. George, Delabole." First of all, it obviously exposes anyone who circulated the pamphlet to prosecution for dispersing and publishing a pamphlet without the proper imprint upon it; and, secondly, such information as I had led me to believe that the alias was adopted in order to prevent responsibility being fixed for the spread of a very poisonous pamphlet.
  Mr. RAMSAY MacDONALD: Was it the contents of the pamphlet that upset the Attorney-General?
  The ATTORNEY-GENERAL: There was no question of the Attorney-General

  1657
  being upset. The question was whether I should give my sanction, on an application made by the responsible police authorities, for prosecution for an offence against the law. I gave that authority because I saw no mitigating circumstances, and, in fact, the defendant pleaded guilty and was dealt with as a guilty person by the responsible magistrate.
  Mr. ATTLEEasked the Home Secretary whether he is aware that the Reverend Jack Bucknall, a clergyman of the Church of England at Delabole, Cornwall, was recently fined £7 10s. for the technical offence of printing a leaflet without having printed thereon his name and address; and whether he will take steps to remit or reduce the same?
  Captain HACKING: The answer to the first part of the question is in the affirmative, except that the fine was £3 3s. The answer to the second part in the negative.
  Mr. ATTLEE: Were the Magistrates entitled on a technical point like this to open up the question of the contents of this pamphlet; and is not the fine much too large for the offence?

  COAL (LOW-TEMPERATURE CARBONISATION).
  Sir HARRY BRITTAINasked the Secretary for Mines whether, in view of the importance to-day of extracting all possible results from each ton of coal, he can inform the House whether, apart from the experimental plant at Greenwich, any help is being given to the development of the low-temperature carbonisation process; and whether he is prepared to consider affording all possible encouragement to airy concern which is able to show a reasonable prospect of an oil and smokeless fuel production on a commercial basis?
  Major Sir HARRY BARNSTON (for Colonel LANE FOX): I have been asked to reply. As regards what is already being done, I would refer my hon. Friend to the answer given to the hon. Member for Aberdare on the 8th March. As regards the question whether anything further can usefully be done, this is being considered in connection with the Report of the Royal Commission.
  Sir H. BRITTAIN: Is anything being done in addition to the experimental station at Greenwich?
  Sir H. BARNSTON: I will communicate that question to my right hon. Friend.

  EDUCATION.

    DEFECTIVE CHILDREN.
    Mr. R. MORRISONasked the President of the Board of Education whether he is aware that the Medway Education Authority (Rochester, Chatham, Gillingham) have decided to postpone the provision of schools for defective children; and, in view of recent Circulars issued by the Board urging the provision of special schools in areas where none at present exist, what action he proposes to take?
    The PRESIDENT of the BOARD of EDUCATION (Lord Eustace Percy): I was informed last year by the Rochester Authority that they contemplated the provision of a school for mentally defective children in conjunction with the neighbouring authorities, and I have received no intimation from them that the proposal is to be postponed.
    Mr. MORRISON: May I take it that the Noble Lord, when he receives the information that this proposal has been postponed, will press upon the local authority the urgency of making provision for these children?
    Mr. SPEAKER: That is a hypothetical question.

    BARRY (ESTIMATED EXPENDITURE).
    Mr. G. HALLasked the President of the Board of Education whether, as he has ordered the local education authority of Barry to reduce its estimates, he will state in what respect he considers them to be excessive; and what response the authority has given to his orders?
    Lord E. PERCY: I have asked this authority, whose expenditure in terms of cost per child was the highest in England and Wales in 1924–25, and whose revised estimates for 1926–27 show a further increase, to reconsider their estimates, and I have drawn their attention particularly to their expenditure

    1659
    on teachers' salaries which is the second highest in England and Wales. I am now awaiting their reply to my letter.

  WAR GRAVES COMMISSION EMPLOYES (SCHOOLS).
  Colonel DAYasked the Secretary of State for War if his attention has been drawn to the fact that over 100 children of English employés of the War Graves Commission, employed in the Ypres district, are attending Belgian schools; and, in view of the need of such children being afforded an English education, will he state whether any steps will be taken for such education to he provided?
  The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans): I am aware that a considerable number of children of employés of the Imperial War Graves Commission in the Ypres and other areas are attending local schools, where an exceedingly good general education is given. As I explained in the Debate on the Imperial War Graves Commission Supplementary Estimate on 1st March last, it is impossible for me to set up schools all over the Continent for the purpose of teaching groups of English children.

  ECONOMY BILL (WIDOWS' FRANCHISE).
  Lieut.-Colonel ACLAND-TROYTEasked the Home Secretary whether he is aware that, under the Economy Bill, a woman whose husband dies during March, April, or May is disfranchised for 12 months; and whether he will introduce legislation during this Session to remedy this situation?
  Captain HACKING: The question put by my hon. and gallant Friend is based on an assumption that under the existing law a widow on her husband's death must herself acquire a qualification by occupation of premises throughout the qualifying period. It is by no means certain that this assumption is correct; but supposing that it is, it will be the case, as suggested in the question, that the registration of widows whose husbands die during the three months referred to
  1660
  will be deferred for six months as the result of the abolition of the Spring Register. On the other hand, widows whose husbands die during the months of December, January and February will, by reason of the reduction of the qualifying period, be registered six months earlier than under the present system of two registers a year. The question is one which should be considered by the proposed Committee on the franchise, and, as the Home Secretary promised my hon. and gallant Friend last year, he will see that it is brought to their notice.
  Lieut.-Colonel ACLAND-TROYTE: Is it not very undesirable that there should be doubt as to whether these women are allowed to vote or not?
  Captain HACKING: That doubt will certainly be cleared up.
  Mr. HARRIS: Will the hon. Gentleman consider introducing an Amendment in another place to deal with these particular cases?
  Captain HACKING: A promise has already been made, and I have read it to the House.

  STREET ACCIDENTS (RETURNS).
  Mr. J. H. THOMASasked the Home Secretary whether he is aware that in police districts, other than London, the return showing the number of accidents resulting in death or personal injury known by the police to have been caused by vehicles in streets, roads, or public places is compiled on the. basis that each accident causing death or personal injury is counted as one accident only, irrespective of the number of persons killed or injured thereby; and whether he will take steps to secure that future returns are more accurate by being compiled, as in the case of the Metropolitan police district, on the basis of the number of persons killed or injured?
  Captain HACKING: Yes, Sir. Arrangements have already been made for the number of persons killed and injured as well as the number of accidents to be shown for all police districts in the returns for the current and future years.

  TAXATION (EVASION IN CHANNEL ISLANDS).
  Sir F. WISEasked the Chancellor of the Exchequer if he, will take steps to see that the Imperial Exchequer does not lose the benefit of Death Duties in the case of the will of a British subject being proved in the Channel Islands?
  Mr. WALLHEADasked the Chancellor of the Exchequer whether he proposes to introduce legislation for the purpose of preventing wealthy persons establishing domiciliary rights in Jersey and its contiguous islands for the purpose of avoiding the taxes imposed by this country, which is the source of their wealth?
  Sir JOHN PENNEFATHERasked the Chancellor of the Exchequer whether, as he has riot sufficient powers to enable him to prevent the Treasury from losing the benefit of Death Duties through a transfer of domicile or the proving of a will in the Channel Islands, he will ask this House for such additional powers as may be necessary to enable him to deal with any such cases which have recently occurred or may occur in the future?
  Mr. SANDEMAN ALLENasked the Chancellor of the Exchequer, whether, in the case of a British subject who earned his wealth when domiciled in this country and then prior to his death transferred his domicile to the Channel Islands, he will see that the benefit accrues to this country of Death Duties in any such cases which have recently occurred or may occur in the future?
  Colonel WOODCOCKasked the Chancellor of the Exchequer what steps he proposes to take to prevent losses to the Imperial Treasury of Death Duties on estates of British subjects which may be transferred to the Channel Islands, as has been done in a recently reported case?
  Sir LESLIE SCOTTasked the Chancellor of the Exchequer whether, having regard to the risk of the Revenue losing Death Duties by a change of domicile to places outside the United Kingdom, particularly in the case of persons who have amassed large fortunes under the protection of the laws of the United Kingdom, he will consider the advisability
  1662
  of proposing legislation analagous to the provision that Estate Duty shall be payable on property voluntarily transferred within a fixed period before the death, in order that if in any case a genuine transfer of domicile in such circumstances he successfully proved the Revenue may still be protected.?
  Mr. HAYESasked the Chancellor of the Exchequer whether his attention has been called to cases of wills being proved in the Channel Islands of persons previously resident in Great Britain who had recently acquired domicile in one of these islands; and whether he will take steps to see that the imperial Exchequer is not thereby deprived of the Death Duties ordinarily payable in the case of British domicile?
  Mr. JACOBasked the Chancellor of the Exchequer whether he contemplates introducing fresh legislation to prevent persons deliberately evading Income Tax or Death Duties by changing their domicile with that end in View?
  The CHANCELLOR of the EXCHEQUER (Mr. Churchill): I think I can identify the case to which reference is made. The House may rest assured that the Inland Revenue authorities will take all necessary steps to secure payment of any Death Duties legally due. From such information as I have at present it appears that there is a good prospect of securing duty on the whole estate, the total amount of which, however, has probably been exaggerated. The question of the evasion of taxation by residence in the Channel Islands and of the measures required to prevent it has been under consideration for some time past, following the Report of the Atholl Committee on the Channel Islands Contributions; and I shall not hesitate to ask the House to take any action which may be suitable for the protection of the Revenue.
  Sir J. PENNEFATHER: Has the right hon. Gentleman any reason to sop-pose that other unpatriotic persons q re attempting to evade national taxation by taking up their domicile in the Channel Islands?
  Mr. CHURCHILL: Yes, Sir, this is one of the points to which we have been devoting attention, and which engaged the labours of the Commission which recently visited the Channel Islands.
  Mr. SNOWDEN: Seeing that the right hon. Gentleman has identified the person referred to in the question, will he tell the House to what political party did that person belong?
  Mr. CHURCHILL: From the point of view of the Inland Revenue, there is no such thing as a political party.
  Mr. HAYES: In the event of Death Duties being realised on the whole of this estate, will the right hon. Gentleman undertake to allocate some of those Death Duties for the benefit of the widows and relatives of those seamen who were successfully "skinned" in order that such an estate might be amassed?
  Sir NICHOLAS GRATTAN-DOYLE: Will the right hon. Gentleman bear in mind the question of retrospective legislation?
  Captain GARRO-JONES: As the right hon. Gentleman is making inquiries in this matter, will he extend those inquiries so as to include cases of persons who, while retaining a British domicile, transfer their money abroad, in order to escape British taxation?
  Mr. CHURCHILL: This is clearly not the moment in which to embark on a discussion of elaborate general questions.

  NATIONAL DEBT AND INCOME TAX.
  Mr. T. WILLIAMSasked the Chancellor of the Exchequer what amount was paid for interest on the National Debt for the years 1913 and 1925; and the amount received for Income Tax and Super-tax for the same two years?
  Mr. R. McNEILL: The amount paid for interest on the National Debt in 1913–14 was £19,104,986, and in 1925–26 was £306,994,847. The receipts for Income Tax and Super-tax were £43,900,000 and £3,300,000 respectively in 1913–14 and £259,400,000 and £68,500,000 respectively in 1925–26.

  WAR LOAN (DIVIDEND WARRANTS).
  Sir WILLIAM DAVISONasked the Chancellor of the Exchequer what would
  1664
  be the cost involved in printing a brief note at the top or bottom of the next issue of Five Per Cent. War Loan dividend warrants, intimating that tax will be deducted at the request of the holder?
  Mr. McNEILL: I understand that the preparations for the dividend due in June are so far advanced that considerable expenditure would be involved, the precise amount of which I am unable to estimate. I will, however, consider the point in connection with subsequent dividend payments.

  INNSBRUCK PROTOCOL.
  Sir CYRIL COBBasked the Financial Secretary to the Treasury whether the Rumanian Government has yet ratified the Protocol of Innsbruck; and whether he is aware that the arrangement with regard to the payment of Hungarian Government bonds to British holders is being held up?
  Mr. LOCKER-LAMPSON: The answer to the first part of the question is in the affirmative. The Innsbruck Protocol and the Prague Agreement have now come into force and the arrangements required for carrying them out are being made by the Caisse Commune of the Bond Holders. set up under these Agreements.

  BISHOP'S CASTLE RAILWAY.
  Lieut.-Colonel WINDSOR-CLIVEasked the Minister of Transport whether he has received a copy of a resolution passed by the Bishop's Castle Borough Council on 6th April, urging that the Great Western Railway Company should acquire the Bishop's Castle Railway; and what steps he proposes to take
  The MINISTER of TRANSPORT (Colonel Ashley): I have received a copy of the resolution to which my hon. and gallant Friend refers. The question whether legislation authorising the acquisition of the Bishop's Castle Railway by another railway company should be promoted is one for the parties themselves to consider, and I am calling the attention of the railway companies concerned to the suggestion made by the Bishop's Castle Council.
  Lieut.-Colonel WINDSOR- CLIVE: Will the right hon. and gallant Gentle

  1665
  man, in order to induce the Great Western Railway to take over this line, he prepared to give some assistance to the project for extending the Bishop's Castle Railway to Montgomery?
  Colonel ASHLEY: I will consider that flatter.
  An HON. MEMBER: Is the right hon. and gallant Gentleman aware that the Great Western Railway Company have already intimated their willingness to take over this concern, on condition that the Government co-operate financially?
  Colonel ASHLEY: I do not think that in these days of financial stringency we could give a promise of financial cooperation in every undertaking.

  CHAR-A-BANC ACCIDENT, FENNY STRATFORD.
  Mr. THOMASasked the Minister of Transport whether, in connection with the recent char-a-bane disaster at Fenny Stratford, when nine persons lost their lives and six were injured, it is the intention to include this mishap in the annual return of accidents by railway; and, if so, will he indicate the reason for attributing to the railway an accident which inquiry showed to be entirely due to the action of the char-a-bane driver?
  Colonel ASHLEY: The accident to which the right bon. Member refers, which unfortunately involved considerable loss of life, is reportable under the Regulation of Railways Act, 1871, and will be included in the annual returns. I should, however, like to take this opportunity to make it clear that the inclusion of a railway accident in the returns does not imply that the railway company concerned, or its employés, were in any way responsible for its occurrence.
  Mr. THOMAS: Having regard to the importance to the public generally of ascertaining the facts, will the right hon. and gallant Gentleman not take the necessary steps to separate these returns, as in this case, the accident, which was clearly not a railway accident, is included in the general return of railway accidents?
  Colonel ASHLEY: I quite sympathise with the right hon. Gentleman's point. This had nothing to do with the railway company or its employés, but, unfortunately, under the terms of the Act of 1871, I have no option but to include it.

  AUSTRALIA (MOTOR CAR IMPORTS).
  Sir H. BRITTAINasked the Parliamentary Secretary to the Overseas Trade Department whether, seeing that the import of motor cars into Australia last year amounted to the value of nearly £11,000,000, of which 12 per cent. only came from this country, his Department is taking steps, and, of so, what steps, to bring home to manufacturers the opportunities of this great and growing market, coupled with the need for studying and meeting Australian requirements?
  Mr. A. M. SAMUEL: The Department of Overseas Trade and I myself personally are constantly bringing the facts in regard to the Australian market for motor cars to the notice of our manufacturers. The latter are fully alive to the requirements and possibilities of the market which they are actively cultivating. The latest monthly returns for the year 1925 show that the British share in this trade has increased to close on 20 per cent. of the imports of motor cars.

  UNEMPLOYMENT.

    BENEFIT DISALLOWED (GLAMORGANSHIRE).
    Mr. D. GRENFELL (for Mr. G. HALL)asked the Minister of Labour the number of applications for extended benefit that have been rejected in each of the Employment Exchanges in Glamorganshire during the past three months on the grounds of being unable to satisfy the requirements specified in paragraph 2 of U.I. 503A?
    Mr. BETTERTON: As the reply necessarily includes a number of figures, I will, with the hon. Member's permission, circulate a statement in the OFFICIAL REPORT,
    Following is the statement promised:

    1667

    NUMBER of APPLICATIONS for extended benefit recommended for disallowance during the period 12th January, 1926, to 12th April, by Local Employment Committees in Glamorganshire.

    Area.

    Not normally insurable.

    Insurable employment not likely to be available.

    Not reasonable period of insurable employment.

    Not making reasonable efforts to secure employment.

    Total.

    Aberdare

    …

    1

    15

    38

    36

    90

    Bargoed

    …

    —

    1

    69

    27

    97

    Barry

    …

    6

    13

    67

    221

    307

    Bute Docks and Penarth Docks

    …

    —

    1

    122

    90

    213

    Cardiff

    …

    11

    28

    69

    573

    681

    Merthyr Tydfil

    …

    13

    50

    84

    148

    295

    Mountain Ash

    …

    2

    11

    27

    40

    80

    Neath

    …

    1

    3

    21

    46

    71

    Pontypridd

    …

    19

    10

    103

    75

    207

    Port Talbot

    …

    15

    15

    27

    114

    171

    Swansea

    …

    15

    20

    122

    257

    414

    Swansea Docks

    …

    1

    1

    4

    12

    18

    Total—Glamorganshire

    …

    84

    168

    753

    1,639

    2,644

    The total number of applications for extended benefit recommended by those committees for allowance during the period was 44,449.

    RELIEF SCHEMES.
    Mr. T. WILLIAMS (for Mr. PALING)asked the Minister of Labour (1) the number of schemes of work that have been placed before the Unemployment Grants Committee during the last 12 months; and how many of such schemes have been approved:
    (2) the number of local authorities which have made application to the Unemployment Grants Committee for sanction to proceed with schemes of work during the last 12 months; and how many such authorities have had their applications granted;
    (3) what is the total cost of the schemes of work that have been sent to the Unemployment Grants Committee during the last 12 months: and what is the total cost of the schemes that have been approved?
    Mr. BETTERTON: During the 12 months ended 31st March, 1926, 2,061 schemes, estimated to cost £21,311,714, were submitted to the Unemployment Grants Committee by 650 local authorities: 1,497 schemes, estimated to cost £16,399,275, and submitted by 515 authorities were approved for grant.

    PETITIONS TO PARLIAMENT.
    Mr. SAKLATVALAasked the Prime Minister whether he is prepared to submit for the consideration of the House proposals for modernising the existing rules for the presentation of petitions to Parliament, such as the necessity of the same being handwritten and the exact. repetition of the wording of the prayer on each sheet containing signatures, as such rules cannot generally be made known to the people in Great Britain or the Colonies who desire to petition this House?
    Mr. AMERY: The Prime Minister is not aware of any general desire in favour of any alteration in the existing rules, but if he were convinced that such a desire existed, he would be prepared to consult the Committee of the House which deals with petitions.
    Mr. SAKLATVALA: Is the right hon. Gentleman aware that recently a petition which was sent in by teachers against education economy, and on which they had spent a considerable amount of money and time, was sent back simply because it happened to be printed—which form the public take to be the right form—and is he also aware. that another petition from 'the people of Bombay had to be sent back with a request that it should be

    1669
    made out in handwriting; and, in view of these instances, is the right hon. Gentleman taking any steps?

    POOR LAW STATISTICS (MANCHESTER).
    Mr. LOWTHasked the Minister of Health the number of men and boys, also women and girls, in receipt of Poor Law outdoor relief and in the workhouse in the Manchester area for the periods ending in December, 1923, 1924, 1925, and for February. 1926?
    Sir K. WOOD: I am sending the hon. Member a copy of a statement furnished to me by the Clerk to the Guardians.

BUSINESS OF THE HOUSE.
Ordered,
"That the Proceedings of the Committee of Ways and Means be exempted, at this day's Sitting, from this provisions of the Standing Order (Sittings of the House)."— [The Prime Minister.]

FINANCIAL STATEMENT (1926–27).
Copy ordered, "of Statement of Revenue and Expenditure as laid before the House by Mr. Chancellor of the Exchequer when opening the Budget."—[Mr. McNeill.]
Copy presented accordingly; to lie upon the Table, and to be printed. [No. 69.]

RATING (SCOTLAND) BILL,
"to amend the Law with respect to rating in Scotland; and for purposes incidental thereto or connected therewith," presented by Sir John GILMOUR; supported by the Lord Advocate, Mr. Solicitor-General for Scotland, and Captain Elliot; to be read a Second time To-morrow, and to be printed. [Bill 94.]
SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE C.
  Mr. William NICHOLSON reported from the Committee of Selection; That they had discharged the following Member
  1670
  from Standing Committee C: Major Astor; and had appointed in substitution: Mr. Burman.
  Report to lie upon the Table.

ORDERS OF THE DAY.

  WAYS AND MEANS.
  Considered in Committee.
  [Captain FITZROY in the Chair.]

  FINANCIAL STATEMENT.
  The CHANCELLOR of the EXCHEQUER (Mr. Churchill): Last year I was able to announce the memorable events of the return to the gold standard and of the Widows' and earlier Old Age Pension Scheme, together with substantial reductions in direct taxation. This year lies in a smaller, a simpler, and a more sombre sphere. The attempt to help the coal industry to put its affairs on an economic basis has overshadowed and overwhelmed all other interests and claims. It remains only to consider how to balance the Budget and carry forward our financial affairs in a business-like manner. Let us, first of all, look at the general position.
  FINANCIAL STATEMENT.

    REVENUE, 1925–26.
    The consuming power of the people is maintained. It is more than maintained, it is increasing. It is increasing faster than the population, but it is not increasing very rapidly; it is not increasing in any remarkable manner. The character of the consumption of the people has been affected by the high taxation on beer and spirits. Both show a decline on Budget: estimates.
    Viscountess ASTOR: Hear, hear!
    Mr. CHURCHILL: Beer shows a small increase in consumption over the previous year, but spirits have again fallen—
    Viscountess ASTOR: Hear, hear!
    Mr. CHURCHILL: —and I must budget for a further fall in the year now beginning. This change is, no doubt, largely due to the extremely high taxation in force on these articles. It is also due, though to an extent which cannot be precisely determined, to changing habits and competing interests in the general life of the nation. The reformer may rejoice, but the revenue suffers. On the other hand, tea, the cocoa group, and sugar show healthy compensating
    1688
    expansion. The tax on tea is actually lighter than it was before the War, and the consumption has responded to the relief. Sugar, above all, has grown and thrived. The large reduction effected in the sugar tax by the right hon. Gentleman the ex-Chancellor of the Exchequer, combined with exceptionally cheap world prices, have enabled the population to consume last year, for the first time, a larger quantity of sugar per head than before the War. My estimate this year assumes a consumption from foreign, Imperial, and home-grown sources nearly one-fifth greater—that is to say, 1,740,000 tons against 1,460,000 tons—than only three years ago. In this total homegrown sugar has played its part. This year it will cost the Exchequer £2,750,000 in subsidy, and a loss of revenue of over £500,000 more, but it is expected to produce over 130,000 tons. That is a real achievement; it is a very expensive one.
    Tobacco, I am glad to say, more than holds its own. Perhaps it may prove to be the last stronghold of the male population of the twentieth century. In spite of high taxes. and, I must add, high profits, the consumption of tobacco has substantially increased in the past year, and I hope for a further modest increase in the present year. However, speaking generally about the Customs and Excise, I feel bound to say that they show only moderate resiliency. They are increasing steadily, they are increasing healthily, but they are not increasing as much as one would have expected, in view of the gradual improvement in industrial conditions. It would seem, also that the immense sums paid by the National Exchequer in social services for the mass of the people have tended to average the effect of good and bad times as far as the Customs and Excise revenue is concerned. We have to look forward to smaller fluctuations in that revenue. We have fallen short by £1,000,000 of the very exact estimate of Customs and Excise which was made last year; and in budgeting for a moderate general increase this year. I shall hope to be equally accurate, and even more successful.
    When I turn to the Inland Revenue, we see the national position revealed from a different angle. But, although the angle is different, the impression of the picture is the same. The nation is richer

    1689
    this afternoon than it was a year ago. The profits on which future calculations of Income Tax may he based show an increase, a substantial increase, but not so much as I had been inclined, even a few months ago, to hope. While the general trade of the country is steadily improving, while important sections of that trade are in an extremely prosperous condition, while very large profits have been made in rubber and in tin, commodities so important for our exchange position: while all this is taking place the basic industries of the country, those, that is to say, which employ the largest number of work-people, and require very large amounts of rateable property, nearly all continue obstinately depressed under their heavy burdens. The picture, as I said some time ago, is not black. It is not grey; it is piebald, and, on the whole, the dark patches are less prominent this year than last.
    The estimate of the Inland Revenue has rivalled that of the Customs and Excise in exceptional accuracy. In fact, it is only £1,000,000 wrong in the enormous total of £428,000,000. But that £1,000,000. again, is wrong on the wrong side The details of the Inland Revenue show their customary variations. If the Committee care to consult the Blue Paper, which, in colour, at least, is almost indistinguishable from the White Paper, they will find in Table 2 the details of Inland Revenue. The two moribund taxes practically balance each other. Excess Profits Duty is £2,000,000 less than the Estimate, and the Corporation Profits Tax is £2,500,000 more. Income Tax is £2,500,000 less than the Estimate, but that is partially offset by the improvement in Stamps. The most striking feature of the Inland Revenue is presented by the Death Duties and the Super-Tax. Last year I reduced the Super-tax, and I increased the Death Duties by equal amounts. Yet the Death Duties are £5,250,000 below the Estimate, and the Super-tax is £5,250,000 above it. What is the explanation? It is not, unhappily, the explanation which we should all have welcomed, namely, that an increase of taxation, at this point in the scale, produces a decrease in yield, and, conversely, a decrease in taxation produces a corresponding increase in yield. No, Sir, I cannot say that. The increase of Super-tax is due to
    1690
    stricter and more efficient collection, and the overtaking of arrears. These two factors have powerfully reinforced the real increase. On the other hand, the falling off in Death Duties is not shown in that middle class of estates which, last, year, was made the subject of the increased duties. It has mainly occurred in the very large estates of over £1,000,000 in the aggregate, and in these a serious deficiency has manifested itself. Whether this is due to an exceptional wave of good health and longevity among millionaires, or to the habit of dividing estates in the lifetime of owners, and to other methods of avoiding the high scales of taxation, are matters which, while they are being watched with keen attention, had better await the experience of another year.
    The non-tax Revenue shows in the field of Miscellaneous Receipts, both Ordinary and Special, a substantial advance upon the Estimate. When I budgeted last year for£30,000,000 of Miscellaneous Special Receipts, the right hon. Gentleman opposite was inclined to think I was over sanguine. In fact, however, no less than £37,000,000 has been realised, including £10,250,000 from German Reparations. When to this is added £3,000,000 increase on Miscellaneous Ordinary Receipts, and £2,000,000, the first instalment of the Italian Debt, together with one or two small items, the non-tax Revenue exceeded by more than £13,000,000 the Estimate., making a surplus of total Revenue over the Estimate of £11,000,000. In fact, but for the Coal Subsidy, in respect of which we have paid £19,000,000 in the past year, we should have realised a net surplus of Revenue in spite of all the increased expenditure of nearly £5,000,000. Coal—and coal alone—has converted this into a, deficit of £14,000,000. That deficit would, in the normal course of events, have gone to swell the total of our Floating Debt, but one of the results of the Conversion Issue, which I effected last autumn, has been to fund this addition to our Debt. It is now actually funded, and there, for the moment, but only for the moment, I leave this deficit of £14,000,000.
    The position revealed by last year's Revenue figures is not so good as it, looks. Although we may expect Reparations and payments on account of War Debts to swell the Revenue in future years, there

    1691
    is no doubt that the Special Receipts, which have played such a large part in our present finance, will undergo heavy, continuous diminution. I have to count this year, on this head alone, upon £11,000,000 less than was yielded last year. And this blunt fact emerges—The tax Revenue, our staple, on which we must rely, has produced no windfall, no unexpected advantages, indeed, it has fallen slightly short of the Estimate, while the non-tax Revenue, on which we last year thrived, is about to undergo severe progressive contraction. To this contraction we must add the heavy pending loss through the drying up of the moribund taxes, and of the extra cost to the Revenue of the reductions in direct taxation made last year. When, therefore, we contrast, on the one hand, a revenue which in its permanent branches is barely holding its own with the strong swelling tide of expenditure on the other, the outlook is somewhat bleak. That is the general position of our finances, as revealed by the experience of last year.

    DEPT REDEMPTION.
    The Committee will wish, no doubt, to have some information upon the Debt. On 31st March of this year the Nominal Deadweight Debt was £7,616,000,000, having been reduced in the course of the year by £30,000,000. The Blue Paper, in Table IV, gives particulars which show that the External Debt has been reduced by £11,000,000 to a, total of £1,110,750,000. The reduction in the External Debt is due, partly, to capital repayments to the United States, and partly to the repatriation of nearly £6,000,000 worth of British dollar bonds in the United States market through their being converted into sterling National War Bonds. As for the Internal Debt, the Floating portion of it was reduced last year by almost exactly £38,000,000, partly by conversions and partly by the sale of Treasury Bonds and National Savings Certificates. The total Floating Debt on the 31st March stood at £704,250,000, of which £564,750,000 were represented by Treasury Bills. This figure of £704,250,000 on 31st March compares with a total of £1,412,000,000 on the same date in 1919. In seven years, therefore, the Floating Debt has been reduced by over
    1692
    £700,000,000 has, in fact, been actually halved.
    That is a remarkable achievement. Six years ago, when our Annual Debt. Interest Charge reached its maximum—I take six years, and not seven, because the peak was not reached till a year after the War—that charge, excluding the liability to the United States, amounted to £325,500,000. Last year the charge was £278,500,000, a reduction in annual interest of £47,000,000. But that does not allow for the fact that six years ago our debt to the United States was accumulating unfunded at a rate of over £56,000,000 a year, whereas, apart from Sinking Fund, we now pay in interest £28,000,000 a year Thus the total diminution of the National Debt Charge during these six years has been effectively £75,000,000 a year, or about one-fifth of the whole original expense. These figures are, perhaps, some return for the immense efforts which have been consistently made by all parties and all Governments, and surveying them, and repeating them, I can only say, "Let us persevere.
    All the thrift agencies of the people have continued to prosper in the past year. The Post Office Savings Bank, the Trustee Savings Banks, the Friendly Societies, have all increased their deposits or their funds. Above all, the sales of Savings Certificates in the tenth year of their existence, for they are celebrating their tenth year at the present time, have grown impressively. The receipts from Savings Certificates, £35,500,000, overtop the withdrawals, £28,750,000, and give a net increase of £6,750,000, or more than double the increase last year. This system of popular investment is taking deep root. We owe much to the voluntary and unpaid workers who have made the popularisation of this scheme their central effort in social service, and in particular to Lord Islington, who after six years arduous work is about to relinquish the chairmanship of the National Savings Committee. There are certain arrangements for the renewal of War Savings Certificates of the first series, which are now beginning to reach maturity, which require a Clause in the Finance Bill. The arrangements are technical. They are favourable to the holders. They will be found set forth in detail in the White

    1693
    Paper which will be available when I sit clown, and I do not complicate my remarks by attempting to explain them to the Committee.

    EXPENDITURE, 1926–27.
    4.0 P.M
    So much for debt and saving. But, after all, it is expenditure which governs the position. Let us then look at expenditure itself. I made so full a statement to the House on this subject on the Second Reading of the Economy Bill that only a very brief supplement is necessary now. The Committee may again find it convenient to keep the Blue Paper in their hands for a few moments. The new Table, which I presented on the Second Reading of the Economy Bill, will be found on page 8, Table VIII. The Estimates of the so-called Supply Services have been published at £417,241,000. I estimate the Consolidated Fund Services,as stated in the Blue Paper, at £395,400,000. The total estimated expenditure is, therefore, justover £812,500,000 as against about £799,500,000 the estimated expenditure for last year, and £826,000,000 the actual expenditure. But if we wish to compare the Estimates of this year with those of last year, comparing like with like, we ought to reduce this year's expenditure first of all by £2,700,000 on account of the book-keeping change which as I have several times explained to the House has occurred in connection with teachers' pensions and which involves no additional charge. We ought to reduce this year's expenditure by practically £1,000,000 on account of the Excise Duty which we shall recover On the increase of the Beet Sugar Bounty. We ought to reduce it by £4,100,000 on account of coal, which did not figure in last year's original Estimates. It would seem also reasonable to omit the increase of £4,250,000 which is due to the extended healthy remunerative activities of the Post Office and the Road Fund. Thus, on a comparable basis, it may be said that the actual burden of expenditure this year is approximately equal to our original Estimates of last year, but included in the new Estimates are nearly £19,000,000 of additional expenditure arising either from the automatic growth of pensions and other statutory charges or from decisions of policy taken by the House
    1694
    and by the Government last year. Let me mention some of them. The widows' and old age pensions scheme, £5,750,000; the automatic growth of the original old age pensions, £1,250,000; the new cruiser programme, £3,750,000; the real increase, apart from book-keeping, in education grants, £1,100,000; the increase in health and housing grants, £750,000; the net increased cost of the beet sugar subsidy, nearly £1,000,000; Empire marketing, £500,000; steel houses, £370,000. All these details have already been set forth in the White Paper issued in connection with the Economy (Miscellaneous Provisions) Bill, and I will not occupy the attention of the Committee with them. But it is to be remembered that the whole of these new Services, as to the necessity for which or the value of which everyone can form his own opinion according to the part of the House in which he sits and the item of expenditure which he particularly favours or dislikes, have to be paid for either by automatic reductions in the expense or out of specific economies effected, not upon the whole great volume of our annual Budget, but upon those limited sections of our expenditure that are readily controllable by Parliament or by the Government. All these new Services have been achieved practically without any net addition to the public charge, and, so far as the class of expenditure which is directly and primarily under the control of the Executive is concerned, namely, that section on page 10 of the Blue Paper, National Administrative Services, aggregating £165,000,000 last year, there is a net reduction in that controllable branch of the expenditure of upwards of £7,000,000, £4,000,000 of which is upon armaments.
    I have had many jeers and reproaches about promising to try to reduce expenditure on the Supply Services by £10,000,000 in the past year, but, surveying all that has been done, the result that has been achieved, namely, a reduction in this limited sphere of £7,000,000 net and the compression of £19,000,000 of new expenditure within the total of the expenditure of last year without any appreciable addition, I do not feel that those two achievements are unworthy of the immense time and labour which the Government and the House have bestowed upon the subject. It is obvious that further continuous effort is needed.

    1695
    There will certainly be new demands in the course of the present year. There will certainly be an automatic increase in pensions and a growth of incremental scales and the normal statutory grants accounting for not less than £5,000,000 or £6,000,000. Even if we are only to hold our own, a further reduction to this extent is imperative, and it is not until such a reduction of expenditure has been discovered and effected that any net diminution of the burden can be achieved. Without upsetting the country by violent change, without repudiating the lawful obligations of the State, without endangering the national defence, without harsh reactions in the social services of the country, we shall persevere in our thankless but indispensable task of curtailing expenditure.
    I am authorised by the Prime Minister to say that the Cabinet Committee on Economy will pursue its work unceasingly, thus inculcating upon all Departments and branches of the Public Service the extreme importance of saving money in every possible way. The Estimates of the three Fighting Services will be considered jointly. It is only by a prolonged and searching process of balancing new weapons and new organisations against old weapons and old organisations and weighing the relation of all of them in a combined and integral system of Imperial defence, that our Fighting Services will attain either true economy or full efficiency, and, if I do not dwell more upon this point this afternoon, it is because the Prime Minister has promised an early and full day's debate upon the co-ordination of Imperial defence, and this matter it would be more appropriate to examine in detail on that occasion.
    The question of the substitution of block grants—that is not to say fixed grants, because obviously they must be reconsidered from time to time, but grants which arc not related directly to expenditure—for the present percentage grants are already under the consideration of expert and Cabinet Committees. It is not our intention—there I pass from cash to credit—to renew the Trade Facilities Act next year. We have reached the conclusion that that process has exhausted its usefulness. I make no promise, I give no undertaking as to
    1696
    results—I made none last year—but, upon the aim, the effort, the mood, the policy of thrift and retrenchment, on behalf, not alone of the Chancellor of the Exchequer, but of the Prime Minister and of every single member of the Government, I give a solemn undertaking, even after our recent dreary experience, that we will continue in the matter of economy to do our utmost.

    GOLD STANDARD.
    There were two special departures in the Budget of last year to which I must at this point refer—the restoration of the Gold Standard and the imposition of the Silk Duties. I think it will be pleasant for the Committee to linger for a few moments in the region of silk and gold before we come to the more severe stages of our journey. It was my duty last year to declare the return of this country to the Gold Standard. This decision was only the culminating act in a policy unswervingly pursued by all parties and all my predecessors since the War. It fell to me either to achieve or to abandon the prolonged attempt. Can anyone doubt that the choice was right? I am not gong to argue the theoretical case, but when, after seven years' consistent effort, the goal was found to be within our reach, what folly, what inconsequence, it would have been to cast it away. Many attempts are made to swim the English Channel. Unhappy is the fortune of those who, after swimming the greater part of the night and day, get within half-a-mile of the shore and then have to give in. This was for us a case of either landing while the tide and the sea and the temperature of the water were favourable, or else being drifted back out to sea to the utter waste of all our previous exertions and with she certainty that the opportunity would not recur perhaps for several years to some. Nobody, I am sure no responsible person, certainly no one who occupied the position I hold, would in that situation have taken a different decision from that which I took.
    What has been the broad result? The dollar exchange returned immediately to parity, and it has remained virtually stable ever since. A gain of only 10 cents in the dollar exchange saves us on our purchases from the United States, especially cotton, bacon, and wheat, £5,000,000 a year. On our war debt to

    1697
    the United States alone it saves us £750,000 a year. A 10 cents improvement in the exchange in our favour procures us on the capital of our foreign investments, the vast bulk of which are payable in sterling, a gain, which may be estimated in tens of millions, in the appreciation of the value of those immense holdings. These are definite and provable advantages, but there are a great many others. The bank rate is no higher than it was last year, no higher than it often was before the War. It would almost certainly have been lower now but for the uncertainty of the coal situation. There has been no sensational exodus of gold We have only reduced our reserves from £154,000,000 to £145,000,000, and that in face of quite exceptional demands for gold from India. We have had no need to use the powerful trans-Atlantic credits which, for greater security, we took steps to provide. The cost of living index has declined seven points; that is to say, the purchasing power of money and the real value of wages have increased by seven points. The exchanges of our great gold-using Dominions, Australia-, New Zealand and South Africa, have all moved in our favour and are now in close normal relation with us. But the most important fact and the most important gain is that we stand to-day on a basis of reality. Whatever adjustments in international price levels were necessary had largely been effected before our return to gold. They have since been completed. Our prices are now in favourable relation to those of the United States. We have no need to contemplate contraction or deflation in any form. Whatever return there may be of prosperity stands upon a sound and solid basis. We may not be soaring in the clouds, but there is at least firm ground under our feet. All around us we see, in many disillusioned countries, the bitter trials of currency depreciation and the almost universal effort to reach the same secure foundation which we have at last, and I trust finally, regained.

    SILK DUTIES.
    It was not without some misgivings, which I concealed as much as possible, that I last year committed myself to a tax on silk. It was hardly to be expected that the raising of over £6,000,000 from one comparatively small industry would
    1698
    have been attended by benefits to those directly concerned. The complexity of the tax, its many uncertain features, and the fact that it had been so often examined and rejected by my predecessors, all these factors incited tremors, if not, indeed, actual trepidation, and to those were soon added the extravagant denunciations and the lugubrious predictions of political partisans and the natural fears of the interests affected. Let me dispel the apprehensions of the right hon. Gentleman the Member for Colne Valley (Mr. Snowden). I am not going to quote his speeches of a year ago, nor am I going to analyse in retrospect the accusations of ruining the textile industry of Lancashire, by which I was so seriously assailed by solid deputations from Manchester and Bradford. I have made careful inquiries as to the state of opinion in these trades, and I am quite sure that if I this afternoon were to announce the repeal of the Silk Duties, that announcement would be received throughout those trades with universal dismay.
    It was, of course, inevitable in a duty of this kind, that the working of the tax should show a certain number of anomalies and inconveniences on which I shall at the proper time have minor mitigating proposals to make during the course of the Budget. But apart from this the tax—its Customs Duties, its Excise Duties, and its rebate—has worked with an unexpected smoothness which, I think, redounds to the credit of the Customs and Excise officials who performed a task which 'required all sorts of qualities of tact and patience. The natural and the artificial silk trades have both been largely compensated for the tax by the favourable margin accorded to them in the scale of the Customs Duties. There has recently been a check in the consumption of artificial silk, but, though feminine fashion flickers at the moment, the trade has continued to progress. The Excise Duty has been paid out of the profits of the great firm of Courtaulds, without apparently reducing its profits to a discouraging level. The Customs Duties on artificial silk have been paid by the foreigner. Between the announcement of the tax and its enforcement there were, as the

    1699
    Committee remembers, very heavy forestalments. More than the revenue, however, which I expected to get in the face of these forestalments, has actually been collected, and yet the price of artificial silk goods in the common forms is, at the present moment, somewhat below what it was this time last year. We have, moreover, secured a revenue which in a full year will be between £6,000,000 and £7,000,000, without, I am thankful to say—for it would he a very wounding thought—without making any dearer the finery of poor working girls. It is, however, my duty to admit that while the cost to the consumer has not indeed been increased by the Artificial Silk Duties, we have probably intercepted to a very large extent a reduction which otherwise would have reached the, consumer in this country.

    McKENNA DUTIES.
    Now I come to the famous, or notorious, McKenna Duties.
    Mr. J. H. THOMAS: Infamous!
    Mr. CHURCHILL: The word "notorious" is, perhaps, more in proportion. As the Committee will remember, we estimated that the result of the interim dumping, after the Budget was announced, would cost the revenue £1,000,000, but in the result the deficit is only about £400,000. The yield therefore has been above the expectation. I hope that the revenue from this source will amount to £2,500,000 in the present year. The dumping which took place before last July, and the disturbance under the right hon. Gentleman the Member for Colne Valley in the previous year, make a comparison between the figures for 1924 and 1925 a matter of very great difficulty, but, broadly speaking, this may be said: imports have declined, re-exports—a comparatively small branch of the trade—have fallen substantially, and the British exports of motor cars have made a marked and substantial expansion. This is also true of musical instruments. Again, the re-imposition of the duties has not let to any general increase in price on the part of British manufacturers. On the contrary, in the classes of goods affected by the duties; in many instances the prices have fallen. Finally, I may add that so far as statistics are available, the percentage of
    1700
    workmen unemployed in these industries shows a reduction in recent months as compared with the corresponding figures of 12 months ago. It must be remembered, however—here again I add my word of caution—that as regards motor cars, as in the case of artificial silk, the conditions observable are those which apply to trades in a rapid and general state of expansion, through a change in world habits. It would be foolish for anyone to close his eyes to the actual facts that we have experienced in regard to these duties, but it would be imprudent to attempt to draw a general and unchanging rule from them.

    ANITIQUES (EXEMPTION FROM DUTY).
    One of the effects of the Silk and McKenna Duties was to expose a variety of works of art to taxation on their importation into the country. The importation of antiques ought not to be discouraged. It is important in the legislation of a country to draw a clear distinction between art and luxury, between the work of art—"a thing of beauty and a joy for ever''— and a mere consumable article of indulgence or ostentation. I propose, therefore, to exempt from Customs Duties from 1st May next all goods more than 100 years old, except wines and spirits. The effect upon the revenue is inappreciable, and there will be some benefit to the trades concerned, which were seriously affected, in a way unforeseen by Parliament, by the changes which have taken place.

    PROVISION AGAINST DUMPING.
    So much for the past. But before I proceed to consider the finance of the new year, there are certain general measures which have to be taken. The first is a question, of procedure. Last year, in the interval between the announcement of the Silk Duties and the McKenna Duties and the final passage of the Finance Bill, we were subjected to a wave of dumping by importers anxious to avoid the new taxes. This caused a heavy loss to the revenue, great injury and disturbance, the effects of which have not yet passed away, to the trades affected, and, furthermore, it plainly stultified the will of Parliament. We have no intention of allowing that exhibition to be repeated. In the future new duties on commodities will apply as from

    1701
    the earliest practicable date after the introduction of the Ways and Means Resolution imposing them. There can, of course, be no legal obligation on traders to pay such duties until the Bill containing them becomes law. A record will be kept of all goods liable to duty imported in the intervening period, and traders will be required to pay the appropriate duties as from the original date named as soon as the Bill passes into law. A Clause will appear in this year's Finance Bill by which importers will be required to give security for the Customs Duty on their importations during the intervening period, and similar suitable provisions will be made to deal with new Excise Duties. The duties will in future be levied as from the original slate fixed. This Clause, which I am sure is an essential and a reasonable form of safeguard, will no doubt be one on which the Committee will not find itself in unanimous accord.

    IMPERIAL PREFERENCE.
    The results of the extended preferences which were given last year are satisfactory. The reduction of the Sugar Duty by the right hon. Gentleman the Member for Colne Valley without any compensating change in the preference, abated the amount of the preference and the imports of Empire sugar declined. As the result of our action last year in restoring the preference, the flow of Empire sugar into this country has been greatly stimulated. In 1923–24, it was 368,000 tons. Under the right hon. Gentleman it fell to 165,000 tons, but it has risen again last year to practically the 1923 level, and we look forward to a further increase in the present year. Empire wines of the heavier kinds have for the first time found an appreciable market in this country. Empire supplies of tobacco are increasing. They are cheaper than anything else sold, and they are steadily improving, so I am informed, in quality. Empire raisins have also increased.
    It is, however, only by stability and continuity that these trade preferences can be made to produce an effective and permanent deflection in inter-Imperial trade. Four years ago, in the days of the Coalition Government, I was authorised to state that the preference accorded to British Dominions and possessions would be maintained at the existing pro-
    1702
    portions over a lengthy period, and I mentioned, in the case of sugar, a period of 10 years. The right hon. Gentleman opposite took marked exception to this when he became Chancellor of the Exchequer. His Majesty's Government were, however, quite impenitent. Last year we stabilised for a period of 10 years the actual amount of preference on sugar then granted. We shall now take a general step forward. Subject, of course, to the unfettered discretion of Parliament to vary or abolish any tax, we propose to extend the principle of a 10 years' guarantee to all the numerous articles which now form the subject of Imperial Preference. In the case of specific duties, the actual amounts of the rebates will be maintained for 10 years, or for so long within that period as the full duties do not fall below those amounts. In the case of ad valorem duties, the present. proportions will be maintained. I also propose, although this is not a matter of Imperial Preference, in the interests of the British producer, to repeal the Excise Duty on chicory, which involves a sacrifice to the Exchequer of about £500 a year.

    REVENUE 1926–27.
    I will now proceed to forecast the revenue of 1926–27 on the existing basis. I put the various items as follow:

    £

    Customs

    107,700,000

    Excise

    134,300,000

    Total Customs and Excise

    242,000,000

    Motor Vehicle Duties

    20,100,000

    Estate, etc., Duties

    66,000,000

    Stamps

    25,000,000

    Land Tax, etc.

    1,000,000

    Income Tax

    255,000,000

    Super-tax

    64,500,000

    There is a decline in Super-tax because of the remission made last year, and a converse improvement in Estate Duty because the increased duties of last year have begun to take full effect.

    Excess Profits Duty

    2,000,000

    Corporation Profits Tax

    6,500,000

    This shows a very heavy drop as compared with the yield of last year. This tax is coming to an end very speedily now.

    £

    Total Inland Revenue

    420,000,000

    Total Tax Revenue

    682,100,000

    Post Office

    59,400,000

    Crown Lands

    950,000

    Interest on Sundry Loans

    17,650,000

    This includes £4,000,000 from Italy.

    Miscellaneous:

    Ordinary Receipts

    18,600,000

    Special Receipts

    26,000,000

    —this shows a reduction of

    £11,000,000—

    Total Non-tax Revenue

    122,600,000

    Total Revenue

    804,700,000

    We have thus a revenue of £804,700,000, and an estimated expenditure of £812,600,000. The prospective deficit is £7,900,000 therefore.
    Let us review the situation. Last year's finance realised a deficit, however explainable, of £14,000,000. Next year's figures, if nothing is done, show a prospective deficit of £7,900,000. The prospects for the year after threaten us with decreases in revenue that will balance, or more than balance, its normal growth. They threaten us also with increases in expenditure which will probably, at the very best, go far to offset the fruits of further economies. Evidently, if a sound basis of our finance is to be maintained, we must act, and act in good time. I have, therefore, felt it my duty to seek additional resources, both temporary and permanent, in every direction open to me, and I come first of all to the sphere of Inland Revenue.

    INLAND REVENUE CHANGES.
    The changes which will be proposed this year in the Inland Revenue are mainly mechanical, and do not appreciably add to the burden on the taxpayer. I strike that note of reassurance at the outset. The Excess Profits Duty, although it was repealed five years ago, is not yet closed. It is still open to the Board of Inland Revenue or to any taxpayer to challenge any assessment which may be found to have been wrongly made. The tax was charged at a very high rate in a period of great emergency, and an opportunity for re-examining it and for re-reckoning was necessary; but, after all these years, I
    1704
    feel that an adequate opportunity has been given to both sides, and a Clause has been framed which will bring the uncertainty to an end and close the assessment on either side once and for all. At the same time, legislation will be required to validate a view of the law on a technical point affecting the computation of capital for the purposes of Excess Profits Duty which, although it has passed un disputed for 10 years, is now at this late date called into question.

    THREE YEARS' AVERAGE.
    I shall propose an important modification in the Income Tax law, which will not affect the finances of this year, as 12 months' notice will be needed before it can be brought into operation. Everyone seeks for the simplification of the Income Tax. I have an expert Committee sitting continuously, and have had for many months, under my personal direction, and I trust some day to be able to frame extensive proposals. All I can say at present is that the difficulties do not diminish with careful study. There is, however, one feature common to all schemes of Income Tax simplification—I mean the abandonment of the three years' average, I propose to sweep away the three years' average and the medley of other bases with which Schedule D is encumbered, and to found that Schedule exclusively on the pr ceding year. This, as I have said, will not come into operation until the financial year 1927; it will be impossible for the Income Tax authorities to make arrangements, get the forms, and make their calculations without a full year's notice. The legislation, which will follow very closely the recommendations of the Royal Commission, will include relief for hard cases in the period of transition, and the grant of the right to carry forward losses for six years. It will also include provisions to correct the anomalies which now arise when a business closes down at the end of an exceptionally prosperous year.
    Assuming that, on a long view, the aggregate profits of business in this country will tend to grow, the Exchequer, on the whole, will be the gainer in revenue from the change. It will, however, be the loser in convenience. The difficulty of estimating for Budget purposes will obviously be sensibly increased. There will be fluctuations which

    1705
    are now merged in the three years' average. That accuracy on which we now all plume ourselves will be endangered. But this change is one that is desired by the majority of the taxpayers, it is strongly recommended by the Royal Commission on Income Tax, and the time has come to take a definite decision in its favour.

    DOUBLE INCOME TAX.
    His Majesty's Government have recently been discussing with the Government of the Irish Free State certain outstanding financial questions, and the Committee will have been glad to see that we have arrived at a settlement of the problem of double Income Tax. That settlement was mixed up with the conclusion of a number of outstanding financial matters, upon which a full Report will be presented to the House, in conjunction with a similar Report when it is presented in Dublin. A copy of the agreement on the question of double Income Tax was last week laid before the House. The settlement is, briefly, that each country will tax only its own residents, and will exempt from taxation the income of persons resident in the other country, although the income arises within its own borders. Those who are resident in both countries will be chargeable by both, but given a measure of relief by both. This is a fair and reasonable arrangement. It will cost the Exchequer £200,000 in the first year, and £300,000 thereafter. The agreement, so far as it affects Income Tax, together with certain consequential alterations of the Income Tax code, will be included in the Finance Bill for confirmation by the House, and I propose to circulate with the Bill a Memorandum setting out the details of the scheme and the administrative arrangements involved.
    Against the loss which I shall suffer in this matter, I can look forward to a prospective gain, not this year, but in 1927, of about £1,500,000 as the result of abandoning the three years' average. In the sphere of Income Tax, legislation is also required to correct a technical flaw revealed by the recent judgment in the case of Whelan v. Henning. This completes my treatment pf the Inland Revenue.

    BETTING DUTY.
    I am very reluctant to add to the existng burdens of compulsory taxation. I have, therefore, caused an examination to be made of various methods of optional, or luxury, taxation. I prefer the word "optional" to "luxury." By optional taxation I mean taxation which all persons can avoid, perfectly legitimately, if they choose, without depriving themselves of anything required for their health, comfort, morals or business. Many suggestions on this subject have reached me and many plans have been explored. I will not weary the Committee by enumerating, still less arguing, those alternatives, on which at present I have no proposal to make, but there is one form of optional taxation which has been so much debated in the last few months that the Committee will be aware of it before the words are out of my mouth. We have decided to impose a tax on betting. Betting is certainly a luxury and it is certainly optional. No one need pay a tax on betting unless he, or I must add, she, wants to do so. I shall have plenty of opportunities of arguing the question later on
    Let me this afternoon explain what we propose to do. The law and practice of this country in regard, to betting are curious. Credit betting is legal everywhere. Cash betting is legal on a race course. Everywhere else cash betting is illegal, and the police are charged with the duty of repressing it. As always happens when prohibitions are imposed which do not carry public opinion with them, there is both wholesale evasion and occasional connivance, and the law is brought into disrepute. There is one law for the rich and another for the poor, but in one way or another everyone and anyone who wants to make a bet in this country can do so with impunity.
    Such is, I hope, a succinct account of the existing position of the law and practice of betting as it is known to everyone. We do not propose to alter that position in any way. I am not looking for trouble, I am looking for revenue. I am not trying at this particular moment, or on this particular point, to set the world to rights. I am trying to balance future Budgets. I do not, therefore, propose to change the law. We do not propose to make anything

    1707
    legal which is not now legal and we do not propose to invest a wager with any recognition, sanction or recoverability which it does not now possess. I propose to leave the anomalies, the inequalities and the prohibitions where they are. My object is to tax legal betting only and to leave illegal betting in the same position as it is at present. That is the proposal, and I need scarcely say it is a proposal which has been very long and carefully examined. The ground on which it stands has been very carefully considered and tested, and it is the only proposal I have to put before the House on this subject.
    All estimates are necessarily highly speculative. I am advised that legal betting, although involving a smaller number of persons than illegal betting, covers more than nine-tenths of all the money that passes. I propose to put a tax of 5 per cent. on every stake made upon a racecourse or through a credit bookmaker. As I have already told the Committee, I do not intend to argue this case to-day. I shall no doubt have plenty of opportunities later on. There is one point, however, to which I must refer forthwith. I shall be told, "Granted that you are not making legal anything that Os now illegal, are you not making money for the State out of what, however legal, is an evil thing?"
    Miss WILKINSON: Hear, hear!
    Mr. CHURCHILL: I reply that the Treasury is already making money out of the evil thing. I am afraid this will shock the hon. Lady the Member for East Middlesbrough (Miss Wilkinson). Every Chancellor of the Exchequer, of every Party, for many years past, has unhesitatingly done so. About £250,000 a year is gathered in Income Tax and Super-tax from the profits of bookmakers. Moreover—I am afraid the Committee must brace itself for a shock—a certain amount has been collected in every year by the vigilance of the Revenue officials from the profits, not of legal, but of illegal bookmaking. Money is, therefore, already being made by the State out of the evil thing, and not out of the legal evil thing only, but out of the illegal evil thing. This has been done as a matter of course without exciting public
    1708
    censure, or even public comment, by everyone who has occupied the post of Chancellor of the Exchequer, even by so rigorous a social reformer as the right hon. Gentleman the Member for Colne Valley.
    The machinery of the tax is not more difficult than that of other taxes which we are successfully collecting. Nearly the whole will be collected on returns furnished by credit bookmakers. It will be collected as easily as Income Tax is collected on their profits, or on the profits of stockbrokers or business men. Cash betting on race courses will be taxed by a system of tickets, to which we believe the race-going public and the ring will readily accommodate themselves. The tax will in all cases be based on the amount of the stake. The bookmaker will be the person immediately responsible, and he will no doubt recover the tax from his clients by a certain shortening of the odds. This tax cannot, I regret to say, come into operation till the flat-racing season this year is ending. Therefore, it will not be imposed before 1st November. A great deal of work has to be done. The yield in the first year will, therefore, not exceed £1,500,000. In a full year it is estimated to produce £6,000,000.

    FOREIGN WRAPPING PAPER.
    The Betting Tax is the only optional or luxury tax I shall put forward at the present time. There will be a duty on imported wrapping paper, to which the House has already been introduced. which was temporarily omitted from the Safeguarding of Industries Bill last autumn on account of pressure of Parliamentary time and is now to be included in the Budget. It will be chargeable as from 1st May at 16⅔ per cent. ad valorem, and it is estimated to yield £400,000 this year and £550,000 in a full year.

    COMMERCIAL MOTOR CARS (IMPORT DUTY).
    I next propose to extend the system of McKenna Duties to cover commercial motor cars. This duty could not be justified within the limits of the. Safeguarding of Industries policy. Only one-tenth in value of the commercial motors in Great Britain are imported, and the export of British commercial motors is greater than the foreign import, and there is therefore

    1709
    no case for the protection of the industry, nor is that in any way my object. The reasons on which I justify this tax are two. First of all it is the only Customs Duty I have ever heard of the imposition of which will positively simplify and diminish the work of the Customs authorities. All foreign motor cars and parts of motor cars are now taxed at the rate of 33⅓ per cent. In the midst of this important volume of merchandise, there is an enclave of similar or almost similar articles freely imported—commercial cars. The frontiers of this enclave have to be drawn in every motor shop and workshop throughout the country. The line of division between the commercial and the pleasure car is wavering and nebulous. It is becoming increasingly difficult to separate one from the other. The spare parts are in many cases identical. One type is readily converted into another, permanently or for an occasion. An import duty which depends not upon the character of the article but upon the use to be made of it is bound to produce special difficulties. It has done so in this case, and it is doing so in increasing degree. That is my first reason for including the commercial motor-car, although it is not a luxury, within the ambit of the so-called McKenna Duties. My second reason is that the tax will yield £300,000 in the first year and £350,000 in a full year. It will come into force on 1st May and the duty will be collected from that date.

    KEY INDUSTRIES DUTY.
    We propose to re-enact Part I of the Safeguarding of Industries Act, called the Key Industries Duty, which otherwise would lapse this year. These industries are essential factors in the national defence. The principle of safeguarding them has never, since the War, been seriously disputed by any of the three parties in the State. An expert Committee has revised and refined these duties. The modifications are slight, and yield only an additional £50,000 of revenue this year and £60,000 in a full year. Except in the case of optical glass and instruments, where the tax is increased to 50 per cent., and some other small additions to the duties, they are practically the old duties that are re-imposed, but they are re-imposed for a period of 10 years.

    ROAD FUND AND MOTOR VEHICLES.
    I come next to the Road Fund. The revenue of the Road Fund is growing rapidly. The Estimate for last year was £1,000,000 over the Estimate of the year before. The yield of last year exceeded this increased Estimate by £500,000. The estimated yield of the existing Motor Licence Duties, which were designed in 1920 to produce about £8,000,000 a year, is for next year no less than £20,100,000—more than £2,000,000 increase on the increased yield of last year. There is also a surplus of nearly £19,000,000 in reserve. This island is better supplied with roads than any other equal area in the world, and those roads are better maintained than in any other country. We have also a magnificent railway system, on which £1,200,000,000 of British capital have been spent. The immense developments of motor transport since the War raise several serious questions. Of these the first is, what is the relationship of the roads to the railways, and of road transport to railway transport? No one can be unappreciative of the great advantage to the country of motor transport. The convenience, the pleasure of millions, is only a part, and the lesser part. In the spreading use of the motor lorry, we have evidently obtained a new and powerful stimulus to that internal trade which exceeds, perhaps, tenfold all the oversea transactions of the country.
    5.0 P.M
    A retrograde policy, or even a stand-still policy in motor transport, is a folly no one is ever likely to commit or is ever likely to be allowed to commit. Motor transport will steadily increase, and the roads must not only he maintained, but must progressively improve. Nevertheless, it is impossible to watch this development which is taking place both with regard to freight and passengers, without considering its reaction upon the railways. A gentleman who introduced a deputation to me the other day explained that the needs of the roads in the next few years were such that £200,000,000 or £300,000,000 of new expenditure would scarcely suffice to meet them. When we consider our limited capital and credit—public and private—and the heavy burdens that root upon the country, we may perhaps occasionally ask ourselves whether the

    1711
    rapid expenditure in these few years of £200,000,000 or £300,000,000 upon this new means of transport would be a wise undertaking, if at the same time the results were to render obsolete and bankrupt a railway system upon which the livelihood and the savings of a large part of the people depend. There must be some sense of proportion in these large issues, and some effort must be made by those who discuss them to consider, not merely a particular aspect which is presented to them, or which interests them, but must decide upon a long and general consideration of the necessities of the nation as a whole.
    It will surely be agreed by motorists of all kinds that they should pay for the extra wear and tear which they cause to the roads. The light and medium motor cars and motor vans, broadly speaking, do this now, but there is one class of motor traffic which does not contribute its fair share, or anything like its fair share, in proportion to the damage it does to the roads. The heavy motor lorries, charabancs, and, above all, the heaviest vehicles which do not have rubber tyres, put a strain upon our roads which very few of them, in their present condition, are capable of bearing for any prolonged period of time. The railways complain that this competition is injurious and unfair. They say that they have to keep up their own permanent way, pay for their own signals, and, in addition, pay high rates for their competitors, the roads. Heavy motor transport will certainly make its way irresistibly, and it will certainly play an immense and growing part in our economic life. But it ought to make its way on its merits, and not by receiving a virtual subsidy at the expense of the whole community, including its own rivals. It is a mere act of justice to increase the taxation heavy vehicles to a closer correspondence with the wear and tear of the roads.

    MOTOR SPIRIT TAX
    I have given prolonged study to the question of collecting the bulk of the taxation upon motors through the agency of a motor spirit tax, instead of by the existing system of licence duties. The advantages of the change are obvious to everyone who thinks about the subject.
    Clearly such a system of taxation would be in far more close accord with the use of the roads by individuals, and the wear and tear they impose upon them, than any arbitrary scale of licence duties based upon a nominal scale of horse-power. Motorists are in favour of it, motor manufacturers are in favour of it, and it has been strongly pressed upon me by the representatives of the railway companies and of the railway trade unions. Because no countervailing excise duty would he levied on home productions, it would exercise a favourable influence, and be a favourable factor in that all important cause of developing the production of oil from coal, thus restoring our coalfields to their old position. This would only be a factor, but it would be an important factor. The difficulties are, however, as great as the advantages, and in particular the financial difficulties of the transition from one system to another have not been solved, and I am not able to make proposals to the Committee in the present Budget. The question, however, will be perseveringly examined, and I have not abandoned the hope of making such a change during the lifetime of the present Parliament.

    TAXATION OF HEAVY MOTOR VEHICLES.
    I shall propose meanwhile an increase in the taxation on heavy vehicles. The revised scale of these duties will be found in the White Paper, which will be available in the Vote Office in a very little while. In the case of commercial goods vehicles, the new scale is estimated to produce an additional revenue in a full year of about £1,800,000, or an average increase of about one-third of these duties. For the hackney vehicles the new scale will produce an extra £500,000 or an increase of about one-fifth; that is to say, not enough to justify, in our opinion, any raising of the fares, while about £45,000 extra money will be brought in in a full year by the new scale for road locomotives, tractors, etc. As these duties have already been paid on the present scale for the calendar year, the new scale will not be brought into operation until 1st January, 1927. They will yield in a full year a total of £2,300,000, of which about £1,500,000 may be expected to be received in this financial year between 1st January and 31st March. This raises the total estimated revenue from motor vehicle duties

    1713
    in 1926–27 to £21,600,000, while in addition the Road Fund starts the year with practically an extra year's revenue in reserve.
    What is to be the share of the Exchequer in these large revenues? That the Exchequer is entitled to a share is unquestionable. I cannot accept the suggestion which has been put forward from time to time that motorists are in a different position from the rest of the citizens of the country; that they have some special right to the whole yield of any taxes imposed upon motor vehicles; that if the yield of these taxes exceeds what is required for the roads, those taxes should be reduced. Any question of contract in matters of taxation between the State and any body of its citizens would be manifestly improper. No contractual relation in this matter of taxation has ever existed, or ought ever to exist, between the State and any particular body or class of taxpayers. The hands of Parliament must be free to deal with all matters of taxation from time to time in the general interest of the whole community. Motor taxes are compulsory like any other taxes, and can be varied, increased, diminished, redistributed, or devoted to any particular purpose or to general purposes as Parliament shall determine. That is unquestionably the legal and constitutional position, and that position is in no way modified, in our judgment, by declarations of policy made in quite different circumstances by particular Ministers or Governments in former Parliaments.

    LIBERAL PROVISION FOR ROAD IMPROVEMENT.
    If that is the law and the constitutional position, let us look at the equity. The state has made a liberal provision for the roads since the War. Immediately after the Armistice, when the roads were neglected and, when the Road Fund was depleted, and when the Exchequer conceived itself to be endowed with limitless wealth, not only was the £8,000,000, which the Motor Licence Duties were then estimated to yield, devoted to road improvement and maintenance, but a further capital sum of over £8,000,000 was granted from the Exchequer as capital assistance to supplement the revenues of the Fund. Moreover, the Exchequer continued to provide, and is now con-
    1714
    tinuing to provide, through the Local Taxation Account, that unallocated balance on the Assigned Revenues system of about £1,500,000 a year, which since 1888 has taken the place of the old Exchequer grant for main roads. Above and beyond this the Exchequer has given considerable assistance to road works since 1920, and has gone on paying an increasing sum, a heavily increasing sum, for extra police, metropolitan and provincial, required for point duty in consequence of the ever-increasing number of motor cars on the roads.
    It is this situation which Parliament must review, and which Parliament, in its plenary authority, is entitled to review. His Majesty's Government have decided to propose to Parliament that £7,000,000 shall be transferred to the Exchequer out of the balance of approximately £19,000,000 in the Road Fund. For the future we propose that the revenue from motor taxation shall be divided between the Road Fund and the Exchequer on the broad principle that what is raised on account of wear and tear should go to the roads and the balance from the luxury or the pleasure aspect of it shall go to the Exchequer.

    DISTRIBUTION OF TAX. PROCEEDS.
    I come to the final distribution of the proceeds of the tax. Of the £21,600,000, which immense sum is expected to be realised in the coming year from the old duties increased as I have described, the Exchequer will take one third of the yield of the duties on private motor cars and cycles, this proportion being attributed to the luxury or pleasure aspect of motoring. This proportion will be continuous, and it will grow with the general yield of the duties. It amounts in the present year approximately to £3,500,000. The statutory payments to the local authorities in lieu of the old carriage licence duties will continue to draw£600,000 a year. All the rest of the duties, including two-thirds of the duties on private motor cars and cycles, and the whole of the increased yield from the commercial and hackney vehicles, will go to the Road Fund, which will have at its disposal a revenue of £17,500,000 in the coming year. When the increased duties are in full operation next year and the number of vehicles has further increased, as no doubt they will, this revenue will be considerably augmented; but even in

    1715
    the present year, after deducting the £3,500,000 required by the Exchequer, there will be available for the Road Fund out of revenue an amount £600,000 greater than the original estimate for last year, and slightly greater than the total receipts of the Road Fund last year.
    In addition, the Fund will have an available balance of nearly £12,000,000 on which it can draw for the execution of its present extensive programme of road and bridge works, and for undertaking new improvements. In all, the amount provided for road purposes in the coming year will be £21,000,000, or £3,500,000 more than was spent on the roads last year. There will, therefore, be no diminution in the programme of expenditure of the Road Department, nor will its resources be rigidly fixed. On the contrary, they will increase with the growth in the wear and tear upon the roads. This wear and tear is tending each year to affect an increased mileage on the roads, especially on roads not hitherto classified. We contemplate in future a steady extension of grants to cover a greater proportion of the total mileage. Last Autumn, I agreed with the Minister Of Transport to make an additional £750,000 available in the present financial year to be distributed amongst authorities essentially rural in their character, as assistance towards the cost of the maintenance of unclassified highways under their charge. On a further review of the position, we have decided that an additional £500,000 should be set aside in like manner for the purpose of making grants towards the maintenance and repair of such unclassified roads in Great Britain. Thus, in dealing with the Road Fund, we have secured, or we are seeking to secure, subject to the assent of the House of Commons, first of all, a fair adjustment of heavy traffic between the roads and railways; secondly, a new source of revenue to the State; thirdly, the largest programme of road development ever undertaken, and fourthly, further special assistance to rural roads.

    BEER DUTY (CREDIT PERIOD REDUCED).
    Pursuing my quest for money for the public service, I come to a windfall peculiarly refreshing in its character. When the Excise Duty on beer was progressively increased during the War, the
    1716
    period of one month's credit which had been hitherto granted to the brewers for the payment of duty was successively extended by Parliament, at the discretion of the Commissioners of Customs and Excise, first to two months and then to three months. The Chancellor of the Exchequer has statutory powers without fresh legislation to reduce this period should he consider it equitable. I propose, therefore, to reduce the period from three months to two months. As a consequence, I shall collect 13 months' revenue from beer in this financial year. The brewers will have the option of paying the extra month's duty in instalments throughout the year. This will produce a once-for-all payment of £5,500,000. Although I have the power to do this without legislation, I thought it would be more convenient and also more suitable to insert a Clause in the Finance Bill for the purpose, and the issue will thus be submitted to the judgment and discussion of Parliament.

    FRENCH WAR DEBT.
    I turn next to the French War Debt. In my negotiations with M. Caillaux, the standard payment of £12,500,000 was not to begin until the year 1930. There was to be a ladder—échelle was the word used—of gradually increasing payments, which were suggested by us. Subject to any reaction which may be produced by the Franco-American settlement on the principle of pari passu, the quota appropriate to the present year was to have been £4,000,000. The many changes in the French Ministry of Finance and the political situation in France has hitherto delayed the final conclusion of this arrangement. I have good reason, however, to expect a visit from the French Minister of Finance very shortly after the Budget, and I have received from M. Peret an assurance that, without prejudice to the settlement between us, the French Government undertake to make an unconditional minimum payment of £4,000,000 during the current financial year, on the sole credit of France. This practical step, this interim step, which M. Peret has taken, shows his desire to arrive at a settlement, and it is, I am sure, a good augury for our coming discussions. The Committee should also welcome it as a proof of the determination and evidence of the power of France to

    1717
    strengthen her credit by the appropriate regulation of her external debt.

    SURPLUS OF £14,000,000.
    I have now finished my immediate search for revenue and resources. The length of time which it has taken me to detail to the Committee those results only which have been fruitful will perhaps show that it has not been a short or an easy task; but in the result the appearance of the: national balance sheet has been considerably improved. I started with a prospective deficit of £7,900,000. Since then we have added by

    £

    New duties on imported wrapping paper and on commercial motor cars and by modifications in the Key Industry Duties

    750,000

    From the Road Fund surplus

    7,000,000

    From the new Exchequer share in motor taxes

    3,500,000

    From the Betting Tax

    1,500,000

    From the shortening of the Brewers' Credit

    5,500,000

    From the French Debt Provisional Settlement

    4,000,000

    This makes a total of

    £22,250,000

    From this must be deducted the loss of £200,000, due to the arrangement about double Income Tax. Making allowance for this the deficit of £7,900,000 is thus converted into a surplus of £14,100,000 odd
    What shall we do with it? I will no conceal from the Committee that I have been sorely tempted to give a portion in relief to the taxpayer. But let me reassure the Committee at once that I have resisted the temptation; I have risen superior to it. A long view of the public finances in no way justifies a remission of taxation. In this Parliament we must continue to think for more years than one. There is too much prospective shrinkage in the yield of the moribund taxes and in the special miscellaneous receipts to justify weakening our resources this year in any way. Moreover, the £7,000,000 reclaimed from the Road Fund surplus and the £5,500,000 from the Beer Duties are not annual revenue. They are only windfalls—windfalls produced not only by
    1718
    the wind but by a certain judicious shaking of the trees.

    INCREASED SINKING FUND.
    At this point the Committee may remember that, in consequence of the Coal Subsidy, we had a deficit last year of £14,000,000. This would probably not be considered a deficit in any other country in the world. It means that we are paying our way and paying off very large sums of debt. It does not mean that we have spent more than we raised in taxation. It means that we have, in effect, reduced the £50,000,000 statutory new Sinking Fund to £36,000,000, and we have to that extent fallen below the programme of debt redemption which we had set before ourselves. I am certainly not going to argue as if it wore an immutable law that in all circumstances the only way to improve credit and to create favourable conditions for debt conversion operations is to pay off ever increasing quantities of debt. I am not making any such general claim. It is not the only way, but it is one way, and it is a very good way. Every repayment of debt liberates an equal sum for the support of industry and commerce.
    At the present time especially we have to consider how last year's deficit occurred. I share the responsibility in full for the Coal Subsidy. I was strongly in favour of it. Whatever may happen in the immediate future I am certain that what we did last August was only right and prudent. But every subsidy is a questionable policy. A subsidy that is paid out of borrowed money or which leads the national finance into a deficit or which prevents the carrying out of financial policy deliberately conceived is not questionable, it is vicious. It would be altogether too easy for us to get into the habit of turning awkward corners or delaying unpleasant ordeals by simply whittling away the provision which successive Parliaments, Governments and parties have considered necessary for the redemption of the National Debt. The only check upon such expedients as subsidies, however legitimate upon occasion they may be, is the finding of the money out of revenue, annual or occasional.
    There are many features of our national life which rightly give rise to misgivings and anxieties, but no one, even here at home, denies that we have

    1719
    maintained a very strict system of finance. The Coalition Government, the Conservative Government, the Labour Government—I gladly recognise the orthodoxy of the right hon. Member for Colne Valley—all differing on so many other issues, have with equal consistency maintained strict and severe finance. Moreover, we are quite strong enough to do it. There is no need, and there would be no excuse to show failure or weakness in carrying out our purposes. I must, however, pray in aid the surplus of £4,000,000 which resulted from the Budget of my right hon. Friend the Member for Colne Valley, and which in conformity with the law was devoted to the old Sinking Fund. We have therefore devoted in 1925–26 not £36,000,000 but £40,000,000 to debt redemption out of revenue. We are £10,000,000 short. In order to fill the gap and maintain in effective operation the £50,000,000 Sinking Fund, I propose to increase the new Sinking Fund for this year from £50,000,000 to £60,000,000. I am sorry indeed to offer such austere fare to the Committee, but I am sure, having regard to all the circumstances of the present time, it is the right thing to do. Thus we shall in fact have paid the whole £23,000,000 of the coal subsidy out of current resources without impairing the £50,000,000 Sinking Fund provided for the redemption of Debt. That is the object upon which all my efforts during the last six months have converged. It is a limited objective, it is a modest objective, but such as it is it has been attained.

    FINAL BALANCE-SHEET.
    I now proceed to balance the Budget of 1926–27. The total estimated expenditure, including a £60,000,000 Sinking Fund, is £820,641,000. The total estimated revenue is £824,750,000. That leaves me with a prospective surplus of £4,109,000. Out of this, if there is a peaceful settlement of the coal difficulty, I shall have to meet any expenditure arising out of the Report of the Coal Commission and also to narrow the gap which will exist upon the cessation of the coal subsidy in some of the mining districts. This surplus will also have to cover the ordinary contingencies for which surpluses are reserved in every financial year. I have in my calcula-
    1720
    tions assumed throughout a peaceful issue from the industrial difficulties in which we are all involved. All my Estimates are based on a peace footing. That is the only basis on which any Estimate can be framed. If, contrary to the national wish and hope, a prolonged paralysis of industry should overwhelm us, I shall be forced to propose supplementary taxation in order to meet the loss which will fall upon the revenue, and I think it right to state that such supplementary taxation will comprise substantial increases both in direct and indirect taxation.
    On the assumption, however, that these unpleasant experiences will be avoided, let us see what the position will be next year, that is the year 1927–28. The £4,000,000 provided in the Estimates of this year for the April payments of the coal subsidy will not appear next year. I am keeping in hand, say, £3,000,000 more in case it may be necessary to taper it off, and for other purposes. This £7,000,000 will not recur next year. Therefore, apart from other economies, we have a right to expect that we shall be £7,000,000 better off. The new Sinking Fund will again be reduced by £10,000,000, that is to £50,000,000. The betting tax is estimated to raise about £4,500,000 extra in a full year, and the result of the change in the basis of Income Tax from the three years average to that of the preceding year will, it is anticipated, improve the revenue by another £1,500,000 I have, therefore, a total relief or increase in prospect of, at any rate, £23,000,000. To what extent this will emerge as a definite advantage will depend, first, on how far new economies cancel the automatic growth of expenditure; and, secondly, upon how far the normal growth of permanent taxation will balance the loss by the moribund taxes and special receipts.
    If this double equipoise is maintained both in expenditure and revenue, we should certainly find ourselves in a more satisfactory position next year than we are this year, and in any case this year we shall have made effective precautionary provisions against the future. Apart from those unforeseeable events, which play so large a part in the vicissitudes of human life, we can see our way fairly clearly through the finance of two

    1721
    successive years; and we must face emergencies with courage as they come.

    CUSTOMS AND EXCISE.

      CONTINUATION OF DUTY ON TEA.
      Motion made, and Question proposed,
      "That the Customs Duty chargeable on tea until the first day of August, nineteen hundred and twenty-six, shall continue to be charged on and after that date until the first day of August, nineteen hundred and twenty-seven, that is to say:

      Tea, the lb.

      …

      …

      four pence.

      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Mr. SNOWDEN: Members of the Committee are naturally exhausted after listening so long to so many details from the Chancellor of the Exchequer, and 1 can well understand that they are not disposed to listen to another speech. I shall therefore not detain the Committee more than a few moments this afternoon, and shall reserve till a later date what I have to say on his proposals, after I have had time to examine them, free from the glamour and the fascinating rhetoric of the right hon. Gentleman. The right hon. Gentleman deserves—and this is no formal matter, as I believe I am expressing the wish of every Member of the Committee—our warmest congratulations upon the rhetorical success of his speech, and the clearness with which he has put very complicated matters of detail before us. He confessed at the outset that it would be a very sombre picture, but be has certainly enlightened it by many flashes of humour, very much to the entertainment of hon. Members. It is a great ordeal, not only mentally but physically, to present such a Budget statement, and I can assure the right hon. Gentleman that he can take what I am saying as a sincere expression of appreciation, not only on my own part, but on the part of every Member of the Committee.
      I am afraid I cannot 'congratulate the Chancellor of the Exchequer altogether upon his proposals for increased taxation and the alteration of taxation which he has put forward in his statement. I am glad, however, to be able to mention a number of matters on which I am in agreement. I do not think he will find any opposition from this side of the House to his proposal to abolish the three years' average and estimate Income Tax upon
      1722
      the preceding year. That is a proposal which was recommended by the Royal Commission on Income Tax, and it is one which is not only to the advantage of the Exchequer, but will be a great convenience to the Income Tax payer. After many years of negotiations, I am glad the Chancellor of the Exchequer has been able to come to an arrangement with the Irish Free State Government for the settlement of the delicate and complicated matters between them, and, as far as I can understand, the arrangement he has made is satisfactory to both parties. I do not think there are any other proposals to which I need refer at the moment, but there are one or two on which I am glad to think we shall be able to co-operate with the right hon. Gentleman. The Chancellor of the Exchequer appears to take a delight in creating as much trouble as possible for himself and other people. Last year he had a surplus of £26,000,000, just sufficient to reduce the Income Tax by 6d., but, instead of confining himself to that simple operation, he took off a tax here, imposed a new tax there, and caused considerable commotion and unrest throughout many sections of the community.
      I do not think the Chancellor of the Exchequer expects that the Budget proposals this year are going to pass through the House of Commons easily. He must anticipate that most of them will be very vigorously opposed. His proposal to tax betting will arouse intense hostility in quarters which are not usually in co-operation—the betting interests and the moral sense of the community. I shall do as the right hon. Gentleman did—leave any further observations on that important matter to a later stage. it is rather remarkable that the proposals of the Chancellor of the Exchequer have been anticipated so accurately. I cannot call to mind any previous Budget which has been anticipated so accurately by the public and the Press as the Budget the right hon. Gentleman has put before the Committee this afternoon. The forecasts have been correct down almost to the details, and the explanation of this is that the right hon. Gentleman himself has been much less reticent than his predecessors in that office, and less successful in hiding its features than his predecessors. I congratulate him on having found a hen

      1723
      roost of which I was not previously aware. I regret that in my ignorance I left him a nice nest egg to raid—that is, to lessen the term of credit to the brewers. There is not very much more that I can, with advantage, say to the Committee at this stage, hut I congratulate the right hon. Gentleman on the manner of his speech and the way he has placed the Budget statement before the Committee. I regret that 1 cannot extend my congratulations to many of the more important proposals of the Budget.
      Mr. LLOYD GEORGE: I propose to follow the example of my right hon. Friend who has just spoken, and to confine my observations within a very few minutes. Obviously, this is not an occasion when one can examine in detail, after so very little reflection, the proposals put forward by the Chancellor of the Exchequer. I wish, however, to join with him in congratulating the Chancellor of the Exchequer upon the very luminous statement which he has made I agree with every word that fell from my right hon. Friend as to the conspicuous clarity of the statement and the charm and fascination with which the Chancellor of the Exchequer has entranced the House of Commons. To me, as an old Member who has heard a great many Budgets in this House, it was a very remarkable achievement, and it filled me with great delight to listen to it. There are one or two questions that I would ask before I come to the proposals of the Chancellor. He did not tell us how much he expected to receive from German reparations this year. I would like the information, if he can give it to us, before the Debate closes.
      Now I come to some of the statements that the right hon. Gentleman made. I wish that I could, after years of experience of the gold standard, find the same source of satisfaction as he seems to derive from the course that he pursued last year. The Chancellor did not state very fully the effect of that precipitation. It is not a question of the gold standard—we are all in favour of it—but a question of the time when it was done, the way it was done, and the results. He altogether omitted the effect upon our export trade. There is a general opinion among, all the traders in the country who
      1724
      are engaged in export business that it had a very restrictive effect upon most important export industries. Undoubtedly it had that effect upon coal; no one can doubt that for a moment. And it has cost us in subsidy, in another form, some millions of money, and has helped undoubtedly to precipitate the conflict, through the difficulties which it caused in the reduction in the price of coal in the foreign market. The same thing is apparent in other trades as well. In spite of the fact that the Chancellor of the Exchequer has claimed that there has been a steady improvement in trade, the exports for the last quarter of the financial year are £19,000,000 down, compared with the corresponding quarter of last year. I do not say that that is due to the gold standard, but all authorities are of opinion that the gold standard had a very pernicious effect upon the market in our foreign goods.
      The Chancellor of the Exchequer has attributed to his action in regard to the gold standard what is really due to the fact that we were paying our way. It is because we had established our credit by sound finance. The Chancellor delivered a very eloquent passage upon what had been done by all Governments, including the present Government, in the way of debt reduction. It is the most remarkable achievement in the history of the finance of any country—the way in which hundreds of millions have been paid. The present Foreign Secretary, my right hon. Friend the Member for Hillhead (Sir R. Horne), and my right hon. Friend the ex-Chancellor of the Exchequer have all contributed to that, and the present Prime Minister and the present Chancellor of the Exchequer have all had their share in it. It is the fact that we have reduced our debt by hundreds of millions, that we have not had to borrow for current expenditure, and that every year we are making provision of tens and scores of millions for the reduction of debt. That is the thing that established our credit.
      The right hon. Gentleman compared himself to a strong Channel swimmer who was invited to give up the feat just when lie was nearing the coast. That is not the case. What happened to my tight hon. Friend was this: he was getting near the coast, but, as too often happens with him, he became impatient, and he chartered a liner to pick him up, and

      1725
      carry him the rest of the way. And at very great expense to the trade of this country. That is really what happened. He ought to have kept on swimming, like all the other Chancellors of the Exchequer. It is a very unpopular thing to do. We were constantly tempted to in dulge in a little bit of inflation. It was a very tempting thing to do. But still, through all these temptations have been resisted, and that is what has made our credit. If the Chancellor of the Exchequer had been a little more patient the thing could have been done, without inflicting an injury upon our trade at a moment when it was recovering gradually. It has created difficulties, and we are not altogether through them. I am bound to make that protest straightaway, lest the right hen. Gentleman should be too happy over his achievement of the gold standard.
      I come now to his proposals with regard to taxation. With regard to the tax on betting, I would like to see exactly what the proposals are. All that I know is this: that certainly once during the time when I was Prime Minister there was a Committee appointed to examine the question el a tax on betting. I know perfectly well that the majority of those who sat on the Committee were in favour of a tax on betting, and strongly in favour of it, when they became members of the Committee. But it is very remarkable that, after a prolonged investigation, they came to the conclusion that it was an unwise thing to do. I know one or two of them told me afterwards of their surprise, because they had always been strong advocates of a tax on betting. They were put on the Committee rather to represent that point of view, and to my amazement, they found at the end that they were strongly opposed to it; that was after hearing the whole of the evidence. The Chancellor of the Exchequer must remember that. A tax on betting is one of the things that look very plausible. It looks as if you would get a lot of money for nothing. But it is full of mischief.
      The second Committee that was set up, I think by the present Prime Minister, was a Committee of men who were in favour of the tax when they went there; the majority were predisposed in favour of it. But when they came to examine
      1726
      it, the conclusion to which they arrived was that though practicable it was not desirable. Therefore, we have had two Committees. Both of them were composed of men the majority of whom were predisposed in favour of the tax. They both turned it clown after a prolonged examination. I am afraid that the Chancellor of the Exchequer may have the same experience. I am not going into the question of betting taxation on the ground of encouraging something which is in itself thoroughly mischievous. But what appears to me is that by the method which the Chancellor has adopted, he is really driving people to the most pernicious form of betting, namely street betting, which has been treated as illegal—the form of betting over which you have no control, and which is conducted by a different class of people from those who conduct the credit business. And oil the whole it does give to them an opportunity, and as a matter of fact they can afford it, to give better odds than the people whom the Chancellor of the Exchequer taxes. The proposal is a bonus upon street betting. There is no doubt about that, because they can give better —I do not know the exact term—
      Sir JOHN SIMON: Shorter odds?
      Mr. LLOYD GEORGE: I really thought I was discussing this with a man Of experience.
      Sir J. SIMON Sir J. SIMON: indicated dissent.
      Mr. LLOYD GEORGE: At any rate, they can charge less than the other bookmakers, and that is mischievous. I am very doubtful whether the harm done by this tax will not more than counterbalance the advantage which the Chancellor of the Exchequer will get from it. I am not much of a believer in restoring these freak taxes. The Chancellors of the Exchequer of the past, when they began to revise our financial system—I am not talking now merely of Protection and Free Trade—gradually dropped these freak taxes, because they were irritating and mischievous, and did not produce as much of revenue as of irritation and trouble. I think the Chancellor of the Exchequer is making a mistake in restoring these fancy and freak taxes. That is all I have to say for the moment on the Betting Tax.
      With regard to protective duties—there is a very considerable number of them—

      1727
      I have no doubt at all that they will receive the same opposition as they have always received from this quarter of the House. Now I come to the question of the roads. I deeply regret that the Chancellor of the Exchequer has decided to raid the Road Fund. I do not agree in the least in the view which he seems to take with regard to the roads of this country, as if we had achieved the end of development and improvement.
      Mr. CHURCHILL: No.
      Mr. LLOYD GEORGE: The Road Fund was started in 1909, and the present Chancellor of the Exchequer was one of those responsible, with other Ministers, for it. The idea was, as he knows very well, to start a fund for the purpose of adapting the roads of this country to the new traffic that was beginning to develop then. It was only a beginning, to widen and straighten the roads and to make them free from danger, and above all to start a fund for the making of new roads. Whatever the need was then, it has become more obvious year by year. The Chancellor of the Exchequer scoffed at the idea that you can spend another £200,000,000 profitably upon new road development. Has he thought for a moment, from the point of view of the profit and loss account of business, what that means? He has only to consider what the cost of the present block in traffic is in every great city of the country. I saw a computation the other day that in London alone the loss in business, owing to delays created by the block in traffic, was £20,000,000 a year. If the right hon. Gentleman goes to Manchester, Birmingham, Leeds, Glasgow or any if the great trade centres he will find the same thing. It takes twice and three times as long to go from point to point as it ought to take, if there were great new roads.
      6.0 P.M
      When you come to consider the problem of housing, you find that transport is at the very root of the problem. It is no use spending huge sums of money upon the purchase of expensive sites inside the town. What you want to do is to open up new avenues, so as to give the industrial population the same opportunity for living outside a crowded area as at present the well-to-do classes enjoy. Therefore, the Road Fund is at the root of our
      1728
      traffic problem, and at the root of our social reform; and 1 think it is a retrograde step for the Chancellor of the Exchequer to begin to raid this Fund at the present moment. If the Chancellor were doing it in conjunction with a proposal to tax the values created by new roads, with a view to raising a fund out of those values for that purpose, then I could understand the Chancellor of the Exchequer doing it. All he is doing is taking away the revenue, whilst he is increasing the values and, at the same time, not taxing them. I hope we shall have further opportunities of dwelling upon these things later on when we come to examine these proposals. Obviously, this is not the time to do so, and I shall end as I began by giving my personal meed of felicitation to the Chancellor of the Exchequer upon a very fine Parliamentary achievement.
      Sir ROBERT HORNE: I rise, like two of my predecessors in the office of Chancellor of the Exchequer, to express my great admiration of the very clear and perspicuous statement which the Chancellor of the Exchequer has made on the nation's finances. He has surveyed a very wide field, and has given the Committee a great many details, without ever losing sight of the great principles by which the nation's finances ought to be directed. Like the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) I propose to sleep off the intoxication of the Chancellor's eloquence before I proceed to express considered views upon his proposals. There are just one or two things which I should like to say before sitting down. I think it is marvellous that, in a time of such extraordinary depression as that through which we are passing, the Chancellor should find the revenue so nearly approximating to that which he estimated in the Budget of last year. It says a very great deal, not merely for the system of finance under which we carry on our business, but also for the courage and perseverence and patience of our people that so much should have been done at a time when it might be supposed that everybody would be so discouraged as to be unable to put forth their best efforts. The figures which the Chancellor has given us to-day are indeed remarkable, especially those under the head to which my right

      1729
      hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) has referred, namely, the debt which we have succeeded in paying off since the War. It amounts to a colossal figure, and it is extraordinary that we should have succeeded in reducing our debt charge by so high a sum as £75,000,000 a year, while at the same time reducing our floating debt by £700,000,000. These are figures upon which we are entitled to congratulate ourselves.
      I was glad to hear that the right hon. Gentleman proposes to collect the Income Tax upon the basis of one year's revenue. I think that is a change which ought to be made, and it is not a bad time for the Treasury to make the change, because, if you have any hopes at all of better years in the immediate future, then undoubtedly the revenue is going to get the advantage of not including the bad years in its computation. I suggest that, at the same time, the right hon. Gentleman should carry out another reform which is much needed. Super-tax is at present based upon the revenue of the previous year, and when this change is being made with regard to the Income Tax, it would he a suitable period at which to combine Income Tax and Super-tax. In fact, although these taxes arc differently described, they are graded as one tax, and it is quite an error to suppose that the impositions of Super-tax are impositions in many cases upon moneys which are already taxed. It is not so. The whole system is graded so as to form really one tax, but the public is very much confused about it, and I am certain it becomes almost impossible, by reason of this confusion, to induce the public to believe that Super-tax should ever be in any circumstances reduced. They imagine that it is being paid by people who are earning such enormous sums that they need not he considered. That is a hopelessly fallacious view of the country's finances, and I hope the right hon. Gentleman will take into consideration the suggestion of making an attempt at the same time to unite these taxes, and to present them in proper shape.
      The right hon. Gentleman the Member for Carnarvon Boroughs referred to the return to the gold standard, and pointed out, quite properly and correctly, that it was by reason of the very great increase of our credit, through meeting our obliga-
      1730
      tions, that we were enabled to approach so nearly to the parity of gold at the time when the Chancellor's swimming operations became a little more active than they had been before. I do not think my right hon. Friend is making sufficient allowance for the fact that the Chancellor of the Exchequer had to make up his mind at the period when he was called upon to decide, whether he was going to make an effort to reach the shore, or give up swimming. In fact, the Act which placed an embargo on the export of gold was coming to an end, and there is no doubt that if at that stage our country had said, "We are not ready for a return to the gold standard" when other less important countries had already reached it we should have done ourselves the greatest possible detriment, and we should have led the world to believe that it would be a long time before we could hope to put our finances upon a proper footing. Whatever might have been said had there been no Act in existence, I am sure that in the circumstances in which the Chancellor found himself he had no option but to take the course which he did take.
      When reference is made to the difficulties into which industry has been put by the appreciation of our currency, the advantages which we obtain from its increased value are sometimes forgotten. It is true that the higher value of our own currency makes it more difficult for other people to buy our goods. On the other hand, since we arc an industrial country and buy enormous quantities of food and raw material, it is obviously much cheaper for us to purchase with a currency of higher value. If you take the one side of the account, you must take the other. On the balance of considerations, I think when the whole matter is thought out, and the results are calculated, most people will come to the conclusion that it was a wise and prudent step. I shall leave for another occasion such remarks as I have to make on other parts of the Budget. In the meantime, I have great pleasure in congratulating the Chancellor on the way in which he has presented his Budget, and I am sure every Member of the Committee is grateful for the clear statement he has given us.
      Brigadier-General Sir HENRY CROFT: I wish to add my hearty congratulations to those which have already been ex-

      1731
      pressed to the Chancellor of the Exchequer upon the truly remarkable and ingenious speech which we heard from the right hon. Gentleman. I think it is quite clear that he has considered every form of cunning device in order to tide us over these difficult days, and I imagine that, but for the fact that we have great difficulties, he would not have explored roads and race courses and other places in order to maintain the balance of our finances. I expect, however, the Chancellor of the Exchequer shares the feeling, to which I confess, that we have come to a position where we must ask ourselves whether there is any great hope that we can improve matters to any extent. The Committee will remember that within the last week or two we have been discussing an Economy Bill, and I think it will be agreed that no other Measure was possible, by which we could economise to any extent without throwing further thousands of people on to the streets. That Measure was fought relentlessly by the two Oppositions, and it must be admitted that we have come to a cul de sac so far as the question of economy is concerned.
      The Socialist party opposed the Economy Bill, according to plan, because they believe that there are inexhaustible sources of wealth which any Government can draw upon, and they have threatened that if they come into power they may depart from constitutional means of raising revenue. The Liberal party are in a different position. They are the relics of a force in this country whose foundation of belief, I might almost say, was economy. They were the great party of retrenchment, and it can now be said that the Liberal party, the heirs and successors to Gladstone, have resisted every economy proposed by the Government now in office. They have given us no practical constructive alternative. All they have been able to say is, "Reduce your armaments," and, before coming to what I hope will be some constructive suggestions, I wish to refer to that point. The Leader of the Liberal party last Thursday derided naval defence. Apparently the right hon. Gentleman was not satisfied with the fact that we have reduced our naval defences from a two-Power to a one-Power standard. He said there was not
      1732
      an enemy visible, even on the haunted seas of the Navy League. Why then did the right hon. Gentleman resist the economy on Pembroke Dock? I must remind the Committee of these facts, because the right hon. Gentleman has held a responsible position, and I may recall the words which he used at the commencement of 1914. Interviewed on behalf of the "Daily Chronicle" in January, 1914, the right hon. Gentleman was asked:
      "Do you consider this to be a favourable moment for us to overhaul our expenditure on armaments?"
      His reply was:
      "I think it is the most favourable moment that has presented itself during the last 20 years. Our relations with Germany are infinitely more friendly now than they have been for years."
      It may be said that even a long-sighted statesman, a man of great vision, possessing powers almost of clairvoyance and wizardry, would have found it impossible at that time to tell that a, great War was imminent. But, if that be so, he has no right to tell us now, that we should reduce our Fleet, because he can see no immediate enemy. He saw no immediate enemy even when the evidence was fairly strong in 1914. I ask the Committee to remember what he said in July, 1914, in answer to the present Foreign Secretary, who has said that we could not depend upon any economy in armaments.
      "I think that is not so. I think the right hon. Gentleman will find that next year there will be a substantial economy."
      That profound and statesmanlike utterance was made in this House 12 days before the declaration of War. If anyone has proved a false prophet on the subject of naval defence it is the present Leader of the Liberal party. No one ought to know better than he, that the Royal Navy saved this country from disaster at the time of the Great War, and yet he now advises us to cease paying our insurance premium. He reminds one of the old woman whose house was burned down and who refused to insure her new house on the ground that she was unlikely to have a second fire.
      The right hon. Gentleman, like the old lady, is prepared to gamble with the law of averages, but neither this House nor the country is prepared to gamble with our naval defence. The reduction of our defences is the only suggestion which has

      1733
      emanated from the apostles of retrenchment. With regard to the policing of the Empire with military forces, I think it will be agreed that the Liberal party before the War, in their long term of office, did not have an extravagant record. They told us at the time that the sky of Europe was quite clear, and they only gave us a regular Army necessary for policing the Empire. The post-war responsibilities for Empire defence are immensely greater, and yet we have reduced the regular Army very considerably below that which was considered necessary by the Liberal Government. The Army Reserve is very much down, the Special Reserve of 63,000 men has been completely wiped out, and the Territorial Force establishment is down by 100,000. I think, therefore, it will be agreed, in view of those figures, that, with our naval reduction, no country in the world can approach the economies which we have made in respect to these two forces in materiel and in man-power, and, that being so, I submit that, unless indeed the whole world is going to disarm, you are not likely to get any further economies in that direction.
      The Chancellor of the Exchequer showed us very conclusively, in introducing his Economy Bill, that it is only upon a part of your expenditure that you can now really economise, and I believe that all the wild talk about great economies is holding out false hopes to the people and is a snare and a delusion. If we admit that further great economies are impossible, then surely we have only one alternative, and that is to produce more revenue and so to stimulate national production that we can the more easily bear the burden of our debt, and thereby eliminate what is now the greatest waste of all, material, moral, and physical, namely, our unemployment, the payment of unemployment benefit and the relief of the unemployed. I may be told that I should not offer such a platitude to this Committee, but what we in this House again and again fail to realise is that we are only going to cure unemployment by providing employment. How can we do that? While we wrangle over the mote of extravagance which is in the eye of His Majesty's Government, we are not considering the beam which is in the eye of every hon. Member in this House who is neglecting to do everything that he can
      1734
      to preserve national production, which, after all, is the fount of all national revenue and can alone restore our finances.
      I want the Committee to consider some very serious figures. Our adverse balance of trade in 1922 was £202,000,000—that is to say, of course, imports over exports; in 1924 the adverse balance had risen to £253,000,000, and in1925 it was £415,000,000. That means that in three years the balance of trade against us had more than doubled. Bankers and doctrinaires may find consolation in the fact that the difference is made up by invisible exports, although I think even they will agree that the invisible exports barely cover the difference at the present time; but to regard the situation as it is now with complacency seems to me to be absolutely fatal, because, if this process continues, it means—let us face the facts—the death knell of British production. There is no other description for it, and I say quite frankly, as an individual, that if I have to choose between the great wealth of a hundred city magnates and the welfare of a million British workers, I am on the side of the British workers every time. We could possibly exist in this country without our international moneychangers, but we could not exist without the wage fund which supports some nine-tenths of our whole population. In case it may be thought that anything I say is tainted, I would like to quote the remarks of a great Free Trader, Lord Inchcape, who, after telling us the past year has been the worst which shipping has ever experienced—and of those remarks I make a present to the Liberal party, who tell us that shipping and Free Trade are the heavenly twins and always go together—said:
      "The excess of imports over our exports is a grave menace to the country's solvency. The value of our invisible exports is greatly reduced, and adverse trade balances, if continued, must in the long run damage our national credit and, by raising prices, reduce the real value of wages."
      If the adverse balance of trade is admitted by the whole of this Committee, as it is by Lord Inchcape, to be a grave national menace, why not readjust that balance, which you can by simple Act of Parliament? I may be asked what evidence there is that national production is being sacrificed, and I am going to ask the Committee if they will listen to

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      one more brief set of figures. If you take the balance of trade in manufactures between this country and Europe, which before the War was very largely in our favour, you will find that in 1923 we sold to Europe £135,000,000 worth of manufactures and bought from Europe £149,000,000 worth, or an adverse balance of £14,000,000. In 1924 we sold to Europe £151,000,000 worth and bought from Europe £176,000,000, an adverse balance of £25,000,000, and if the figures for 1925, which unfortunately the President of the Board of Trade was unable to give me last week, were also issued, I am afraid you would find that the process has gone to an even greater extent in an adverse direction.
      Does the country, does even this Committee, realise the vital change which has taken place in regard to our exchange of manufactured goods with foreign countries since the War? The excess of imports over exports, which was with us before the War, was then due entirely to foodstuffs and raw materials, but to-day Europe is invading our home markets for manufactures and has completely reversed that process. All this change has taken place in the last few years, and I submit that up to the present nobody has noticed it, and I do not think it has even been mentioned here. The result is that Europe has now got a grip over our citadel of industry, while excluding our manufactures from their own markets, and, but for the increased export of manufactures to the preferential market of the British Empire, I think it must now be admitted by any business man that we should have been long before this in an utterly parlous position. I am going to ask the Committee to exercise their imagination and to suppose that there is a country in some part of the world called, let us say, Suicidia, where there are over 1,000,000 unemployed, who are being entirely maintained by the people of that country, who simultaneously import manufactured goods which that country could produce equally well itself, and which have given employment to over 1,000,000 foreigners. What would you say of that country? You would say that they were stark, staring mad!
      That is the position here. We, have over 1,000,000 unemployed, and all this
      1736
      nonsense which goes en in this House is deplorable. We have not got rid of unemployment. We have 300,000 more young people coming into industry every year with the natural increase of population, and we are not dealing with the problem, and while we have over 1,000,000 unemployed we are importing into this country manufactures which have given employment to 1,250,000 foreigners. That position is one which you cannot contemplate with any pleasure. If this process goes on, it seems to me that this House will be correctly called the grand inquest of the nation. The only thing is that it seems to me that the jury will be responsible for the corpse of British trade which lies before them. We have to act, and to act immediately. We have got to get to work in order to bring about the change desired, not only by Lord Inchcape, but, presume, by others.
      First, we have to get to work to restore the balance of trade, and we can do that simply by safeguarding such industries as are at present being undermined. If it be a national menace, why not act? Secondly, we could provide revenue, which we must have, as the Chancellor of the Exchequer has explained, and we could provide that revenue by levying a toll against importers of foreign manufactured goods into this country in the same way as they levy a toll on the goods we send them. Thirdly, we could economise by absorbing in industry a vast number of our unemployed, who at the present moment are costing us in unemployment relief, in benefits, and in charity at least £120,000,000 a year. That is the greatest visible economy which we could really effect. Fourthly, we could develop the resources of the Empire overseas by granting loans in order to push right ahead with the construction of railways, bridges, power stations, and new homesteads and cities wherever possible, thus providing a greater market for our manufactured goods and giving preference for preference to the only people in the world who are both willing and able to buy our goods from us.
      I submit that safeguarding alone can accomplish all these things, and that safeguarding alone can accomplish even one of them. Then I ask the question why, when this great party, of which I am so proud to be a member, with its enormous majority, is pledged up to the hilt to

      1737
      carry the policy of safeguarding, do we hesitate to go right ahead with a bold national policy, and why do we allow ourselves to be limited in our operations by this spectral White Paper, as if it were some sacrosanct thing, which it is not at all? The White Paper is no more a holy thing which you cannot alter, I submit, than when it emanated from the brains of one or two gentlemen in the Board of Trade, and we might quite easily make it more efficient and more businesslike if we chase to do so without violating any traditions. The historic tradition of the Conservative party, I believe, has always been to see to it that industry and agriculture in this country have a right to develop and to prosper, and if necessary we should nurse those industries against unfair competition and also preserve the right of our citizens to find employment and to enjoy the fruits of their labour. If cheap labour is the only hope of Free Traders and the professors of laisser faire, all that I can say is, with the evidence of the world now before us, heaven help their countrymen. But for the Conservative party, who believe neither in sweating nor in the products of sweating, there is a clear duty, and that is to preserve their birthright to the British people and to see that no worker and no industrialist in this country shall have his right to live filched from him, whether the invader be the armed hosts of a foreign Power or the purveyor of masses of manufactures which are calculated to destroy the livelihood of our people.
      May I ask what has been our policy since we raised such great hopes at the time of the General Election? I believe something like 30 industries have applied for safeguarding, and I think only five of them have received it. It is harder for an industry to pass through the inquisition of the White Paper than for the rich man to go anywhere at all. A dozen industries were turned down by the Board of Trade Committees on the ground that they were too small. The steel industry was turned down on the ground that it was too large. No industry should be deprived of the defence which we undertook in our election man date to give them against unfair competition. I submit that no industry is so small that it is unimportant, and that no industry is so large that it must not be preserved from destruction. Steel is the key of the whole industry. We are
      1738
      importing sufficient steel manufactures at me present moment not only to give employment to the whole of our out-of-work steelworkers, but also to all these we nave driven in despair to America during the last four or five years. Steel alone, as the Coal Commission has told us in the Report, can improve the home coal consumption, and thereby assist the coal industry of this country. I will read the exact words:
      "If the iron and steel trade were working up to its greatly increased capacity, its normal consumption would be 37,000,000 tons. In 1925 it was only 22,000,000 tons. It is only to the revival of these heavy industries that the coalmining industry can look for any substantial increase in the home demand for coal."
      So by turning down the steel industry from safeguarding, you also turn down the coal industry. If we had safeguarded the steel industry, and full capacity had been started a year ago, how many pits would we have stopped from closing down? Nothing was more cheerful to me than to hear that at least the little ewe lamb of the Chancellor of the Exchequer was growing fat and flourishing. He admitted he went with trepidation into these matters, but he is converted. He has seen the success, and I think the whole Committee realise there has been a great success. I do not think it is an exaggeration to say that, if you take the motor industry, the glove industry, and the musical instrument industry, you can practically say we have solved the question of unemployment there. I know there are still unemployment figures in the motor industry, but it must not be forgotten that an enormous number of workers have gone into that industry since June. You can practically say that in those industries you have cured the unemployment question so far as you can cure it, because you always had similar figures existing, even before the War, in those industries. All the gloomy prognostications of hon. Gentlemen who sit on the benches opposite, and who led astray the hon. Gentlemen below them, thinking they had a good party cry—and I commiserate with hon. Members who were led astray—all those prognostications have proved to be false. Every single prognostication from those benches with regard to the McKenna Duties, the Safeguarding Duties and the duties on silk

      1739
      have been falsified by the facts. They said it would destroy the export trade of artificial silk manufactures, whereas, in the first three months of this year it has gone up by 82 per cent., compared with the three months of last year, while the adverse trade balance, even with the small duties, has been certainly slightly redressed.
      I ask hon. Members representing industrial constituencies to consider the industries which are not safeguarded, and what has happened during the last two years. If you take the increase of imports of manufactures in 1925, compared with the imports of manufactures in 1923, you find the following astonishing facts in round figures: iron and steel imports of manufactures increased in those two years by £10,000,000; nonferrous metals by £12,500,000; earthenware and glass by £2,500,000; cotton manufactures by£1,000,000; woollen and worsted by £3,000,000; other textile industries, except silk, by £4,000,000: and apparel by £4,500,000. Only in silk manufactures is there a decrease visible. If you take these fifteen principal imports of manufactures in 1925, excluding silk, you will find that they increased in value over 1924 by £25,000,000 and over 1923 by £58,500,000. We hear complaint, day after day, from the Liberal benches about the distress in the industrial areas of this country. In two years our imports of these manufactures have increased by £58,500,000. In other words, the increase in these 15 classes of manufactures imported into this country in two years gave employment to some 200,000 foreigners, which employment might have been given to a similar number of workers in this country.
      I am perfectly ready to admit that by buying these goods abroad, purchasers in this country have saved something like £2,000,000. I will make a present of that to the representative of the Liberal party here. But what a saving, which has cost the British workers £30,000,000 in wages, and lost the Chancellor of the Exchequer £5,000,000 in Income Tax and Super-tax! That, of course, takes no account of the £60,000,000 approximately of extra trade circulating through all the industries, trades and professions of this country, had those goods been produced at home instead of being imported from
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      abroad. When it is understood that this small calculation I have given, merely for the sake of example, refers only to the increased imports of manufactures in two years, it will be realised how immense is the field of economy and increased production over our total manufactures, if we only grasp the nettle, and extend this policy to those industries which really need it. If you really want to reduce Income Tax by 2s. in the £, here is the means. If you really deal with this question seriously; if you really want to economise and cut down taxation, this is the one and only way to do it.. I remember a most admirable speech by the right hon. Member for Colne Valley (Mr. Snowden) at the time when the right hon. Member for Carnarvon Boroughs was introducing his great Budget in 1909–10, known as the "People's Budget." None of us knew at the time why it was so called, but afterwards we learnt that it was because all the people suffered by it. At any rate, the right hon. Member for Colne Valley pointed out at that time, that all taxation, whether Super-tax or Income Tax, finally falls upon the working classes of the country, and that is true. That is why I say a policy such as I have indicated would be a boon to all classes in this country.
      I am very grateful to the Committee for so kindly allowing me to offer these few words, and I want to say, in conclusion, that it seems to me we have come to an absolute impasse. Even those who are keener on this question than any other will now admit that you cannot effect any great economy. Feeble hands and over-cautious words will not solve these, great evils. The finger of fate is pointing a grave warning to us that 43,000,000 souls in this country are dependent upon our agriculture, the success of our factories, mills and our workshops, and there is no one who is not blind who does not now see that our great industries in this country, or a vast number of them, at any rate, are fighting for their very existence. I do hope and pray that all parties in this House, if they agree with me that you cannot really economise in any other direction with safety, or without great hardship, will resist further bickering over nonessentials, and will concentrate on this great national question, and have the

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      courage to act before our industrial hour has struck.
      Mr. HARRIS: We have just listened to a very eloquent and interesting speech, but it had very little reference to the Budget statement of the Chancellor of the Exchequer. I think in his half hour speech the hon. and gallant Gentleman the Member for Bournemouth (Sir H. Croft) hardly made any reference to it, except perhaps in a few words to the retention of one or two protective taxes. Most of his speech, if he will forgive me for saying so, was rather irrelevant to a debate on the Budget. There was an attack on the policy of the Liberal party in 1914 in reference to the defence of this country. All I can say is that in 1914 the country was so well organised for defence that we were able to hold our own against the most bitter foe, and that our Navy was so efficient that it was enabled to resist the highly organised Navy of Germany. I do not think it is necessary to say more than that the organisation of our defences suited the requirements of the nation at that time. All that has been pointed out by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) is that conditions have changed, that the German Navy is now et the bottom of the sea, that a new weapon has appeared in the form of the Air Force, and we have demanded that in future our national defence should be treated as a whole. I was very glad to hear the Chancellor of the Exchequer accept that policy in principle, and we understand there is to be a Debate at a Very early date on that question. I, and many on this side, contend that if you treat our national defence as one unit of defence, it will be possible to make very substantial economies. One of our main weapons of defence being the Air Force, it does seem necessary to review the expenditure of the Navy, and I understand that was the policy outlined by the Chancellor of the Exchequer when he referred to a policy of regarding our national defence as one.
      Of course, the hon. and gallant Member for Bournemouth could not resist his one remedy. All our ills would disappear; we should all be employed, all wealthy, and Income Tax would be reduced by 2s., if we would only go in for a full-fledged policy of Tariff Reform. He has
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      not been satisfied with the inquisition into many industries under the Safeguarding of Industries. There has been Committee after Committee, and we are now to understand that these Committees have not been efficient or satisfactory, and that they have been partial in their inquiries.
      Sir H. CROFT: I never said any such thing. I said that, under the terms of the White Paper, it is an inquisition by which it is almost impossible for any industry to get aid.
      Mr. HARRIS: All I can say is that the hon. and gallant Gentleman pointed out that there have been 30 inquiries, and only five cases of success. I think it proves that, although many of these Committees were not weighted against Free Trade, they were satisfied, after inquiry, that it was not in the interests of our trade that there should be tariffs put on. I do not think it is unreasonable to say that the hon. and gallant Gentleman waxed eloquent about the great advantages of a large extension of tariffs, but quite ignored the facts as to Germany and France, where they have the advantages of full-fledged protection. In Germany, instead of trade improving as they got further away from the War period, the condition of employment grew steadily worse, and it is common knowledge that at present there are 1,900,000 people out of work in that country. France, in spite of the advantages of a general tariff to raise revenue, and highly organised machinery for the purpose, shows a deficit year after year; year after year she is unable to balance her Budget, and has not been able to pay her debts either to this country or America. If it be France that he envies, he has not got a very good example to follow, and we may be well content that, in spite of all the vicissitudes of trade and changes of Government, we have substantially retained that Free Trade policy which has enabled us to weather the storm, and to set Europe an example of financial stability and sound finance. Far from condemning the Chancellor for his adherence, at any rate in principle, to Free Trade, we ought to be thankful that, in spite of the company he has been keeping, and the pressure from hon. Members behind him, he still, apparently, retains intact his adherence to the principles of Free Trade. I congratulate him, even though

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      he has engaged in various tariff experiments, in realising that they by no means justify a general extension of the policy of tariffs.
      With reference to the Silk Duty, I am quite unrepentant, and I maintain that my expectations when it was imposed have been justified by experience. There were large imports of silk just before the imposition of the new duties, and the full evil effect of them has not been felt in our export trade. Large firms like Courtaulds have been able to carry on their industry from old stocks of raw material, and it has not been necessary for them to claim drawback; but in trade generally there has been a steady interference with many of our great exporting industries which depend, either directly or indirectly, upon the use of silk. During the first few weeks of the year there were no fewer than 18,000 claims for drawback from London alone. Every one of those claims has meant delay and extra trouble for many of our large export industries, and has helped to hinder trade. Forms have to be filled up, and money has to be found, and I say, with some knowledge, that some manufacturers have abandoned the export trade entirely because of the trouble caused by these new Regulations, the difficulty of getting the drawback, and the large amount of clerical labour involved. I am quite ready to give information to the right hon. Gentleman, but I am talking from personal knowledge.
      Many of our great towns are suffering from this needless interference with industry. London, which is still the greatest town in the world, has thriven owing to its having been a free port; it is the largest shipping centre in the world. London is now losing a great many of its staple trades; they have been diverted to other ports, such as Antwerp and Hamburg, because of the difficulties created by these new taxes—the clerical labour involved, the money which has to be paid in order to get the goods into the country, and the difficulty of getting that money refunded. A great deal of trade which used to go through London, which used to be handled by our English merchants, packers and shipping agents, has now been diverted to other ports, and is permanently lost; at any rate, it will be very difficult to recover
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      it. Lines that used to come to London are now going direct from Hamburg, and London has suffered considerably by this new experiment.
      I am not going to be diverted by answering in detail the hon. and gallant Member for Bournemouth, who has not even had the courtesy to wait to listen to my reply, but I am glad to say that the Chancellor of the Exchequer has not been tempted to extend his experiments in Protection, save for one little instance, the case of wrapping paper. We managed to prevent its going through at the end of last year by keeping him up all night, and in that way we saved the industry of this country from a tax which is not going to help general industry. Wrapping paper is an article used by hundreds of small industries—by the confectionery trade, for instance, and by almost every other trade. Everybody knows there has been a large extension of exports in the form of parcels through the Post Office, and now, at a time of trade depression, and when the export trade is finding difficulty in holding its own, the Chancellor of the Exchequer comes along and puts on a new tax—a tax, actually, on the export of goods, on the packing of goods. Everybody knows it will be impossible to make the greater part of this wrapping paper in this country. The greater part of it comes from Sweden, where the raw material is produced and where they have the advantage of water power; and many of the users, and even the makers, of paper acknowledge that even with the aid of a protective tax the greater part of our wrapping paper will still have to be imported, and on that import 16' per cent. will be paid by the industry, adding to the cost of production of every article in which wrapping paper is used.
      Mr. BASIL PETO: The hon. Gentleman is talking of a tax of 16⅔ per cent. on the export trade of this country. Is he aware that the Committee found that the average imposition upon these trades of which he is speaking will be ⅙th of 1 per cent.?
      Mr. HARRIS: The users of wrapping paper are the people concerned. After all, we do not import the paper as an ornament, but for use. It is a very significant thing that the Chancellor of the Exchequer very carefully avoids putting

      1745
      a tax on the paper used by newspapers. The newspapers would not take that lying down. Instead, he picked out, or his Committee picked out, for protection an article used by every industry in the country, or by every industry that does an export trade. Every parcel put up is taxed, every package to be shipped is taxed, and every person who has to use paper in the course of his business is going to find that it will be increased in cost. It may be a small tax, but it is wrong in principle, and I cannot let this occasion go by without making my protest, and telling the Chancellor of the Exchequer that we on the Liberal benches will do our best to resist it and to make the passage of this new tax as long and as difficult as possible.
      Mr. MACOUISTEN: I am not going into the controversy over the taxation of wrapping paper, though I do wish the Chancellor of the Exchequer had seen fit to put a little tax on newspapers, because it would be a very suitable means of raising revenue. The newspapers all over the country have doubled their prices, and yet we bear from them great demands for economy and cries that everybody is overcharging, except themselves. It is owing to our currency that they have had this means of doubling their prices. The costs are not anything like double, and I think it would have been a very suitable proceeding if the Chancellor of the Exchequer had got some of their inflated profits by the taxation of newsprint. Cabinet Ministers are always afraid of newspapers. It is a great mistake, because they have very little influence on public opinion, no matter how much noise they make, as most people think for themselves. That fact was established in 1906, when the whole Press was in favour of a certain policy and the country swung the other way. I ask Cabinet Ministers not to pay too much attention to what appears in the Press, because there are a vast number of people who do not read it, and, even those who do, form their own opinions.
      I was disappointed to hear that there is to be a raid on the Road Fund. The Road Fund has not all been spent as it should have been. The Minister of Transport went down and offered to build a huge tunnel under the Mersey out of the
      1746
      Road Fund, but I do not think the Government have any right to spend the money of motorists on such an undertaking, which is a matter for municipal enterprise. We could show the Chancellor of the Exchequer and the Minister of Transport plenty of places where all that is needed for development is good roads. We know places in Scotland where there is great need for building good roads, because the roads have been absolutely destroyed by motorists from over the Border. It is a great pity that we cannot get larger contributions towards those roads. I could show him one part of Scotland where £5,000,000 or £6,000,000 could be spent to the great benefit of the community—not only the residents in that particular part, but tens of thousands of motorists and holiday makers who visit Scotland.
      With regard to the betting tax, I do not think the Chancellor of the Exchequer is going the best way about it in the line he has taken. There is a great deal to he said in support of the argument of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), because one can never understand why credit betting should be legal and cash betting illegal. I do not know anything about the turf or betting. I regard betting entirely as a vice, but, still, it is the people's own business if they choose to indulge in it; and it strikes me that a man who pays cash on the nail and knows exactly what he is likely to spend is in a better position and less likely to get into difficulties—it is a less vicious transaction—than the man who is running an account. Some weeks ago I made a suggestion in a question to the Chancellor of the Exchequer, which I am sorry he has not adopted. I believe that betting is a vice, and I do not believe it can be really seriously interfered with by legislation, because so many people engage in it. I have been informed by leading coal-masters and ironmasters that for one working man's home destroyed by drink 10 are destroyed by betting. There is no greater vice in this country than the vice of betting. I remember a workingman, who was making a big wage, and I asked him why he lived in such a small house, because he was living in circumstances which were not equal to his earnings. He told me, "I have lost my money all my life through backing slow

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      horses." There is no doubt about the spread of that vice among children and among women, and it is very largely fostered by the Press.
      7.0 P.M.
      The Press is simply full of betting news. There are six or seven editions of papers dealing with betting—miserable little half sheets for which they charge the full price of morning and evening newspapers. We cannot really interfere with indulgence in a vice, but we can object to people who foster indulgence in it. It is like the vice of incontinence. We cannot interfere with people indulging in that vice, but we can object to those who keep disorderly houses; and I object to newspapers putting in betting news, and I think it should be forbidden, because it is a way of fostering betting. If there were a tax of 50 per cent. of the ordinary price of any newspaper fostering betting and which publishes the odds we should get a far greater revenue than we shall get out of this particular tax. I was told by one newspaper editor that if I proposed to introduce a, Bill to forbid the publication of betting news, it would if carried kill 75 per cent. of the Press, to which I replied that that would be a very good thing because at least 75 per cent. of it did very little good in the matter of educating the masses. If you could get such a tax imposed, it would tend to lessen the vice of betting. Those who wished to go to a race course could engage in betting if they liked—there would be no objection to that—but there are many people who do not know one end of a horse from another and who engage in the vice for the sole purpose of getting money for nothing. Of course, I admit that betting is one of the primitive instincts in man, but it is a vice, and I do not believe we should allow newspaper proprietors to become millionaires by pandering to that vice.
      I come to another tax. I was interested to hear the receipts from the Spirit Duty had gone down. The tax is too high obviously. I think there has been a state of affairs which has inflicted great hardships on the working classes, for working men are entitled to have a glass of spirits if they want it, and you have no business by class legislation to make it impossible by means of taxation. I have heard the Chancellor
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      say that high taxation was a, much better thing for temperance than the American prohibition, but I say he has no right to carry out prohibition by taxation and to make it impossible for the working men or the people of small means to buy a bottle of spirits or whisky. That is a wrongful use of taxation. The consumption has gone down from 35,000,000 gallons in 1909 to 13,000,000 gallons, and that represents a great deal of dissatisfaction and discontent on the part of those who would otherwise have used a certain amount. I am not talking of, and I do not believe in, the regulation of the habits of the community in accordance with the need for dealing with that small and miserable percentage who overindulge, but there is a vast number of working people who like refreshment of that kind, and, if you are going to keep the tax up to the preposterous and ridiculous figure of 72s. 6d. per gallon, you will restrict their liberty. The duty would have been reduced in 1922, but the distillers themselves did not want the tax reduced, or at least gave no encouragement to it because they were doing such a very fine export trade. They sent it abroad duty free, and got a better price. There is also this difficulty about this particular tax, that the higher the tax, the bigger the profit the manufacturers of it make at home. They get a profit on the whole turnover duty included.
      I can recollect that before the War when beer was very cheap, say 2d. to 2½d. a pint, no brewery companies paid big dividends, but as soon as they raised the tax to the high figure they made huge profits, because they make profits from the tax as well as from the beer. Therefore, in any attempt to get the Whisky Duty or the Beer Duty reduced you have very small support, because the trade themselves are not interested, for they do much better under high taxes. But I am thinking of the ordinary man of small means and the working man in the street who has got to pay so much for his beer and his whisky and tobacco. I remember a man saying to me. "Do what you can to get the taxes on beer, whisky and tobacco reduced, because they are the only pleasures we working people have." I said that if you took all the amusements of the wealthy, motoring, hunting, shooting or golfing, and took away the 19th hole and the little refreshment at the end

      1749
      of it, they also would have very little enjoyment. It is not right to keep taxes so high and reduce the contentment of the people.
      I recollect that when the taxes on champagne and cigars rose to a high figure, the Chancellor of the Exchequer of the day came forward the following year and said the tax was not fulfilling its object because it was killing the trade. The same thing is happening here. This particular industry, which is one of the main backbones of the Highlands, is being killed by high taxation, and it has a bad effect on agriculture. Every farmer who grows an acre of barley, which was a very favourite crop in Aberdeenshire and other parts of Scotland, is taxed £350 on his acre. That is most unfair and wrong. There is no use talking about the cost of living being down for the working classes so long as the beer, whisky, and tobacco taxes are all at their present high rates. The cost of existence may be better, but the cost of living is not, because 99 per cent. of the working classes like to have some of these commodities. I submit that if these duties had been reduced to a reasonable figure you would probably never have had to indulge in a mining subsidy. It would have put down an immense amount of discontent. People do not like to get up and say these things on a public platform. I do not know anybody else who says these things except myself, and I say them because I believe them, and because I have heard them in private conversation with working men, who themselves would not go on a platform and have the frankness to say these things. I know how very bitterly they feel about them. It is class legislation, and it is a real hardship that these taxes should he kept at their present prohibitive figure on these three commodities.
      Mr. THURTLE: I have seldom heard a more inconsistent speech than the one we have just listened to. The hon. and learned Member for Argyllshire (Mr. Macquisten) has spent some time in claiming that the Spirit Duty works harshly on the working classes and fulminating against any kind of class legislation of that sort. That may be all very well in itself, but only a single sentence before that he dealt with the
      1750
      betting question and sought to establish the fact that the working men ought not to be allowed to participate in betting. He actually went so far as to suggest that details in connection with betting and information about the horses who were going to run should be prohibited from being published in the newspapers. I suggest that that suggestion is purely on a class basis. If he is going to say that no kind of gambling should be permitted in this country, he ought to go a great deal further than that. I would direct his attention, not only to the columns of newspapers which give the results of races and the starting prices, but also those columns which give the prices on the Stock Exchange and the various things dealt with there. I invite him to consider that.
      Mr. MACQUISTEN: These transactions on the Stock Exchange are in connection with definite commodities which are necessary, but a betting transaction is dealing with nothing at all.
      Mr. THURTLE: The hon. and learned Gentleman must think I know very little indeed about the Stock Exchange if he thinks I am going to accept that statement as being valid. It is a fact that a very large number of transactions on the Stock Exchange takes place within one account. A man buys to-day and sells in two or three days' time, and never really holds the stocks or shares he buys. Not only is that so in the case of these transactions, but it applies to things like options, which are a deliberate form of gambling, and there is a large amount of business of that sort going on.
      Mr. REMER: May I point out that if there are these transactions on the Stock Exchange, there is a Stamp Duty put on them.
      Mr. THURTLE: Exactly; but it is certainly true that this is a kind of gambling. The hon. and learned Gentleman went on to deal with a kind of gambling which I submit is essentially the gambling of the poor, and I am only pointing out his inconsistency in telling us about the Whisky Duty, and then contending that there should be no class distinction of this sort. I submit to him, so far as this betting as a whole is concerned, that the proposal he suggested

      1751
      would certainly affect the poor very much more than the rich.
      But I have not finished my illustration as to options. Anyone who cares to read up the "Financial Times" or other financial papers will find that there are wheat options nod cotton options, which are of a gambling character, and, if the hon. and learned Gentleman is going to be consistent, he will not only say that particulars about racehorses and their starting prices should not be published, but he will say that all these prices which concern the men who gamble on the Stock Exchange and on the various commodity exchanges ought also not to be published.
      I did not rise, however, to deal with the inconsistency of the hon. and learned Gentleman. I rose to make a few comments on the speech of the Chancellor of the Exchequer. I venture to say that his speech has been a most disappointing one. It is true it was, as we might have expected, a very fine piece of oratorical work, for the Chancellor of the Exchequer is a master of the art of exposition, and he exercised that art to the full this afternoon, so that we were able to listen to him for more than two hours and not get bored. I fully appreciate that side of the speech, but when one comes to the matter in the speech, I submit, so far as the great mass of the people are concerned, the poor working-class people, that the speech is bound to be a great disappointment. You can read through the whole speech, and there is not a single proposal in it which tends to ameliorate the conditions of the working classes. As a matter of fact, I do not know any proposal which affects the working class at all, except the one which has been discussed by the hon. and learned Gentleman, namely, the Betting Tax. It may be that certain working men or women who go down to Epsom on Derby Day and venture to put on their shilling or two shillings on the horses may be affected by this proposal to put a tax on betting at racecourses, but that is the only proposal in the Budget which is even remotely connected with the interests of the great masses of the people. I submit that in this time, especially when the workers are in a condition of destitution and poverty probably unparalleled for a generation, we have a right to expect that the Chan-
      1752
      cellor of the Exchequer, when coming along with his Budget proposals, will do something to ameliorate their conditions.
      I am suspicious of the right hon. Gentleman, because I know he is an astute politician, and, as I listened to him this afternoon, I could not help feeling he had a plan in his mind. He was not thinking of this year or next year, but probably the year after that, and he was endeavouring so to order and arrange the finances of this country that possibly in two years' time he would have a very large surplus available, and would use that surplus to distribute largesse of one kind or another to various sections of the electorate with a view to reaping electoral advantage therefrom. It may be that I am misjudging him, but I think he is sufficiently astute to have thought of that aspect of the situation. I want to submit that while that may be all very well, looked at from the standpoint of a party politician, it is not playing the game by the great mass of the people of this country whose wants are immediate and urgent and ought to be attended to, if it is within the power of the Chancellor of the Exchequer. I think I am not laying down any new doctrine when I say that the Budget is the one great Constitutional instrument whereby the great inequalities of wealth in this country may be re-arranged, whereby the wealth which has accumulated in a comparatively small number of hands may be—some of it at any rate—distributed among the great mass of the people. The Chancellor has not used his Budget for that purpose, and there is no reason why he should not have done so. He told us himself that the yield on the Super-tax had increased in the past year. That, surely, is an indication that the rich people are still in the position to pay a great deal more taxation than they are paying at the present time. A few months ago the Chancellor of the Exchequer went to the Oyster Feast at Colchester, where he touched upon the question of whether the wealth of the country was increasing or not. He said:
      "On the question whether we are living beyond our means, he was not at all satisfied that we were living on our capital; on the contrary, the advice he had received was that, although we were not getting richer as rapidly as we were before the War, we were nevertheless still getting richer and not poorer as a nation."

      1753
      That statement must have meant that the comparatively wealthy section in this country are getting richer, because he cannot pretend that the great mass of the poor people are getting richer. Any one in touch with their condition knows that not for a generation have they been in such depths of poverty. Therefore, I say that now would have been the opportune time for him to do something by way of putting fresh burdens of taxes on those who are able to bear them for the benefit of those who are in need of much greater assistance.
      I see that the present Death Duties on fortunes of £175,000 are 23 per cent.; £400,000, 26 per cent.; £800,000, 29 per cent. If the Chancellor of the Exchequer seriously needs money for the purpose of dealing with those social evils which afflict the country, he has an excellent source of revenue in a further steepening of the Death Duties. Permit me to inform the Committee of what is happening in Russia. I know that Russia is not considered an example which this country ought to follow, and I agree that in many respects that is perfectly true jut I submit that in the matter of Death Duties Russia has set an example to this country. In Russia a. fortune of £10,000 has a death duty levied upon it of £1,967, roughly 20 per cent.; a fortune of £20,000 roughly 27 per cent.. In the case even of the £10,000 fortune, the fortunate legatee has still £8,000 left to go on with, and I am sure that no one who has that sum is in immediate danger of starvation. On a fortune of £53,000 there is no less than 48 per cent. death duty levied. They act on this principle in Russia, that where people have accumulated much more wealth than is necessary for them, and where the State stands in need of income for urgent social work, the State is entitled to take a very large measure of that wealth and utilise it for the purposes of the nation as a whole. I submit that we ought to act on the same principle in this country. In the King's Speech, a few months ago, it was stated on behalf of the Government, in connection with the mines dispute, "that the interests of the nation as a whole are paramount." We believe that we have continually to emphasise that fact, that the interests of the country override and are superior to the interests of any section of the people. That means that if there are great crying social evils, and if to remedy them it is
      1754
      necessary to take from the people who have large quantities of superfluous wealth, then there is every reason why we should take that wealth, and there is no good Constitutional reason why we should not take it.
      I am very much disappointed that the Chancellor of the Exchequer has not indicated that he is going to make very large savings in the expenditure on the Fighting Forces. I thought the House was beginning to agree that a very considerable part of this expenditure was wasteful and unnecessary. We arc not obtaining anything like security by this means, but we are doing something which most of the experts agree is unnecessary in maintaining a large Navy and. the Army at its present size. I am not asking you to take my views as an extremist who believes that we should economise on armaments altogether; but, even on the view of the experts who have thought this matter out, there could be very considerable economies effected on the Fighting Services.
      The other expenditure which the Chancellor of the Exchequer should have had the courage to deal with is interest on internal loans. We are even now, although it has been reduced, spending over £270,000,000 a year on interest on the internal loan. It seems to me that this country ought not to be expected to carry that burden which it is staggering under from year to year. The Chancellor of the Exchequer ought to make proposals to reduce that burden to a very considerable extent. He said something about our not having to interfere with the lawful obligations of the State. That is all very well, but there are times when it suits his purpose to interfere with the lawful obligations of the State. We have spent a great deal of time discussing the Economy Bill, which, in the opinion of those on this side of the House, does interfere with the lawful obligations of the State. In this much bigger matter of the amount of interest we are paying on the internal debt, it is high time the Chancellor of the Exchequer reconsidered the whole position and did something to cut down drastically this heavy burden on the people of the country. As I said at the beginning, in my view, and I believe it is the view of the whole Labour party, this Budget is most disappointing.

      1755
      The people look for relief and the Chancellor of the Exchequer has given them nothing. "The hungry sheep look up, and they are not fed." I believe the time will come when the unfed sheep will see that they take their revenge on this Chancellor of the Exchequer and this Tory Government.
      Mr. BASIL PETO: I cannot follow the hon. Member for Shoreditch (Mr. Thurtle) through his whole speech, but I have been rather surprised that anyone who has listened to the Chancellor of the Exchequer's speech could get up and say that, while there is to be a tax on the working man's shilling on his bet at Epsom, there is not a word in the speech which gives relief to the working-classes. The Chancellor of the Exchequer mentioned that he was budgeting for £5,750,000 to pay for widows' pensions and for £1,250,000 for increase in the old age pensions. In these two items alone you have £7,000,000 appropriated in the Budget for the people, and I am convinced that this Budget will go a long way, although not nearly so far as I would like, to find increased employment in many trades in this country. The hon. Member said that a much more drastic cut ought to have been made in our naval and military defences. Perhaps he has not looked at the Blue Paper. I know he is in favour of abolishing the Army and Navy altogether, but, at any rate, we are getting on. We are not going so far as the hon. Member would like, but we do show a diminution of expenditure in the coining year of £2,000,000 on the Army and £2,400,000 on the Navy.
      I want myself to make two or three remarks about the Chancellor of the Exchequer's speech. I think the part that people will find to be the soundest and most courageous is that where he proposes to deal with the £14,000,000 surplus which he showed—the restoration, as I like to consider it, of money borrowed from the Sinking Fund established by the Prime Minister some years ago. I believe it will be an enormous satisfaction to the country as a whole to feel that in the great crisis which we had to meet last August, with the enormous expenditure which it involved—that even that has all been dealt with and met out of current
      1756
      expenditure. I am also extremely pleased with the Chancellor of the Exchequer's statement that Parliament will be asked in the Finance Bill to deal with the question, which affects a variety of safeguarding proposals, of the rapid collection of the Customs Duties from the foreigner who sends goods to this country. With regard to the Paper Duty, which has now been announced, I am delighted to see that it will be put in force on the 1st May. That particular duty has been hanging about ever since last December, and the foreigner has had plenty of time, but in future, at any rate, we shall not give him four or five months in which to compete and practically kill the trade which we are proposing to protect.
      Another matter on which I think the Chancellor of the Exchequer deserves most hearty congratulations from every quarter of the House is what I call the stabilising of Imperial Preference. I think that that is a matter which has a direct bearing on the life and welfare of the poorer people of this country, because I, at any rate, am convinced that the future of the trade of this country lies very largely in the development of our Empire trade. Therefore, considering an utterance which the Chancellor of the Exchequer once made, before he had been converted to the true faith—an utterance which we all remember, and would like to forget—about slamming and bolting the doors, it is extremely satisfactory to find him announcing to-day that Imperial Preference is to be stabilised for several years to come.
      With regard to the Safeguarding of Industries proposals, it is satisfactory to note that the Report of the Committee of the Board of Trade which has been considering Part I of the Safeguarding of Industries Act is going to be put into operation. Although it will not produce a very great deal of revenue, it will, at any rate continue to provide some modest amount of revenue for another l0 years, and, what is much more important, it will give those industries—quite small industries, most of them, but vital key industries—time to establish themselves thoroughly in this country, and, I believe, in many cases, to develop into industries employing enormously more hands than they employ at present. The Chancellor of the Exchequer told us

      1757
      about the motor trade and the Silk Duties, and the effect on the silk trade, noting that employment had increased while the prices of those articles had diminished. He also told us that, as we find from this Report as well, imports have diminished and exports have enormously increased. Last Tuesday we had, in answer to questions in this House, some very remarkable figures, and none of them were more remarkable than those relating to artificial silk exports, the increase for the quarter just ended being no less than 82.9 per cent. as compared with the corresponding quarter of the year before. Although that is a thriving industry, the Chancellor of the Exchequer admitted in his speech that it has recently experienced rather a set-back, and not an increase, in the demand for these goods, so that that increase in exports is the more remarkable.
      Dealing with the question of employment, he gave, however, a word of caution. He mentioned that the motor trade, of course, was a very rapidly expanding trade anyhow. I would like to give him just two little facts regarding another industry which has been safeguarded, and which is not a rapidly expanding industry at all. I refer to the fabric glove industry, one of the minor industries of this country, which has been saved from absolute destruction by the safeguarding enacted last year. I should like to give some first-hand information from the chairman of one of the principal fabric glove factories. I inquired of him two or three dais ago what was the state of employment in the towns in which I and my hen. Friend the Member for South Molten (Mr. Drewe) are mainly interested, namely, Barnstaple and Torrington. I will only give one or two short extracts from his letter. He says:
      "We had a meeting of the Torrington Unemployment Committee (of which I am a member) yesterday, and there are to-day practically no experienced fabric glove workers on the Labour Exchange in Torrington; there are just a few girls off part time, simply because the special depart-meet in which they work happens not to he rushed."
      He goes on to say:
      "My personal opinion about the Safeguarding Tax is that it has absolutely saved our trade from going to the dogs."
      This is the more remarkable, as so great was the clumping before this duty
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      was imposed that it was not expected that any appreciable results would be seen for over a year. I am glad, therefore, to be able to give him this first-hand information. I should like to give one more quotation from a gentleman who owns or is interested in all the fabric glove factories in Barnstaple. He says that they are working full time in every case, and that there is no unemployment—in fact, that he could take on a further thirty skilled hands or so if they were available.
      Turning to the Report of the Committee on Part I of the Safeguarding of Industries Act, which deals, not with trades like the motor trade, with an enormous and expanding demand, but with very small industries that were either non-existent or practically extinct in this country during and immediately after the War, and which have all had to go through extremely hard times, owing to the enormous inrush of foreign goods since the prohibition was taken off after the War, I will give only one short example, under the heading "Ignition Magnetos and Permanent Magnets." In almost every one of these small industries, however, the Committee find exactly the same. They say in paragraph 92 of their Report:
      "Prices have fallen as the output has increased, and as internal competition has developed among the British makers. The average price of the total sales effected in the year 1925 is hardly half the corresponding figure in 1921."
      Again, in paragraph 93 they say:
      "The number of employés in the industry, so far as the firms in question are concerned, has almost doubled since 1921, and is now, we understand, in excess of 4,500."
      I hope the Chancellor of the Exchequer will read that 'Report very carefully. Be is almost converted; he has returned to the fold, and I am convinced that, if he will just read that Report, he will say he will do away with even the proviso that is in his mind about expanding industries because he will find that the rule is absolutely the opposite to what we were always told. We were always told by every Free Trade orator, until we got pretty tired of it, that it would not increase employment, that it certainly would not increase, but would rather tend to kill, exports, and that you could not get both revenue and employment any how. Nevertheless, we find that, in

      1759
      every single industry which this Committee has been inquiring into, there is increased employment, while the Chancellor of the Exchequer has told us to-day that there has also been a very appreciable and gratifying addition to his revenue. I do not want to detain the Committee any further, because it is not usual on these occasions for the Committee to sit very long. I never could make out why that is so, but it is one of the excellent traditions of the House that 1 should be very sorry to see broken.
      Mr. SAKLATVALA: As far as Budgets under the capitalist system go, I would readily grant that the Chancellor of the Exchequer has handled his task just as adroitly and cleverly as any other Chancellor of the Exchequer could. I agree with the remarks that were read out from the benches opposite, from a speech delivered about 15 years ago by the ex-Chancellor of the Exchequer in the Labour Government, to the effect that, whatever may be the tax paid, whether it be direct or whether it be indirect—first going from the worker's production to the master's pocket., and then going out of his pocket—it is in reality paid by the producer of the wealth, by the worker. That being so, I do not see that any very useful purpose is served by a mere wrangle as to how the money is taken ultimately from the production produced by the workers. Whether in one shape or another, it would make very little difference, except for the purpose of newspaper articles. I believe that the nation has now a right, quite seriously, to expect that there is an anti-capitalist party in this country, and that they should put forward a scheme of what an anti-capitalist Budget ought to have been. There is also an anti-militarist party in the country—a large one, representative of large sections of working-class opinion; and I think we have now a right to put, in Opposition, not merely criticism of raising Sugar Duties, or lowering Tea Duties, and so on, but the larger fundamental principles with regard to the national Budget.
      We have been told from the Conservative benches that the one great fundamental difference within the capitalist system is on the question of Tariff Reform, and we are asked to believe that, if a vigorous and systematic
      1760
      tariff policy is followed, all will be well. I doubt it, however, very much. I have never heard an explanation, which it is very necessary that we should have, as to how the mere imposition of a tariff is going to prevent countries of cheaper production from selling in the outside markets belonging to Great Britain. I entirely fail to see how it is going to do so. You are losing your coal trade to-day. How can you recover your exports of coal by imposing a 50 per cent. duty on any coal that people may want to send into this country? It is absurd. You are losing your export trade in iron and steel, as against Czechoslovakia, or Belgium, or local production in India, and so on. How can you remedy that by imposing a duty on iron and steel that people may want to send into this country? It is not a question of what comes into this country; it is a question of what is sold in foreign countries by countries producing the same goods more cheaply than Great Britain, and I do not see how any kind of tariff or protective system is going to remedy that evil.
      To my mind, the real solution lies, not in tariff duties, but in encouraging the international working-class movement, which aims at putting an end entirely to this cheaper production in one country than another. However much our friends are afraid of it at the present moment, the ultimate solution lies in all human beings who are engaged in the production of goods in any part of the world being given the same rights of life, and the same economic value in return for the goods they produce. It is a far better solution that all the nations should possess their rightful quota of trade, rather than that one nation should try to undercut another, or to starve some nations by destroying their trade in order to recover its own. Then people are puzzled as to how to reduce expenses on armaments. You keep on groping in the dark. I submit that this country, more than any other country in Europe, should honestly and sincerely take up the question of what should be done to remedy the great evil that in other countries the cost of labour is cheaper than it is here, and that it is cheaper here than in America. Everywhere the cost of production should be equalised; everywhere men and women engaged in production should be given the best available type

      1761
      of life, and, as prices all over the world assume uniformity, you will soon see that you have got out of your trouble of somebody stealing somebody else's markets and so on.
      The other note that strikes me on the same line of argument is the suggestion about subsidies for the development of industries in the Colonies. I think this country has now got sufficient experience. It looks for the moment very -helpful to this country to grant large loans or subsidies to Australia, Canada, India, or any other country, provided that those loans are used as they were used 30 or 40 years ago in laying down railways, in constructing roads, in doing something which not only gave you immediate engineering trade, but which added also to your facilities in selling your wares in the future. But when new British investment abroad has assumed quite another shape and is used for erecting cotton and jute mills and iron and steel and engineering works in competition with the works here, the more you spend your money in that way the more you make it necessary to create a source of permanent and ever growing unemployment in this country. It would be quite all right as far as the Dominions are concerned, but when you take countries like Malacca, Palestine, Egypt and so on, and when they will be cultivated along this line, with large dividends and very low labour bills, it is not merely the loss of manufacture directly for the time being, but you even lose that business and that work which it was once necessary, to send in return for their products to this country, because British investments earning dividends in these outside countries are now obtaining raw materials from those outside counties without exchanging manufactured goods. Therefore, Great Britain of all countries should give up her fight for international Socialism and international equalisation of working class conditions and so on. That is an essential safeguard for the future for this country, if not for any other.
      With regard to armaments and the National Debt, I again submit that the nation has the right now to want to know what the anti-capitalist and Socialist suggestions are for these purposes. It is no use merely criticising it and saying, "Lower the interest," and do this and
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      that. I take it that complete disarmament is not coming to this, or to any other country in the world, by people sitting round a conference entertaining some enmities and ambitions and combative desires against one another and talking hypocritically about reducing ships and guns, and so on, and, though I met with some derisive response last time, I again say that something far more drastic, requires to be done, and it will not be done by all nations combined, but by one, two or three bolder nations taking the lead and showing their faith in international brotherhood rather than in international armaments. I again put it to the Committee that you could within the measurable time of a few months substantially do away with your large Naval and Air Force expenses. However absurd it may appear to you to-day, I do not see why you cannot become true and sincere friends with the people of France, and why you cannot say to France that, as far as the air area is concerned, Great Britain and France are practically one country.
      If the people of France and Great Britain are sincere in their advertised professions that we are friends, that we are not going to fight one another, that we are not going to bombard each other's country from the air, I do not see why Great Britain and France, without waiting for any disarmament conference, cannot enter into a sort of partnership, maintaining only one Air Force for strictly defensive purposes, and give up their enterprise in bombing the Arabs, Moroccans, and so on. If you can see your way to make your armaments for bona fide defensive purposes, and if you can enter into partnership, each country curtailing its expense by 40 or 50 per cent. and maintaining one united Air Force, with personnel in each aircraft composed half of Frenchmen and half of Englishmen as an absolute guarantee that there can never be an air war between France and Britain, it will be a concrete example set of a sure way of real disarmament and a. real cessation of settling international quarrels by fighting, and so on. A similar step could be taken, without waiting for a disarmament conference, between Great Britain, Japan and America with regard to one combined naval organisation held in partnership by the three countries, first as a guarantee that these three foremost

      1763
      naval Powers make it practically impossible to wage war against each other, and, secondly, at a very much lighter burden they can hold a naval power sufficient for bona fide defensive purposes against any attack, and they must all surrender their ambitions of attacking other people's countries and maintaining armaments under the wrong pretence of requiring them for defence.
      With regard to the National Debt, it again seems curious that the Chancellor of the Exchequer should seriously set about collecting £270,000,000 just for the purpose of giving it back to certain individuals in that nation—merely be put to the expenditure of collecting them and distributing them and just giving them back. The £270,000,000 annual charge on the internal debt is to be collected for the specific purpose of giving it back to the British people. Surely there must be some sensible way out of it without indulging in phraseology and slogans about confiscation, and this and that. There must be some common-sense plan. It is all very well to say this nation is the most highly taxed nation because it wants to tax itself and returns 7s. in the £ to some citizens who possess National Debt stock. I have suggested that something very drastic has to be done. As long as you entertain the pride in your heart that "that will be called confiscation," "it will set an example," "it cannot be done," "it should not be done," very well then. You will not proceed along that line and you will have a Budget which will, with armament charges and National Debt charges, swallow up about 60 per cent. of your revenue. What is the good of arguing and holding Debates? There is no meaning in it. The whole burden has got to be removed, and I do not see that the idea of confiscation comes in. It is not a Chinaman coming and saying, "I am taking away your wealth," or some outside Russian saying. "Give me these £270,000,000 every year.' That is not the idea: The whole idea is a simple one, that the nation pretends that she is in debt to herself, and the. Chancellor of the Exchequer has to keep an elaborate machinery to collect the money and another elaborate machinery to give it back. The only difference is that it is collected from certain indi-
      1764
      viduals and given back to other individuals, and so on.
      The whole position could be simplified if only we gave up all these old time prejudices about rights of possession and so on. I ask the Committee quite seriously if it is wrong to tell the nation that you have incurred this debt. It is their National Debt and therefore each and everyone within the nation economically capable of bearing a share must compulsorily bear that share. I will go much beyond what my friends of the Labour party have put forward as a capital levy. They propose a limit of £5,000, I do not see why we should draw even such a limit. I am morally even opposed to such a limit. I deplore the fact—I myself feel ashamed of it, but there it is—that the whole of the working classes of the country, misguided or not, was just as enthusiastic about taking part in the War as the rich people were. However, I do not agree with the scheme that 90 per cent. of the population should be at liberty to vote for the War under the impression that the 10 per cent. who possess £5,000 and more will be compelled to pay for it, Then we shall have no end of wars. That is not enforcing pence. I do not see any justification for it that millions of men should enthusiastically go into the War and, when it comes to the time of payment, say, "We will make the rich pay and we will get out of it," as if that is the working-class patriotism. I say that if this country, having willingly gone in for it, having carried it out on the extravagant scale the she did carry it out, having financed it on the crazy method on which it was financed, must cheerfully bear the burden, and those who are not willing to bear it cheerfully may be made to bear it by legislative methods. I do not see anything morally wrong in saying to each man and woman in the country, "In accordance with your economic means, whether you are worth £5,000 or £1,000,000—of course, with a higher and higher percentage of the burden as your economic power is higher and higher—you should all compulsorily be owner and possessor of the nation's War debt." I do not think any other Member in the Committee would consider that wrong.
      8.0 P.M.
      If that is so the position becomes quite simple. You can in the same Measure include a provision that amongst those

      1765
      who are economically capable should be included those who are really economically capable, and widows, or orphans, or charity funds, possessing those War Stock must not be considered persons who should bear the burden, and naturally there is no question of any calamity falling upon the indigent whose only source of income is War Loan and so forth. An ethical distribution of the National Debt having taken place, the position becomes quite plain, and again you may say the nation ought to bear the interest, and the Sinking Fund in proportion to the economic power of the individuals within the nation. It resolves itself immediately into the question of your 5 or 6 pet cent. interest or Sinking Fund being collected from you in the ratio of your holding of the War Loan, and then it resolves itself into the very simple question either of the Chancellor collecting it or we can tell the individual to collect his own tax and pay it back to himself as the interest on his own War Loan. I simply consider that is the way to look upon the nation's debt to be administered by the nation itself, and there is no reason why this large spectacular figure should continually be dragged along in annual Budgets from year to year and year to year. I submit that unless this Committee is now prepared quietly and. seriously to consider the merits of the claim of anti-capitalist measures disowning the rights of all those who possess large amounts of wealth, unless you are prepared to protect labour by destroying labour competition instead-of bringing forward tariff reform schemes which will increase international competition and the risk of international war, it is futile to discuss Budget proposals of this character. I submit once more that-the Budget of this nation should raise at least £400,000,000 a year, not with a view to reducing the Income Tax, but with the idea of building up the nation, which is not being maintained at the pitch at which it deserves to he kept.
      Sir CHARLES OMAN: Obviously this is the opportunity for the amateur financier to make his comments on what I think on the whole is a very satisfactory Budget. Of course, the amateur financier may make what comment he pleases and also what suggestions he pleases. The suggestion made by the
      1766
      last speaker that the National Budget would be simplified by a repudiation of our National Debt is one which is not likely to be carried out by this House. Nor do I find anything practical in the grievances of the Member who spoke before him from the same bench, whose complaints was that he could not see that the Budget's proposals did anything towards seizing the property of the well-to-do and distributing it amongst the masses. My hopes were not quite of such widespread intensity but there were two matters in regard to which I confess that being like other speakers a mere amateur, had dimly hoped that something might be heard in the Chancellor's speech. The first was a scheme of both a financial and a non-financial kind, designed for the safeguarding of the old historic and artistic treasures of the country. I had hoped that the time had now come when the continuous drift westward of the old store of historic treasures of England should cease, or if it could not be made to cease, at any rate, it should be made profitable in a certain degree to the Exchequer. I was hoping to hear that a scheme for taxing the export of all national works of art and national monuments and manuscripts would be brought in. I have a question down on the Order Paper for to-morrow on that particular topic. All those who have watched our auction sales of late will agree that the time has come to stop our hoarded wealth of artistic treasures from being alienated for the benefit of the momentary owners. May I point out as an example that Italy has scheduled every first-class work of art in the country—not merely pictures but other things—and she has prohibited their export unless an extremely heavy duty is paid before they are taken out of the country? I sincerely hope that some clay we may have a Chancellor of the Exchequer who will legislate in that direction, and say that the historic treasures of England should first of all he offered to the State, and if the State does not find itself in a position to purchase them, then they should be subjected to a heavy duty before being allowed to he exported.
      My second point is that I was hoping to hear something of a much more ambitious and a much more financially important scheme, in regard to a question

      1767
      that has never come to fruition in a Budget, that is, the Taxation of Advertisements. I do not merely mean the taxation of the large boards that defile our highways and the tops of our mountains, informing us of the nearest point where Shell has its habitation in a garage, or which set forth the advantages of dealing with somebody's milk by means of large and ugly wooden figures of cows. I refer to something much more important, I mean advertisements in the newspapers of all kinds. Here is an enormous field for any Chancellor of the Exchequer who is bold enough to risk a bad Press by the imposition of a minimum tax on every advertisement in every newspaper, upon the same principle on which the Entertainments Duty was imposed by the Coalition Government, putting one single penny on every advertisement. This tax would produce millions in the course of a year, and it would not be any more the cause of general bankruptcy amongst newspapers than was the putting on of 2d. and 6d. on the theatrical and music hall prices, when the tax on amusements was brought in, the ruin of all managers. I am aware that any Chancellor of the Exchequer who brought this proposal forward would be abused by the whole Press, who would declare that he was attacking one of the vital industries of England, but it is equally true that that attack would be insincere, because the mere fact of advertisements being raised from 2s. to 2s. 1d. or from 6s. to 6s. 1d. would have no real effect upon newspapers whatsoever, and the advertising public would be well able to bear the extra penny, just as the public going to the theatre are able to bear the Entertainments Duty. The agitation against the Entertainments Duty was just as insincere as the agitation against an advertisement tax would be. I believe that the taxation of newspaper advertisements would be the financial salvation of the Budget.
      But very near my heart also comes the idea that a good swingeing tax on outdoor advertisements, in places of picturesque beauty or of great public resort, would soon lead to a considerable thinning in the ranks of those abominations. We might by this means gain very little in taxation, but I think we should gain in public amenity enormously. Everyone
      1768
      who motors through the English countryside, when nearing a town or some beautiful point of view, has his eyes offended perpetually by this abominable practice, and often the lovely English countryside is completely spoiled by some rectangular multicoloured horror, which makes him wish that he had not taken that particular way. I am afraid that my two suggestions are probably quite futile, and probably they have been considered by many Chancellors of the Exchequer, and for fear of promoting wrath in certain quarters many Chancellors may have put them aside. Nevertheless, I think that I represent a considerable body of public opinion when I say that every man of good heart, who takes an interest in his own country, would like to see taxation imposed dealing with the two matters I have mentioned.
      Mr. DALTON: There are one or two points which I think ought to be made in any preliminary discussion of the Budget statement. Those who listened to the Chancellor making his speech must have been struck with the very little encouragement he got from hon. Members opposite. He found great difficulty in drawing forth their cheers. I cannot refrain from saying that, in my opinion, the warnings we gave from these benches last year have been more than justified. At that time we called the attention of the Government to the excessive remission of taxation in their first Budget, and can now inform them that had those remissions not been made in Super-tax and Income Tax the present financial position would have been a great deal easier than it is now and the Chancellor would not have been driven into the position in which he now finds himself. Before dealing with the makeshifts which have been adopted by the Government, I would like to draw attention to the fact that both the yield of the Super-tax and the Death Duties has been erroneously estimated to the extent of more than £5,000,000. The Super-tax has brought in £5,200,000 more than was estimated, so that last year's reduction is worth more than £10,000,000 in a full year. The increase of the scale of Death Duties which was supposed to balance this reduction has resulted in a fall in the Death Duties revenue below the estimate, so that the increase has turned out to be worth less than £10,000,000, and thus the

      1769
      reduction of the Super-tax has cost the revenue more than the increased Death Duties have brought in. Therefore the argument used last year that these two proposals would balance out in the accounts has not been borne out. The rich are not only growing richer but many of them are living longer and some of them have gone to Jersey, where it is said that our law does not apply.
      We have been promised still more luxury taxation, but I confess I am an admirer of the old British methods of finance which have been in vogue during the last generation or so. I am a great admirer of those methods from which we now seem to be drifting. I admire the solid architecture of our Super-tax, Income Tax and Death Duties, which should be the main bases of our financial system. These comparatively second-rate expedients we are now adopting have come from France and other Continental countries where they attempt to collect a large amount of revenue from a large number of different commodities and transactions. To my mind this is a very inferior method of procedure. I am not enamoured of the safeguarding principle, but I should like to see a duty imposed in order to prevent the importation of these cheap-jack alternatives.
      A few words upon the Debt charge. It has not been the practice of the Chancellor of the Exchequer in the past to pay any great attention to the heavy burden of the Debt charge in his speeches, but I notice that in his statement this evening he made considerable reference to it, and pronounced in favour of giving back to the Sinking Fund in the coming financial year part of what was taken from it during the year past.. I am glad to find the Chancellor of the Exchequer waking up to the importance of the Debt charge. The debt charge has remained, in terms of money, very nearly stationary during the last year or two, while the proceeds of direct taxation have been diminished. I have worked out a few simple percentages of the proportion of interest charges—leaving Sinking Fund out of account—upon the Debt to the total tax revenue, and I find that whereas in the last pre-War year the interest charge was only 13 per cent. of the total tax revenue, it has risen to 39 per cent. in
      1770
      1922–23 to 42 per cent. in 1923–24 and to 45 per cent, in the present year.
      The amount of dead wood in the financial tree—that is what the interest charge is, dead wood of a most unprofitable kind which yields no present advantage—is continually increasing. When we add the consideration that since three or four years ago the price level has fallen enormously, we see that the holders of War Loan who are receiving the same amount of money as before are, in fact, receiving a much higher purchasing power, because the money goes further. It is clear that the burden of the debt in terms of purchasing power, so far from having been decreased during the last few years by Sinking Fund operations, allowing for the fall in prices, has increased. The developments in the last few years in regard to this increasing burden of the Debt charge, viewed in this way, is a complete justification of those of us who advocated the Capital Levy a few years ago. Moreover, we are not yet informed what the alternative to the Capital Levy, which is being devised in secret by the Colwyn Committee, is to be. I hope the Chancellor of the Exchequer will press the Colwyn Committee to hasten with their Report so that we may see what better alternative their ingenuity can suggest.
      I was very glad to hear the Chancellor of the Exchequer speak in praise of Sinking Funds, and to hear from him a statement which I have often made and which has sometimes been contradicted, that one advantage of a Sinking Fund is that every pound put into the Sinking Fund to pay off debt liberates one pound for the benefit of industry. The Chancellor of the Exchequer enunciated that doctrine this afternoon. Every Sinking Fund has the advantage that it liberates a large stun of money for investment in industry, whereas remissions of direct taxation to wealthy people do not have that commensurate effect, because a large part goes, not to the building-up of industry, but into luxurious expenditure which in the interests of the country might just as well not take place. Therefore, I hope that in the future the Chancellor of the Exchequer will increase the Sinking Fund to an even higher figure than the £60,000,000 proposed for the coming year.
      When a local authority incurs debt, a period is set during which the debt must

      1771
      be paid off, and the period very seldom exceeds 60 years. When the British Government incurred a debt to the American Government, a period was set in the financial agreement entered into by the present Prime Minister of just over 60 years from the start of the funding period during which the debt has to be paid off. It is very unsound finance not to set a corresponding period for the repayment of our internal debt, particularly when, as compared with a debt incurred by a local authority, there is no material and tangible asset to set against our internal debt, such as a local authority may be able to claim against its debt in the form of tramway undertakings, gas works, or kindred assets. Sixty years is long enough in the lifetime of a man, and most of us will not be here 60 years from now if such a scheme were introduced. But at the present rate of going, with a £50,000,000 Sinking Fund, if that were to be maintained, it would take 150 years or more to pay off our present Debt, and even with a Sinking Fund of £60,000,000 a year, it would take over 120 years. That is altogether too slow, and I hope that in the years to come there will be a great speeding up in debt redemption. There are many alternative means, of doing this, but certainly some speeding up is essential.
      I wish to make a few observations about conversion, which was referred to by the Chancellor of the Exchequer. Some people think that the burden of our debt may he reduced in the future by conversion of maturing debt to lower rates of interest. But I read in the "Times" this morning, a paper not altogether unfriendly to the present Government, the statement that the possibilities of converting debt at the present time are absolutely nil, owing to the fact that the national credit has depreciated during the regime of the present Government, as compared with the level at which it stood under the late Government.
      The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill)The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill) indicated dissent.
      Mr. DALTON: I will give the right hon. Gentleman an illustration. Under the late Government, the late Chancellor of the Exchequer, the right hon. Member
      1772
      for Colne Valley (Mr. Snowden), was able to carry through some conversion operations. He issued a new 4½ per cent. Conversion Loan and by that issue and other conversion operations he was able to make some slight reduction in the debt charge. Some 5 per cent. War Loan was converted into 4½ Conversion Loan, with a slight advantage to the Treasury. But at the present time, as the "Times" City Editor states, it is not possible in his judgment, with which I agree, to convert the large maturing block of over £100,000,000 5 per cent.. Treasury Bonds with any advantage to the Exchequer this year, because British long-term credit is now in the neighbourhood of 5 per cent. The 4½ per cent. Conversion Loan stands below par, and it would not be possible to make even a saving of ½ per cent. on such a conversion. If we look forward to next year the prospects are even worse, because in 1927–28 there is a large amount of debt falling due to he converted, of which £80,000,000 are 4 per cent. National War Bonds, and £62,000,000 3½ per cent. War Loan. There you will have a connversion, but it will be a conversion the wrong way—a conversion upwards. You will only be able to renew that debt by offering a higher rate of interest than it now hears. The effect of that kind of conversion, which was familiar during the War, but of which we have not had much since, will be, of course, to increase the Debt charge. I will not weary the Committee with statistical estimates on this point, although I have made some. Perhaps on another occasion I may give them. I only mention that fact in order to show that I am not speaking at random.
      When one works out statistics in detail one finds that the prospect of savings from conversions in the immediate future arc very small, particularly when account is taken of the fact that with the present rates of Income Tax and Super-tax, on every £4 which you save to the State in conversion you lose £1 in tax revenue. The right hon. Gentleman knows that that is so. Therefore the net gain from conversion is diminished by the fact that the reduction in the amount of interest on the Debt means a reduction also in Income Tax and Super-tax paid by owners of converted stock. It would appear,

      1773
      therefore, that any opportunities in this direction of reducing the real burden which rests upon the taxpayer are very limited, and such as they are they can only be achieved if the national credit is leliberately stimulated and raised by vigorous Sinking Fund operations—by setting aside large sums every year to swell the demand for British Government securities for cancellation.
      There is one suggestion which perhaps the Financial Secretary to the Treasury will do me the courtesy to transmit to the Chancellor of the Exchequer. The Government, we know, are opposed to a Capital Levy. The Government, we know, in the present financial year do not propose to increase the Sinking Fund above £60,000,000, or to maintain that increase next year. We have heard much about the necessity of everyone making sacrifices. Why should not the Government invite the wealthier sections of the community to make a voluntary sacrifice regard to the Debt If they are opposed to a compulsory Capital Levy why should they not invite the holders of War Loan to make some voluntary sacrifice, either by surrendering some of their War Loan or by agreeing to accept a reduced rate of interest in the future on the whole or part of their holding? This is not a purely imaginary possibility. The Prime Minister, before he became Prime Minister, won the admiration of a large number of people in this country when it became known that he had himself surrendered a large part of his War Loan through a sense of public duty, and I would suggest that if the hands of the present Government are tied in regard to larger policies of Debt reduction they might at any rate make an attempt to secure some voluntary reduction on these lines and make an appeal to the people who can afford it to make some sacrifices in this direction. I can hardly believe that the present Prime Minister is solitary and alone in his sense of public duty in this connection, and I can well believe that some of the Super-tax payers would welcome the opportunity of making sonic sacrifice for their country.
      I do not think the Chancellor of the Exchequer has been so lacking in foresight as may appear. At first sight the Budget appears to be a hand-to - mouth contrivance, but I am inclined to think that there is more
      1774
      thought and calculation behind it than that. Like the hon. Member for Shore-ditch, it strikes me as a Budget of delayed action, a Budget which is timed not to explode until two or two-and-a half years hence. The Chancellor of the Exchequer has a prospective surplus of £14,000,000, of which £10,000,000 has been tucked away this year in connection with the Sinking Fund, and he expects at the end of the next year to have a surplus of £23,000,000. We are now approaching figures of a magnitude which will allow of considerable alleviations to various classes of the taxpayers, and a tax reducing Budget next year or a year afterwards is possible. I am inclined to think that the Chancellor of the Exchequer has this in mind, and that he comforts himself by this thought for the disappointment and lack of enthusiasm among his own followers. I have seldom seen less enthusiasm and response from a party to a speech of one of its leaders than the complete absence of cheers arid approbation of this afternoon. The Chancellor of the Exchequer is rather more far sighted, and we can calculate that the Budget of next year, or two years hence, will be more spectacular and have a. much higher electoral value than the Budget of this afternoon.
      Viscount SANDON: I regard the Budget statement as being very satisfactory from almost every point of view, but there are one or two omissions and one or two things that might have been put in a slightly different way. Unlike the hon. Member who has just spoken, I am a believer in stunt taxation, and I was surprised to hear from the Socialist benches such conservatism as to former methods of finance. We have to get the money some way, and that is what the Treasury is interested in. I should like to have seen a tax on ladies' dresses of high quality, on furs, jewellery, and other matters of that sort, and I am sorry that the Chancellor of the Exchequer has not seen fit to copy the example of despised France and introduce a hotel tax, which is already in force in that country and elsewhere and is a very great success. It would be very desirable to introduce some of the taxes which are in operation in France from a revenue-producing standpoint. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) referred to

      1775
      the Betting Tax proposals of the Budget and spoke of the tax with much familiar knowledge! I do not profess to have any great knowledge on this matter, but I think he made a most ridiculous statement when he said that he thought the imposition of a tax on betting would mean an increase in the amount of street betting. Does he really think that Clarence Vere de Vere would give up his credit bookmaker in order to conduct his operations at the street corner?
      I am disappointed with one other matter referred to by the Chancellor of the Exchequer. I agree with his general proposals as regards the Road Fund and motor taxation, and I think he is right in saying that the heavy commercial vehicles should pay a greater amount than they have in the past. But it would have been a much fairer adjustment of that burden if it was placed on vehicles which do not use rubber tyres instead of being placed solely on the basis of weight. It is the vehicles which do not use rubber tyres that do the most damage on the roads, and they should be the ones to pay. I do not think the Committee will be satisfied with the proposals of the Chancellor of the Exchequer with regard to the rural roads, in view of the state in which they are at the moment. There is a step in the right direction, but it is not nearly enough. You have an orgy of extravagance on the main roads, which do not need improving; you see them building new ones, which do not need to be built, and rounding off corners simply in order that the road shall be absolutely dead straight upon which motorists can scorch, and Then you look at the sixth and seventh class roads in the rural districts and find that they have been allowed to get into a state of absolute disorder, it is impossible to use them, and all this time this vast amount of money has been spent on the widening of wide trunk roads to make them wider, and on perfect surfaces to make them a little more perfect. I think it is high time this expenditure was readjusted and that some money was spent on the sixth and seventh class roads in rural districts so that they may be used to feed the railways, by facilitating goods being hauled to rural railheads. The railways, which the Chancellor of the Exchequer is rightly anxious to help, will he utilised
      1776
      for the carriage of goods rather than the trunk roads. At present these rural roads are often in so bad a state that children can hardly use them to go to school.
      There is one other point I desire to mention, and it is in connection with Death Duties. I know that some hon. Members opposite regard these Death Duties as a most admirable form of taxation, but. I think there should be some readjustment as between Super-tax and Death Duties. Much the best way is to pay out of income by way of Super-tax than to pay out of capital in the form of Death Duties. There was a hint in this regard when the Chancellor said that they found that the Estate Duties did not realise expectations and there had been a falling off. It is only natural that people will take every opportunity of making legal evasions by transfers so long as the burden of Death Duties is so heavy. I believe he would find that he would benefit the Exchequer if he altered the distribution of the burden as between the Super-tax payer and the payer of Death Duties and amend the unfortunate mistake he made in last year's Budget. I hope that he will bear that in mind. My right hon. Friend is much more likely to see the people carrying out the law in the spirit in which it is framed and to play up to the task of carrying the national burden, if it were possible for them to pay out of income rather than to burden their successors with a burden which is very severe, not only on them and on their successors, but on employés in the country at large.
      Captain GARRO-JONES: The Noble Lord who has just spoken adopted a different tone of criticism from that of the hon. Member for Oxford University (Sir C. Oman). The Noble Lord praised the Budget with faint damns; the hon. Member for Oxford University damned it with faint praise. The hon. Member for Oxford University described it as a bold Budget. I confess to having felt some amusement at that description, because, whatever it was, it was not a bold Budget. It is true that we are accustomed to picture the Chancellor of the Exchequer in the role of the bold soldier of fortune, advancing beyond the front line, taking positions which are dangerous, net only to himself, but to his comrades, who have to rescue him from awkward predicaments. But

      1777
      if that is his usual role he was in the very opposite role to-day. He was fighting a rear-guard action, only too glad to beat a retreat from the position of last year, willing to take advantage of every cover, dodging into shell-holes, adopting any resource if only he could return to the position in which he was at the beginning of last year, with a solvent reputation and a whole skin.
      The Noble Lord made one or two references to what the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) said. He stated that it was ridiculous for the right hon. Member for Carnarvon Boroughs to state that the Budget proposals would lead to an increase of street betting, on the ground that Clarence Vere de Vere or another gentleman of that kind would not leave his credit bookmaker in order to bet with Joe Sykes or someone else in the East End. Nothing could have been further from the intention of the right hon. Member than to suggest that any individual of that type would change his habits. What he did suggest was that there are large numbers of people on the border-line, to whom it is nothing whether they bet on the racecourse or on the street corner before they go to the racecourse. If such people who go to the racecourse are to have a 5 per cent. tax levied on them, it is obvious and natural that they will bet at the street corner and save 5 per cent. on their stakes.
      Viscount SANDON: I assume that the people who go to the racecourse to bet do not go there because it is the easiest place to bet, but go there in order to see the horses and the races as well.
      Captain GARRO-JONES: I cannot enter into an argument with the Noble Lord as to why people go to a racecourse. Some people go there to win 10s., and a small minority to get a look at the races and the horses. But those are the men who can walk about the paddock and the Royal Enclosure. I have been to the Derby once or twice and did not see much of it. However, I need not expand that topic for the moment. I did not intend to enter into a presumptuous criticism of the high finance of the Budget. I rose principally to make a protest, which I have made, perhaps very ineffectively,
      1778
      more than once, with regard to the efforts which are being made by the Chancellor to collect our debts from our foreign debtors. On every occasion when I have attempted to raise that subject, I have met with the most complete and chilling discouragement from every right hon. Gentleman who has had any reply to give from the Treasury Bench. The Foreign Secretary has regretted, deprecated and deplored every question that has been raised in this House, on the pretence that it will damage our relations with France. I attempted the other day to ask two or three questions with regard to the attiude of the French Finance Minister, but those questions were ruled out of order in the discretion of Mr. Speaker. I believe, however, that the wider latitude of Debate permits me to raise the questions again, and I wish to raise them now.
      I wish to ask the Financial Secretary to the Treasury whether he has observed that the successive delays in the coming to this country of the French Finance Minister, which are retarding the settlement of the French debt to us, are being utilised in the meantime by the French Finance Minister and others—I do not say used illegitimately—to make the most intensive propaganda in favour of the French point of view and adverse to the British point of view. I have received two or three pamphlets of various kinds which set the point of view of our foreign debtors, whereas nothing is set out from our own point of view. The French Finance Minister, in addressing a meeting of American hotel keepers in Paris only a week ago, said that France was paying as much as 130,000,000 dollars a. year for War debts. I hope we shall have some explanation as to where that money is going. The one thing certain is that none of it is finding its way into our Treasury. He also insisted, in the most extravagant language, on the absolute necessity to fare serve the Safeguard Clause in all arrangements which might be entered into with this country. I hope that all these statements will not be allowed to go by default. Not only the statements of the French Finance Minister, but the Debates in the French Chamber, are intensive propaganda in favour of the French point of view. Similarly in the French Press; it is full of statements resenting any attempt by this country to collect its debt from France.

      1779
      Only a few weeks ago two ex-Ministers of the French Government, one an ex-Minister of Finance and the other the rapporteur in the French Chamber, held a great public meeting in Paris, at the end of which, when all the speeches had been made, it was not France that owed £650,000,000 to us but we who owed £40,000,000 to France. That sort of thing creates a psychological reluctance to pay, not only in the mind of the French Government, but in the mind of the French taxpayer. I consider that the Chancellor of the Exchequer and the Foreign Secretary, if they allow all those statements to go unchallenged, are guilty of negligent custodianship of the public purse of this country, and ought to he censured for not taking more active steps in the matter. I am not asking that we should make all kinds of repartees against what goes on in the French Chamber. I know that if we were to enter into a kind of reciprocal invective against everything that is said there, it would not promote good relations. But I am asking that no attempt should be made by the Foreign Secretary or the Chancellor of the Exchequer or anyone else to interfere with freedom of speech and liberty of discussion. If we want to criticise the French Government, and the French attitude, especially in this matter, we ought to have the liberty to do so. I consider that freedom of speech, which has been won after such a hard struggle, and occasionally by force in this House, ought riot to be relinquished by persuasion from the Chancellor of the Exchequer or the Foreign Secretary or anyone else. In the long run, if we allow this spirit to guide our relations with foreign Powers, our friendship with them will degenerate into servility and we will lose not only their respect but their friendship.
      Question put, and agreed to.

      CONTINUATION OF ADDITION AL MEDICINE DUTY (EXCISE).
      Resolved,
      "That the additional duties of Excise on medicines imposed by Section eleven of the Finance (No. 2) Act, 1915, and continued by Section two of the Finance Act, 1925, until the first day of August, nineteen hundred and twenty-six, shall continue to he charged on and after that date until the first day of August, nineteen hundred and twenty-seven.
      1780
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provivisions of the Provisional Collection of Taxes Act, 1913."

      BETTING DUTY.
      Resolved,
      "That on and after the first day of November, nineteen hundred and twenty-six, there shall be charged the following Excise Duties:

      (1)On every bet made with a bookmaker a duty equal to five per centum of the amount paid or offered or promised to be paid to, or to the order or for the use of, the bookmaker:

      (2)On a certificate to be taken out annually by a person carrying on the business of a bookmaker a duty of ten pounds:

      (3)On a certificate to be taken out annually in respect of the entry for premises to be used or kept by a bookmaker for the purposes of his business 1 duty of ten pounds:

      Provided that neither the imposition of the duties aforesaid nor anything done in pursuance of this Resolution or in connection with the said duties shall operate so as to render lawful any betting in any manner or place in which it is now unlawful."

      TRADE MOTOR CARS.
      Resolved,
      "That the exemption from Customs Duty which is given by Sub-section (4) of Section thirteen of the Finance (No. 2) Act, 1915, as applied by Section three of the Finance Act, 1925, in respect of such motor cars, chassis, component parts and accessories as are mentioned in the said Sub-section (4) shall as from the first day of May, nineteen hundred and twenty-six, cease to have effect, except as respects any such cars, chassis, pr its or accessories which are shown to the satisfaction of the Commissioners of Customs and Excise to have been imported and entered before the said first day of May.
      And it is declare3 that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of this Provisional Collection of Taxes Act. 1913."

      ANTIQUES.
      Resolved,
      "That, as from the first day of May, nineteen hundred and twenty-six, Customs Duties shall not be charged in respect of any goods (other than spirits or wines) winch are proved to the satisfaction of the Commissioners of Customs and Excise to have been manufactured or produced more than one hundred years before the date of importation.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

      SAFEGUARDING OF KEY INDUSTRIES.
      Resolved,
      "That—

      (a) the Duties of Customs imposed by Section one of the Safeguarding of Industries Act, 1921, for a period of five years expiring on the nineteenth day of August, nineteen hundred and twenty-six, on the goods specified in the Schedule to that Act shall subject to the provisions of this Resolution, continue to be charged for a further period of ten years from the said day at the rates at which they are then in force; and

      (b) in the case of optical glass and the other goods specified in the first paragraph of the Schedule to the said Act, the Duties of Customs chargeable thereon shall, as from the first day of May, nineteen hundred and twenty-six, be duties equal to one-half instead of one-third of the value of the goods; and

      (c) in the case of arc-lamp carbons the Duty of Customs chargeable thereon by section one of the said Act shall, as from the first day of May, nineteen hundred and twenty-six, be a duty at the rate of one shilling per pound instead of a duty equal to one-third of the value of the goods.

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

      COMPONENT PARTS OF ARTICLES CHARGED UNDER SECTION 1 OF THE SAFEGUARDING OF INDUSTRIES ACT, 1921.
      Resolved,
      "That as from the first day of May, nineteen hundred and twenty-six, until the nineteenth day of August, nineteen hundred and thirty-six, there shall he charged on the importation into Great Britain or Northern Ireland of component parts of optical and scientific instruments chargeable with duty under Section one of the Safeguarding of Industries Act, 1921, a duty of Customs equal in the case of component parts of optical instruments to one-half, and in the case of component parts of scientific instruments to one-third, of the value of the goods, and the provisions of the said Section one (other than the provision relating to the rate of duty) shall apply for the purpose of the duty charged by this Resolution as they apply for the purpose of duties under that Section.

      DUTY ON AMORPHOUS CARBON ELECTRODES.
      Resolved,
      "That as from the first day of May, nineteen hundred and twenty-six, until the nineteenth day of August, nineteen hundred and thirty-six, there shall be charged on the importation into Great Britain or Northern Ireland of amorphous carbon electrodes, but not including primary battery carbons or arc-lamp carbons, a duty of
      1782
      Customs equal to one-third of the value of the goods, and the provisions of the said Section one (other than the provision relating to the rate of duty) shall apply for the purpose of the duty charged by this Resolution as they apply for the purpose of duties under that Section

      DUTY ON MOLYBDENUM, ETC.
      Resolved,
      "That as from the first day of May, nineteen hundred and twenty-six, until the nineteenth day of August, nineteen hundred and thirty-six, there shall be charged on the importation into Great Britain or Northern Ireland of molybdenum, ferromolybdenum and molybdenum compounds, and vanadium, ferro-vanadium and vanadium compounds, but not including ores or minerals of molybdenum or vanadium, a duty of Customs equal to one-third of the value of the goods, and the provisions of Section one of the Safeguarding of Industries Act, 1921 (other than the provision relating to the rate of duty), shall apply for the purpose of the duties charged by this Resolution as they apply for the purposes of duties under that Section.

      PACKING AND WRAPPING PAPER.
      Resolved,
      "That during a period of five years beginning on the first day of May, nineteen hundred and twenty-six, a duty of Customs equal to sixteen and two-thirds per cent. of the value of the goods shall be charged on the importation into Great Britain or Northern Ireland of the following goods, that is to say:
      Paper, whether in sheets or toile or otherwise, of any description known as packing or wrapping paper, including tissue paper, of a weight when fully extended equivalent to more than ten pounds but not more than ninety pounds to the ream of four hundred and eighty sheets of double crown measuring thirty inches by twenty inches, and articles made either entirely from such paper or from such paper with the addition only of some adhesive substance or other material the value of which does not exceed one-sixth of the total value of the whole article.
      For the purpose of this Resolution packing or wrapping paper and tissue paper include any such paper which has been coated or otherwise treated in any manner, but this Resolution shall not extend to-vegetable, parchment, glazed transparent paper, grease-proof paper, paper which forms part of another article, or paper, or any article made of paper, which at the time of importation is in use as wrapping or packing or as a container of other goods."

      MECHANICALLY-PROPELLED VEHICLES.
      Resolved,
      "That in lieu of the Excise Duties now chargeable in respect of mechanically-

      1783
      propelled vehicles under paragraphs 3, 4 and 5 of the Second Schedule to the Finance Act, 1920, there shall, on and after the first day of January, nineteen hundred and twenty-seven, be charged the Duties of Excise specified in the following paragraphs 3, 4 and 5, and references in any other enactment to the full amount of the duties chargeable in respect of such vehicles shall be construed accordingly.

      Description of Vehicle

      Rate of Duty.

      3. Vehicles, "being hackney carriages as denned in Section four of the Customs and Inland Revenue Act, 1888:

      Tramcars

      15s.

      Other vehicles having a seating capacity for—

      Not more than 8 persons

      £15

      More than 8, but not more than 14 persons

      £30

      More than 14, but not more than 20 persons

      £45

      More than 20, but not more than 26 persons

      £60

      More than 26, but not more than 32 persons

      £72

      More than 32, but not more than 40 persons

      £84

      More than 40, but not more than 48 persons

      £96

      More than 48, but not more than 56 persons

      £108

      More than 56, but not more than 64 persons

      £120

      More than 64 persons

      £120

      With an additional £1 10s. for each person in excess of 64 persons.

      For the purposes of this paragraph the number of persons mentioned docs not include the driver of the vehicle and the seating capacity of a vehicle shall be determined in accordance with provisions to be made by Regulations under Section twelve of the Roads Act, 1920.

      4.—(1) Locomotive ploughing engines, tractors, agricultural tractors, and other agricultural, engines, not being engines or tractors used for hauling on roads any objects except their own necessary gear, threshing appliances, farming implements, or supplies of fuel or water required for the purposes of the vehicle or for agricultural purposes

      5s.

      (2) Tractors, agricultural tractors, and agricultural engines, other than such tractors or engines in respect of which a duty of 5s. is chargeable, used for haulage solely in connection with agriculture—

      Not exceeding 5 tons in weight unladen

      £6

      Exceeding 5 tons in weight unladen

      £10

      Description of Vehicle

      Rate of Duty.

      (3) Road locomotives used solely in agriculture and agricultural engines, other than such engines in respect of which duty is chargeable under paragraph (1) or paragraph (2)—

      Not exceeding 8 tons in weight unladen

      £25

      Exceeding 8 tons but not exceeding 12 tons in weight unladen

      £28

      Exceeding 12 tons in weight unladen

      £30

      (4) Vehicles of the following descriptions, used at any time otherwise than in connection with agriculture, that is to say, vehicles which are constructed for haulage solely and not for the purpose of carrying or having super-imposed upon them any load except such as is necessary for their propulsion or equipment and which are not used for that purpose—

      Not exceeding 2 tons in weight unladen

      £21

      Exceeding 2 tons but not exceeding 4 tons in weight unladen

      £25

      Exceeding 4 tons but not exceeding 6 tons in weight unladen

      £30

      Exceeding 6 tons but not exceeding 7¼tons in weight unladen

      £35

      Exceeding 7£ tons but not exceeding 8 tons in weight unladen

      £40

      Exceeding 8 tons but not exceeding 10 tons in weight unladen

      £50

      Exceeding 10 tons in weight unladen

      £60

      5. Vehicles (including tricycles weighing more than 8 cwt. unladen) constructed or adapted for use and used for the conveyance of goods or burden of any description, whether in the course of trade or otherwise:

      Being vehicles which are electrically-propelled and which do not exceed 25 cwt. in weight unladen

      £6

      Being vehicles other than such electrically-propelled vehicles as aforesaid—

      Not exceeding 12 cwt. in weight unladen

      £10

      Exceeding 12 cwt. but not exceeding 1 ton in weight unladen

      £16

      Exceeding 1 ton but not exceeding 2 tons in weight unladen

      £26

      Exceeding 2 tons but not exceeding 3 tons in weight unladen

      £40

      Exceeding 3 tons but not exceeding 4 tons in weight unladen

      £48

      Exceeding 4 tons but not exceeding 5 tons in weight unladen

      £54

      Exceeding 5 tons in weight unladen

      £60

      Description of Vehicle

      Rate of Duty.

      With an additional duty, in any case if used for drawing a trailer, of

      £10."

    INCOME TAX.

      CHARGE OF TAX.
      Resolved,
      "That—

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

      (b)all such enactments as had effect with respect to the Income Tax and Super-tax charged for the year beginning the sixth day of April, nineteen hundred and twenty-five, shall '.have effect with respect to the tax charged for the year beginning the sixth day of April, nineteen hundred and twenty-six, subject to the provisions of the Tithe Act, 1925; and

      (c)the annual value of any property which has been adopted for the purpose of Income Tax under Schedules A and B for the year beginning the sixth day of April, nineteen hundred and twenty-five, shall be taken as the annual value of that property for the same purpose for the year beginning the sixth day of April, nineteen hundred and twenty-six:

      Provided that the foregoing provision relating to annual value shall not apply to lands, tenements and hereditaments in the Administrative County of London with respect to which the valuation list under the Valuation (Metropolis) Act, 7.869, is by that Act made conclusive for the purposes of Income Tax.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

      INCOME TAX COMPUTED ON PROFITS OF PREVIOUS PERIOD.
      Resolved,
      "That—

      (a) where under the provisions of the Income Tax Acts, Income Tax in respect of profits or gains or income from any source or in respect of the property in lands, tenements, hereditaments, or heritages is required to be computed by reference to the amount of the profits or gains or income of some period preceding the year of assessment, Income Tax as so computed shall be charged for the year of assessment notwithstanding that no profits or gains or income arise from that source or
      1786
      that property for or within the year of assessment; and

      (b) the foregoing provision shall be deemed always to have had effect in relation to Income Tax chargeable in respect of the annual value of lands, tenements, hereditaments or heritages falling within No. II or No. III of Schedule A, in relation to profits falling within Rule 8 of the Rules applicable to Schedule B, and in relation to profits or gains falling within Cases I, II or VI of Schedule D.

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

      BRITISH INCOME TAX AND IRISH FREE STATE INCOME TAX.
      Resolved,
      "That the Agreement made the fourteenth day of April, nineteen hundred and twenty-six, between the British Government and the Government of the Irish Free State in respect of double Income Tax be confirmed, and that for the purposes of the said Agreement persons resident in Great Britain or Northern Ireland, whether or not also resident in the Irish Free State, shall be chargeable with Income Tax (including Super-tax) in respect of property situate and profits or gains arising in the Irish Free State in such manner and subject to such rules as Parliament may provide by any Act of the present Session relating to finance."

      INCOME TAX ON DIVIDENDS PAYABLE OUT OF REVENUE OF NORTHERN IRELAND.
      Resolved,
      "That Income Tax charged on interest, annuities, dividends and shares of annuities payable out of the public revenue of Northern Ireland shall be paid on behalf of the persons, whether in Great Britain or Northern Ireland or elsewhere, entitled thereto by the persons intrusted with the payment thereof.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

      DEDUCTION OF INCOME TAX IN COMPUTING TAX FOR PURPOSES OF EXCESS PROFITS DUTY.
      Resolved,
      "That—
      9.0 P.M.
      (a) notwithstanding that an appeal is pending against an assessment to Income Tax in respect of the profits of a trade or business, the tax chargeable in accordance with that assessment shall, so far as unpaid, be deemed to be a debt within the meaning of paragraph 2 of Part III of the Fourth Schedule to the Finance (No. 2) Act, 1915, and the

      1787
      deduction in respect of any such tax shall be made as on the date of the commencement of the first accounting period commencing after the date on which the certificate of assessment which includes the assessment in question was in fact signed by the General or Special Commissioners, as the case may be, or as on the date of the commencement of the first accounting period commencing after the thirty-first day of December in the year for which the tax is assessed, whichever such date of commencement is the later:
      Provided that where such an assessment is reduced on appeal, the amount to be deducted shall be treated as having been the amount of the income Tax on the reduced assessment; and
      (b) the foregoing provisions shall be deemed to have had effect as front the commencement of Part ILL of the said Act."

    ROAD FUND AND GENERAL.

      TRANSFER OF SUMS FROM ROAD FUND TO EXCHEQUER.
      Resolved,
      "That the sum of seven million pounds shall be transferred to the Exchequer from the Road Fund."

    AMENDMENT OF LAW.
    Motion made, and Question proposed,
    "That it is expedient to amend the law relating to the National Debt, Custom and Inland Revenue (including Excise) and to make further provision in connection with finance."
    Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put., and agreed to.—[Captain Viscount Curzon.]
    Resolutions to be reported To-morrow.
    Committee report Progress; to sit again To-morrow.
    The remaining Government Orders were read, and postponed.

  PROCESSIONS (POLICE ACTION).
  Motion made, and Question proposed, "That this House do now adjourn."—[Captain Viscount Curzon.]
  Mr. LANSBURY: After the proceedings which we have had this evening, the subject I have to raise with the right hon. Gentleman the Home Secretary will appear very humdrum, and I would like to say I am sorry even to attempt to detain Members who are wanting to get away. But the subject I want to raise
  1788
  is one which is of some importance to my constituents, and to the working-people in London generally. It may he remembered that a fortnight ago I asked the Home Secretary some questions by private notice, and one of them was in reference to the behaviour of the police in regard to a procession which was marching from Wandsworth Prison. I would like to say at the outset, that I am not standing here to denounce all police constables as hard-hearted, brutal people, or to describe all demonstrators as angels. The police have at times a very awkward and a very difficult duty to perform, and I am sure very often their patience is very considerably tried. But I think that the right hon. Gentleman and those in charge at Scotland Yard ought to take into account the fact that in all groups of people there are some who occasionally allow temper to get the better of them, and tact to go to the wind. If the right hon. Gentleman will allow me to say so, I think there has grown up—and I have a great deal of experience of demonstrations—during the last couple of years a sort of antagonism between the police and some sections of the unemployed, and I think also with regard to the Communist party. Some of the bad feeling that has arisen is probably due to the fact that some few of the men think that they are pleasing those in authority by dealing rather differently with the Communists than was the case a year or two ago.
  The right hon. Gentleman, in the position he occupies, is one who should be perfectly impartial, and absolutely neutral in regard to any political opinion. I know it. might be strictly difficult for a. person like me to be impartial, and so on, but when the right hon. Gentleman is placed in the position of Home Secretary, he is the principal Secretary of State, and is in a position which gives him great power over the lives and liberties of men and women, especially in London. I feel that sometimes, when he speaks about us, he allows his tact, and, I was going to say, wisdom, to depart from his utterances, when he talks about his hands itching when he reads certain people's speeches; and when he reproves me occasionally, he honours me with his denunciation, quite mildly, but it gives the impression that in his office he is rather more of a politician than a statesman or an administrator. I would like

  1789
  to say, further, that it is a tall order that he himself and the Attorney-General, who are very keen politicians, should have the deciding of what is a legal or an illegal procession, or what is a legal or an illegal declaration of political faith. I say that, because I feel that in all the dealings with these demonstrators lately, a kind of weight of official protection is placed on the side of those whose opinions coincide with those of the right hon. Gentleman. How far he is a Fascist I do not know, but this is quite true, that if a meeting be interfered with, you very seldom read—there are occasions when you do, but it is very seldom—that the Fascist has been arrested. It is nearly always the Communist who has been arrested. In regard to the particular occasion at Battersea, where I happened to be present, the right hon. Gentleman gave me an answer, which I can only describe as entirely inaccurate, and not in accordance with the facts. I asked him why the procession was broken up, and his answer to me was:
  "The police acted under their general authority to control the traffic, and on this occasion did so with great care and success until near Battersea Rise, when part of the procession became disorderly and spread across the road, blocking the general traffic, which was fairly heavy at the time. The police then tried to reduce the procession to order, when the crowd began to shout. 'Up the Rebels,' 'Come on Reds,' etc. No one was injured except one constable. In reply to the last part of the question, persons who desire to march through the streets of London must do so in an orderly manner.?—[OFFICIAL REPORT, 13th April, 1926; col. 20, Vol. 194.]
  That answer I was not able to discuss at Question time, or to call in question in the same fashion I am able to do now. I would like the right hon. Gentleman to accept my word that at least I was present, that I was not drunk, and that I was simply walking on the pavement looking at the procession. The first part of the answer said that a portion of the crowd got across the road, and caused a blockage. I wonder whether the right hon. Gentleman will believe that the patrols were at the head of the procession, that they went across the road with about fifty of the processionists, that then the bulk of the procession was stopped, and the disturbance, such as it was, took place not in the main road, where the traffic was, but when part of
  1790
  the procession had got across the road. There was no disturbance whatsoever among the main body of the processionists, and there was no disturbance in the road, the name of which I do not know, but which divides one side of Battersea Rise from the other. The only disturbance was with those 40 or 50 demonstrators who had got across the road. For some unknown reason, or a reason I have not been able to discover yet, the patrols, who were leading the procession across the road, directly they got across, or within a few seconds of doing so, turned round and charged into those 40 or 50 men and women, and dispersed them. I, myself, took a man in a fainting condition from a police officer who was holding him, offering to take charge of him. That man collapsed.
  The right hon. Gentleman said that no one was injured except a police constable. The man to whom I have referred collapsed at the feet of two or three police officers. The patrols were dancing round to such an extent that two women were knocked down, one of whom had to be carried off, and the other one about 10 minutes later collapsed in the procession, after the procession had been reformed. I spoke to the one inspector with whom I could get into contact, and asked him what it was all about, and what we were to do? I asked him repeatedly what he wanted the processionists to do, and he finally said, "We only want them to march on," and that in spite of the fact that we had three, if not four, patrols dancing around on horseback, making it impossible to move forward in any way. Only after a good deal of protestation were these men moved on, and finally the procession was reformed. Then six or eight policemen were set right across part of the procession, marching in the procession. What the reason was I do not know, except that I was told that they were dividing the unruly portion of the crowd from the orderly portion. The right hon. Gentleman smiles, but it was one of his inspectors who told me this.
  The SECRETARY of STATE for the HOME DEPARTMENT (Sir William Joynson-Hicks): Quite right.
  Mr. LANSBURY: The, men who were in the leading part of the procession were the Deptford contingent. From beginning to end there was no trouble with these

  1791
  men. The inspector was known to them, and he knew them, and they were getting along very nicely. I am confident that if that inspector had been in charge of the whole demonstration there would have been no disturbance whatever, because he had the usual tact and goodwill of an inspector of police who is accustomed to deal with people who live in the poorer parts of London. I am confident that if our own Poplar inspector had been in charge what did happen would not have happened. When it is said that these six or eight policemen were put there to separate the sheep from the goats, as it were, well, I do not understand that one scrap. The people in front were singing Socialist songs, and those behind the policemen were doing the same. I want to put this to the right hon. Gentleman: Would he think it right and proper for police to be put across a Primrose League demonstration in that way? This is what happened. Everybody who has marched in a procession, a London procession especially—we are the most slovenly marchers possible; we never march in proper order—knows that one's heels are continually trodden on, or one's toes are trodden on, though it is all quite orderly, and there is not any bad feeling about it. These constables who were put in the procession had their heels trodden on every now and then, and then there was very bad language between them and the people in the crowd, and there might easily have been quite a riot. I do not say is because it was me, but I took at least half-a-dozen men who were in danger themselves of "getting a thick ear," as the saying is, or of giving one, and pulled them to the rear of the crowd. There need have been none of that if these police had not been put in, and I think it was a very bad thing indeed, on the part of whoever did, to act in so provocative a manner.
  The only other thing I want to say in connection with that demonstration is that, in spite of a good deal of provocation on both sides, we did manage to get from Battersea Rise to the Elephant and Castle without any disturbance whatever. I put it to the right hon. Gentleman that that of itself proves that there was no need for the sort of provocative action that was taken by the authorities. If he disputes what I say, I am prepared to
  1792
  bring complete evidence from people not connected with the Communist party or with the Socialist party, simply onlookers, who will verify my statements in regard to the beginning of the disturbance and will corroborate what I am saying about the police being put across the procession. What I am asking the right hon. Gentleman to do to-night, because of next Saturday—next Saturday is May Day; I am sorry the right hon. Gentleman is so badly informed—next Saturday is a day on which there will be probably the biggest demonstration of the year in London.
  Sir W. JOYNSON-HICKS: I hope there will not be another row.
  Mr. LANSBURY: No, they are not proposing to have another row, if the right hon. Gentleman will give his officers proper orders as to what they are to do. I would like to point out that up to the time the right hon. Gentleman took office there had been thousands of demonstrations in London and thousands of meetings in Hyde Park, and hardly any break-ups of the demonstrations by the police and very few arrests, even in Hyde Park. What I was going to suggest to the right hon. Gentleman, in view of the May Day demonstration, is that he should make up his mind whether he and the police are going to permit the demonstrators to march home; because, as I see it, there were two reasons why there was this disturbance. The previous week the right hon. Gentleman answered a question of mine in reference to a disturbance in Hyde Park, and, in a supplementary answer, he told me that the demonstrators had decided to walk home slowly and not at the pace the police told them. I would like to know under what Regulations the police can compel a procession to march at a given pace? I would like a straight answer to a straight question, "Are you going to lay it down that there must he a certain rate of progress?" I want the right hon. Gentleman to make up his mind on that question before next Saturday—when they are marching home.
  Then I want him to make up his mind as to whether the police will permit these people to march home at all, because, in my opinion, apart altogether from the fact that some officers may want to please

  1793
  the right hon. Gentleman in giving good, drastic treatment to this nuisance, this Communist nuisance, and the people who create it, I do not think the police like the job of marching back again. It is a long way from the East End of London to Hyde Park. The police have to march to the Park, stand about while the demonstration is on—and they are not interested in that—and then have to form up to march back. That is a pretty big day's work for men coming from the East End, and something out of the ordinary. It may be said that the demonstrators ought not to want to march back, but they do want to march back, because many of them have not the money to ride back, and it is easier to walk behind a band than to walk along the streets by one's self for that great distance.
  If they are to march back, I think the right hon. Gentleman has got to give orders that they are within their legal rights in doing so, and are not to be interfered with by the police at all. If in going back they are a nuisance to the traffic, well, so is a. Royal procession, and so it is when somebody is buried, or there is a wedding at Westminster Abbey or some other fashionable church. There are plenty of other nuisances which stop the traffic besides these processions, Which cause the minimum of inconvenience, because as a rule they are held late in the afternoon, and it is in the evening when they are marching home. I do want to get a ruling from the right hon. Gentleman on this point—whether he has given orders that the processionists must march at a given pace, so that there shall be a minimum disturbance of the traffic. If so, will he tell us at what rate they are to march. Further, I want to ask him to make up hits mind whether the processionists are to be allowed to march back after the procession.
  On the question of reporting, which I told the right hon. Gentleman I should raise, I want to say this. The right hon. Gentleman said that the reporter took clown a verbatim report of what he considered, in his judgment, were the sort of statements that required the attention either of the right hon. Gentleman or of the Attorney-General. That is what I understood the right hon. Gentleman to say—that the reporter made selections from the man's speech for decision as to whether they were sedi-
  1794
  tious or not. The right hon. Gentleman will remember that when this question was raised last year, I think, we could not carry on the discussion for want of time, and at the close he very kindly showed me an extract of a speech of my own. I told him then, and I want to tell him again now, that if I had been taken to Court on that extract I should have said it was a most unfair extract from a speech I delivered at Poplar Town Hall.
  The right hon. Gentleman and the Attorney-General are itching to see whether I cannot appear at the Old Bailey or somewhere else. They have not said it, but I have been warned by the Attorney-General, my political opponent, from the Front Bench, of what may happen to me at the Old Bailey, while the right hon. Gentleman has told me that he has special precautions taken in order to get my speeches. That particular speech was a speech which had not been taken down verbatim. The right hon. Gentleman knows perfectly well that no police reporter takes down a speech verbatim. I will make him an offer that if he produces a speech of mine verbatim I shall never speak on this subject again.
  Sir W. JOYNSON-HICKS: You will never speak again?
  Mr. LANSBURY: I will not go so far as that. I said I would not speak again on this subject.
  Sir W. JOYNSON-HICKS: I thought it might be an offer worth having.
  Mr. LANSBURY: I am not afraid about myself in this matter, because I am quite capable of taking care of myself, and if I go to prison I shall be a bigger nuisance to you inside than out. When I have been to prison it has worried the Home Secretary and the prison governor more than anybody else. But you prosecute poor people on these speeches. I watched your reporters at the meetings outside Wandsworth Prison and on Wandsworth Common, and I am very doubtful whether you get more than a few disjointed sentences from anybody's speeches. The man at the meeting on Wandsworth Common, quite openly and without any attempt to cover it up, did not take down the speeches verbatim. Hs was challenged about it and he simply

  1795
  smiled. It never does happen that one of your polite reporters takes a speech down verbatim and, if they do not do so, you have no right to prosecute men, who are unemployed and who may be Communists, by dragging out a few sentences here and there and making out a case against them in that way. This is a most despicable and mean work to put anybody to. I can quite understand a man sitting down at a table under conditions where he can take a speech down word by word and your judging it as a whole, but to say that these police reporters are to be the judges of the particular pieces they will take out of a man's speech for the purpose of putting him away is a very mean and despicable thing. It is because I feel that that I protest against it.
  On the general question of Communist or Socialist propaganda, I do not believe in the Communist theory of force and violence. If the right hon. Gentleman ever had a single speech of mine taken down verbatim he would find that in 999 speeches out of 1,000 I speak against violence in any shape or form. I am glad to believe that in this country we have been saved from revolution and violence by allowing people freedom to say what they think and in whatever way they think. It is a strange thing that in this year of grace 1926 you should still be adopting this sort of Measure for putting down opinions you disagree with. If we had had a Home Secretary with the same point of view as the right hon. Gentleman in the days when the late Sir Charles Dilke and Mr. Joseph Chamberlain were looked upon as the very bad boys of politics, because they were Republican and were always saying very nasty things about Royalty, I can quite imagine how not only the hands of the Home Secretary, but his whole body would have itched to put them in prison. These two gentlemen in the end become pillars of the Constitution. It may be that one of these days the hon. Member for North Battersea (Mr. Saklatvala) will enter into the sanctity of the Front Bench and the terrible things he is now saying will be forgotten. I would like the Home Secretary to remember the saying that "Hard words break no bones." We in England have
  1796
  always been accustomed to say what we think, and we never interfere with people who have done nothing. It was well said long ago by a much greater man that "it has been our ancient privilege to fling our airy thought into words, not caring." Once the people of England and Scotland give up that right then we may be in danger of revolution.
  Mr. SAKLATVALA: In supporting the hon. Member who has just sat down I wish to offer one or two serious considerations to the Home Secretary. In the first place, although the hon. Member for Bow and Bromley (Mr. Lansbury) has appealed to the Home Secretary to forget he is a politician and to forget his prejudices I feel tempted to say that, although it should be so, I realise that it never can be so. From our party point of view I only regret that the Home Secretary in the Labour Government did not follow the same policy of keeping his political prejudices inside his office. With reference to the reporting of speeches, I received this morning from a friend a newspaper from Otley containing a report of the speech to which the right hon. Gentleman referred recently. I shall forward him a copy and request him to compare it with whatever private report he may have of that speech.
  Another point to which I desire to draw the Home Secretary's attention is that there is such a thing as the majesty of law and that by the processes which our Law Officers and the Home Secretary are now adopting they are completely destroying that mental conception of the majesty of law and are degenerating it a mere partisan squabble between the two parties. Tile other day I was charged with perfect sincerity with making utterances with regard to the national flag, the Union Jack. I may assure the Home Secretary, as well as all who hold the same political views as he does, that it has never been my intention to wantonly hurt the feelings of my hon. Friends opposite, but I do say that when the Home Secretary as a Home Secretary was making statements about. it he was making statements that do not bear the evidence of being proved as true statements. I was told about the attitude of my colleagues on these benches that everyone's blood boiled when I speak about the Union Jack. The Home Secretary is perfectly well aware

  1797
  with regard to the great struggle which the Conservative Association are having in Battersea with regard to the Union Jack, that every Labour member on the Council has views which are exactly opposite to what the Home Secretary said were the generally accepted views of the Labour party. I am going round Scotland, Wales, and England; I have held many meetings and met many organisations, and I have never found in one of these that sentiment about the Union Jack. I do not want to hurt the feelings of those who do hold them, but they have to see that the opposite of that feeling exists among British citizens, and it is worse than exaggeration to say that they all generally accept the superstition about the Union Jack. I have never come across, in all the meetings I have held, British citizens who told me that their blood boiled because of the things that I have said to British audiences. The Home Secretary keeps minute and detailed accounts of my meetings, meetings which have been attended by 5,000 people at the Stadium in Liverpool and outside the Battersea Town Hall, where there are crowds of 5,000, where there has been protest expressed against what I have said among British audiences. Some sentiments are expressed which are unpleasant and unacceptable to members of the Conservative party and the Fascist organisation, and we are prepared to accept their opinions in certain circumstances, hut it is untrue to say that I am violating a generally accepted principle.
  I can remember in the last 15 years two or three occasions when a hall has been decorated, and if by chance a Union Jack has been hanging there, people have been careful to cover it up. The Home Secretary should test the challenge he is offering to the members of the Labour party. Next Saturday is the great day of the working classes of Great Britain. They and their families represent 80 per cent. of the population. I should like the Home Secretary to find out the Members from these benches and march with them at the head of May Day processions with Union Jacks in their hands. We do not take it as an accepted creed that. Imperialism, as represented and carried on by the party that takes up the Union Jack superstition, has proved to be beneficial to the nation as a whole. Millions of men and women do not share the view which
  1798
  the right hon. Gentleman takes, but he takes it almost as a criminality for them to express that sentiment, and thus he puts himself into the wrong track. He is aware that the red flag is the accepted flag and the flag that is used, where flags are used, at Labour functions. Let any Members go to their constituents at the General Election and ask for working-class votes with a Union Jack in their hand and they will soon find out where they are. The Home Secretary and his party are largely responsible for carrying on that campaign against me personally and the Communist party generally, and the effect of it is not to inculcate a higher respect for the Union Jack, but to incite bad blood among the young Fascists, because it is considered a higher kind of patriotism, the third degree of it, to annoy those who hold different opinions from theirs.
  If the Home Secretary would be good enough to correct his arithmetical calculations, he would find that the British Empire has 400,000,000 citizens and not 40,000,000, and he should realise that among that 400,000,000 people, 320,000,000 or 340,000,000 have no traditional sentiment in 'regard to the Union jack. It is the mistaken policy of the Government of this country to try to transport their national sentiment among other peoples. Although people in the conquered countries, out of fear, may not express themselves openly, behind the backs of the rulers they crack jokes about it and say all sorts of things about it. I appeal to the Home Secretary that he need not take it that it is the part of Communist politics or of working-class politics generally to hurt peoples' feelings and merely to excite disturbances Far from it. We are earnestly determined to give expression to our sincere thoughts, whether the Home Secretary and his party agree with them or not, and we are determined to say things which we believe will lead to emancipating and to curing the poverty of the working-classes. We are not concerned with 'hurting or respecting the feelings of this party or of that. If the Home Secretary will begin to give up his exaggerated opinion of what he 'and his party think is the accepted creed of the whole nation and the whole British Empire, he will be able to give proper directions and more workable and fair-minded instructions to his own officers in

  1799
  supervising these meetings. At the present moment what he says does not frighten any of us at all, but simply tears up altogether what has hitherto been known as the majesty of the law.
  Mr. BUCHANAN: I rather apologise for intervening in a purely London Members' Debate. I recognise that the question of these processions and other matters arising from them naturally interest London Members, but the point I wish to raise is in connection with meetings in Hyde Park. I may, perhaps, be excused, as a Glasgow Member, for raising the question of Hyde Park, but, perhaps because of my nationality, I do take some interest in Hyde Park meetings, and, even before I came to Parliament, I often spent most of the evenings at Hyde Park—largely, I suppose, because it cost nothing, and was therefore in the nature of an entertainment. At the same time, I always thought that in every city, whether in Glasgow or elsewhere, it was a first-class thing to have some particular place w here groups of men could air what they were thinking on matters of politics, religion, and one thing and another. Therefore, I want Hyde Park to be preserved, because I think it is a grand thing to have an open-air place where people can gather together and interchange views and ideas.
  I spent last Saturday evening at Hyde Park, and the point I wish to raise with the Home Secretary is one that has already been touched upon by my hon. Friend the Member for Bow and Bromley (Mr. Lansbury), namely, the impartiality of the police. I went there, and I heard Catholics, Jews, Free-Thinkers, Prohibitionists, and various groups carrying on their meetings. I also heard Communists, anti-Parliamentarians, and mild Socialists like myself. I almost felt like not intervening in this Debate to-night, because I am sure there are none of my speeches at the Home Office; they are so mild that no one would bother to take them down. I am positive I shall never he, like either of the two hon. Members who have just addressed the House, confined within prison walls for offensive speeches. Therefore, I cannot be accused of holding the same views as they do, but I occasionally hold advanced views, and, if there is one
  1800
  thing about which I am quite frank, it is that I am a Republican: I am an anti-Monarchist, and I said so at my election.
  Therefore, when a group of people began to sing the National Anthem, I did not take off my cap. "The Red Flag" is very dear to me, but it is not to the right hon. Gentleman the Home Secretary, and I would never expect him, if he were in my company, to take off his hat to "The Red Flag," because he does not hold the same view about it as I do. He must bear in mind, however, that I hold deeply convinced anti-Monarchist views. They may be all wrong, but I have thought them out, I have applied my limited reason to them, and I am frankly a Republican. To that view I commit no one, even in my own party. Even in the right hon. Gentleman's own party there arc people who are committed to different views with which, it may be, the whole of the party do not agree. For instance, the hon. Member for the Sutton Division of Plymouth (Viscountess Astor) is a Prohibitionist, but that would not commit the whole Conservative party; and it is the same with my republicanism—I do not ask any colleague to accept it, but it is my convinced attitude.
  On Saturday I did as I have always done—I do not take off my cap at any time, or stand up in connection with it. That is not because I want to be discourteous to people, but because I cannot do it, because I do not believe in doing it. Like my hon. Friend the Member for Camlachie (Mr. Stephen), I rather like the Home Secretary, because I believe he is straight in what he does, and I do not want to be a hypocrite in my views. Therefore, on Saturday, I did not take off my cap; I did not do the orthodox thing, and I am not going to do it. Immediately I was surrounded by groups of people who seemed to think I should do it, but I am not going to do it; and what angered me was that the police seemed to side with some of the people who gathered about. I did not object much to that, however, but later on, as I watched, it seemed to me that the whole attitude of the police was to side with those who are commonly called the Fascist group.
  I want to say that I do not think all the folks were Fascists; I think that one or two Socialists were entitled to some

  1801
  blame on Saturday; but the point I am concerned about is that the police should take sides, which was much more annoying to me. My observation may have been casual, but certainly I felt that the whole attitude of the police on that occasion, or, at any rate, of one or two of them, was to take sides with those who were opposed to Socialist views. I am not blaming them very much. The whole upbringing of most people is to respect, for instance, the Union. Jack and the Monarchy, and, therefore, if I hold unpopular views, I must suffer to some extent, even from the police; but I think that, after all, the police should be courteous and civil, even to people holding views like mine. I hope the Home Secretary, in regard to Hyde Park, will at least say that Republicans—and I am a Republican—are entitled to hold their views and propagate and uphold them, and that the police have no right to take sides in support of particular views.
  I have intervened in this discussion because I want to see Hyde Park maintained as a free place of expression. I may say that I pleaded with some of the Socialists on that occasion not to do anything provocative, because I did not want to give the right hon. Gentleman any lever for taking away Hyde Park. I pleaded with them not to do anything that, would in the slightest degree give him and his party any chance of taking away Hyde Park, but to do anything in the way of playing second fiddle, as it were, rather than lose the right of public meeting there. I have more respect for the Home Secretary than most Members on the Front Bench, because I do not think he has the humbug and smug hypocrisy of many of his colleagues. I think he is straight; I think he hits out. He would do things to me that I respect; he would drive me out of public life, I suppose. I would respect him for that, but I hate the smug hypocrite who comes along and gives expression to his views. I hope he will see that we retain Hyde Park. I am not blaming the police as a whole. I know them in London and Glasgow fairly well.
  There is one small matter, also, that I want to raise, as to which I have not given the right hon. Gentleman notice; I hope he will excuse me. It is the question of access to this House, which is a far cry from the question of Hyde Park. Whether it is that I am not so well
  1802
  dressed as the rest of my colleagues I do not know, but, when I come to the House of Commons, I always find that everyone can get the traffic stopped but my hon. Friend the Member for Camlachie and myself. I see Labour Members walking in, and the traffic is stopped, but when the hon. Member for Camlachie and I come along—whether it is because we look so unlike Members of Parliament I do not know—no one takes any notice, and occasionally, when coming across the road, it is rather awkward to have to be jumping about. I am not blaming the police at all, but I should like to ask that the police might be given instructions that at least all Members of the House of Commons might get freedom of access into the place. The police do not do it because we are Labour Members, but because we do not make ourselves known, or some other reason. I should like to see the Home Secretary give instructions to the police to keep the access a little more clear. I hope my raising this complaint will not get anyone into trouble, or I would rather I had not raised it at all. I generally find the police in the building and round about the place courteous and decent. In fact, if a Glasgow person comes to London, the first instruction I give him is to ask a policeman anything. All round, and generally speaking, they are very decent. I hope the Home Secretary, not only for his own sake, but for the sake of the office he holds, and for the sake of British freedom, will see that the police are neutral and hold a. fair balance of power in the big issues that divide men from men and prevent them agreeing one with the other.
  Mr. NAYLOR: I want to add my voice to the appeal that has been made by my hon. Friend the Member for Bow and Bromley (Mr. Lansbury). I, like other speakers, can testify to the general good and restrained conduct of the Metropolitan Police. Generally, we get on with them extremely well, but it is just one inspector here and one constable there who cause the trouble on occasions like this. I am extremely anxious as 10 what is going to take place next Saturday. We shall have probably the largest demonstration London has ever seen, and there will be men and women of all opinions in that demonstration. They will have the recollection of what took

  1803
  place only a few weeks ago in their minds. It would be extremely unfortunate if one or two constables, perhaps a little angry at the thought that they were put on extra duty for this special purpose, and not therefore being in the best of tempers, should do or say anything that would be likely in any way to disturb the orderly progress of the procession.
  10.0 P.M.
  I have had a little experience of these demonstrations. I made it my business to go to the demonstration of the Empire women only a few weeks ago. The conduct of the police on that occasion was beyond reproach. In fact they seemed to be enjoying themselves extremely, but I noticed that there have been occasions when I, with two or three others together standing on the pavement opposite the Victoria Embankment, speaking about the arrangements of the procession, have been moved on by the police as if we were causing an obstruction. On this occasion of the women's demonstration, the women were allowed to block the whole of the pavement, standing there possibly for half or three-quarters of an hour, and no policeman moved them on. I am not suggesting that they should have been moved on. Everyone was in a good temper, and the best possible use was made of the occasion. What I suggest is, if it possible for inspectors and superintendents and mounted contables to contain them selves on the occasion of a women's Empire demonstration, why cannot we have the same attitude of mind on the part of the police, on occasions when unemployed workmen or May Day demonstrators are marching through the streets? That is what we want.
  The policeman's lot, we know, is not a happy one. He can make it happier than it is if he is prepared to show that tolerance towards our men and women when they demonstrate as he usually shows when he is passing a Member of this House. I appeal to the Home Secretary not to allow any order to prevent the people marching away after the demonstration. When you have a large concourse of people with their feelings highly strung on occasions like this, at the close of the meeting dispersing in all
  1804
  directions because they cannot march away in orderly procession, the position is much more dangerous to order than it would be if they were allowed to march back behind their hands and banners. I hope the Home Secretary will bear that point in mind and will make it clear that next Saturday at least there shall be no orders to prevent the marchers returning the same way they came.
  Sir W. JOYNSON-HICKS: I cannot complain at all of the speeches that have been delivered. They have been quite fair in tone, and hon. Members were quite entitled to take the opportunity of raising the grievances they have raised. I shall endeavour to deal with these points as fairly and as honestly as they have done. There are two questions that arise; first, the question in regard to the Battersea demonstration or procession, and secondly the general question that has been raised by the hon. Member for Bow and Bromley and the hon. Member for South-East Southwark (Mr. Naylor). With regard to Battersea, I am in this difficulty. The hon. Member for Bow and Bromley (Mr. Lansbury) is a Member of the House. I have known him for a good many years, and he gives me his, personal view of certain facts. The police give me a different one. I realise that there are always two views of most facts. I was engaged in litigation before I became a Minister for a great many years, and I have always found that there are three or four people who see one view of a London street incident, and three or four people who see exactly the opposite view.
  The hon. Member has made a complaint against the police, but has not made any definite charges of bad behaviour. I will tell him the information I have obtained from the police. I have not only got the police report, but I have seen the inspector who was in charge of the matter. I must ask the hon. Member to forgive me for what. I am going to say. The inspector tells me—and this is supported by independent testimony—that the real trouble was that there were two sections of the procession, one of Deptford and Southwark people, who were quite decent, and the other the Bow and Bromley lot.
  Mr. LANSBURY: The right hon. Gentleman and his informant are quite misinformed. I cannot say anything else. There were none of my own friends there at all. There was no Bow and Bromley contingent, so they are quite wrong about that.
  Mr. NAYLOR: The right hon. Gentleman is not misinformed as to the good behaviour of the Southwark and Deptford sections.
  Sir W. JOYNSON-HICKS: Perhaps I should not have said Bow and Bromley, but the hon. Member bulks so largely in the House that I regard all he says as coming from Bow and Bromley. What happened, as far as I can gather, is that the Deptford people, who headed the procession, had a band, and not a. bad band, and they were marching fairly behind it. Then someone intervened and came in front and stopped them, and said, "I must see if the others are behind." We know this man quite well. He is generally called Pruth, but his real name is Proothovski. I daresay the hon. Member knows him. He is the same man who intervened in the Hyde Park trouble a fortnight ago, and urged the Hyde Park people on the way home to go slowly so as to annoy the shopkeepers in the West End. This inspector says quite definitely that the whole thing would have gone all right and comfortably if this man had not searched behind, and had not been stopped and worried by these men. They were walking four abreast, and when he came on the scene they scattered across the road and interrupted the traffic and would not keep in line as the Deptford Inca did. The inspector directed two mounted police to disperse these people in front of the procession and that was done. In a melee of that kind it was quite possible that, the hon. Member for Bow and Bromley saw something happen which the inspector did not see.
  Mr. LANSBURY: The disturbance took place across the main road, where the patrols had led this little group.
  Sir W. JOYNSON-HICKS: Then the hon. Member does know Pruth?
  Mr. LANSBURY: Yes, I do, as well as I know the Home Secretary.
  Sir W. JOYNSON-HICKS: Then if the hon. Member will leave this man and myself on one side, it would be much better for himself and the East End. A perfectly independent man told me what the police did on this occasion. The second point raised by the hon. Member was very much more important, but what I would say is that if a procession is going along orderly, and if the hon. Member and others will work with the police instead of allowing men like those we complain of to work against him, things will go on all right. I believe the hon. Member for Bow and Bromley paid a compliment to the police for doing their best with a very difficult job, but- the difficulty arose from the action of this one man, Pruth. The hon. Member knows his record very well. He is an alien, he has been convicted of larceny and of causing obstruction before, and naturally he is known to the police. When you see a man of that kind trying to create trouble as I am informed he was doing, the natural thing to say is, "Here is this fellow again trying to create a disturbance."
  There was very little trouble on this particular afternoon, but the question as to the position of the police is very important. The hon. Member for Bow and Bromley has suggested that since I have been in office I have given instructions to the police under which they have adopted different methods in dealing with these processions. That is a serious accusation, and while the lion. Members makes that accusation in one breath he tells me that certain police behaved admirably, and the hon. Member for South-East Southwark confirms that view, and so does the hon. Member for Gorbals (Mr. Buchanan). I may say that since I have been Home Secretary I have not issued any instructions which would cause any police officer to assume that I wanted these processions dealt with in a different manner to that in which they have been dealt with before, and I have given no such instructions of any kind.
  The police arc under superior officers and it is the duty of the Chief Commissioner to be responsible for the organisation, discipline and conduct of the police. If there is any real trouble and anything goes wrong, then I am the ultimate authority, and that is why the hon. Member for Bow and Bromley lays

  1807
  his complaint before me, which he is quite entitled to do, instead of laying it before the Chief Commissioner of Police. I want to make it quite clear that it is not my wish that the police should in any way depart from the way in which they have carried out their difficult duties in regard to processions under previous Home Secretaries. I want to see good feeling between the police and the public, and I want that feeling to continue to exist. A procession of this kind, in plain language, is a nuisance to everybody who is not in the procession, because it obstructs traffic when it takes place on an ordinary afternoon and it obstructs accesss to tradesmen's shops. Therefore a procession of this kind cannot be other than an episode which is not desirable in the interests of the public. What is more, it is illegal. I say to all those who take part in these processions while they are illegal, and while I will take no steps to prevent them, I want hon. Members opposite to use their influence to sec that they are conducted with as little annoyance as possible to other people. If my statement is true about this man Pruth, it is quite plain that he wished to create a disturbance. If we help you with your profession and prevent? obstruction along the East End or along the Embankment to Hyde Park I think it is up to you to cause as little nuisance to the people of London as possible. I am certain that we are not going to do anything to prevent processions going hack again in proper order. It is much better that they should do that rather than straggle back in unregulated mass formation. Do it as decently as you can and cause as little inconvenience to other people as possible. I understand there is to be a large procession on Saturday next. They will come and return without any orders of any kind from the Home Secretary to hinder them or any orders from the Chief Commissioner of Police. I say "Go back as decently as you can." The Deptford people walked at quite a decent pace, and caused no trouble.
  Mr. LANSBURY: They nearly killed me!
  Sir W. JOYNSON-HICKS: Then the hon. Member must go into training before going into these marches, and then he will be able to go more than two
  1808
  miles an hour with the procession. On the subject of reporting speeches, it is not correct to say that no verbatim reports are taken. I have seen them. I have spoken during the last 10 days to a police sergeant who took verbatim reports of some speeches on Clapham Common. This particular sergeant had his book torn from his hand, and a couple of pages were torn out in the grab that was made at him by somebody, I do not. know who it was who saw him taking the report. It is a little difficult—the hon. Member for Bow and Bromley will perhaps forgive my saying this—to take a verbatim report of all the froth talked on Clapham Common. It is quite unnecessary.
  Mr. LANSBURY: Hear hear!
  Sir W. JOYNSON-HICKS: The hon. Member for Bow and Bromley is rather a special favourite of mine, because I am a student of English literature, and I like to read his speeches. I have had very fair reports of them, I congratulate the hon. Member that, up to the present, he has either been sufficiently loyal or sufficiently clever in his speeches not to come within my clutches.
  Mr. LANSBURY: Why do you want me in your clutches?
  Sir W. JOYNSON-HICKS: I do not want that. I would much sooner the hon. Member behaved himself, made his speeches in this House, and attacked me as often as he likes, rather than go to the Albert Hall, and make a declaration which put him very nearly within the clutches of the law, if not of myself. There is very little more to be said about reports of 6-speeches. It is my duty to carry out the law. I cannot put people into prison; I can only ask the Attorney-General to prosecure. When people are prosecuted it is, not for me, and it is not for the Attorney-General, but it is for the jury to say whether or not they are to be convicted. As long as I am Secretary of State, I must take steps if I have information, and I have reason to believe that the law has really been broken in such a way as to be detrimental to the well-being of the community.
  Let me make the point quite clear to the hon. Member for Gorbals and the hon. Member for Bow and Bromley in regard to opinion. I spoke very fully

  1809
  on this point on Thursday last, when we had not the privilege of seeing the hon. Member in his place; he was otherwise engaged. I spoke very fully on the question of opinion. Opinion is perfectly free in this country. The hon. Member for Bow and Bromley may say that he is a Socialist, or that he is a Communist. He may try to persuade the people to that effect. He may try to persuade them that the Socialist system is far better than our capitalist system, and he may try to get them at the ballot box to change the existing constitution of the country. That is perfectly legal, but when you come to the point of revolution by force of arms—
  Mr. LANSBURY: Has the right hon. Gentleman ever, on any occasion, had one single word that I have uttered in favour of violent revolution, anywhere or at any time?
  Sir W. JOYNSON HICKS: I think—
  Mr. LANSBURY: If so, I challenge him to produce it.
  Sir W. JOYNSON-HICKS: The hon. Member is entitled to ask me that. I have not. He asks me whether he has ever said anything of that kind. I say that the Albert Hall speech was very near it.
  Mr. LANSBURY: It was telling the people not to be violent. That is very important. I am a well-known pacifist. The only charge you have against me is that I call upon people to follow the pacifist line in national and international relations. That is the only thing you have against me. You must not mix me up with the Communist point of view of substituting armed force, when occasion arises, as against this House. They dislike my point of view as much as you do. I object to you talking about me in the same manner as you do about them, in regard to violence. I am against violence in any shape or form, and am always preaching it everywhere. When I preach it in this House I am laughed at by hon. Members opposite.
  Sir W. JOYNSON-HICKS: I will abstain in future from classing the hon. Member for Bow and Bromley with the hon. Member for North Battersea (Mr. Saklatvala).
  Mr. LANSBURY: On that point you must.
  Sir W. JOYNSON-HICKS: The hon. Member for North Battersea has his own point of view. He is perfectly sincere. He told the House on Thursday, in language which was perfectly unmistakable, what his views were. He is always perfectly honest and clear as a logical exponent of the law of force and in this House he is entitled to express those views. Whether he is so entitled outside is another question on which I am not going to give an opinion to-night. Still I am glad to have had the declaration from the hon. Member that he is not in any way in favour of force of any kind in political questions.
  Mr. BUCHANAN: Is it an offence for me not to pay homage to the Union Jack?
  Sir W. JOYNSON-HICKS: I am coming to the hon. Member. He has asked me about the meetings in Hyde Park. I agree it is very desirable that there should he some place in a great city like this where everybody can meet and expound every form of view of politics or religion, and may I say where every form of crank can speak. But there is this to be said. It is very foolish indeed of the Socialists and Fascists to have a pitch side by side. Have an anti-vaccination pitch in between them. After all, the Marble Arch end of Hyde Park is big enough and it is very foolish to have pitches side by side. Have one at one end of the Park and the other at the other, and all sorts of odds and ends in between. The hon. Member asked me about removing his cap when the National Anthem is sung or played. There is no law in this country which compels a man either to stand at attention or remove his hat while the National Anthem is being played. It is purely a matter of taste, and the hon. Member will forgive me if I say that as long as this is a monarchist country he would be doing no real harm to his personal convictions but something which would please his political opponents if he paid that tribute of respect to the National Anthem. It might also perhaps prevent a lot of trouble. The police cannot guard everybody. It would be wrong undoubtedly for anybody to take any notice of the hon. Member because he did not remove his hat, but he knows that passions run high—
  Mr. BUCHANAN: The point is this. I maintain that the police have no right to take sides as against me. In the Hyde Park meeting I got the idea that the police deliberately took sides against me because I did not do what the majority wanted me to do. Honestly I cannot, and I am not going to do it. I hope the Home Secretary is not going to instruct the police to take sides as between Republicans and Monarchists. I can be as good a citizen as a Republican as anyone else.
  Sir W. JOYNSON-HICKS: I am sure there is no such suggestion by any officer of the police to give such instructions, and after what I have said to-night I am quite sure the police force will take note that they are not to take sides in these matters. The duty of the police is to preserve peace and prevent any disturbance from any section of His Majesty's subjects.
  The last thing is in regard to access to this House. I am sure that the police would give the same attention in the hon. Members as they do to all other hon. Members. I suggest that when next they come to the House one of them should say to the inspector in charge at Westminster, "We are Members of Parliament." The time was when I was quite unknown to the police: but gradually one gets more known. If hon. Members would do me the honour of giving me a photograph, I would see that it was handed to the police inspector, and then
  1812
  I am sure that a way would be made for them to cross the streets to the House. I am very proud of the Metropolitan Police. I think that the whole of England and the whole world are proud of them. Americans, Frenchmen and Germans all say that there never was and never is such a police force for the ability, great kindness and courtesy they show, and for the way they do their duty with as little friction as possible. It is a great honour to be the head of a great Force of that kind. I am always willing to receive any suggestions to improve it. After what I have said to-night, I am very hopeful that there will be no further trouble in regard to anything like coming to the House of Commons, as I hope that what I hare said will reach the ears of the police, and will make them realise that my desire is that there shall be no conflict of any kind. At the came time, I repeat the appeal I made to hon. Members opposite, those who have the responsibility for these processions, which cause a good deal of trouble, "Do your utmost as gentlemen and Members of Parliament to help the police, and make their duty on May Day next and every other day as little irksome as possible and as little of a nuisance to His Majesty's subjects as possible."
  Question, "That this House do now adjourn," put, and agreed to.
  Adjourned accordingly at Twenty-eight Minutes after Ten o' Clock.