HC Deb 17 June 1930 vol 240 cc55-151
The CHAIRMAN

I do not propose to call the first three Amendments on the Paper, in the name of the hon. Member for Torquay (Mr. C. Williams)—(1) in page 15, line 29, to leave out the words "and no," and to insert instead thereof the words "but full"; (2) to leave out the word "such"; and (3) after the word "income," to insert the words "from trade or business." The Amendment in the name of the hon. Member for Torquay—in page 15, line 34, to leave out paragraph (a)—that in the name of the hon. and gallant Member for Oxford (Captain Bourne)—in page 15, line 36, to leave out paragraph (b)—and that in the name of the right hon. and gallant Member for Brighton (Major Tryon)—in page 16, line 3, to leave out from the word "agent," to the end of the Subsection—appear to me to negative the Clause. I propose to call the Amendment in the name of the right hon. and gallant Member for Brighton—in page 15, line 41, at the end, to insert the words Provided that this section shall not apply to the consul or official agent of any foreign state which has not made reciprocal arrangements to a similar effect with His Majesty's Government"— and I would suggest that there might be a general discussion on that Amendment, with Divisions, if desired, upon it and the following Amendments—in page 16, line 8, to leave out the words "for the purposes of profit," and in line 9, at the end, to add the words Provided that this section shall not apply to the income of any consul or official agent in the service of any foreign state which has made default in meeting its financial obligations"— on the understanding that such general discussion be not repeated on the Question, "That the Clause stand part of the Bill."

Mr. CHARLES WILLIAMS

May I ask for your guidance on this matter? You mentioned that you were not going to call the first three Amendments on the Paper, but I am not quite certain whether you are going to call upon me to move my Amendment to leave out paragraph (a).

The CHAIRMAN

I said that the Amendments to leave out paragraphs (a) and (b), and the Amendment in the name of the right hon. and gallant Member for Brighton, in page 16, line 3, appear to me to negative the Clause. I now propose to call upon the right hon. and gallant Member for Brighton to move his Amendment in page 15, line 41.

Mr. C. WILLIAMS

I beg to move, in page 15, line 41, at the end, to insert the words: Provided that this section shall not apply to the consul or official agent of any foreign state which has not made reciprocal arrangements to a similar effect with His Majesty's Government. I move this Amendment in the absence of my right hon. and gallant Friend the Member for Brighton (Major Tryon), and I do so for various purposes. This Clause, as far as I understand it, has been put into the Bill for the specific purpose of exempting certain Consular officers who are employed in this country by foreign Powers, and I think that, before the Committee decides to exempt any body of persons in this country from payment of Income Tax, we should have from the Government a very clear and definite reason for such exemption. I fully realise that some reason may be given, such as that they are employed by this or that foreign Power, but I think we ought to know definitely what will be the cost of this exemption to the Exchequer, and also how many people, approximately, it is likely to affect. Having arrived at that point, we shall be able to form some sort of estimate of the extent of the need for this Clause. It seems to me and to some of my hon. Friends that this Clause may be put in for some special purpose. I will separate, if I may, the two bodies of people whom it may affect——

Mr. DENMAN

On a point of Order. Are we discussing the Amendment in page 15, line 41, or the Question, "That the Clause stand part of the Bill," to which the hon. Member's present remarks appear to be directed?

The CHAIRMAN

My suggestion was that we should have a general discussion on the Amendment in page 15, line 41, and in that respect the hon. Member for Torquay (Mr. C. Williams) is in order.

Mr. CHURCHILL

On that point of Order. May we have everything made quite clear? You have suggested that there should be a general discussion on this particular Amendment, and it is not for us to say that any inconvenience arises from that, but it must not be supposed that we in any way abrogate or invalidate our right to discuss other Amendments fully.

The CHAIRMAN

I am not clear to which Amendments the right hon. Gentleman is referring.

Mr. CHURCHILL

There is an important Amendment in the name of my hon. Friend the Member for Barnstaple (Sir B. Peto)—in page 16, line 8, to leave out the words "for the purposes of profit"—which we shall certainly desire to discuss in a manner very different from arranging that it shall go through pro forma.

The CHAIRMAN

I may say that the Amendment in the name of the right hon. Gentleman the Member for St. George's (Sir L. Worthington-Evans)—in page 16, line 9, at the end, to add the words: Provided that this section shall not apply to the income of any consul or official agent in the service of any foreign state which has made default in meeting its financial obligations, seems to me to be rather vague, and I cannot quite see why it cannot be covered in the discussion I suggest.

Mr. CHURCHILL

That difficulty will, no doubt, be completely dispersed, and the whole position clarified, when the right hon. Gentleman in charge of the Amendment rises to explain it to the Committee.

The CHAIRMAN

Then I will call that Amendment.

Mr. DENMAN

I gather that what we are now discussing is a proviso that the Clause shall not apply to certain agents in certain circumstances, and, on that question, it seems to me to be very inappropriate to have a discussion on the merits of the Clause as a whole. The discussion up to the present has been, obviously, more in relation to the Question, "That the Clause stand part of the Bill."

The CHAIRMAN

I did not say that I would not allow a discussion on the Clause. I said that, when we came to the discussion on the Clause as a whole, there might be a shorter discussion.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)

This practice of having a general discussion upon a particular Amendment has been increasing considerably in the last few years, but it has always been on the understanding that it would obviate a detailed discussion upon further Amendments on the Paper. From what the right hon. Gentleman the Member for Epping (Mr. Churchill) said just now, I gathered that he is maintaining the right to have a full discussion upon any Amendment which may be called, but I do not think that it can conduce either to the convenience of the Committee or to the saving of time to have a general discussion now, and then, perhaps, a long discussion on any other Amendment which you may call.

The CHAIRMAN

My suggestion was that, on the Amendment which is now before the Committee, there might be a general discussion on the questions covered by any other Amendments which it seems to affect. As to the Amendment of the right hon. Gentleman the Member for St. George's (Sir L. Worthington-Evans) I was rather in doubt, but the right hon. Gentleman the Member for Epping (Mr. Churchill) has suggested that it will be explained. I suggest that, if we have this wide discussion now, it should certainly curtail to a large extent the discussion on the Question, "That the Clause stand part of the Bill."

Mr. CHURCHILL

I accept what you say. If we are to have, as the Chancellor of the Exchequer has now suggested, a narrow discussion upon the Amendment before the Committee, surely it would have been natural for the Chancellor of the Exchequer or the Financial Secretary to the Treasury to have given an explanation of the Clause as a whole before the Amendment had been moved. We have not received an explanation of the Clause as a whole at all.

The CHAIRMAN

I intended, before the Question "That the Clause stand part" was put, to get rid of this Amendment, and the other Amendment standing in the name of the right hon. Gentleman the Member for St. George's (Sir L. Worthington-Evans). I think that the other Amendments are smaller and are covered by the present Amendment.

Sir LAMING WORTHINGTON-EVANS

That is the point I wanted to raise. One of the so-called smaller Amendments—in page 16, line 8, to leave out the words "for the purposes of profit"—raises a very large question. This Clause, in effect, exempts consuls, in certain capacities perhaps, from taxation. If a consul trades for profit, is his profit to be exempted? That is the sort of question which is raised by this Amendment, and it is really a very important one and quite distinct from the general case.

The CHAIRMAN

I do not think that there need be a long discussion on this Amendment.

Sir L. WORTHINGTON-EVANS

As long as it is not ruled out.

The CHAIRMAN

The two Amendments I propose to take are the one which I have called and the one in page 16, line 8, to leave out the words "for the purposes of profit." If the Amendment standing in the name of the right hon. Gentleman the Member for St. George's (Sir L. Worthington-Evans) is not covered by the present discussion, I shall call it.

Sir L. WORTHINGTON-EVANS

Do I understand that you intend to call the Amendment in page 16, line 8, to leave out the words "for the purposes of profit"?

The CHAIRMAN

Yes.

Mr. CHURCHILL

Are we to have a general discussion on the Amendment which you have now called and a general discussion on the Clause without there being an understanding that discussion upon the other Amendments will, as far as we are concerned, necessarily be abridged?

The CHAIRMAN

This Amendment in relation to the consul or official agent covers a large number of Amendments on the Paper. I propose to take the Amendment in page 16, line 8—to leave out the words "for the purposes of profit"—and the next Amendment—in page 16, line 9, at the end, to add the words: Provided that this section shall not apply to the income of any consul or official agent in the service of any foreign state which has made default in meeting its financial obligations. They cover a very large part of the Clause, and it will not be necessary to have a long discussion on the Clause itself, as I have suggested.

Mr. C. WILLIAMS

Do I understand that at present the points which I am entitled to discuss are only those which have any connection with the arrangement made for reciprocity between the two countries, and also how far these are mutual arrangements between the various countries? I assume that these are the points with which we are dealing. It is impossible to know how far this reciprocity is to affect this country unless some figures are given as to the number of people who will be affected. Does it affect practically the whole of the consular services in the country, or is it meant to affect a section of the consular service who, because of the difference in the nature of their Government as compared with the Governments of other people, are to have this special privilege given to them? I wish to know whether this is put in purely to enable certain officials of Soviet Russia to carry on trade in this country. Is this Clause put into the Bill in order that trade carried on in this way shall not be subject to taxation? That may be one explanation of the insertion of the Clause.

There may be another explanation, and that is, that every consular servant in this country should have exemption under this Clause. If this is so, it will affect a very large number of people. Are our officials going to receive the same kind of exemption and the same kind of benefits in other countries? Do our consular services get similar benefits in the South American countries, for instance, or in the Eastern countries? We should be given information on this point as it is one of considerable substance. We are entitled to know whether this is another instance of the Government trying to give a direct benefit to the foreigner, and, if so, we ought to know how much it is going to cost and how much the taxpayers of this country will have to pay to make the concession. It is clear that any representative of a foreign country who comes here and receives this exemption will, in view of the high direct taxation in this country in comparison with the low indirect taxation, get an enormous benefit out of all proportion to what our people may get in a highly protected country. Obviously, if an official representative of Britain in a protected country, where the Income Tax may be small, obtains exemption from the payment of Income Tax, it may not be of any real benefit to him, because it is not the form upon which the largest amount of taxation in those countries is based. It is conceivable in this case that because we are an Income Tax collecting country on an abnormally high scale our officials may have to bring into other countries articles for their own use and may actually pay in taxation in another way on an abnormally high, or comparatively high standard. This is a point which should go straight to the heart of the Chancellor of the Exchequer. It should appeal to him in those places where he has most heart. Surely it is a matter which he might follow with interest and see whether he cannot get some further advantages, so that our people in other countries are not burdened with taxation when foreign representatives in this country get off scot free.

I should like the right hon. Gentleman to give us the fullest information as to his intention in putting this Clause down. I have heard it said that it is only to affect a small section of the Consular service, but it may possibly affect practically the whole of the service, and it certainly will, as far as any reciprocity is concerned, unless we get some very definite advantage in foreign countries for our own people to get in goods they want and to be exempt from duty. If the Chancellor would answer those questions, some of us would feel relieved in our minds if we have eventually to support the Bill. I am having a considerable amount of difficulty with people who seem to think he is trying to place some added burden on our own people, and I have not yet been able to explain properly and adequately what he is actually doing and, until I can do so, I am in the unfortunate position of having people throwing bricks at the right hon. Gentleman and I am not able to divert them in any way. I know the Chancellor is following in the footsteps of a much more brilliant man and that adds to his difficulties. I hope he will meet my Amendment. It will be an enormous advantage if he can accept it, and it would help many of us to give him further support.

Sir AUSTEN CHAMBERLAIN

May I make a further request in order to avoid a misunderstanding such as arose between us on a previous occasion. As you, Sir, have invited a general discussion on the Amendment, I would ask the Chancellor of the Exchequer to say what is the reason for having this Clause in the Bill at all; in other words, to explain, not merely the specific questions which my hon. Friend has put, but the whole purpose of the Clause, the reason why such a Clause now becomes necessary, and what difference it will make from the practice which we have hitherto followed.

Mr. P. SNOWDEN

I hope hon. Members opposite will not make a mountain out of a mole-hill. We are asking for the Clause to give statutory authority to what has been the practice for nearly 100 years. Some criticism was made by the Public Accounts Committee about the continuance of the relief of Consuls from Income Tax under a Treasury concession and not by Statute, and, in order to conform with their request, it is proposed to give statutory authority for what since 1842 has been the general practice. Whatever may be said about the ambiguity and difficulty of some of the Clauses of the Bill, I think that criticism cannot apply to this Clause, because it is peculiarly clearly drafted, and a reading of it gives, perhaps, the clearest explanation of what is intended by it.

Sir L. WORTHINGTON-EVANS

Will the right hon. Gentleman read the Treasury Minute?

4.0 p.m.

Mr. SNOWDEN

The Committee may take it that that is the fact. Consuls, consul-generals, vice-consuls and consular agents, irrespective of whether they are foreign or British nationals, will get relief from Income Tax, but—this does not appear to be fully appreciated in view of some of the Amendments which have been put down—they get relief upon their official emoluments only. Up to 1922 the relief had been extended in practice to all the employés of a foreign consul. In 1922 a change was made limiting it to consuls, but in practice it was found to be quite impracticable, because many consuls have insisted upon regarding everyone in their employ—clerks and typists, including British subjects—as being entitled to relief. This Clause will clarify that position. As regards consuls, the relief has been given regardless of nationality. It is proposed to continue that relief to all consuls, vice-consuls, and consular agents, whether they are foreign nationals or not, in the service of any foreign State.

Sir A. CHAMBERLAIN

Do I understand that that will cover consular clerks or others employed by the consul?

Mr. SNOWDEN

They will come under paragraph (b).

Sir A. CHAMBERLAIN

I understood the right hon. Gentleman said that consuls covered all consular agents?

Mr. SNOWDEN

It is explained in Sub-section (3): In this section the expression 'consul' means a person recognised by His Majesty as being a consul-general, consul, vice-consul or consular agent, and the expression 'official agent' means a person not being a consul, who is employed on the staff of any consulate, official department or agency of a foreign state, not being a department or agency which carries on any trade, business or other undertaking for the purposes of profit. Therefore, "official agent" will include the staff of the consulate provided they are doing the ordinary duties of a consulate staff. An attempt has been made to include British subjects belonging to the consular staff in the scope of the relief. It is not proposed that they should get relief. That would place them in a very much better position than the British employés of a foreign embassy. Is there any other point which I have not answered?

Mr. C. WILLIAMS

What were the numbers and the amount?

Mr. SNOWDEN

As to the cost, as I said at the beginning, there is no large amount of revenue involved in it. I am told by the Inland Revenue that the amount is so infinitesimal that they have not taken the trouble to make an estimate of it.

Mr. WARDLAW-MILNE

The right hon. Gentleman spoke about this nullifying something, and at another moment he spoke of it carrying on the practice of the past. Will he make it perfectly clear whether, in fact, any British staffs of consulates have hitherto paid Income Tax, and whether the first half of paragraph (b), which excludes those British subjects who are so employed, is a new aspect of the matter or not, because I rather gather, from what the right hon. Gentleman said, that, in fact, they have been excluded in the past?

Mr. SNOWDEN

Under the old concession, as I said, consuls have generally claimed relief for all their staff down to clerks or typists, whether British or foreign nationals. In future, British nationals employed by the staff of the consulate will not be exempt from Income Tax upon the emoluments of their office. That, I think, is the only point. I have answered the question raised by the hon. Member for Torquay (Mr. C. Williams) about the cost, which is infinitesimal.

Mr. C. WILLIAMS

The numbers?

Mr. SNOWDEN

There are a great many. I cannot give the exact number, but I am told that the number is very considerable. Foreign States do exempt the incomes of British consuls from taxation, and some of them, I am given to understand, deal with the matter rather more generously than we do. Therefore, there is no need at all to impose in this Clause the condition of reciprocity, because if we made reciprocity a condition, it might be that we should have to extend the proposals of this Bill, and give even a larger concession in this country than they enjoy. I may add—and the right hon. Gentleman with his experience of the Foreign Office will agree—that the Foreign Office has always taken the view that we should not embody in legislation any proposals for reciprocity in regard to this matter.

Sir L. WORTHINGTON-EVANS

The Committee was told by the Chancellor of the Exchequer that this Clause was to put into legal form a practice which had been pursued by the Treasury for 100 years. I asked for the Treasury Minute, but the Chancellor of the Exchequer has not got it. I asked for it in order that the Committee might be in a position to check this Clause and compare the exemption given by the Treasury Minute with the exemption given by this Bill, and now, under a process of cross-examination, the Chancellor of the Exchequer is obliged to admit that this Clause goes a great deal further than the Treasury Minute, because, under the Treasury Minute, Britishers and foreigners employed by a consul were treated alike. Both sets of employés were treated alike, and, both escaped Income Tax in respect of their emoluments. In future, however, the British are not to escape Income Tax, but the foreigners are. Those in the employment of the consuls are for the first time differentiated between. If there is a British employé, he has to pay Income Tax, but if there is a foreigner employed by a consul in London, he is not to pay Income Tax. That is a variation, as I understand, by the Chancellor from the Treasury Minute, and my right hon. Friend interposed to ask the Chancellor not to deal separately with single questions, but really to state the position. The Chancellor commenced by saying that this Clause is merely to legalise a position which has been adopted by the Treasury for 100 years, but when we go into it we find something quite different. A penalty is being put on British employment, and a subsidy is being given to foreign employment. It amounts to that. With Income Tax at its present high rate, it, of course, amounts to a preference in favour of the foreigner both in employment and in emoluments. Then we ask whether there is reciprocity, and the Chancellor vaguely says that in some countries there is reciprocity, but in others there is not.

Mr. SNOWDEN

I said that in a very large number of countries there was reciprocity.

Sir L. WORTHINGTON-EVANS

And as regards the others—the minority—what about them? Of course, the Chancellor did say there was no reciprocity in some, and his statement repeats it. In a large number of cases there is reciprocity; in the others there is no reciprocity. This Amendment proposes to limit this Clause to the consuls of countries where reciprocity is given, and surely that is very wise. There is no country in the world with so high a rate of Income Tax as we have, and there is no country, therefore, that does not gain more from us than it gives to us, even if it exempts us from their lower rate of Income Tax. It seems to me that we ought to insist upon reciprocity in this matter.

There is another question I want to ask the Chancellor of the Exchequer which he does not seem to have answered. At any rate, I did not understand it. Paragraph (a) of Sub-section (2), he said, referred to the official emoluments of both British and foreign consuls, and he drew a distinction between paragraph (a) and paragraph (b). Is it the case that paragraph (b) does not refer to foreign people? Does it deal only with British? Let me put this question: Does the trade agent in this country who represents the Russian Government doing an exporting trade to this country, have to pay Income Tax upon any profits that may be made in this country either by him, if he is an official agent as is contemplated by this Clause, or by the Russian Government? Is that trade carried on without the Government or its agent being liable to Income Tax, and may I ask whether that is a form of subsidised competition which the Chancellor is asking us to support and adopt? It is said that by the definition that does not apply, or rather that the official agent means a person. … who is employed on the staff of any … agency of a foreign State, not being a department or agency which carries on any trade. … for the purposes of profit. That depends upon what is intended to be represented by "carrying on trade for the purposes of profit." We know very well that certain Socialists consider that trade ought not to be carried on for profit, but that it ought to be carried on for use. I do not know whether the Russian Government adopt that attitude and say that their trade section is not being carried on for profit. I can quite believe that it would pay them, as they want foreign exchange, to send goods here on which it would be quite easy to show that there was no actual profit, that is to say, the selling price was even below the price of production in Russia. What power have we got to check that, if a claim is made for exemption from tax? It is obscure, and, therefore, I ask the Chancellor whether it is intended to exempt from Income Tax in this country the official agent of the Russian Government, whether he makes a profit or not, or whether it is a profit which the Russian Government makes and which he says he does not make? I put this as a, sufficiently specific question to enable the right hon. Gentleman to answer. I would still ask him to produce the Treasury Minute to enable the Committee to compare what has been done in the past with what is proposed here, and I ask him definitely to say whether there is a preference, as I fancy there is in this Clause, in favour of foreign employment at the expense of British employment?

Mr. SNOWDEN

There is no provision in this Clause giving preference to foreign employment. [HON. MEMBERS: "You said so!"] A British national employed by a foreign consulate is treated exactly as a British subject in British employment. If he were not so treated, it would be giving preference to persons in foreign employment in this country. In regard to the point about trading profits, the head of the Russian trade delegation in this country and two of his officials have diplomatic status, and, therefore, they do not come within this Clause. They are not regarded as consuls, but as diplomats, but it is only upon their official salaries as such that they would get exemption. All the other servants or officials of the Russian trade delegation will come under that part of the Clause which exempts from relief those engaged in trade for profit.

Sir ASSHETON POWNALL

The Chancellor of the Exchequer said there was a danger with regard to reciprocity, because we might get worse terms abroad than we now get, but I do not see how that argument applies. The right hon. Gentleman said that in a good many cases abroad, consuls were exempt from the Income Tax of the country concerned, but he did not deal with the question of consular staffs abroad. By this Bill, as I understand, we are going to give exemption to consular staffs of foreign origin working in this country, and, therefore, surely we are entitled to ask, as a measure of reciprocity, that not only consuls abroad but British citizens who are working as vice-consuls up and down the world should have the same measure of consideration as, by this Clause, we are giving to foreign individuals working here.

With regard to the Russian delegation here, I understand from the right hon. Gentleman that three of them owing to having diplomatic privileges will not have to pay Income Tax, and no doubt a similar advantage is extended to our trade commissioners in Russia, but if, as happened before, the Soviet Government builds up a large trading establishment, as I see it they will be covered by Sub-section (3) of this Clause. The Russian Government may build up a very large staff here, as was the case in 1927, when they had to leave the country, who would all of them, under this Clause, be exempt from English taxation, although it is common knowledge that we should only have two or three individuals in our commercial delegation in Russia, and therefore we are giving a great advantage in that way to Russia. Those are three points of substance to which I hope the right hon. Gentleman will reply.

Major GEORGE DAVIES

The Chancellor of the Exchequer, with that sweet reasonableness of which, by constant use, he is such a master, implored us not to make a mountain out of a molehill. I have always been suspicious of molehills, because the inhabitants of a molehill do their nefarious work underground, and as this debate has gone on the molehill, it seems, is getting rather mountainous. I think it is reasonable that the consular corps of a foreign country, along with ours abroad, should be relieved of Income Tax on their official emoluments, for the reason that they are sent under discipline. They do not choose whether or not they will go; they are always sent. By courtesy, therefore, they are relieved, but as soon as you get beyond that and extend it to the staffs of such individuals, you at once begin to land yourselves into difficulties; and although the amount concerned may be so unimportant that the Treasury have not thought fit to prepare information to allow this Committee to know how much it is, by the Chancellor's own admission there is going to be an extraordinarily unfair differentiation.

If a foreign consular official engages as a typist a foreigner, that foreigner does not pay any Income Tax, but if he engages an English person, that person has to pay Income Tax at 4s. 6d. or whatever the rate may be. I submit that that is going a great deal further than this country has ever gone before or than this Committee should go on this occasion. On the other hand, it brings out the importance of there being perfectly strict reciprocacy in this matter. I welcome any attempt to rectify the crying shame to the taxpayers of all countries of having to pay double taxation, of having to pay taxes on the same income in the country of origin and in the country of residence, and this is a small step towards the ideal of ultimately having only single taxation of individuals, but while I think everyone would agree that the actual consular emoluments of a consular officer, by reciprocity, should be free from Income Tax, I view with considerable apprehension the extension of it provided for in this Clause.

I am sure hon. Members opposite will acquit me of being obsessed, as they might say, with the Soviet nightmare, but they must admit that the conditions under which that country operates are entirely exceptional and different from anything that the world has ever been accustomed to in diplomatic representation. Consequently, any provision for the normal conditions of diplomatic representation does not necessarily apply. We have some experience before of an enormous aggregation of employés under the roof of a so-called diplomatic establishment, contrary to world experience of what a diplomatic establishment was, and we had all kinds of people there closely connected with trade. A large number of them were coming to live here and to do work that could quite as well be done by employés of British nationality, but if British people are employed, they have to pay the predatory rate of taxation with which this country is now saddled, whereas if they take in a foreigner, he gets his income 100 per cent. free of tax.

By trying to correct one irregularity, the Chancellor of the Exchequer lets himself in for a state of affairs which, if we do away with any partly feeling in the matter and regard it from a business point of view, seems to be to be unsound. It is unfair that a typist in an ordinary office in the City of London should have to pay Income Tax, and that if she gets a job in a foreign Consular office she should be free of it, but that anomaly is still worse when you have two sitting side by side, doing precisely the same job, and earning the same salary, but one paying 4s. 6d. in the £ Income Tax and the other not. If the amount involved is infinitesimal and the numbers concerned are limited, the Chancellor would do well to leave the matter as is has been in the past, instead of seeking to drive it to a logical conclusion which only drives us into a logical impasse.

Major LLEWELLIN

The duty of a Government is to look after the interests of its own nationals, but this Clause seems to differentiate between two classes of persons. First of all, Sub-section (2, a) allows a Consul, who is defined by Sub-section (3) as meaning a Consul-General, Consul, Vice-Consul, or Consular agent, to be exempt from our British Income Tax, whether he is of British nationality or not. He is a more highly paid official in a Consul's office, and he is allowed this exemption, but when we get down to one of his typists, as the Chancellor of the Exchequer has said, or one of the more poorly paid members of his staff, if that person is a British subject, immediately he is not exempt from British tax, whereas if he is a foreigner, he is exempt. It seems to me very strange that this differentiation should be made by the party opposite between the poorer people and the richer, exempting the richer from taxation but not the poorer.

The main exception which I take to this Clause, however, is this: It may well have been that some 50 years before I was born this arrangement was made by a Treasury Minute, which was altered slightly in the year in which I was born, but that did not differentiate, as this Clause will now do, between the British person employed in a Consular office and the foreign person so employed, and if we are giving this privilege to foreigners here, it seems to me only right and proper that we should insist on like concessions being made abroad to us. The Chancellor of the Exchequer said there were a great many countries which were at present giving us that reciprocal concession. He did not vouchsafe to name them, and I think it is only fair that the Committee should know which nations are giving us this preferential treatment and which are not. When he says that there are a great many which are giving it, obviously there is a certain number which are not, and if we are going to give that benefit here to the agents and the Consuls of those States, it is only right and proper that we should at the same time obtain a similar concession for our people who are employed in those foreign countries.

I cannot understand any reason for any Government of this country trying to exempt from British taxation foreign people who come here, unless at the same time they get some benefit for our own nationals who are sent from this country to serve abroad. I should have thought that this Amendment, which stands in my name as well as in that of my right hon. and gallant Friend the Member for Brighton (Major Tryon), would have been accepted by the Government. Certainly I view Sub-section (2, b) of this Clause with considerable disfavour, in that obviously it will pay foreign consuls here to employ in their offices people whom they import from abroad. If you are going to charge Income Tax to one man and not to another it is obvious that, to make both ends meet in his family, the man who has to pay Income Tax will want a rather higher salary than the other man. That being the case, no doubt the consular offices will go to the cheaper market and will bring over here foreign subjects whom they can employ at a less wage, for the very simple reason that they have not to pay any Income Tax out of that wage. This Clause, as it stands, is going to hamper, although it may not be much, employment for our own people in this country and will give a benefit to foreigners who seek employment here. In that way, it is a departure from the practice of the Treasury since 1842 and is to be thoroughly deplored. I hope that this Amendment in regard to reciprocity which stands in my name will be carried to a Division.

Mr. CHURCHILL

I have listened to this debate with an increasing feeling of astonishment that the Chancellor of the Exchequer should have seen fit to overload this already complicated and controversial Budget by the introduction of a Clause like this. Whether his officials have taken advantage of his inexperience and thrust before him a number of stock departmental amendments and grievances which they would be glad to have cleared out of the way, and he has not noticed it, nor realised it, or whether there is some other reason, some desire to show favour to some particular Government with whom the right hon. Gentleman and his Government are willing to have specially agreeable relations; which of these it may be I cannot attempt to decide, but of this I am sure, that a more foolish course for the right hon. Gentleman to take than to introduce into the Budget a Clause of this kind, which, as has been shown, has vices inherent in it against which Parliament is bound emphatically to protest, is certainly an astonishing course to take. There is, of course, a third reason which has actuated the right hon. Gentleman, and I am inclined to think perhaps it may be the true one. The right hon. Gentleman is anxious so to cumber the Budget with unessential details, and this sort of trumpery matter which could quite well be left for another year when we were not imposing an additional £50,000,000 or £60,000,000 taxation, as to exhaust and weary the House in the hope that his more general proposition on taxation may escape without the examination which they deserve.

Whichever of these three reasons may have actuated the right hon. Gentleman, the fact remains that he has not been content to allow the practice to proceed upon the basis of the Treasury Minute. He has brought it to our notice and forced us to examine in detail the propositions which hitherto have rested, as it were, under general acquiescence. But he has added a new and more precise definition of the tolerances which have been allowed in the past. Therefore, we are bound to examine it. He knows that by this departure which he has made and by the principles to which he asks us to subscribe—I am not going to dwell upon the extraordinary facts elicited in cross-examination from the Chancellor of the Exchequer by my right hon. Friend the Member for St. George's (Sir L. Worthington-Evans)—he is actually putting a premium upon the employment of foreigners by the consul of a foreign State and a consequent impediment upon the employment of British subjects. This point has been clearly made. It is entirely in harmony with the general logical scheme and outlook of the party opposite and is one which cannot be too widely censured and held up to public animadversion throughout the country as the policy of the Socialist party.

We have to take into consideration the whole issue of reciprocity. This Amendment raises that point directly. It is quite true that in the palmy days of Queen Victoria, in 1842 and thereafter, when this country was at the summit of its power and had reached the highest point in its long history, when in every sphere of trade and finance and on the seas we held an undisputed and almost indisputable supremacy, many tolerances and indulgences were vouchsafed to foreigners. But now in these harder times, when a far sharper competition rules the world and when we find ourselves in no way met by other countries in the spirit in which we guided our policy, we have at every point to go carefully over and count our balance, to examine the whole bearing of any concessions which we may give to foreigners and to make sure that we get the full value for any concessions that we may make.

I recommend the right hon. Gentleman to withdraw this Clause and not occupy the Committee talking about these matters which, on his own showing, need never have come before us but for his spirit of meticulous pedantry which desired to include them. If he refuses to withdraw this Clause, then I ask him why cannot he accept the Amendment which has been moved by my hon. Friend? Why should we give these favours to nations that do not give these favours to us? Why should we discriminate against our own nationals when employed in the consular offices of a foreign State when the foreign State does not similarly give a favour to our nationals when employed under our own consuls in that foreign State?

Of course, if reciprocity were established, and full reciprocity, you would be able to say that it is much better for the consul of Russia or Germany to employ a German or a Russian than to employ an English person on his staff; and, on the other hand, our consuls in their countries would have an advantage and an incentive to employ British persons on their staffs. Let the right hon. Gentleman insist upon reciprocity. Let him embody this Amendment in the Clause. Let him say that it would apply only to people who treat us in the same way as we treat them. The right hon. Gentleman would be routed. Who is the cause of this debate and its prolongation? It is the right hon. Gentleman. Why did he want to stick this Clause on the face of this Bill unless he is asking us to make a new affirmation of principle? If we have to make new affirmations of principle we must make them in relation to the changed circumstances of the times in which we live. The right hon. Gentleman would be well advised even now to withdraw this Clause. If he refuses, then all I can say is that he will be well advised to accept the Amendment. If he refuses to accept the Amendment, it will only be another instance of the unlimited bad weather that he is capable of making for himself.

Mr. REMER

I want to protest about the way the right hon. Gentleman has conducted this debate this afternoon. Obviously, he did not know very much about the Clause. He contradicted himself three or four times in the course of his speech, and he could not make it quite clear to the House what the Clause was about. It is only one more confirmation of what the country is thinking about the Chancellor of the Exchequer, which is that he is fast becoming the world's worst Chancellor of the Exchequer. Russia is setting up a huge trading organisation, and if I understand the right hon. Gentleman aright, their agents will not be liable to British Income Tax, because the direct agents of the Russian Government when they come here evade Income Tax. Their competitors who are selling the same goods throughout the British Dominions will be liable for British Income Tax.

May I point out something further? The agent of a foreign State is called a consul, but in the case of our own Dominions he is called a High Commissioner. I am credibly informed that the High Commissioners are liable to British Income Tax, although they are doing exactly the same work as the foreign consuls are doing. I should like the Chancellor of the Exchequer, or the Financial Secretary to the Treasury, to tell us whether it is a fact that the High Commissioners for the Dominions are entitled to this exemption from British Income Tax? It does seem to me that the Chancellor of the Exchequer has made no answer whatever to the point that he is putting an absolute premium on the employment of foreign clerks in the offices of these consuls and that by that means is going to deprive a great many British people of employment which they might expect to secure. I think we ought to make the strongest protest against the inadequate way in which the Chancellor of the Exchequer has seen fit to treat the Committee.

Mr. GODFREY LOCKER-LAMPSON

I would like to ask the Chancellor of the Exchequer a question. I understand that the Treasury Minute was issued and presented a good many years ago in regard to the point of non-payment of Income Tax. I understand that the Public Accounts Committee then issued a report in which they said that the practice under the Treasury Minute should be legalised and put into a Bill and that the Treasury presented a Measure to that effect. Why cannot the Chancellor give us some information about the Public Accounts Committee's report? Why can he not allow us to see the Minute? I do not see what is the object of the Chancellor of the Exchequer to letting us see that Minute or reading the relevant passages from it, or giving us some references to the Public Accounts Committee's report. We should be able to see in what way the Bill differs from the Treasury Minute. I do not want to press the right hon. Gentleman unduly, but I cannot understand his objection to giving the terms of the Minute to the Committee.

The other point is this. We have gone on the assumption that only consular agents are in question; that it is a commercial or trade matter. That is not the case if one reads the Clause. As I read it, it refers to those employed on the staff of any consulate, official agent, or agency of a foreign State; that is, to those who are employed on the staff of any agency of a foreign State. Under this Clause Russia could set up an agency in this country; and it must be an official agency because no other agency is allowed to exist. If such an agency is set up it need not be for commercial purposes at all; it may be for political purposes, and, as the Clause stands, the official agents who come here for political purposes can be exempted from Income Tax. I am perfectly certain that the Chancellor of the Exchequer does not wish or intend this, but as the Clause stands there is nothing to prevent it. I hope the right hon. Gentleman will accept an Amendment to make it perfectly clear that it is only the official staff of consuls who will come under the Clause.

Lieut.-Colonel ACLAND - TROYTE

From the short attempt of the Chancellor of the Exchequer to explain this paragraph, I really cannot think that he understood the matter at all, and, therefore, I hope he will withdraw it and bring it forward again, if necessary. It is a Clause which could only be brought in by a Socialist Government, because it benefits the foreigner and no one else. It gives him not only an advantage but a distinct preference. The Chancellor of the Exchequer, apparently, does not realise that if a man receives £1 a week in wages, and the Government takes 4s. 6d. in Income Tax, that he has only 15s. 6d. to spend on himself. The man who pays no Income Tax has a distinct advantage. He has the whole pound to spend and so can afford to take a lower salary. This Clause will only mean throwing our own people out of work and giving employment to the foreigner. No one gets any benefit under this Bill except the bookmakers and foreigners. We all know why the bookmaker gets a benefit, but I do not understand why the foreigner should be the recipient of this tender treatment. The Clause is quite unnecessary. It is put forward as a pretence to put things in order and to relieve the burdens upon our people. As a matter of fact, it does not relieve any burdens; it places additional burdens upon them. I hope the Committee will reject this paragraph. The Chancellor of the Exchequer said that the amount involved was infinitesimal, in fact, so small that the Treasury had not taken the trouble to work it out. If that is the case, how can he say that it is infinitesimal? It may be much larger than he imagines. I hope the right hon. Gentleman will withdraw the Clause, and if he does not that the Committee will reject it.

Mr. AMERY

I should like to follow up the question raised with regard to the position of corresponding agencies and staffs of other Governments in the British Empire. I know that High Commissioners enjoy certain exemptions, but for the purposes of this Clause the parallel position is the position of Agents-General; the Agents-General of the Australian States and the Canadian Provinces, and the Agents-General who conduct business operations for Malaya and East Africa. Are all their staffs to be also exempt from Income Tax; is special distinction to be made between the representative of the Malayan Government if he is domiciled in Malaya and a member of the staff taken on in this country? I hope the Chancellor of the Exchequer will deal with these points. If he does not, and if an invidious distinction is made to the advantage of foreign agencies and their staffs as compared with the staffs of other Governments in the British Empire, it will create a good deal of ill-feeling and trouble.

Mr. ARTHUR MICHAEL SAMUEL

I should like to emphasise what has been said by my right hon. Friend the Member for Wood Green (Mr. G. Locker-Lampson) and other speakers on this side of the Committee, and ask why this Clause has been imported into the Bill. The Chancellor of the Exchequer tells us that a Treasury Minute of 1842 allowed a certain procedure to be followed, and that the Public Accounts Committee protested against such procedure. I do not remember whilst I was Financial Secretary to the Treasury any such protests being brought to my notice, nor do I remember as Chairman of the Public Accounts Committee that we had to deal with any protests concerning this procedure. The right hon. Gentleman the President of the Board of Trade, who was Chairman of the Public Accounts Committee before I took that office, may be able to tell us the terms of the original Minute and whether he was responsible for making the protests against the then normal procedure. That would allow us to know why the Clause has been put in the Bill. Consuls have been going on for many generations, and Income Tax for more than a century. Let us know the reason and origin of this Clause. Let us know why it is put in, and at whose instance. Let us know what part the Public Accounts Committee played in it; and why. I do not remember during the years 1927, 1928 and 1929 any protests being brought to my notice with respect to this procedure.

Mr. P. SNOWDEN

I have been asked to reply to the particular point which has been put with regard to the Public Accounts Committee. My right hon. Friend the President of the Board of Trade was Chairman of the Public Accounts Committee which made this recommendation, and he confirms what I have said, that such a recommendation was made and that we are carrying out the recommendation.

Sir AUSTEN CHAMBERLAIN

Can you give the reference.

Mr. SNOWDEN

I cannot.

The PRESIDENT of the BOARD of TRADE (Mr. William Graham)

The point raised by the right hon. Member for Wood Green (Mr. G. Locker-Lampson) and the hon. Member for Farnham (Mr. A. M. Samuel) is quite simple. The duty of the Public Accounts Committee is to see that the revenue is collected exactly in the terms of the Act of Parliament in force, and that expenditure is also strictly in terms of the Act. During the time I was Chairman of the Public Accounts Committee attention was drawn in the evidence of the Chairman of the Board of Inland Revenue to certain extra statutory reliefs; I do not know the precise year. Our recommendation was made, of course, against such reliefs, and that has always been the general attitude of the Public Accounts Committee. That is all that is involved in the matter.

Mr. C. WILLIAMS

There is one point which has not been answered. The Chancellor of the Exchequer says that already we get a certain amount of reciprocity under this Clause; in fact, that the advantages were on our side. He also said that we received reciprocity as far as the majority of countries are concerned. The majority of countries concerned have not an Income Tax of anything like 4s. 6d. in the pound and it is therefore absolutely impossible to get reciprocal treatment which is of any advantage to us. Perhaps the Chancellor of the Exchequer will explain how we can get an advantage in most other countries when they have little or no Income Tax at all? Unless he is pre- pared to accept the Amendment the Clause will merely give relief to foreigners in this country and take it away from certain British citizens.

Sir A. CHAMBERLAIN

I have no desire of being ungenerous in our treatment of the representatives of foreign Powers in this country but when we are asked to legislate on a matter on which some precision is necessary I must confess that I am still in the dark as to the exact extent of the law if the Clause is passed as it stands. We are discussing the matter under circumstances of quite unnecessary difficulty. The opening statement of the Chancellor of the Exchequer was to the effect that subject to a few variations in exemptions, which he later explained, the Clause merely put into the Statute a practice ordained by a Treasury Minute of 1842. We ask for that Treasury Minute, and it is not forthcoming. We ask why it was necessary to put into this Bill a practice which for 100 years has gone on unquestioned until the Chairman of the Board of Inland Revenue drew attention to it a year or two ago after which the Public Accounts Committee drew attention to it in their report.

Mr. W. GRAHAM

The statement of the right hon. Member is hardly accurate. Attention would be drawn to the matter by the Comptroller and Auditor-General, under the heading extra statutory reliefs, and, of course, the Chairman of the Board of Inland Revenue would draw attention to it.

5.0 p.m.

Sir A. CHAMBERLAIN

I misunderstood the President of the Board of Trade. It is the Comptroller and Auditor-General, whom I should expect to call attention to the matter, and I misunderstood the right hon. Gentleman. I thought he said that the person to draw attention to it was the Chairman of the Board of Inland Revenue. We ask why a practice which has existed for 100 years and has worked well, which is capable of elasticity, should be deprived of that elasticity by being put into statutory form? The answer that we are given is that it is because of a report of the Public Accounts Committee. We ask for a reference of the Public Accounts Committee. I have not the least doubt that it is available, and that if my two right hon. and hon. Friends would keep the discussion going I could go to the Library and search for the reference, and that in course of time I could find it, and in this Committee examine exactly what the Minute did say and why exactly the Public Accounts Committee called attention to the matter. But surely that is information which the Chancellor of the Exchequer ought to have placed at the disposal of this Committee to-day? I make serious complaints of the right hon. Gentleman coming to the House and telling us that this Clause is a mere translation into statutory form of a Minute, and then his saying that he cannot produce the Minute. He told us that this Clause is included in order to comply with a report of the Public Accounts Committee, and then he says, "We are unable to tell you where it is." We say, "Will you give us the report of the Public Accounts Committee?" I think there is more than one report in every Session, though it is a long time since I sat on the Public Accounts Committee. When we ask for the reference the Chancellor of the Exchequer says, "We cannot tell you even under what year to look."

Surely the right hon. Gentleman could have got that information when I asked him for it, and could have had it in his possession now? I shall be grateful to him if he would get it, because I should at least like to see what it is that the Public Accounts Committee said. Apart from this obscure and secret and hidden basis on which the Chancellor of the Exchequer founds the necessity for the Clause, may I repeat a question which was put by my right hon. Friend the former Secretary of State for the Dominions? To that question neither the Chancellor of the Exchequer nor the President of the Board of Trade has given any reply so far. Do High Commissioners and their staffs and employés stand in all respects on a not less favourable footing than any foreign agency will do under this Clause? Apart from the High Commissioners, with whom I have to deal separately because they are assimilated with diplomatic representatives who have diplomatic privileges, do the agencies of the States of the British Empire not possessing any diplomatic privileges enjoy, and will they enjoy under this Clause, the same rights as the agency of any foreign Government? If not, I think that the Chancellor of the Exchequer will find that he is opening a big question which, whatever the decision of this Committee, will not be allowed to rest, and that it is likely that the peace of the Treasury will be interrupted with remonstrances from these agencies against being treated less generously than foreign agencies of a similar character. Those are all points strictly germane to the issues hitherto discussed. There is another matter raised on one of the Amendments which is to be called, but I refrain from speaking on it now.

Mr. P. SNOWDEN

I last rose mainly for the purpose of answering a question put to me by the right hon. Member for Sparkbrook (Mr. Amery). The position is that the High Commissioners, the agents and their staffs, are in a superior position to that of consuls or consular representatives, as they will be under this Clause. In fact they are in the position of embassies.

Sir PATRICK FORD

Following up the request of my right hon. Friends, I would ask what is the position of employés of the Russian Soviet Government in this country. It would appear from the Clause that in order to secure exemption from Income Tax there are three requisites—a man must not have the misfortune to be an Englishman, but must be a foreigner; he must be the official agent of a foreign State; and he must

not be engaged in employment which is carried on for the purpose of profit. Under the construction of the Soviet system every person who engages in trade on behalf of that State in this country must, I apprehend, be an official agent of his Government. That is the first requisite. Secondly, he is engaged by a foreign State and he is a foreigner. That complies with the second requisite. I have the gravest doubt whether employment under the Soviet system would be held by the Courts to be employment for the purpose of profit, because the principle of profit is not the principle upon which at any rate they pretend to conduct their business. It, therefore, appears that the agents for trade under the Soviet system in this country could claim exemption from Income Tax under this Clause, and as I apprehend that the right hon. Gentleman does not intend to go so far as that, and does not intend to allow all the oil merchants sent here by Soviet Russia to escape Income Tax, will he tell the Committee whether he has been assured by the Law Officers that I am wrong in my interpretation of the Clause, and that in fact these are not the kind of persons who would be exempted from Income Tax.

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

The Committee divided: Ayes, 131; Noes, 241.

Division No. 349.] AYES. [5.9 p.m.
Acland-Troyte, Lieut.-Colonel Dalkeith, Earl of Lane Fox, Col. Rt. Hon. George R.
Albery, Irving James Davies, Dr. Vernon Leighton, Major B. E. P.
Amery, Rt. Hon. Leopold C. M. S. Davies, Maj. Geo. F. (Somerset, Yeovil) Llewellin, Major J. J.
Atholl, Duchess of Dawson, Sir Philip Locker-Lampson, Rt. Hon. Godfrey
Atkinson, C. Eden, Captain Anthony Long, Major Eric
Baldwin, Rt. Hon. Stanley (Bewdley) Edmondson, Major A. J. Lymington, Viscount
Balfour, Captain H. H. (I. of Thanet) Elliot, Major Walter E. Macquisten, F. A.
Berry, Sir George Erskine, Lord (Somerset, Weston-s-M.) MacRobert, Rt. Hon. Alexander M.
Birchall, Major Sir John Dearman Falle, Sir Bertram G. Maitland, A. (Kent, Faversham)
Bird, Ernest Roy Fermoy, Lord Makins, Brigadier-General E.
Bourne, Captain Robert Croft Fremantle, Lieut.-Colonel Francis E. Marjoribanks, E. C.
Bowater, Col. Sir T. Vansittart Gault, Lieut.-Col. Andrew Hamilton Meller, R. J.
Bowyer, Captain Sir George E. W. Gibson, C. G. (Pudsey & Otley) Mitchell, Sir W. Lane (Streatham)
Boyce, H. L. Gilmour, Lt.-Col. Rt. Hon. Sir John Mitchell-Thomson, Rt. Hon. Sir W.
Bracken, B. Graham, Fergus (Cumberland, N.) Monsell, Eyres, Com. Rt. Hon. Sir B.
Brass, Captain Sir William Gretton, Colonel Rt. Hon. John Morrison, W. S. (Glos., Cirencester)
Briscoe, Richard George Gritten, W. G. Howard Muirhead, A. J.
Brown, Ernest (Leith) Guinness, Rt. Hon. Walter E. Newton, Sir D. G. C. (Cambridge)
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Gunston, Captain D. W. Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Buckingham, Sir H. Hacking, Rt. Hon. Douglas H. Nield, Rt. Hon. Sir Herbert
Bullock, Captain Malcolm Hanbury, C. O'Connor, T. J.
Burton, Colonel H. W. Hannon, Patrick Joseph Henry Oman, Sir Charles William C.
Cadogan, Major Hon. Edward Hartington, Marquess of Ormsby-Gore, Rt. Hon. William
Cautley, Sir Henry S. Haslam, Henry C. Peake, Captain Osbert
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) Heneage, Lieut.-Colonel Arthur P. Penny, Sir George
Churchill, Rt. Hon. Winston Spencer Herbert, Sir Dennis (Hertford) Percy, Lord Eustace (Hastings)
Cockerill, Brig.-General Sir George Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Pilditch, Sir Philip
Colfox, Major William Philip Hope, Sir Harry (Forfar) Pownall, Sir Assheton
Colville, Major D. J. Howard-Bury, Colonel C. K. Purbrick, R.
Cowan, D. M. Hurd, Percy A. Ramsbotham, H.
Cranborne, Viscount Hurst, Sir Gerald B. Reid, David D. (County Down)
Cunliffe-Lister, Rt. Hon. Sir Philip Kindersley, Major G. M. Remer, John R.
Rentoul, Sir Gervais S. Somerville, A. A. (Windsor) Ward, Lieut.-Col. Sir A. Lambert
Richardson, Sir P. W. (Sur'y, Ch'ts'y) Spender-Clay, Colonel H. Wardlaw-Milne, J. S.
Rodd, Rt. Hon. Sir James Rennell Stanley, Maj. Hon. O. (W'morland) Waterhouse, Captain Charles
Ruggles-Brise, Lieut.-Colonel E. A. Steel-Maitland, Rt. Hon. Sir Arthur Wells, Sydney R.
Russell, Alexander West (Tynemouth) Stewart, W. J. (Belfast South) Williams, Charles (Devon, Torquay)
Salman, Major I. Stuart, Hon. J. (Moray and Nairn) Windsor-Clive, Lieut.-Colonel George
Samuel, A. M. (Surrey, Farnham) Sueter, Rear-Admiral M. F. Womersley, W. J.
Sandeman, Sir N. Stewart Tinne, J. A. Wood, Rt. Hon. Sir Kingsley
Sassoon, Rt. Hon. Sir Philip A. G. D. Todd, Capt. A. J. Worthington-Evans, Rt. Hon. Sir L.
Savery, S. S. Train, J.
Skelton, A. N. Tryon, Rt. Hon. George Clement TELLERS FOR THE AYES.—
Smith-Carington, Neville W. Turton, Robert Hugh Captain Wallace and Sir Victor Warrender.
Smithers, Waldron Vaughan-Morgan, Sir Kenyon
NOES.
Adamson, Rt. Hon. W. (Fife, West) Hall, F. (York, W. R., Normanton) Morgan, Dr. H. B.
Adamson, W. M. (Staff., Cannock) Hall, G. H. (Merthyr Tydvil) Morley, Ralph
Addison, Rt. Hon. Dr. Christopher Hall, Capt. W. P. (Portsmouth, C.) Morris, Rhys Hopkins
Aitchison, Rt. Hon. Craigie M. Hamilton, Mary Agnes (Blackburn) Morrison, Herbert (Hackney, South)
Alexander, Rt. Hon. A. V. (Hillsbro') Hardie, George D. Morrison, Robert C. (Tottenham, N.)
Alpass, J. H. Hartshorn, Rt. Hon. Vernon Mort, D. L.
Ammon, Charles George Hayday, Arthur Moses, J. J. H.
Arnott, John Hayes, John Henry Muff, G.
Aske, Sir Robert Henderson, Right Hon. A. (Burnley) Muggeridge, H. T.
Attlee, Clement Richard Henderson, Arthur, Junr. (Cardiff, S.) Naylor, T. E.
Ayles, Walter Henderson, W. W. (Middx., Enfield) Newman, Sir R. H. S. D. L. (Exeter)
Baker, John (Wolverhampton, Bilston) Herriotts, J. Noel Baker, P. J.
Baldwin, Oliver (Dudley) Hirst, G. H. (York W. R. Wentworth) Oldfield, J. R.
Barnes, Alfred John Hopkin, Daniel Oliver, George Harold (Ilkeston)
Batey, Joseph Hore-Belisha, Leslie. Oliver, P. M. (Man., Blackley)
Bellamy, Albert Horrabin, J. F. Palin, John Henry
Benson, G. Hudson, James H. (Huddersfield) Paling, Wilfrid
Bentham, Dr. Ethel Hunter, Dr. Joseph Palmer, E. T.
Birkett, W. Norman Isaacs, George Parkinson, John Allen (Wigan)
Bondfield, Rt. Hon. Margaret Jenkins, W. (Glamorgan, Neath) Perry, S. F.
Bowen, J. W. John, William (Rhondda, West) Pethick-Lawrence, F. W.
Bowerman, Rt. Hon. Charles W. Johnston, Thomas Phillips, Dr. Marion
Broad, Francis Alfred Jones, F. Llewellyn- (Flint) Picton-Turbervill, Edith
Brockway, A. Fenner Jones, J. J. (West Ham, Silvertown) Pole, Major D. G.
Bromfield, William Jones, Morgan (Caerphilly) Potts, John S.
Brooke, W. Jones, T. I. Mardy (Pontypridd) Price, M. P.
Brothers, M. Jowett, Rt. Hon. F. W. Quibell, D. J. K.
Brown, C. W. E. (Notts, Mansfield) Kelly, W. T. Ramsay, T. B. Wilson
Brown, W. J. (Wolverhampton, West) Kennedy, Thomas Raynes, W. R.
Burgess, F. G. Kenworthy, Lt.-Com. Hon. Joseph M. Richardson, R. (Houghton-le-Spring)
Buxton, C. R. (Yorks. W. R. Elland) Kinley, J. Riley, F. F. (Stockton-on-Tees)
Caine, Derwent Hall- Kirkwood, D. Ritson, J.
Cameron, A. G. Lansbury, Rt. Hon. George Roberts, Rt. Hon. F. O. (W. Bromwich)
Carter, W. (St. Pancras, S. W.) Lathan, G. Romeril, H. G.
Charleton, H. C. Law, Albert (Bolton) Rosbotham, D. S. T.
Chater, Daniel Law, A. (Rosendale) Rowson, Guy
Cluse, W. S. Lawrence, Susan Russell, Richard John (Eddisbury)
Clynes, Rt. Hon. John R. Lawson, John James Salter, Dr. Alfred
Cocks, Frederick Seymour Lawther, W. (Barnard Castle) Samuel, Rt. Hon. Sir H. (Darwen)
Compton, Joseph Leach, W. Samuel, H. W. (Swansea, West)
Cove, William G. Lee, Frank (Derby, N. E.) Sanders, W. S.
Daggar, George Lees, J. Sandham, E.
Dallas, George Lewis, T. (Southampton) Sawyer, G. F.
Dalton, Hugh Lloyd, C. Ellis Scrymgeour, E.
Day, Harry Longbottom, A. W. Scurr, John
Denman, Hon. R. D. Longden, F. Shepherd, Arthur Lewis
Dickson, T. Lovat-Fraser, J. A. Shield, George William
Dudgeon, Major C. R. Lowth, Thomas Shiels, Dr. Drummond
Dukes, C. Lunn, William Shillaker, J. F.
Ede, James Chuter Macdonald, Gordon (Ince) Short, Alfred (Wednesbury)
Edwards, E. (Morpeth) MacDonald, Rt. Hon. J. R. (Seaham) Simmons, C. J.
Egan, W. H. MacDonald, Malcolm (Bassetlaw) Sinclair, Sir A. (Caithness)
Elmley, Viscount McElwee, A. Sinkinson, George
Forgan, Dr. Robert McEntee, V. L. Smith, Alfred (Sunderland)
Freeman, Peter MacLaren, Andrew Smith, Ben (Bermondsey, Rotherhithe)
Gardner, B. W. (West Ham, Upton) Maclean, Sir Donald (Cornwall, N.) Smith, Frank (Nuneaton)
Gardner, J. P. (Hammersmith, N.) MacNeill-Weir, L. Smith, H. B. Lees- (Keighley)
Gibson, H. M. (Lancs, Mossley) McShane, John James Smith, Rennie (Penistone)
Gill, T. H. Malone, C. L'Estrange (N'thampton) Smith, Tom (Pontefract)
Gillett, George M. March, S. Smith, W. R. (Norwich)
Glassey, A. E. Marcus, M. Snell, Harry
Gossling, A. G. Markham, S. F. Snowden, Rt. Hon. Philip
Gould, F. Marley, J. Snowden, Thomas (Accrington)
Graham, Rt. Hon. Wm. (Edin., Cent.) Marshall, Fred Sorensen, R.
Granville, E. Mathers, George Stamford, Thomas W.
Gray, Milner Messer, Fred Stephen, Campbell
Grenfell, D. R. (Glamorgan) Middleton, G. Stewart, J. (St. Rollox)
Griffiths, T. (Monmouth, Pontypool) Mills, J. E. Strachey, E. J. St. Loe
Groves, Thomas E. Milner, Major J. Strauss, G. R.
Grundy, Thomas W. Montague, Frederick Sutton, J. E.
Taylor, W. B. (Norfolk, S. W.) Wallhead, Richard C. Williams, David (Swansea, East)
Thomas, Rt. Hon. J. H. (Derby) Walters, Rt. Hon. Sir J. Tudor Williams, Dr. J. H. (Llanelly)
Thorne, W. (West Ham, Plaistow) Watkins, F. C. Williams, T. (York, Don Valley)
Thurtle, Ernest Watson, W. M. (Dunfermline) Wilson, R. J. (Jarrow)
Tinker, John Joseph Watts-Morgan, Lt.-Col. D. (Rhondda) Winterton, G. E. (Leicester, Loughb'gh)
Toole, Joseph Wedgwood, Rt. Hon. Josiah Wright, W. (Ruthergien)
Townend, A. E. Wellock, Wilfred Young, R. S. (Islington, North)
Trevelyan, Rt. Hon. Sir Charles Welsh, James (Paisley)
Vaughan, D. J. White, H. G. TELLERS FOR THE NOES.—
Viant, S. P. Whiteley, Wilfrid (Birm., Ladywood) Mr. Charles Edwards and Mr. T. Henderson.
Walker, J. Whiteley, William (Blaydon)
Wallace, H. W. Wilkinson, Ellen C.
Sir A. CHAMBERLAIN

I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

I do so solely in order to afford the Government time to procure information with which they ought to have been provided when this discussion opened and which they have not yet offered to the Committee. I am sorry to have to repeat myself, but I shall do so as briefly as possible and only in order to make my meaning clear, and because I am probably speaking in the presence of some hon. Members who were not here during the previous discussion. This Clause is required, says the Chancellor of the Exchequer, in consequence of an observation made in a report of the Public Accounts Committee requiring that a practice founded on a Treasury Minute shall be made statutory. I have asked the Chancellor of the Exchequer to produce the Minute. He says he cannot produce it. I put it to him: Does any such Minute exist, and if it does why cannot he produce it? If it exists, the Committee is entitled to it for purposes of comparison and because the Chancellor of the Exchequer himself cites it as the basis of the Clause and presents the Clause as its statutory equivalent.

We have asked repeatedly also for a reference to the report of the Public Accounts Committee on which we are told the Clause is founded, or in consequence of which the Clause is being introduced. Again, we are told that it exists somewhere, but neither the Chancellor of the Exchequer nor the President of the Board of Trade can tell us in which report to look for this reference. That is not treating the Committee with fairness or with decency. I do not say that it is the fault of either of these right hon. Gentlemen, but it is very bad staff work to come down here, without answers to questions obviously arising on the very explanation which the Government themselves propose to tender. In order to give the Government time to procure from the Treasury the Minute on which this Clause is founded, and time to ascertain in the Library the report of the Committee to which they are referring, I beg to move this Motion.

Mr. P. SNOWDEN

This is a mere quibble. The Rules of the House prevent me from saying that this Motion is introduced for the purpose of delaying the business, but I never remember a Motion of the kind made on such a trivial pretext. Does the right hon. Gentleman assume that it is the business of the Minister, or even the business of the staff to which he referred, to anticipate every question which a Member of the Opposition may bring forward? If that were so, then we should have to bring down here the whole of the archives of the Department whose business happened to be under discussion at the moment. Does the right hon. Gentleman suggest that the whole business of the Committee is to be suspended until the report of the Public Accounts Committee in which this reference is made, has been produced? I submit that that would be a waste of the time of this Committee. My right hon. Friend the President of the Board of Trade who was chairman of the Committee at the time gave his assurance to the right hon. Gentleman that the reference had been made.

Sir A. CHAMBERLAIN

I asked for the reference 20 minutes or half-an-hour ago.

Mr. SNOWDEN

My right hon. Friend, as I say, gave the assurance that such a reference has been made, and we shall produce it as soon as we conveniently can do so.

Mr. CHURCHILL

The right hon. Gentleman must not endeavour to escape from the very precise point which is directed against it by vague and general denunciations of the conduct of the Opposition nor must he seek to do so by what I think I may describe as insinuations against the conduct of the Chair. The right hon. Gentleman suggested that the Motion which you, Mr. Young, have accepted is an abuse of the Rules of the House and thereby he directly accused the Ruling which you have given. Further, he went on to say that only the Rules of the House prevented him from describing this Motion as of a dilatory and obstructive character or words to that effect. I leave the Committee to judge if that is a decent way of evading the Rules, and if it is worthy of the Chancellor of the Exchequer, as the Minister in charge of the Committee, to say something which he knows is contrary to the Rules of the House and which is a reflection, and has always been judged to be an unparliamentary reflection on hon. Members, and to cover it up and wrap it up in the specious pretence of saying, "I am prevented by the Rules of the House from saying so." All this is done by the right hon. Gentleman in the awkward shift to which he is reduced by the fact that he has cited a Minute but has not been able to say whether that Minute exists or not. He has cited a Minute, but he is not prepared to produce it. Is there any reason why this Minute should not be produced? The right hon. Gentleman spoke about the staff not being obliged to produce material in anticipation of every question which might be put by the Opposition. Of course they are not obliged to do so; but in the brief which is presented to the Chancellor of the Exchequer, if there is a Clause which is intended to take the place of a Minute, it would be quite in accordance with the natural and ordinary process to have the particulars for which we ask. In saying so, I think I speak with the concurrence of my right hon. Friend the Member for West Birmingham (Sir A. Chamberlain), and he and I can claim something like 10 or 11 years of combined experience in the office of Chancellor of the Exchequer.

Mr. J. JONES

In every party bar one.

Mr. CHURCHILL

I am afraid the hon. Member's thoughts are away in other fields, far different from those with which we are now concerned. But I am not going to allow anything to draw the Committee away from the definite point against the right hon. Gentleman. Where is the Treasury Minute? If it exists, there is no conceivable reason why it should not be produced, because we are told that that is the hypothesis on which the argument of the Government proceeds, and that the Clause simply renders the Treasury Minute statutory. The Clause is published, it is in the Bill, and how can it be suggested that there will be any detriment to the public interest in producing the Minute which is said to be the foundation of the Clause? Where is the Minute? It is more than an hour since this matter was first bruited in the Committee, and there has been ample time in which to obtain the Minute. Unless the right hon. Gentleman is able to produce the Minute this Motion is justified, because he has said that it is on the Minute that this Clause is founded, and, if there is no Minute, then the right hon. Gentleman has made a statement to the Committee—no doubt through error and inadvertency—which is found to be related at no notable point to the actual facts. There is not the slightest use in the right hon. Gentleman trying to escape from his difficulty by such methods as he has adopted. We are not in the least surprised at his methods, or at his harsh manner—and we shall probably have less reason to be afraid of him or of those who supported him, with every week that passes. We move this Motion as a protest against the refusal of the right hon. Gentleman to answer this specific question put to him and the failure to produce the Minute; and in the circumstances this Motion, which will be pressed to a Division, ought to commend itself to the general sense of the Committee.

Mr. J. JONES

I have sat in the House of Commons for nearly 12 years and on previous occasions I have seen Ministers belonging to both sides of the House unable to answer questions or to produce documents or other satisfactory evidence of their misconduct. The right hon. Gentleman the Member for Epping (Mr. Churchill) ought to be the last to complain about other people's misdeeds, because he has a record for doing the things that he ought not to have done, and it is a case of the Devil rebuking sin when he proceeds to find fault with his successor in office. I, of course, do not pretend to know much about procedure. I have learned the Rules by breaking them, but most hon. Members opposite are up to the neck in rules. They would, perhaps, be more human if they forgot the Rules.

The CHAIRMAN

The hon. Member is breaking the Rules now. He must keep to the Motion to report Progress.

Mr. JONES

That is what I want to do—to report Progress and get on with the business. I protest against these clever gymnastics, these attempts to make people believe us when we say, "Thank God we are not like the other fellows." We get too much of that kind of thing in the House of Commons. Instead of playing these nasty tricks, from the mental point of view, and trying to throw dust in the eyes of the public, we ought to be trying to operate the machinery of Parliament, to get on with the business.

Sir DENNIS HERBERT

The Chancellor of the Exchequer has resisted this Motion on the plea that it is impossible to foresee every possible question that may arise in the course of a debate, and he says that to do so it would be necessary to bring down here the whole archives of the Treasury. He appears to have forgotten what I believe is a definite and well-acknowledged rule of procedure and debate in the House of Commons. When a Minister refers to a Government Paper, he is bound to produce that Paper. It is not a question of the Opposition having sprung this question on the right hon. Gentleman. The right hon. Gentleman has himself attempted to defend his Clause by quoting or referring to and relying upon a Treasury Minute, and under those circumstances he ought to have recognised that well-known rule that he must produce the document. His onslaught on my right hon. Friend for moving this Motion was far from justified, and if any onslaught should have been made, it should have been made against the Chancellor of the Exchequer himself.

Captain EDEN

The hon. Member for Silvertown (Mr. J. Jones) complained that he wanted to get on with the business, but that complaint should have been addressed, not to this side, but to his own Treasury Bench. If hon. Members opposite had been in the House, they would have known that it was more than an hour ago that any right hon. Friend the Member for West Birmingham (Sir A. Chamberlain) asked precisely for the information for which we are now asking. The Chancellor of the Exchequer based his whole case upon this Treasury Minute. We did not ask him to do that. We were not even aware of the existence of the Minute. It is no use his pretending that the Opposition are asking him to bring down all the archives of the Treasury. We are asking him for only two documents, namely, the Minute upon which he based his case, and the Report of the Public Accounts Committee to which he referred. How can we judge whether the terms of this Clause are what he claims them to be, and whether they rightly fulfil the terms of the Minute, when he cannot produce it? He says that no more English persons would be exempted, but how are we to judge whether what the Treasury believes to be the result of this Clause is the same as is embodied in a Treasury Minute of 100 years ago?

I hope the Committee will refuse to be blunderbusted by the Chancellor of the Exchequer's simulation of indignation, which would not impress anybody who had listened to the debate. I congratulate the right hon. Gentleman on his fiery eye, but we are not at The Hague now, and though I have no doubt that, on seeing it for the first time, one would tremble, if he uses the flashing eye on wrong as well as right courses, one does not feel the same amount of terror as no doubt he wished to impart. I hope the Committee will refuse to be dragooned by this attempt to refuse the most reasonable request that has ever been made in these debates, and if the Chancellor of the Exchequer will not comply, I trust we shall report Progress.

Mr. WARDLAW-MILNE

Is it quite fair to say that we are unreasonable in asking for this Minute? In the first part of the speech of the Chancellor of the Exchequer, he referred quite clearly to the fact that this Clause was merely a repetition of a Treasury Minute, that it was merely making statutory the conditions which existed in a Treasury Minute which had been in force for a great many years, but a few minutes later he made it clear that under this Clause a new set of people, who previously got exemption, are not now to get exemption—that is to say, the British employés in the offices of consuls acting for foreign countries. It is clear, therefore, that there is a deviation, and I put it to the right hon. Gentleman that he cannot have it both ways. It cannot be an exact copy of the Treasury Minute and at the same time produce an innovation. I suggest that the right hon. Gentleman is not justified in saying that we are unreasonable in asking for a clear definition of the Treasury Minute in these circumstances.

Major COLFOX

The Chancellor of the Exchequer has adopted a course which we are getting used to associate with him, namely, he has endeavoured to cover up his gross misconduct by a display of fiery bad temper. But in doing so he is not advancing the cause which he seeks to promote, because he is obviously delaying the transaction of business by this totally unfounded refusal to produce a document to which he himself referred. It may well be that this Clause does embody the intentions of the document in question, but equally it may be that it does nothing of the sort, and unless and until the Committee are in possession of the document, we are quite in the dark as to whether or not the Clause is what it claims to be. The Chancellor of the Exchequer himself has absolutely contradicted his own statement. Either this Clause introduces an innovation or it does not. The Chancellor of the Exchequer has stated both to be the case, and obviously one or the other is incorrect.

It is impossible for us to discover which of the right hon. Gentleman's statements is the false one, and by merely exhibiting his bad temper, as he did a few moments ago, he is reducing the whole procedure of this Committee to an absolute farce, because he is in effect saying, "There is a Minute. I cannot quote it exactly, because I do not know where to look for it, but this Committee is bound to carry out my reading of that Minute. I do not know really what the Minute says. It may say one thing, or it may say another, but you have to accept this Clause as the interpretation of a Minute which, although it exists, I do not know where to find." Therefore, he is merely delaying the proceedings. There has been ample time since this question was raised for him to have obtained the information, and the right hon. Gentleman is treating the Committee with absolute disrespect by merely losing his temper.

Sir L. WORTHINGTON-EVANS

An hour and a-half ago I asked the Chancellor of the Exchequer whether he would let us have this Minute. May I now repeat that question? I have never known a Minister, having a document to which any serious number of Members desired to have a reference, refuse to disclose it. It makes one think that there is no such Minute. If there is no such Minute, is it not better that he should say there is no Minute, so that we can get on with the business, or if there is a Minute, is it not better that we should have it? It is a very reasonable request.

Mr. REMER

Not only has the Chancellor of the Exchequer been rude and stubborn in the way in which he has treated the Committee, but he has shown the greatest inefficiency that I have ever seen any Chancellor of the Exchequer display. He has behind him two hon. Members who act, one as his Parliamentary private secretary and the other as the Parliamentary private secretary to the Financial Secretary to the Treasury. When he discovered that the Committee desired this Treasury Minute and this reference to the Public Accounts Committee Report, surely, if he had wished to show courtesy to the Committee—which apparently he does not wish to show, and never does wish to show—he could have asked one of those hon. Members to go to the Treasury or to some other place for the information. For these reasons, I enter my strongest possible protest at the way in which the Chancellor of the Exchequer is treating us, and I hope my right hon. Friends will insist upon a Division.

Sir A. CHAMBERLAIN

I made what I thought was a reasoned and reasonable request to the Chancellor of the Exchequer, first of all across the Floor, a long time ago, and later when I moved this Motion. The right hon. Gentleman chose to treat my Motion as being an abuse of the forms of the House, and to lecture me on delaying the business. I have sat in the House even longer than the Chancellor of the Exchequer.

Mr. J. JONES

You have sat here too long.

HON. MEMBERS

So have you!

Mr. JONES

I shall be here when you are dead.

The CHAIRMAN

If hon. Members object to interruptions, it is my duty to deal with them. They should not interject in return.

Sir A. CHAMBERLAIN

As I was saying, I have sat in this House even longer than the Chancellor of the Exchequer, and he is by this time an old Member of our body. I cannot remember an occasion on which a Minister, having referred, as the occasion for his action, to a Report of the Public Accounts Committee, declined on a polite request to give his inquirer the reference to the Report which he has mentioned. Is it not reasonable that when the Chancellor of the Exchequer or a Minister says, "We took this action in pursuance of a specific recommendation of a Parliamentary Committee," we should ask to be informed what is the Report in which we shall find the recommendations in question? The Chancellor of the Exchequer refuses to give it. The President of the Board of Trade says it is there, but he does not give it. The right hon. Gentleman does not make the slightest effort to meet the wishes of the Committee, the honest and reasonable wishes, the politely and reasonably expressed wishes. He could have had the information long ago. He could have sent to the Library and searched within the year within which the Report is presumably to be found, and certainly the President of the Board of Trade could have fixed the reference,

and they could have given it to us without forcing us to these measures.

The other document for which we have asked is a Minute which the Chancellor of the Exchequer cited himself. He said he could not be expected to know all the questions which we should ask. It has been already pointed out to him. Nobody on this side knew anything of the existence of such a Minute. It is the right hon. Gentleman who has cited the Minute. Having cited it, why has he not brought it to us? If the Minute be the whole foundation of the Clause, why are we not enabled to see it? Again I put a specific question, and I ask for a specific answer. Is there such a Minute, or was the right hon. Gentleman under a misapprehension when he told us that there was a Minute which had been in existence for 100 years? To accuse me of an abuse of the Rules of the House is in itself disorderly. It is the right hon. Gentleman who is treating the Committee with a contempt that I have never known to be shown by any other Minister in a responsible position, and he is the last man who has any right to make such a charge against his opponents. I repeat before I sit down: is there such a Minute?

Question put, "That the Chairman do report Progress, and ask leave to sit again."

The Committee divided: Ayes, 136; Noes, 248.

Division No. 350.] AYES. [5.48 p.m.
Acland-Troyte, Lieut.-Colonel Cranborne, Viscount Haslam, Henry C.
Albery, Irving James Croft, Brigadier-General Sir H. Heneage, Lieut.-Colonel Arthur P.
Amery, Rt. Hon. Leopold C. M. S. Cunliffe-Lister, Rt. Hon. Sir Philip Herbert, Sir Dennis (Hertford)
Atholl, Duchess of Dalkeith, Earl of Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Atkinson, C. Davies, Dr. Vernon Hope, Sir Harry (Forfar)
Baldwin, Rt. Hon. Stanley (Bewdley) Davies, Maj. Geo. F. (Somerset, Yeovil) Howard-Bury, Colonel C. K.
Balfour, Captain H. H. (I. of Thanet) Dawson, Sir Philip Hurd, Percy A.
Berry, Sir George Eden, Captain Anthony Hurst, Sir Gerald B.
Birchall, Major Sir John Dearman Edmondson, Major A. J. Iveagh, Countess of
Bird, Ernest Roy Elliot, Major Walter E. Kindersley, Major G. M.
Bourne, Captain Robert Croft Erskine, Lord (Somerset, Weston-s-M.) King, Commodore Rt. Hon. Henry D.
Boyce, H. L. Falle, Sir Bertram G. Lane Fox, Col. Rt. Hon. George R.
Bracken, B. Fermoy, Lord Leighton, Major B. E. P.
Brass, Captain Sir William Fielden, E. B. Llewellin, Major J. J.
Briscoe, Richard George Fremantle, Lieut.-Colonel Francis E. Locker-Lampson, Rt. Hon. Godfrey
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Gault, Lieut.-Col. Andrew Hamilton Long, Major Eric
Buchan, John Gibson, C. G. (Pudsey & Otley) Lymington, Viscount
Buckingham, Sir H. Gilmour, Lt.-Col. Rt. Hon. Sir John Macquisten, F. A.
Bullock, Captain Malcolm Graham, Fergus (Cumberland, N.) MacRobert, Rt. Hon. Alexander M.
Burton, Colonel H. W. Grattan-Doyle, Sir N. Maitland, A. (Kent, Faversham)
Cadogan, Major Hon. Edward Greaves-Lord, Sir Walter Makins, Brigadier-General E.
Cautley, Sir Henry S. Gretton, Colonel Rt. Hon. John Margesson, Captain H. D.
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) Gritten, W. G. Howard Meller, R. J.
Churchill, Rt. Hon. Winston Spencer Gunston, Captain D. W. Mitchell-Thomson, Rt. Hon. Sir W.
Cockerill, Brig.-General Sir George Hacking, Rt. Hon. Douglas H. Mond, Hon. Henry
Colfox, Major William Philip Hanbury, C. Monsell, Eyres, Com. Rt. Hon. Sir B.
Colville, Major D. J. Hannon, Patrick Joseph Henry Morrison, W. S. (Glos., Cirencester)
Courthope, Colonel Sir G. L. Hartington, Marquess of Morrison-Bell, Sir Arthur Clive
Muirhead, A. J. Samuel, A. M. (Surrey, Farnham) Turton, Robert Hugh
Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld) Sandeman, Sir N. Stewart Vaughan-Morgan, Sir Kenyon
Nield, Rt. Hon. Sir Herbert Sassoon, Rt. Hon. Sir Philip A. G. D. Ward, Lieut.-Col. Sir A. Lambert
O'Connor, T. J. Savery, S. S. Wardlaw-Milne, J. S.
Ormsby-Gore, Rt. Hon. William Skelton, A. N. Warrender, Sir Victor
Peake, Captain Osbert Smith, R. W. (Aberd'n & Kinc'dine, C.) Waterhouse, Captain Charles
Penny, Sir George Smith-Carington, Neville W. Wells, Sydney R.
Percy, Lord Eustace (Hastings) Smithers, Waldron Williams, Charles (Devon, Torquay)
Pilditch, Sir Philip Somerville, A. A. (Windsor) Windsor-Clive, Lieut.-Colonel George
Pownall, Sir Assheton Spender-Clay, Colonel. H. Winterton, Rt. Hon. Earl
Ramsbotham, H. Stanley, Maj. Hon. O. (W'morland) Wolmer, Rt. Hon. Viscount
Reid, David D. (County Down) Steel-Maitland, Rt. Hon. Sir Arthur Womersley, W. J.
Remer, John R. Stewart, W. J. (Belfast, South) Wood, Rt. Hon. Sir Kingsley
Rentoul, Sir Gervals S. Stuart, Hon. J. (Moray and Nairn) Worthington-Evans, Rt. Hon. Sir L.
Richardson, Sir P. W. (Sur'y, Ch'ts'y) Sueter, Rear-Admiral M. F.
Rodd, Rt. Hon. Sir James Rennell Tinne, J. A. TELLERS FOR THE AYES.—
Ruggles-Brise, Lieut.-Colonel E. A. Todd, Capt. A. J. Captain Sir George Bowyer and Captain Wallace.
Russell, Alexander West (Tynemouth) Train, J.
Salmon, Major I. Tryon, Rt. Hon. George Clement
NOES.
Adamson, W. M. (Staff., Cannock) Gillett, George M. Lunn, William
Aitchison, Rt. Hon. Craigie M. Glassey, A. E. Macdonald, Gordon (Ince)
Alexander, Rt. Hon. A. V. (Hillsbro') Gossling, A. G. MacDonald, Rt. Hon. J. R. (Seaham)
Alpass, J. H. Gould, F. MacDonald, Malcolm (Bassetlaw)
Ammon, Charles George Graham, Rt. Hon. Wm. (Edin., Cent.) McElwee, A.
Arnott, John Granville, E. McEntee, V. L.
Aske, Sir Robert Gray, Milner MacLaren, Andrew
Attlee, Clement Richard Grenfell, D. R. (Glamorgan) Maclean, Sir Donald (Cornwall, N.)
Ayles, Walter Griffiths, T. (Monmouth, Pontypool) MacNeill-Weir, L.
Baker, John (Wolverhampton, Bilston) Groves, Thomas E. McShane, John James
Baldwin, Oliver (Dudley) Grundy, Thomas W. Malone, C. L'Estrange (N'thampton)
Barnes, Alfred John Hall, F. (York, W. R., Normanton) March, S.
Batey, Joseph Hall, G. H. (Merthyr Tydvil) Marcus, M.
Bellamy, Albert Hall, Capt. W. P. (Portsmouth, C.) Markham, S. F.
Benn, Rt. Hon. Wedgwood Hamilton, Mary Agnes (Blackburn) Marley, J.
Benson, G. Harbord, A. Marshall, Fred
Bentham, Dr. Ethel Hardie, George D. Mathers, George
Birkett, W. Norman Harris, Percy A. Messer, Fred
Blindell, James Hartshorn, Rt. Hon. Vernon Middleton, G.
Bondfield, Rt. Hon. Margaret Hayes, John Henry Mills, J. E.
Bowen, J. W. Henderson, Right Hon. A. (Burnley) Milner, Major J.
Bowerman, Rt. Hon. Charles W. Henderson, Arthur, Junr. (Cardiff, S.) Montague, Frederick
Broad, Francis Alfred Henderson, W. W. (Middx., Enfield) Morgan, Dr. H. B.
Brockway, A. Fenner Herriotts, J. Morley, Ralph
Bromfield, William Hirst, G. H. (York W. R. Wentworth) Morris, Rhys Hopkins
Brooke, W. Hopkin, Daniel Morrison, Herbert (Hackney, South)
Brothers, M. Hore-Belisha, Leslie Morrison, Robert C. (Tottenham, N.)
Brown, C. W. E. (Notts, Mansfield) Horrabin, J. F. Mort, D. L.
Brown, Ernest (Leith) Hudson, James H. (Huddersfield) Muff, G.
Brown, W. J. (Wolverhampton, West) Isaacs, George Muggeridge, H. T.
Burgess, F. G. Jenkins, W. (Glamorgan, Neath) Nathan, Major H. L.
Buxton, C. R. (Yorks, W. R. Elland) John, William (Rhondda, West) Naylor, T. E.
Caine, Derwent Hall- Johnston, Thomas Newman, Sir R. H. S. D. L. (Exeter)
Cameron, A. G. Jones, F. Llewellyn- (Flint) Noel Baker, P. J.
Carter, W. (St. Pancras, S. W.) Jones, Henry Haydn (Merioneth) Oliver, George Harold (Ilkeston)
Charleton, H. C. Jones, J. J. (West Ham, Silvertown) Oliver, P. M. (Man., Blackley)
Chater, Daniel Jones, Rt. Hon. Leif (Camborne) Owen, H. F. (Hereford)
Cluse, W. S. Jones, Morgan (Caerphilly) Palin, John Henry
Clynes, Rt. Hon. John R. Jones, T. I. Mardy (Pontypridd) Paling, Wilfrid
Cocks, Frederick Seymour Jowett, Rt. Hon. F. W. Palmer, E. T.
Compton, Joseph Kelly, W. T. Perry, S. F.
Cove, William G. Kennedy, Thomas Pethick-Lawrence, F. W.
Cowan, D. M. Kenworthy, Lt.-Com. Hon. Joseph M. Phillips, Dr. Marion
Daggar, George Kinley, J. Picton-Turbervill, Edith
Dallas, George Kirkwood, D. Pole, Major D. G.
Dalton, Hugh Lansbury, Rt. Hon. George Potts, John S.
Davies, E. C. (Montgomery) Lathan, G. Price, M. P.
Day, Harry Law, Albert (Bolton) Quibell, D. J. K.
Denman, Hon. R. D. Law, A. (Rosendale) Ramsay, T. B. Wilson
Dickson, T. Lawrence, Susan Raynes, W. R.
Dudgeon, Major C. R. Lawson, John James Richardson, R. (Houghton-le-Spring)
Dukes, C. Lawther, W. (Barnard Castle) Riley, Ben (Dewsbury)
Ede, James Chuter Leach, W. Riley, F. F. (Stockton-on-Tees)
Edwards, C. (Monmouth, Bedwellty) Lee, Frank (Derby, N. E.) Ritson, J.
Edwards, E. (Morpeth) Lees, J. Roberts, Rt. Hon. F. O. (W. Bromwich)
Egan, W. H. Lewis, T. (Southampton) Romeril, H. G.
Elmley, Viscount Lindley, Fred W. Rosbotham, D. S. T.
Freeman, Peter Lloyd, C. Ellis Rowson, Guy
Gardner, B. W. (West Ham, Upton) Longbottom, A. W. Russell Richard John (Eddisbury)
Gardner, J. P. (Hammersmith, N.) Longden, F. Salter, Dr. Alfred
Gibson, H. M. (Lancs, Mossley) Lovat-Fraser, J. A. Samuel, Rt. Hon. Sir H. (Darwen)
Gill, T. H. Lowth, Thomas Samuel, H. W. (Swansea, West)
Sanders, W. S. Snowden, Thomas (Accrington) Watkins, F. C.
Sandham, E. Sorensen, R. Watson, W. M. (Dunfermline)
Sawyer, G. F. Stamford, Thomas W. Watts-Morgan, Lt.-Col. D. (Rhondda)
Scrymgeour, E. Stephen, Campbell Wellock, Wilfred
Scurr, John Stewart, J. (St. Rollox) Welsh, James (Paisley)
Shepherd, Arthur Lewis Sutton, J. E. West, F. R.
Shield, George William Taylor, R. A. (Lincoln) White, H. G.
Shiels, Dr. Drummond Taylor, W. B. (Norfolk, S. W.) Whiteley, Wilfrid (Birm., Ladywood)
Shillaker, J. F. Thomas, Rt. Hon. J. H. (Derby) Whiteley, William (Blaydon)
Short, Alfred (Wednesbury) Thorne, W. (West Ham, Plaistow) Wilkinson, Ellen C.
Simmons, C. J. Thurtle, Ernest Williams, David (Swansea, East)
Sinclair, Sir A. (Caithness) Tillett, Ben Williams, Dr. J. H. (Llanelly)
Sinkinson, George Tinker, John Joseph Williams, T. (York, Don Valley)
Smith, Alfred (Sunderland) Toole, Joseph Wilson C. H. (Sheffield, Attercliffe)
Smith, Ben (Bermondsey, Rotherhithe) Townend, A. E. Wilson R. J. (Jarrow)
Smith, Frank (Nuneaton) Treveiyan, Rt. Hon. Sir Charles Winterton, G. E. (Leicester, Loughb'gh)
Smith, H. B. Lees- (Keighley) Vaughan, D. J. Wright, W. (Rutherglen)
Smith, Rennie (Penistone) Viant, S. P. Young, R. S. (Islington, North)
Smith, Tom (Pontefract) Walker, J.
Smith, W. R. (Norwich) Wallace, H. W. TELLERS FOR THE NOES.—
Snell, Harry Wallhead, Richard C. Mr. Allen Parkinson and Mr. T. Henderson.
Snowden, Rt. Hon. Philip Walters, Rt. Hon. Sir J. Tudor
Mr. C. WILLIAMS

I beg to move, in page 16, line 8, to leave out the words, "for the purposes of profit."

The object of this Amendment is to get something from the Chancellor of the Exchequer. I began this afternoon full of hope and optimism that we might be able to get something out of him. That was on a complicated matter, and my hope was not realised. This is quite a simple matter. The present Chancellor of the Exchequer does not generally put words into a Clause unless they have some meaning. There are at least two possible meanings to these words, and other hon. Members may find other meanings. Are these words put in for the purpose of narrowing the Clause or for widening it? They can only be understood if they are taken in connection with the fact that under this Sub-section we are dealing with certain official agents who are employed on the staffs of "any trade, business or other undertaking." It is conceivable that these words are added to make the position narrower than it need be. It has been pointed out from time to time that there are certain agencies who would employ people under this Clause and who might be carrying on "trade, business or other undertaking" which is not carried on for the purposes of direct profit.

6.0 p.m.

I hope that I shall not frighten hon. Members opposite if I take Russia as an illustration. Supposing that the business agency of the Russian Government in this country, employing people such as would come under this Clause, deliberately tried to run their business so as to avoid a profit that could be shown in any sale merely for the purpose of widening their trading interests on some other lines. It is conceivable that they might be able to act on such lines. They would be actually showing no direct profit, and, with these words in, they would be able to say that they did not come under this Clause. It is clear that the words have been put in for some purpose which we have not yet been able to discover. Take the case of a co-operative society which has some connection with a foreign country. There is a business which, on the surface, is not run directly for profit, yet in actual fact such societies do produce profits. There are friendly societies, such as building societies, which quite conceivably might be attached to some foreign consular body such as this. We are not legislating in a narrow sense, because this Clause is widely drawn, and these words are clearly intended to cover the widest possible form of business.

I wish to know whether these words have been placed in in order to protect the State and to get as much money as we can, or for the purpose of giving further exemption to foreigners? That is what we have to find out. So far as the main purpose of the Clause is concerned, we have ascertained that it is to help foreign businesses in this country as against the business carried on by our own people. That has been clearly admitted by the Chancellor of the Exchequer himself, and I wish to know whether these words are inserted for the deliberate purpose of making things still more difficult for our own people and letting a still larger number of foreigners off this burden. This is not a matter of minor importance, and I regret that my hon. Friend the Member for Barnstaple (Sir B. Peto) was not able to be present to move the Amendment himself, and I apologise to the Committee for not having been able to put the case with the same clarity that he would have done.

Mr. P. SNOWDEN

As has been said very often in the course of the debate, it is proposed that the official agents of a consulate shall be exempt from this taxation if they are not employed in connection with any trade, business or undertaking carried on for profit. It is most important that these words should be inserted. May I give an illustration? The business of a consul is very largely connected with trade, but he is not carrying on trade for his own personal profit. His profits can hardly be regarded as the profits of trade. If the Amendment were accepted, it is extremely likely that a consul would be regarded as being engaged in trade, and therefore would be denied the relief which it is proposed to give him. I would point out that these words are taken exactly from the Finance Act of 1923, which was passed when, I believe, the late Prime Minister was Chancellor of the Exchequer. They then dealt with the relief of Dominion representatives. These very words are found in Section 19 of the Finance Act, 1923: in any trade, business, or other undertaking carried on for the purposes of profit. May I make this further point, although it is a legal point? It is quite conceivable that the Law Courts might construe the word "undertaking," which will be left in if this Amendment be carried, as a business undertaking carried on for the purposes of profit. In spite of the eloquent and lucid speech of the hon. Member who submitted this Amendment, I really do not understand what the hon. Member for Barnstaple (Sir B. Peto) had in mind in putting down the Amendment, and I regret that he was not here to tell us what his object really was. For the reasons I have given I cannot accept the Amendment. It would be likely to exclude from relief the class of people we are anxious to bring within the scope of this relief.

Lieut.-Colonel Sir A. LAMBERT WARD

In neither his preliminary explanation nor in the explanation which he has just given did the Chancellor of the Exchequer deal with the case of a consul who is not in receipt of a definite salary. The right hon. Gentleman must know that there are many consuls representing minor foreign countries in small seaports of this kingdom who do not receive a definite salary. They receive official emoluments in the form of payment for the work which they do in their official capacity as Consuls. The right hon. Gentleman has not said whether in that case the consul will be free of Income Tax or will not. In his first explanation he used the term "official emoluments," but in a later explanation he spoke of "official salary," and those two terms are not by any means synonymous.

Let us take the case of a consul representing some small second-rate Power in some small seaport in this country. He may be a native of the country he represents, or he may be a British citizen. The amount of work for him at that port is not sufficient to warrant the country he represents paying him an official salary, but when a ship flying the flag of that country comes into that port it has to be cleared by the consul. That is official work for which he receives an official emolument, although it is not a salary. When the ship leaves it has to be cleared again, and that is also official work, but it is not rewarded by an official salary. In many of these ports it is part of the consul's duty to visa passports, for which he receives a fee. Is that an official emolument or is it not? Are we to consider that a consul in receipt of no official salary, although he does official work for which he receives official emoluments, is not to benefit under this Clause and will be considered liable for Income Tax upon those emoluments?

The right hon. Gentleman is shaking his head, but it seems to me that it is going to be very difficult to differentiate between the emoluments which he receives for clearing a ship and the emoluments he receives for visaing passports and a commission which he might receive on that ship being coaled—it may be an illegal commission, and probably it is, but at the same time he receives it through his connection with that foreign country and the work which he does for the ship. The possible effects of this Clause require a considerable amount of elucidation. It may be quite true that from the point of view of the Treasury the amount of money involved is infinitesimal, but at the same time we may cause a great deal of discontent and ill-feeling among traders in these ports if it is known that because of a man's connection with a foreign country he is entitled to receive emoluments on which he is absolved from paying Income Tax.

Major COLFOX

I would like to ask the Chancellor of the Exchequer what is the opinion of the Public Accounts Committee on this matter, because although I know how difficult it is for him ever to admit the possibility of his having committed an indiscretion, I would give him the opportunity, now that an interval has elapsed, to produce the document which his peculiar temperament made it impossible for him to produce just now. There is an old saying that the devil looks after his own. It is not for me to comment upon that, nor, of course, would it be in order or, indeed, suitable to liken the Chancellor to that hero of fiction; but it did occur to me when I first saw this Clause that the Chancellor was looking after his own friends, namely, the traders of Soviet Russia.

The DEPUTY-CHAIRMAN (Mr. Dunnico)

The Amendment before the Committee raises the question whether the words "for the purposes of profit" shall remain or be deleted from the Bill.

Major COLFOX

Exactly, and the traders of Soviet Russia are people who ostensibly, at any rate according to their own profession, are not trading for the purposes of profit. Therefore, it seems to me, or it did seem to me on first reading this Clause, that the particular reason for inserting the words "undertaking carried on for the purposes of profit" was that the Bolshevist friends of the Chancellor would not have to pay any Income Tax in this country. If that is the effect of the Clause, as I submit it is, then I think all who are not friends of the Bolshevists must agree that it is a most undesirable result to follow from any legislation passed by this House. I see no reason why the subjects of one particular country should be placed in specially favoured conditions, particularly when they have behaved as the Bolshevists have. For these reasons I strongly support the deletion of the words "for the purposes of profit" because I want to include as few people as possible under this exemption from the payment of Income Tax.

There is another reason which makes it desirable to omit these words, and it is that it might happen that some consular official might be carrying on an undertaking which might have made a profit one year and sustained a loss in the following year. In such a case the person concerned would be continually transferred from one category to another. In the year in which he made a profit his whole income would be subject to Income Tax; whereas in the following year he might make no profit at all, and then he would be covered because he would not be carrying on an undertaking for the purposes of profit, and the whole of his income would be exempt from Income Tax. If those words are allowed to remain in the Bill you will never have any continuity or stability, and the result will be a constant transfer of persons from one category to another. I would like to be informed what the Public Accounts Committee think about this matter, and I hope the Chancellor of the Exchequer will now condescend to produce to the Committee the document to which he has alluded.

Mr. ALBERY

I have listened carefully to the reasons which have been given by the Chancellor of the Exchequer for refusing to accept this Amendment, but it does not seem to me that the right hon. Gentleman has, up to the present moment, given the information which we require. So far as I know, there is only one foreign State which has an official agency in this country for carrying on trade or business. It is quite obvious that by moving this Amendment we want to discover what the position of that particular foreign agency is going to be with reference to Income Tax matters. Perhaps the Financial Secretary to the Treasury will give us some detailed information on that subject and if he will do so I am sure it will very much shorten the debate on this point.

Lord EUSTACE PERCY

I support the request which has been put forward for some further information about a certain class of official agencies. This Clause exempts from Income Tax persons employed in the service of a foreign State so long as they do not carry on any trade or business for the purposes of profit. There are a number of official agencies which exist for the purpose of carrying on official propaganda. There are perfectly proper agencies like the educa- tional agencies maintained in London by the French Government through the French Universities, and we have our own library of information in New York which may be called an official agency. Besides all these quite well recognised educational, cultural propaganda agencies there are other agencies existing for the purpose of carrying on political propaganda such as the Soviet Government and the Third International, which is connected with the Soviet Government. Does this Clause mean that any person employed in this country by a foreign Government to conduct propaganda in the Press of this country will be exempt from Income Tax on the salary he is paid by the foreign Government to conduct that political propaganda on the ground that he is not conducting it for his own personal profit? Is it the position that every person from the officer of an educational institution to the political propagandist paid a salary by the Third International is ipso facto exempt from Income Tax?

Mr. HASLAM

We are carrying on this debate in circumstances of considerable difficulty. This Clause is based upon a certain Treasury Minute which the Chancellor of the Exchequer has refused to produce.

The DEPUTY-CHAIRMAN

The arguments which are now being used by the hon. Member would be more appropriate on the Question, "That the Clause stand part of the Bill." This Amentment deals exclusively with the omission of the words "for the purposes of profit."

Mr. HASLAM

I submit that those words have an important bearing upon the question which I am discussing. Before we are able to judge of the proper meaning of those words, surely the Committee ought to be put in possession of the fullest information, because that has always been the practice hitherto maintained by revenue officials in collecting taxes from these particular persons Fears have been expressed as to what may happen under this Clause in regard to the agents of the Russian Government who, in this country, are carrying on various activities of one sort and another. We want to know whether those Russian agents are to be exempt from the payment of their Income Tax or not. That point is not clear from what the Chancellor of the Exchequer has said, and we want a clear understanding as to what the position of those agents will be under this Clause.

The DEPUTY-CHAIRMAN

I cannot see what bearing the arguments now being used by the hon. Member have upon this Amendment, which deals with the particular point of the omission of the words "for the purposes of profit."

Mr. HASLAM

The omission of the words "for the purposes of profit" would undoubtedly limit the scope of this Clause. If the Amendment is carried, the Clause would read: not being a department or agency which carries on any trade, business or other undertaking.

The DEPUTY-CHAIRMAN

The omission of those words would not widen the scope of the Section.

Mr. HASLAM

I want to provide by this Amendment that all these people will come under the Income Tax law, and surely I am entitled to argue whether this Amendment achieves that object. Take, for example, a foreign propagandist. Is he carrying on an undertaking for the purposes of profit? A foreign propagandist might say that he was not carrying on an undertaking for the purposes of profit, and he might claim to be let off the payment of Income Tax. The members of the Russian Trade Delegation might very well say that they are not carrying on trade for the purposes of profit and they might take shelter under the co-operative definition, and say that they are not carrying on trade for the purposes of profit. I submit that all these questions ought to be answered, and the Committee ought to be placed in possession of this information. We ought to know definitely what are the objects of the Government in relation to the particular agencies of the Russian Government. Do the Government want to let these people off the payment of their Income Tax?

Sir A. CHAMBERLAIN

I do not want to go over again the ground which has been covered by previous speakers, but I ask the Chancellor of the Exchequer to consider a difficulty which occurs to my mind, and one against which, I think, it is necessary to guard when we are laying down a rigid statutory definition. I quite understand the desire of the Chancellor of the Exchequer to provide that consuls, and those employed as official agents, shall not have their salaries treated in the same way as money earned by trade. We have to deal with a world in which trade is no longer in the hands of private individuals alone, but trading has become the function of Governments in more than one country. Some of my hon. Friends have argued this question as if Russia stood alone in this respect, but it is quite true that the Governments of other countries which do not hold the same doctrines as the Russian Government are carrying on certain trades.

What is to be the position of a trade carried on by a Government—of an agent carrying on a trade, not for profit, but in competition with British traders who cannot live unless they make a profit? Do you really mean that, if the work which the foreigner is doing on behalf of his Government is of the same kind as the work which the British subject is doing in competition with him, the foreign agent shall go free of taxation while the British agent shall pay taxation? Let me try to illustrate my argument. In the case of the American Government Mercantile Marine, are the agents of the American Government, if any, established in this country for the purposes of the American Mercantile Marine, to be exempt from taxation which the agents of a British shipping company engaged in the same trade would have to pay? The right hon. Gentleman may say that that is guarded against by the inclusion of the words which we are proposing to leave out, but I would ask hon. Gentlemen below the Gangway if that is so.

Mr. LEIF JONES

I think it is a safeguard.

Sir A. CHAMBERLAIN

Then I invite the right hon. Gentleman to consider it with me and with the Chancellor of the Exchequer.

Mr. JONES

I am following the right hon. Gentleman's argument most closely.

Sir A. CHAMBERLAIN

I am greatly encouraged by the interest of the right hon. Gentleman. Would it be a good argument to say that the Government shipping of America is conducted for profit? If so, it has long been condemned. It has never made a profit in any year. It is maintained by immense direct and indirect subsidies, and no American statesman, if he were called upon to justify it before Congress, would for one moment think of saying, "I did this in order that the Government might make a profit." They do not need a profit; they have no intention of making a profit; it has been proved that they cannot make a profit. They are doing it in order to establish an American Mercantile Marine; they are doing it for a high political purpose, and not for profit at all. I venture to think that the right hon. Gentleman is mistaken in supposing that to say that it must be for profit is a safeguard against that kind of competition, carried on for quite other reasons, which, as I have said, would not only not encourage, but would not permit any American defender of the system in his own Congress to justify it on the ground that it was, or was likely to be, a profit-making concern.

Again, take the case of Australia a little time ago. I think that their purpose was twofold. It was not to make a profit. They never did make a profit. If they ever had made a profit, the idea of profit would have been wholly subsidiary to other and more immediate purposes which the establishment of a State shipping line was intended to further. It was intended to create an Australian Marine which should be subservient to the promotion of Australian industry. Profit was a matter of secondary concern; the purpose was to facilitate Australian trade and to break down what is called the British shipping ring. But would you really, in such a case, say that the establishment of a State-controlled, State-organised and State-subsidised line of shipping by Australia, South Africa or any other Dominion, in competition with an established British line of shipping, should be favoured by the exemption of its agents in that competition from an Income Tax which the agents of British lines have to pay, when the purpose of the competition was to cut into the British trade and substitute another trade for it?

Take, as a third case, that of Russia. A good deal of the trade that is being done with this country has, we are told, been done through the Russian co- operative societies on the one side, and our own co-operative societies on the other. Our own co-operative societies, for reasons with which most of those who have sat for any length of time in this House are familiar, are not subject to Income Tax because they are not profit-making concerns in the Income Tax sense; but are the agents of a Russian trading concern, working in a similar or parallel field, to be exempt from that tax on their salaries which every agent of an English co-operative society will have to pay? Surely, these things are not intended by the Chancellor of the Exchequer, and yet, surely, that would be the effect of these limiting words, for the purposes of profit. As long as the competition is carried on for other purposes than profit, as I read the Clause, the agent escapes the taxation which the agents of the British undertaking in the same line of trade and working under similar conditions—sometimes, perhaps, in complementary trade, sometimes in competitive trade—would still remain obliged to pay. I have taken rather more time than I meant to take, in the effort to put my case before the Chancellor of the Exchequer in such a way that it shall not be open to him to think for a moment that I am not arguing a serious question, and arguing it seriously, but merely trying to waste his time or the time of the Committee.

Mr. P. SNOWDEN

The right hon. Gentleman has raised what he has described as an important point, and the very courteous way in which he has spoken prompts me to reply. Let us look at the words of the Clause. Sub-section (3) says that: The expression 'official agent' means a person not being a consul, who is employed on the staff of any consulate, official department or agency of a foreign state, not being a department or agency which carries on any trade, business or other undertaking for the purposes of profit. The Noble Lord the Member for Hastings (Lord E. Percy) took two quite opposite cases, one of which, as I understood it, he would regard as being entitled to relief from Income Tax, such as scientific missions——

Lord E. PERCY

I did not mean that I thought that they were entitled to relief.

Mr. SNOWDEN

At any rate, the Noble Lord referred to them quite emphatically. It is intended that scientific research of such a character shall come within the definition of an undertaking not carried on for purposes of profit. The second case, namely, that of a political agency in this country, would, I think, be clearly excluded by the words of this Clause, because it must be an agency which is established by the foreign State. If we take the case of Russia, which has obtruded a great deal into our debate this afternoon, one cannot imagine that the Russian Government would officially and openly establish an agency in this country for the purposes of political propaganda, and, therefore, the employés of such an organisation would, I assume, if they were resident in this country, be called upon to pay Income Tax. With regard to the cases raised by the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain), I can inform him that the agents of the American Shipping Board in this country did pay Income Tax, because that work was regarded as coming within what is meant by the words of this Clause. The right hon. Gentleman's second case was that of Australia——

Sir A. CHAMBERLAIN

I beg the right hon. Gentleman's pardon. It must be remembered that hitherto the exemptions have rested on no statutory basis. The foreign agency could go before no court. It was within the discretion of the Revenue authorities to refuse exemption in any case where they thought that it would be an abuse. It is quite a different thing to make it a statutory obligation, which the foreigner can plead before the courts. Are you satisfied that the words which you have put into the Bill would preserve your right to exclude these people? It is not a question of whether they have been excluded, but of whether they will be excluded.

Mr. SNOWDEN

I am no lawyer, but I cannot imagine that any court of law would take the view that a State agency such as the Australian Commonwealth Shipping Lines or the American Mercantile Marine was not a business or undertaking carried on for profit. The right hon. Gentleman says that they may make no profit, and, therefore, would not come within the operation of these words, but, surely, the fact that they might make no profit in a particular year, or over a succession of years, does not remove them from the category of a business that is carried on for profit.

Sir A. CHAMBERLAIN

My contention went further than that. It is not merely that they do not make a profit; it is that they themselves would never have defended the establishment of their State lines on the ground of profit. They were founded for quite other reasons. They were carried on regardless of profit. Profit might be a test of success, but it was never the purpose for which they were carried on.

Mr. SNOWDEN

That might not have been the motive for their establishment, but I venture to submit that that does not remove them from the category of business concerns carried on for profit. About the other case which was put by the right hon. Gentleman, namely, the case of the Australian Commonwealth Shipping Lines, there is even less ambiguity than in the case of the United States Shipping Board. These words, as I pointed out a little time back, are taken from Section 19 of the Finance Act of 1923. That was the Section which gave relief to High Commissioners and Agents-General, and it excluded from relief any person employed in any trade, business or undertaking carried on for the purposes of profit. Therefore, we have introduced nothing new, but we are extending to these agents of foreign Governments precisely the same conditions which were applied in Section 19 of the Finance Act, 1923. I think there is some little confusion as between the exemption of an undertaking and the exemption of the staffs of the undertaking. It is only a question of the exemption or relief from liability of the staffs, and not of the business itself. I think the right hon. Gentleman rather fell into that confusion when he was using co-operative societies as an illustration. Co-operative societies may be exempt from payment. Of course, they are not supposed to make a profit. That is a very debatable point which I am not going into now. That applies to the societies, but the officials, those who are employed by the co-operative societies are not exempt from the payment of Income Tax. Therefore, the case between them and the application here in this Clause seems to me to be fairly analogous.

Sir A. CHAMBERLAIN

Would the agents of the Soviet Trade Agency, which is an organ of the Government, be exempt or not?

Mr. SNOWDEN

No, I have said that already. There are three. There is the chief trade representative and two of his principal officials with diplomatic status.

Sir A. CHAMBERLAIN

Does not this Clause exclude any other agent?

Mr. SNOWDEN

I do not think so. I think the words "trade or business carried on for profit" very clearly and definitely bring them within the scope.

Sir L. WORTHINGTON-EVANS

The right hon. Gentleman says that, although it may be an organ of the Government, yet, because it is carried on for profit, it will not come within the Clause, nor will any of the agents of that body living in this country be exempt from Income Tax. But can he really say that? The whole basis of a co-operative society is that it should not be carried on for the purpose of profit, that it should be carried on for the benefit of its members.

Mr. SNOWDEN

How can that possibly be the case? Even if it is not carried on for profit in the ordinary sense of the term, it may be carried on so as to produce a dividend for its members.

Sir L. WORTHINGTON-EVANS

If they give a dividend to non-members of the society, that is a trading profit, but the whole basis of the Income Tax exemption on dividends to members is that they are merely a discount, the same sort of discount that an individual gets from his tailor if he is able to pay cash. It is because it is a discount and not a dividend out of profits that co-operative societies claim to be exempt from Income Tax. This Clause exempts only the agents of Government bodies which carry on any trade, business or other undertaking for the purposes of profit. It is not a question of whether they will make a profit or not but of what is the object of the business. Is it carried on for the purpose of a profit? The Commonwealth Shipping Line was not carried on for the purpose of a profit. It was publicly announced that it was carried on for the purpose of breaking what they called a shipping ring and trying to secure lower and fairer freights for Australian shippers. Whether they made a loss or a profit was quite immaterial to them. Their justification for going on after they had made a loss was not that the loss was accidental and that they were going to make a profit later on, but that they should have cheap freights for the Australian people. Such a body requires a large staff in this country. A business carried on like that might easily have 30 or 40 people employed in this country, and some of them would be highly paid. This Clause, as far as I can see, is going to give those highly-paid people an actual preference over their competitors, who are the representatives of English or other non-official non-State trading organisations. [Interruption.]

It is all very well to say it is not. It only is not if those organisations are being carried on for the purpose of profit. It is really difficult to construe those words. [Interruption.] That was a totally different thing. That was to put the Dominion representatives in the same position as consuls and representatives of foreign powers. It was not to give them a preference over people here. It was to put them on a level with the representatives of foreign Powers, and, if that was too generous, it was, at any rate, generous to our own people. But the generosity of the right hon. Gentleman is not to inure for the benefit of our own people, but of those who are competing with our own people. The right hon. Gentleman says the representatives of the Commonwealth did pay and, therefore, they will not be exempt under this Clause. They only paid because they were not covered by the Treasury Minute. If they are covered by this Clause, they will not pay. We want to know if the right hon. Gentleman is right in arguing that, because they paid in the past, they will have to pay in the future. We cannot judge that unless he will produce the Treasury Minute. If he produces that, we shall see whether they paid because of the words of the Treasury Minute, and whether they will have to pay in future because of the words of the Bill. So long as he withholds from us the Treasury Minute, it is impossible to follow his argument. So far as he has made any sort of case, it all depends on the meaning of the words "for the purposes of profit." That may well be a matter of national policy and not of pounds, shillings and pence. In Australia and America it certainly has been a matter of national policy and not of pounds, shillings and pence, and consequently, I do net believe for a moment that these words are effective for the purpose for which they are put in.

Major G. DAVIES

The Chancellor of the Exchequer just now said that he was no lawyer. It would be unparliamentary to give the lie direct to that categorical statement, but, if that be the case, surely we are entitled to the advice of a Law Officer, who can make a definite statement, not as to what the Chancellor of the Exchequer intends, but as to what the Clause actually conveys. This matter has largely revolved around maritime questions, and I suppose, if the Chancellor is not a lawyer, he is certainly not a sea lawyer. We can afford to be generous when times are good, but when times are had it seems a short-sighted policy to bring in Measures which admittedly are going to help foreigners and be a handicap to our own people. It does not matter whether these are big maritime organisations whose aim is to break a shipping ring. We may be a great shipping ring. Apparently, the House of Commons is in favour of coal rings, but that is another story. We are all in favour of profitable industry to employ our own people. It seems to be the height of folly to take any risk in passing a Measure like this which seems to be giving the foreigners additional advantages and putting additional disadvantages on our own people. We are very much disturbed, because the Chancellor is not a lawyer, and these are not mere quibbles but legal points of the first importance. A little earlier it would have been the right policy for him to have had the Minute in one hand and the resolution of the Public Accounts Committee in the other, and on this occasion he should have had, dexter, the Attorney-General and, sinister, the Solicitor-General in order to give us the benefit of their legal advice on a matter on which the Chancellor admits that he is not an expert. Many of the matters which have been brought up are very vital. We are all at one in what we intend to do. The question is what are we doing, and the Chancellor is unable to tell us what it is that he wants us to do. We are entitled to the expert advice of the Law Officers of the Crown.

7.0 p.m.

Mr. C. WILLIAMS

I thank the Chancellor of the Exchequer for his courteous references to me. He said he wished to hear something further as to the purpose of the Amendment. It is to endeavour to get from the Government a clear legal definition of precisely what trades and businesses they intend to exclude or to include under this Clause. There are three forms of business which the right hon. Gentleman has not yet dealt with. What about a foreign railway, which may quite conceivably be called a trade or business but whose fundamental purpose is the military defence of the country, and yet it may really be an agency for the purpose of obtaining travellers. A foreign country may make a very good claim that it is really a business concern. It is quite likely that under this particular Clause there will be scores of foreign firms who will be able to get exemption. That is one of the reasons why we ask that this Amendment should be accepted. It is a very great pity that the Chancellor has refused to accept the Amendment, which would make it much easier for his Department to operate in the way they have operated hitherto and not give these exemptions from taxation unless they were given to cases clearly concerning a foreign Government, and not in cases of business. If the right hon. Gentleman is still obdurate and refuses to accept the Amendment, I hope that we shall divide.

Sir ARTHUR STEEL-MAITLAND

I wish to put one last point to the Chancellor. He prayed in aid Section 19 of the Act of 1923, but it gives no support whatever to his contention. If he will compare it with what he is doing in the present Clause, he will find the operation of the two Clauses is quite different. The present Clause gives an exemption to a class of people engaged in a class of business. What we are claiming is that that Clause is too widely expressed, that it gives an exemption to the representatives engaged in classes of business too widely defined, and that they ought to be further restricted. The Section of the Act of 1923 is of an entirely opposite kind The first part of Section 19 extends to High Commissioners and Agents-General the same class of exemption that is given to diplomats, but the Sub-section to which the right hon. Gentleman refers goes on to restrict the operation of that Sub-section. Here it is the opposite. In the Act of 1923 it says that, whatever is done for High Commissioners and Agents-General— Nothing in this Section shall operate to grant relief from income Tax (including Super-tax) in respect of income arising from the employment of any person in any trade, business, or other undertaking carried on for the purposes of profit. Perhaps with the knowledge of recent experience the restrictive clause ought to have gone further but it is quite possible, too, that, if there was any virtue in that Treasury Minute on which the executive acted, these employés in occupations of the kind described by my right hon. Friend the Member for West Birmingham (Sir A. Chamberlain) would have been liable to Income Tax. It is possible that it did not go far enough, but it did not give any relief whatsoever to people engaged as representatives of co-operative societies. It acted to restrict relief already given by a preceding section. The operation of the two Sub-sections is entirely different, and I hope that the Chancellor of the Exchequer at the very least will consider this with a view, if the contention is correct, of introducing an Amendment on Report. If he will read those Clauses himself, I am quite certain that he will come to the same conclusion.

Mr. P. SNOWDEN rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 278; Noes, 147.

Division No. 351.] AYES. [7.7 p.m.
Adamson, Rt. Hon. W. (Fife, West) Hall, F. (York, W. R., Normanton) Moses, J. J. H.
Adamson, W. M. (Staff., Cannock) Hall, G. H. (Merthyr Tydvil) Mosley, Lady C. (Stoke-on-Trent)
Addison, Rt. Hon. Dr. Christopher Hall, Capt. W. P. (Portsmouth, C.) Muff, G.
Aitchison, Rt. Hon. Craigie M. Harbord, A. Muggeridge, H. T.
Alexander, Rt. Hon. A. V. (Hillsbro') Hardie, George D. Murnin, Hugh
Ammon, Charles George Harris, Percy A. Naylor, T. E.
Arnott, John Haycock, A. W. Newman, Sir R. H. S. D. L. (Exeter)
Aske, Sir Robert Hayday, Arthur Noel Baker, P. J.
Attlee, Clement Richard Hayes, John Henry Oldfield, J. R.
Ayles, Walter Henderson, Arthur, Junr. (Cardiff, S.) Oliver, George Harold (Ilkeston)
Baker, John (Wolverhampton, Bilston) Henderson, Thomas (Glasgow) Oliver, P. M. (Man., Blackley)
Baldwin, Oliver (Dudley) Henderson, W. W. (Middx., Enfield) Owen, Major G. (Carnarvon)
Barnes, Alfred John Herriotts, J. Owen, H. F. (Hereford)
Batey, Joseph Hirst, G. H. (York W. R. Wentworth) Palin, John Henry.
Beckett, John (Camberwell, Peckham) Hollins, A. Palmer, E. T.
Bellamy, Albert Hore-Belisha, Leslie Parkinson, John Allen (Wigan)
Benn, Rt. Hon. Wedgwood Horrabin, J. F. Perry, S. F.
Benson, G. Hudson, James H. (Huddersfield) Pethick-Lawrence, F. W.
Bentham, Dr. Ethel Hunter, Dr. Joseph Phillips, Dr. Marion
Bevan, Aneurin (Ebbw Vale) Hutchison, Maj.-Gen. Sir R. Picton-Turbervill, Edith
Birkett, W. Norman Isaacs, George Potts, John S.
Blindell, James Jenkins, W. (Glamorgan, Neath) Price, M. P.
Bondfield, Rt. Hon. Margaret John, William (Rhondda, West) Pybus, Percy John
Bowen, J. W. Johnston, Thomas Quibell, D. J. K.
Bowerman, Rt. Hon. Charles W. Jones, F. Llewellyn- (Flint) Ramsay, T. B. Wilson
Brockway, A. Fenner Jones, Henry Haydn (Merioneth) Rathbone, Eleanor
Bromfield, William Jones, J. J. (West Ham, Silvertown) Raynes, W. R.
Brooke, W. Jones, Rt. Hon. Leif (Camborne) Richardson, R. (Houghton-le-Spring)
Brothers, M. Jones, Morgan (Caerphilly) Riley, Ben (Dewsbury)
Brown, C. W. E. (Notts. Mansfield) Jones, T. I. Mardy (Pontypridd) Riley, F. F. (Stockton-on-Tees)
Brown, Ernest (Leith) Jowett, Rt. Hon. F. W. Ritson, J.
Brown, W. J. (Wolverhampton, West) Kelly, W. T. Roberts, Rt. Hon. F. O. (W. Bromwich)
Buchanan, G. Kennedy, Thomas Romeril, H. G.
Burgess, F. G. Kenworthy, Lt.-Com. Hon. Joseph M. Rosbotham, D. S. T.
Buxton, C. R. (Yorks. W. R. Elland) Kinley, J. Rowson, Guy
Caine, Derwent Hall- Kirkwood, D. Russell, Richard John (Eddisbury)
Cameron, A. G. Lambert, Rt. Hon. George (S. Molton) Salter, Dr. Alfred
Carter, W. (St. Pancras, S. W.) Lansbury, Rt. Hon. George Samuel Rt. Hon. Sir H. (Darwen)
Charleton, H. C. Lathan, G. Samuel, H. W. (Swansea, West)
Chater, Daniel Law, Albert (Bolton) Sanders, W. S.
Church, Major A. G. Law, A. (Rosendale) Sandham, E.
Clarke, J. S. Lawrence, Susan Sawyer, G. F.
Cluse, W. S. Lawson, John James Scrymgeour, E.
Clynes, Rt. Hon. John R. Lawther, W. (Barnard Castle) Scurr, John
Cocks, Frederick Seymour Leach, W. Sexton, James
Compton, Joseph Lee, Frank (Derby, N. E.) Shepherd, Arthur Lewis
Cove, William G. Lee, Jennie (Lanark, Northern) Shield, George William
Cowan, D. M. Lees, J. Shiels, Dr. Drummond
Daggar, George Lewis, T. (Southampton) Shillaker, J. F.
Dallas, George Lindley, Fred W. Short, Alfred (Wednesbury)
Dalton, Hugh Lloyd, C. Ellis Simmons, C. J.
Davies, E. C. (Montgomery) Longbottom, A. W. Simon, E. D. (Manch'ter, Withington)
Day, Harry Longden, F. Simon, Rt. Hon. Sir John
Denman, Hon. R. D. Lovat-Fraser, J. A. Sinkinson, George
Dickson, T. Lowth, Thomas Smith, Alfred (Sunderland)
Dudgeon, Major C. R. Lunn, William Smith, Ben (Bermondsey, Rotherhithe)
Dukes, C. Macdonald, Gordon (Ince) Smith, Frank (Nuneaton)
Ede, James Chuter MacDonald, Rt. Hon. J. R. (Scaham) Smith, H. B. Lees- (Keighley)
Edmunds, J. E. MacDonald, Malcolm (Bassetlaw) Smith, Ronnie (Penistone)
Edwards, E. (Morpeth) McElwee, A. Smith, Tom (Pontefract)
Egan, W. H. McEntee, V. L. Smith, W. R. (Norwich)
Elmley, Viscount MacNeill-Weir, L. Snell, Harry
Evans, Capt. Ernest (Welsh Univ.) McShane, John James Snowden, Rt. Hon. Philip
Freeman, Peter Malone, C. L'Estrange (N'thampton) Snowden, Thomas (Accrington)
Gardner, B. W. (West Ham, Upton) March, S. Sorensen, R.
Gardner, J. P. (Hammersmith, N.) Marcus, M. Stamford, Thomas W.
George, Major G. Lloyd (Pembroke) Markham, S. F. Stephen, Campbell
George, Megan Lloyd (Anglesea) Marley, J. Stewart, J. (St. Rollox)
Gibbins, Joseph Marshall, Fred Strachey, E. J. St. Loe
Gibson, H. M. (Lancs. Mossley) Mathers, George Strauss, G. R.
Gill, T. H. Matters, L. W. Sullivan, J.
Gillett, George M. Messer, Fred Sutton, J. E.
Glassey, A. E. Middleton, G. Taylor, R. A. (Lincoln)
Gossling, A. G. Millar, J. D. Taylor, W. B. (Norfolk, S. W.)
Gould, F. Mills, J. E. Thomas, Rt. Hon. J. H. (Derby)
Graham, D. M. (Lanark, Hamilton) Milner, Major J. Thorne, W. (West Ham, Plaistow)
Graham, Rt. Hon. Wm. (Edin., Cent.) Montague, Frederick Thurtle, Ernest
Granville, E. Morgan, Dr. H. B. Tillett, Ben
Gray, Milner Morley, Ralph Tinker, John Joseph
Grenfell, D. R. (Glamorgan) Morris, Rhys Hopkins Toole, Joseph
Griffiths, T. (Monmouth, Pontypool) Morrison, Herbert (Hackney, South) Townend, A. E.
Groves, Thomas E. Morrison, Robert C. (Tottenham, N.) Trevelyan, Rt. Hon. Sir Charles
Grundy, Thomas W. Mort, D. L. Turner, B.
Vaughan, D. J. Welsh, James (Paisley) Wilson C. H. (Sheffield, Attercliffe)
Viant, S. P. Welsh, James C. (Coatbridge) Wilson, J. (Oldham)
Walkden, A. G. West, F. R. Wilson, R. J. (Jarrow)
Walker, J. Westwood, Joseph Winterton, G. E. (Leicester, Loughb'gh)
Wallace, H. W. White, H. G. Wise, E. F.
Wallhead, Richard C. Whitetey, Wilfrid (Birm., Ladywood) Wright, W. (Rutherglen)
Watkins, F. C. Whiteley, William (Blaydon) Young, R. S. (Islington, North)
Watson, W. M. (Dunfermline) Wilkinson, Ellen C.
Watts-Morgan, Lt.-Col. D. (Rhondda) Williams, David (Swansea, East) TELLERS FOR THE AYES.—
Wedgwood, Rt. Hon. Josiah Williams, Dr. J. H. (Llanelly) Mr. Charles Edwards and Mr.
Wellock, Wilfred Williams, T. (York, Don valley) Paling.
NOES.
Acland-Troyte, Lieut.-Colonel Fremantle, Lieut.-Colonel Francis E. Ormsby-Gore, Rt. Hon. William
Albery, Irving James Ganzoni, Sir John Peake, Capt. Osbert
Amery, Rt. Hon. Leopold C. M. S. Gibson, C. G. (Pudsey & Otley) Percy, Lord Eustace (Hastings)
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Gilmour, Lt.-Col. Rt. Hon. Sir John Pownall, Sir Assheton
Atholl, Duchess of Graham, Fergus (Cumberland, N.) Ramsbotham, H.
Atkinson, C. Grattan-Doyle, Sir N. Reid, David D. (County Down)
Baldwin, Rt. Hon. Stanley (Bewdley) Greaves-Lord, Sir Walter Remer, John R.
Balfour, George (Hampstead) Gritten, W. G. Howard Rentoul, Sir Gervais S.
Berry, Sir George Guinness, Rt. Hon. Walter E. Richardson, Sir P. W. (Sur'y, Ch't'sy)
Bevan, S. J. (Holborn) Gunston, Captain D. W. Rodd, Rt. Hon. Sir James Rennell
Birchall, Major Sir John Dearman Hacking, Rt. Hon. Douglas H. Ruggles-Brise, Lieut.-Colonel E. A.
Bird, Ernest Roy Hall, Lieut.-Col. Sir F. (Dulwich) Russell, Alexander West (Tynemouth)
Bourne, Captain Robert Croft Hamilton, Sir George (Ilford) Salmon, Major I.
Bowyer, Captain Sir George E. W. Hanbury, C. Samuel, A. M. (Surrey, Farnham)
Boyce, H. L. Hannon, Patrick Joseph Henry Samuel, Samuel (W'dsworth, Putney)
Bracken, B. Hartington, Marquess of Sandeman, Sir N. Stewart
Brass, Captain Sir William Harvey, Major S. E. (Devon, Totnes Savery, S. S.
Briscoe, Richard George Haslam, Henry C. Shepperson, Sir Ernest Whittome
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Herbert, Sir Dennis (Hertford) Skelton, A. N.
Buckingham, Sir H. Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Smith, R. W. (Aberd'n & Kinc'dine, C.)
Bullock, Captain Malcolm Hope, Sir Harry (Forfar) Smith-Carington, Neville W.
Cadogan, Major Hon. Edward Howard-Bury, Colonel C. K. Smithers, Waldron
Cautley, Sir Henry S. Hurd, Percy A. Somerville, A. A. (Windsor)
Cayzer, Sir C. (Chester, City) Hurst, Sir Gerald B. Somerville, D. G. (Willesden, East)
Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Iveagh, Countess of Spender-Clay, Colonel H.
Cazalet, Captain Victor A. Jones, Sir G. W. H. (Stoke New'gton) Stanley, Maj. Hon. O. (W'morland)
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) Kindersley, Major G. M. Steel-Maitland, Rt. Hon. Sir Arthur
Chamberlain, Rt. Hon. N. (Edgbaston) King, Commodore Rt. Hon. Henry D. Stuart, Hon. J. (Moray and Nairn)
Churchill, Rt. Hon. Winston Spencer Lane Fox, Col. Rt. Hon. George R. Sueter, Rear-Admiral M. F.
Colfox, Major William Philip Leighton, Major B. E. P. Todd, Capt. A. J.
Colville, Major D. J. Lewis, Oswald (Colchester) Train, J.
Courthope, Colonel Sir G. L. Llewellin, Major J. J. Tryon, Rt. Hon. George Clement
Cranborne, Viscount Locker-Lampson, Rt. Hon. Godfrey Turton, Robert Hugh
Croft, Brigadier-General Sir H. Long, Major Eric Vaughan-Morgan, Sir Kenyon
Crookshank, Cpt. H. (Lindsey, Gainsbro) Macdonald, Capt. P. D. (I. of W.) Wallace, Capt. D. E. (Hornsey)
Croom-Johnson, R. P. MacRobert, Rt. Hon. Alexander M. Ward, Lieut.-Col. Sir A. Lambert
Cunliffe-Lister, Rt. Hon. Sir Philip Maitland, A. (Kent, Faversham) Wardlaw-Milne, J. S.
Dalkeith, Earl of Makins, Brigadier-General E. Warrender, Sir Victor
Dalrymple-White, Lt.-Col. Sir Godfrey Marjoribanks, E. C. Waterhouse, Captain Charles
Davidson, Major-General Sir J. H. Meller, R. J. Wells, Sydney R.
Davies, Dr. Vernon Mitchell-Thomson, Rt. Hon. Sir W. Williams, Charles (Devon. Torquay)
Davies, Maj. Geo. F. (Somerset, Yeovil) Mond, Hon. Henry Windsor-Clive, Lieut.-Colonel George
Dawson, Sir Philip Monsell, Eyres, Com. Rt. Hon. Sir B. Winterton, Rt. Hon. Earl
Eden, Captain Anthony Moore, Sir Newton J. (Richmond) Withers, Sir John James
Edmondson, Major A. J. Morrison-Bell, Sir Arthur Clive Wolmer, Rt. Hon. Viscount
Elliot, Major Walter E. Muirhead, A. J. Womersley, W. J.
Erskine, Lord (Somerset, Weston-s.-M.) Newton, Sir D. G. C. (Cambridge) Worthington-Evans. Rt. Hon. Sir L.
Falle, Sir Bertram G. Nicholson, O. (Westminster)
Fielden, E. B. Nicholson, Col. Rt. Hn, W. G. (p'trsf'ld) TELLERS FOR THE NOES.—
Fison, F. G. Clavering Nield, Rt. Hon. Sir Herbert Captain Margesson and Sir George
Penny.

Question put accordingly, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 282; Noes, 152.

Division No. 352.] AYES. [7.16 p.m.
Adamson, Rt. Hon. W. (Fife, West) Baker, John (Wolverhampton, Bilston) Blindell, James
Adamson, W. M. (Staff., Cannock) Baldwin, Oliver (Dudley) Bondfield, Rt. Hon. Margaret
Addison, Rt. Hon. Dr. Christopher Barnes, Alfred John Bowen, J. W.
Aitchison, Rt. Hon. Craigie M. Batey, Joseph Bowerman, Rt. Hon. Charles W.
Alexander, Rt. Hon. A. V. (Hillsbro') Beckett, John (Camberwell, Peokham) Brockway, A. Fenner
Alpass, J. H. Bellamy, Albert Bromfield, William
Ammon, Charles George Benn, Rt. Hon. Wedgwood Brooke, W.
Arnott, John Benson, G. Brothers, M.
Aske, Sir Robert Bentham, Dr. Ethel Brown, C. W. E. (Notts, Mansfield)
Attlee, Clement Richard Bevan, Aneurin (Ebbw Vale) Brown, Ernest (Leith)
Ayles, Walter Birkett, W. Norman Brown, W. J. (Wolverhampton, West)
Buchanan, G. Kelly, W. T. Ritson, J.
Burgess, F. G. Kennedy, Thomas Roberts, Rt. Hon. F. O. (W. Bromwich)
Buxton, C. R. (Yorks. W. R. Elland) Kenworthy, Lt.-Com. Hon. Joseph M. Romeril, H. G.
Caine, Derwent Hall- Kinley, J. Rosbotham, D. S. T.
Cameron, A. G. Kirkwood, D. Rowson, Guy
Carter, W. (St. Pancras, S. W.) Lambert, Rt. Hon. George (S. Molton) Russell, Richard John (Eddisbury)
Charleton, H. C. Lansbury, Rt. Hon. George Salter, Dr. Alfred
Chater, Daniel Lathan, G. Samuel, Rt. Hon. Sir H. (Darwen)
Church, Major A. G. Law, Albert (Bolton) Samuel, H. W. (Swansea, West)
Clarke, J. S. Law, A. (Rosendale) Sanders, W. S.
Cluse, W. S. Lawrence, Susan Sandham, E.
Clynes, Rt. Hon. John R. Lawson, John James Sawyer, G. F.
Cocks, Frederick Seymour Lawther, W. (Barnard Castle) Scrymgeour, E.
Compton, Joseph Leach, W. Scurr, John
Cove, William G. Lee, Frank (Derby, N. E.) Sexton, James
Daggar, George Lee, Jennie (Lanark, Northern) Shepherd, Arthur Lewis
Dallas, George Lees, J. Shield, George William
Dalton, Hugh Lewis, T. (Southampton) Shiels, Dr. Drummond
Davies, E. C. (Montgomery) Lindley, Fred W. Shillaker, J. F.
Day, Harry Lloyd, C. Ellis Short, Alfred (Wednesbury)
Denman, Hon. R. D. Longbottom, A. W. Simmons, C. J.
Dickson, T. Longden, F. Simon, E. D. (Manch'ter, Withington)
Dudgeon, Major C. R. Lovat-Fraser, J. A. Simson, Rt. Hon. Sir John
Dukes, C. Lowth, Thomas Sinkinson, George
Ede, James Chuter Lunn, William Smith, Alfred (Sunderland)
Edmunds, J. E. Macdonald, Gordon (Ince) Smith, Frank (Nuneaton)
Edwards, C. (Monmouth, Bedwellty) MacDonald, Rt. Hon. J. H. (Seaham) Smith, H. B. Lees- (Keighley)
Edwards, E. (Morpeth) MacDonald, Malcolm (Bassetlaw) Smith, Rennie (Penistone)
Egan, W. H. McElwee, A. Smith, Tom (Pontefract)
Elmley, Viscount McEntee, V. L. Smith, W. R. (Norwich)
Evans, Capt. Ernest (Welsh Univer.) MacNeill-Weir, L. Snell, Harry
Freeman, Peter McShane, John James Snowden, Rt. Hon. Philip
Gardner, B. W. (West Ham, Upton) Malone, C. L'Estrange (N'thampton) Snowden, Thomas (Accrington)
Gardner, J. P. (Hammersmith, N.) March, S. Sorensen, R.
George, Major G. Lloyd (Pembroke) Marcus, M. Stamford, Thomas W.
George, Megan Lloyd (Anglesea) Markham, S. F. Stephen, Campbell
Gibbins, Joseph Marley, J. Stewart, J. (St. Rollox)
Gibson, H. M. (Lancs. Mossley) Marshall, Fred Strachey, E. J. St. Loe
Gill, T. H. Mathers, George Strauss, G. R.
Gillett, George M. Matters, L. W. Sullivan, J.
Glassey, A. E. Messer, Fred Sutton, J. E.
Gossling, A. G. Middleton, G. Taylor, R. A. (Lincoln)
Gould, F. Millar, J. D. Taylor, W. B. (Norfolk, S. W.)
Graham, D. M. (Lanark, Hamilton) Mills, J. E. Thomas, Rt. Hon. J. H. (Derby)
Graham, Rt. Hon. Wm. (Edin., Cent.) Milner, Major J. Thorne, W. (West Ham, Plaistow)
Granville, E. Montague, Frederick Thurtle, Ernest
Gray, Milner Morgan, Dr. H. B. Tillett, Ben
Grenfell, D. R. (Glamorgan) Morley, Ralph Tinker, John Joseph
Griffiths, T. (Monmouth, Pontypool) Morris, Rhys Hopkins Toole, Joseph
Groves, Thomas E. Morrison, Herbert (Hackney, South) Townend, A. E.
Grundy, Thomas W. Morrison, Robert C. (Tottenham, N.) Trevelyan, Rt. Hon. Sir Charles
Hall, F. (York, W. R., Normanton) Mort, D. L. Turner, B.
Hall, G. H. (Merthyr Tydvil) Moses, J. J. H. Vaughan, D. J.
Hall, Capt. W. P. (Portsmouth, C.) Mosley, Lady C. (Stoke-on-Trent) Viant, S. P.
Harbord, A. Mosiey, Sir Oswald (Smethwick) Walkden, A. G.
Hardie, George D. Muff, G. Walker, J.
Harris, Percy A. Muggeridge, H. T. Wallace, H. W.
Haycock, A. W. Murnin, Hugh Wallhead, Richard C.
Hayday, Arthur Nathan, Major H. L. Watkins, F. C.
Hayes, John Henry Naylor, T. E. Watson, W. M. (Dunfermline)
Henderson, Arthur, Junr. (Cardiff, S.) Newman, Sir R. H. S. D. L. (Exeter) Watts-Morgan, Lt.-Col. D. (Rhondda)
Henderson, Thomas (Glasgow) Noel Baker, P. J. Wedgwood, Rt. Hon. Josiah
Henderson, W. W. (Middx., Enfield) Oldfield, J. R. Wellock, Wilfred
Herriotts, J. Oliver, George Harold (Ilkeston) Welsh, James (Paisley)
Hirst, G. H. (York W. R. Wentworth) Oliver, P. M. (Man., Blackley) Welsh, James C. (Coatbridge)
Hirst, W. (Bradford, South) Owen, Major G. (Carnarvon) West, F. R.
Hollins, A. Owen, H. F. (Hereford) Westwood, Joseph
Hore-Belisha, Leslie Palin, John Henry White, H. G.
Horrabin, J. F. Palmer, E. T. Whiteley, Wilfrid (Birm., Ladywood)
Hudson, James H. (Huddersfield) Parkinson, John Allen (Wigan) Whiteley, William (Blaydon)
Hunter, Dr. Joseph Perry, S. F. Wilkinson, Ellen C.
Hutchison, Maj.-Gen. Sir R. Pethick-Lawrence, F. W. Williams David (Swansea, East)
Isaacs, George Phillips, Dr. Marion Williams, Dr. J. H. (Llanelly)
Jenkins, W. (Glamorgan, Neath) Picton-Turbervill, Edith Williams, T. (York, Don Valley)
John, William (Rhondda, West) Potts, John S. Wilson, C. H. (Sheffield, Attercliffe)
Johnston, Thomas Price, M. P. Wilson, J. (Oldham)
Jones, F. Llewellyn- (Flint) Pybus, Percy John Wilson, R. J. (Jarrow)
Jones, Henry Haydn (Merioneth) Quibell, D. J. K. Winterton, G. E. (Leicester, Loughb'gh)
Jones, J. J. (West Ham, Silvertown) Ramsay, T. B. Wilson Wise, E. F.
Jones, Rt. Hon. Leif (Camborne) Rathbone, Eleanor Wright, W. (Rutherglen)
Jones, Morgan (Caerphilly) Raynes, W. R. Young, R. S. (Islington, North)
Jones, T. I. Mardy (Pontypridd) Richardson, R. (Houghton-le-Spring)
Jowett, Rt. Hon. F. W. Riley, Ben (Dewsbury) TELLERS FOR THE AYES.—
Jowitt, Rt. Hon. Sir W. A. Riley, F. F. (Stockton-on-Tees) Mr. B. Smith and Mr. Paling.
NOES.
Acland-Troyte, Lieut.-Colonel Fison, F. G. Clavering O'Connor, T. J.
Albery, Irving James Forestier-Walker, Sir L. Ormsby-Gore, Rt. Hon. William
Amery, Rt. Hon. Leopold C. M. S. Fremantle, Lieut.-Colonel Francis E. Peake, Captain Osbert
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Ganzoni, Sir John Percy, Lord Eustace (Hastings)
Atholl, Duchess of Gibson, C. G. (Pudsey & Otley) Pownall, Sir Assheton
Atkinson, C. Gilmour, Lt.-Col. Rt. Hon. Sir John Ramsbotham, H.
Baldwin, Rt. Hon. Stanley (Bewdley) Graham, Fergus (Cumberland, N.) Reid, David D. (County Down)
Balfour, George (Hampstead) Grattan-Doyle, Sir N. Remer, John R.
Berry, Sir George Greaves-Lord, Sir Walter Rentoul, Sir Gervals S.
Bevan, S. J. (Holborn) Greene, W. P. Crawford Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Birchall, Major Sir John Dearman Gritten, W. G. Howard Rodd, Rt. Hon. Sir James Rennell
Bird, Ernest Roy Guinness, Rt. Hon. Walter E. Ruggles-Brise, Lieut.-Colonel E. A.
Bourne, Captain Robert Croft Gunston, Captain D. W. Russell, Alexander West (Tynemouth)
Bowyer, Captain Sir George E. W. Hacking, Rt. Hon. Douglas H. Salmon, Major I.
Boyce, H. L. Hall, Lieut.-Col. Sir F. (Dulwich) Samuel, A. M. (Surrey, Farnham)
Bracken, B. Hamilton, Sir George (Ilford) Samuel, Samuel (W'dsworth, Putney)
Brass, Captain Sir William Hannon, Patrick Joseph Henry Sandeman, Sir N. Stewart
Briscoe, Richard George Hartington, Marquess of Savery, S. S.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Harvey, Major S. E. (Devon, Totnes) Shepperson, Sir Ernest Whittome
Buckingham, Sir H. Haslam, Henry C. Skelton, A. N.
Bullock, Captain Malcolm Herbert, Sir Dennis (Hertford) Smith, R. W. (Aberd'n & Kinc'dine, C.)
Cadogan, Major Hon. Edward Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Smith-Carington, Neville W.
Cautley, Sir Henry S. Hope, Sir Harry (Forfar) Smithers, Waldron
Cayzer, Sir C. (Chester, City) Howard-Bury, Colonel C. K. Somerville, A. A. (Windsor)
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.) Hurd, Percy A. Somerville, D. G. (Willesden, East)
Cazalet, Caplain Victor A. Hurst, Sir Gerald B. Spender-Clay, Colonel H.
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) Iveagh, Countess of Stanley, Maj. Hon. O. (W'morland)
Chamberlain, Rt. Hon. N. (Edgbaston) Jones, Sir G. W. H. (Stoke New'gton) Steel-Maitland, Rt. Hon. Sir Arthur
Churchill, Rt. Hon. Winston Spencer Kindersley, Major G. M. Stuart, Hon. J. (Moray and Nairn)
Colfox, Major William Philip King, Commodore Rt. Hon. Henry D. Sueter, Rear-Admiral M. F.
Colman, N. C. D. Lane Fox, Col. Rt. Hon. George R. Todd, Capt. A. J.
Colville, Major D. J. Leighton, Major B. E. P. Train, J.
Courthope, Colonel Sir G. L. Lewis, Oswald (Colchester) Tryon, Rt. Hon. George Clement
Cowan, D. M. Llewellin, Major J. J. Turton, Robert Hugh
Cranborne, Viscount Locker-Lampson, Rt. Hon. Godfrey Vaughan-Morgan, Sir Kenyon
Croft, Brigadier-General Sir H. Long, Major Eric Wallace, Capt. D. E. (Hornsey)
Crookshank, Cpt. H. (Lindsey, Gainsbro) Macdonald, Capt. P. D. (I. of W.) Ward, Lieut.-Col. Sir A. Lambert
Croom-Johnson, R. P. MacRobert, Rt. Hon. Alexander M. Wardlaw-Milne, J. S.
Cunliffe-Lister, Rt. Hon. Sir Philip Maitland, A. (Kent, Faversham) Warrender, Sir Victor
Dalkeith, Earl of Makins, Brigadier-General E. Waterhouse, Captain Charles
Dalrymple-White, Lt.-Col. Sir Godfrey Marjoribanks, E. C. Wells, Sydney R.
Davidson, Major-General Sir J. H. Meller, R. J. Williams, Charles (Devon, Torquay)
Davies, Dr. Vernon Mitchell-Thomson, Rt. Hon. Sir W. Windsor-Clive, Lieut.-Colonel George
Davies, Maj. Geo. F. (Somerset, Yeovil) Mond, Hon. Henry Winteron, Rt. Hon. Earl
Dawson, Sir Philip Monsell, Eyres, Com. Rt. Hon. Sir B. Withers, Sir John James
Eden, Captain Anthony Moore, Sir Newton J. (Richmond) Wolmer, Rt. Hon. Viscount
Edmondson, Major A. J. Morrison-Bell, Sir Arthur Clive Womersley, W. J.
Elliot, Major Walter E. Muirhead, A. J. Worthington-Evans, Rt. Hon. Sir L.
Erskine, Lord (Somerset, Weston-s-M.) Newton, Sir D. G. C. (Cambridge)
Falle, Sir Bertram G. Nicholson, O. (Westminster) TELLERS FOR THE NOES.—
Fermoy, Lord Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld) Captain Margesson and Sir George
Fielden, E. B. Nield, Rt. Hon. Sir Herbert Penny.
The DEPUTY-CHAIRMAN

The next Amendment is the one about which the Chairman and myself are rather doubtful, but I will call upon the right hon. Member to move it.

Mr. G. LOCKER-LAMPSON

I beg to move, in page 16, line 9, at the end, to add the words: Provided that this section shall not apply to the income of any consul or official agent in the service of any foreign state which has made default in meeting its financial obligations. I am moving this Amendment on behalf of my right hon. Friend the Member for St. George's (Sir L. Worthington-Evans), and it has been put down in order to provide that the benefits of this Clause shall not apply to any consul or official agent in the service of any foreign State which has made default in meeting its financial obligations. I have listened to every word of this debate, and I have been trying to study this Clause to the best of my ability. I cannot see that, as far as British subjects are concerned, many people will derive any benefit from the Clause. I can see that considerable benefit will accrue to the subjects of at least one foreign country in particular—Soviet Russia. I am sorry again to have to drag in Russia. I will mention, very shortly, the reason why Russia has to be mentioned in this connection. I believe that very few British subjects are going to be affected at all by this Clause, but Russia is on an entirely different footing. It has been mentioned over and over again in this debate that Russia has a trade monopoly. She had not only a trade monopoly, but she has practically a monopoly in every activity indulged in by the people. She can throw the cloak of this monopoly over any kind of national activity she wishes to cover up. That means, if she chooses to do so, that a very large number of people from Russia may benefit from this Clause. Do we really want to give the Soviet Government at the present moment the benefit of this very preferential treatment? If we do want to give Soviet Russia the benefit of this preferential treatment I think that we should ask ourselves, what are we going to get in return?

The DEPUTY-CHAIRMAN

On the last Amendment we really discussed the substance of the Clause itself. It was not strictly in order, but I thought that by allowing that discussion on the question of Russia, it would not be further discussed. In this particular Amendment the sole issue before the Committee is whether a nation shall benefit under this Clause which has not fulfilled its financial obligations, and I must rigidly keep within that point. We cannot discuss the whole field of Russia's alleged shortcomings.

Mr. LOCKER-LAMPSON

I will do my utmost to abide by your Ruling, but I believe it is true that the only defaulting nation at the present moment, so far as we are concerned, is the Soviet Union.

HON. MEMBERS

No!

Mr. MILLS

May I ask the right hon. Gentleman if he will kindly specify the actual data on which he bases the assertion that Russia is a defaulting nation?

Mr. LOCKER-LAMPSON

Perhaps it is not entirely accurate to say that Russia is the only defaulting country, but the magnitude of their default bears no comparison with the default of other countries. I will reply to the question of my hon. Friend, keeping within your Ruling. Surely, before we give this concession we ought to see that these debts are, not perhaps altogether paid off, but that at any rate Russia, or the Soviet Union, is willing to pay the debts? It is perfectly true that negotiations are going on at the present time between our Foreign Secretary and the Soviet in regard to these debts, but for the moment we have not the slightest idea what the issue will be, and we do not in the least know whether the debts will be paid off. In the past it has very often been taken for granted, and I have often heard hon. Members opposite mention this fact, that the debts are owing to very rich people. That is an entire fallacy. These Soviet debts in large part are owing to very poor people. If you look at the debts, you will find that the majority of them are very small holders indeed. I have in my hand a pamphlet issued by the British holders of Russian bonds. Perhaps the hon. Gentleman knows this pamphlet. I do not think he will say that this is in the least controversial. He will find that on page 25 it gives a summary of the holders of these Russian bonds, and it may surprise hon. Members opposite to hear that the bonds up to £100 and not over form 42.3 per cent. of the whole; from £101 to £500 no less than 28.4 per cent.; from £500 to £1,000, 10 per cent.; from £1,000 to £5,000, 11.6 per cent.; and above £5,00, only 7.7 per cent.

Many of these debts are in railway bonds and municipal bonds. The Soviet, after its revolution, took over the railways as a going concern. They were flourishing, and all their reports have shown that the railways are bringing in a great deal of money and that a great deal of progress has been achieved. Why should debts like these be repudiated? Why should this kind of debt which is owed in respect of a concern which was taken over as flourishing and is now paying a large income to the State be repudiated? The same applies to the municipal bonds. If you look at the borrowing municipalities, you find that, according to all reports, official reports, of the Soviet Government, they exceeded the level of their pre-War prosperity. If you take the Russian Imperial bonds, you will find that they were not used for war purposes. They were not used to upset the Czarist regime; they were used for roads, waterways, and other economic purposes, and also for famine relief and similar national necessities. Why should these debts be repudiated? I can understand some hon. Members opposite saying that we should no longer hold the Russian Soviet Government responsible in the case of money loaned for war purposes, but to my mind there is no moral reason why we should not hold them responsible for these debts. The national debt of Russia today is smaller per capita of the population than that of any other of the countries allied in the War.

I have dealt with the question of Russia, because, looking at this Clause, I do not see that we are going to get any benefit out of it at all, and I do see that a very large and indefinite number of Russian subjects may get considerable benefit. I say once more that I feel that this preferential treatment ought not to be offered to a country in the position of Russia with her debts completely unpaid, debts to this country which obviously are in respect of loans of which she made good use, and which are a national asset to her.

Mr. MILLS

I wish, very briefly, to deal with the alleged answers that have been given by the right hon. Member opposite. Briefly the contention on this side is that the historical basis of the argument goes back to 1924. I think it is agreed that the agreement reached in 1924 was something of more material benefit to those who were the actual creditors of Russia than anything yet achieved in Genoa, The Hague, or anywhere else. There was a definite promise, not only to recognise, but to pay, and no further steps were to be taken in any direction until the first payment was made. Conversations are going on now for an agreement based upon the recognition of these debts, all of which are of the pre-War period of Russia. I fail to see where they can possibly be brought in to apply in any way whatever to this year's Finance Bill. If you can point to any commercial transaction since the change of Government, since 1918 or later, which has led to any default in any commercial transaction, then I am quite prepared to admit that that is an entirely new case. I have made the challenge from this side of the House before. I have said, and I repeat it, that the owner of the "Morning Post" himself, the Duke of Northumberland, has benefited to the extent of thousands of pounds from coal going out from the port of Blyth. Every ton of coal that went out has been paid for. Even during the period of Lord Curzon, when the greatest possible pressure was being put on that coal area to restrict the export of coal to Russia, it was continued because the commercial agreement was satisfactorily honoured.

The DEPUTY-CHAIRMAN

I have allowed hon. Members to refer to Russia, but it is obvious that on an Amendment like this we cannot go into the history of Russia. The principle under discussion is very clearly stated in the words of the Amendment, and, while it is quite legitimate to argue on the point at issue, we cannot discuss the whole field of Russian history.

Mr. CHURCHILL

On a point of Order. May I, with great respect, refresh your memory as to the course which events in this debate have taken? In the first place, my right hon. Friend was engaged in unfolding the case for the Amendment, and made some reference to Russia. You cautioned him that in the main your Ruling was that Russia could not be a substantial matter of debate. Then the hon. Member for Dartford (Mr. Mills) interjected a question which forced my right hon. Friend to reply and to enter much more closely into the matter than he had otherwise intended. Then you, observing the provocation of the hon. Member for Dartford, allowed the right hon. Gentleman to open up the question. Then the hon. Member for Dartford got up and made a speech full of all sorts of definite statements which I should have thought were wholly unfounded and incorrect, statements which we are very familiar with as part of the stock-in-trade of the party opposite. We cannot allow all these untruthful statements to pass, statements grossly erroneous and misleading if they were accepted, because we should lay ourselves open to the charge of failing in our duty. It is impossible after you have allowed that latitude to the hon. Gentleman, that an adequate reply should not be permitted, at any rate up to the point when you intervened. I was myself intending to deal, and am now relying upon you letting me deal, with some of the propositions which the hon. Gentleman has advanced. Now that you have arrested his flow upon this subject, I will of course hold myself strictly limited to replying to the points that he has advanced. I submit, as a point of Order, that when a Chairman has per- mitted a discussion to be made upon matters of high public policy, it is the right of Members who are deeply offended by those assertions, to have an opportunity of expressing their views.

Mr. LEIF JONES

On a point of Order. There are other countries than Russia, and, if the case of Russia is to be entered into fully on this Amendment, shall we not equally be able to discuss the question of any other country which has at any time made default in its financial obligations? I venture to suggest that Germany has made default in meeting its financial obligations. Austria has made default, and so has France, at the time of the French Revolution. If this line of argument is to be followed, I see no reason why we should not range over most of the countries of the world discussing their financial position at any time. There is no limit as to time or space in this Amendment. I doubt if any Government has not in the last 200 years defaulted in its financial obligations. To limit it to Russia is not only unfriendly to a country with which we are on diplomatic and friendly terms at the present time, but it is altogether an unjust conception of how we are to deal with this matter in a financial Bill. I appeal to you to have in mind, not only Russia, but all those other countries which in comparatively recent years have made default in meeting their financial obligations.

The DEPUTY-CHAIRMAN

I must confess that I had grave doubts as to whether I ought to call this Amendment, and I warned hon. Members that they must keep to the point at issue. Unfortunately, when an interjection is made the Chairman does not know what the speaker is going to say until he has said it. The hon. Member for Dartford (Mr. Mills) expressed a number of things very quickly, and I allowed him to do so in reply to the right hon. Member for Wood Green (Mr. G. Locker-Lampson), but when he transgressed upon grounds not necessary for his reply, I immediately pulled him up. I am convinced now that I allowed my generosity to override my judgment, and I must now confine the debate within the very narrow limits laid down earlier. I cannot allow a general discussion.

Mr. CHURCHILL

On that point of Order. If a specific statement of facts is allowed to be made by the hon. Member for Dartford (Mr. Mills), is it not open for us on this side of the Committee to reply to them?

The DEPUTY-CHAIRMAN

If the right hon. Member for Epping (Mr. Churchill) accepts my Ruling, and the reply is kept precisely to the statement made, I will allow it. But I say at once, quite firmly, that I am not prepared to allow a general discussion.

Mr. LEIF JONES

Is it really the case that on this Amendment we can go into the question as to whether any foreign State has at any time defaulted in its financial obligations? The Amendment says: any foreign state which has made default in meeting its financial obligations. That does not involve, I submit, any particular case where a country has defaulted. That is not within the scope of the Amendment.

Mr. MILLS

The terms of the Amendment are hopelessly out of order because they are incoherent. There ought to be some time limit.

The DEPUTY-CHAIRMAN

The hon. Member is not responsible for accepting Amendments. That is the responsibility of the Chair.

Mr. CHURCHILL

I certainly feel strongly disposed to deal seriatim with the various statements of the hon. Member for Dartford (Mr. Mills), but, in all the circumstances of the case, and having regard to the appeal which has been made to us by the representative of the Liberal party not to allow any remarks to pass about any country which might have the slightest irritating effect, I will deal with the proposition entirely in general terms. On the face of it, is it not the most reasonable proposition that could be presented? Is there not a case for excluding from these special favours a State which has defaulted in the payment of its debts? If there were such a State—I will not mention names—which, having borrowed vast sums of money, hundreds of millions of pounds, from a friendly ally, afterwards repudiated flatly and con- tumaciously all responsibility for repaying a single penny of that sum, is that a State to which you would grant these special favours? If there were a State which not only repudiated the debts contracted by the Government of the country, but proceeded to steal the private property of individuals who had invested their money on public faith and international understanding, would not that be the State which you would exclude from these special favours? If there were a State which was founded upon a doctrine and creed so vile and inhuman that it takes as its fundamental point the breaking of faith with all persons not associated with its doctrine, if there were such a State, is not that the State which we should exclude from our courteous indulgence and usages in this country? That is all that the Amendment says. It is not necessary to go back over a period of 200 years; that would be a long time to go back in a search of the State which I have hypothetically mentioned. You might not have to go back over the whole of that time—I do not know. The right hon. Member for Camborne (Mr. Leif Jones) cried out against any remarks which might possibly wound the susceptibilities of any foreign country; now he complains that we do not extend our condemnation to all foreign countries.

Mr. LEIF JONES

You do. The Amendment in set terms reflects upon any foreign State which has made default at any time in meeting its financial obligations. I say that Germany has made default, Austria has made default, and France has made default. I say that most European countries within the last 200 years have made default in meeting their financial obligations.

Mr. CHURCHILL

The right hon. Member, in a most offensive way, has mentioned the names of some countries, and the responsibility for any ill-will which may follow must fall upon his shoulders. We have not been the cause of bringing this matter before Parliament. The Government have gone out of their way to insert in this Finance Bill a provision by which, unless this Amendment is accepted, they will bestow special indulgences upon Powers, if such Powers there be, who have defaulted and repudiated their public obligations. I agree that there are strict limits upon the amount of pressure which one country can put upon another in the matter of repayment of debt. You cannot put a great Power in the county court, you cannot obtain a summons against a State or distrain upon their property. The repayment of debt by countries depends very largely upon the measure of their desire to maintain proper credit, and I agree that it would perhaps be unwise for us to press upon the Government the interpretation of this Amendment which would have the effect of denying these privileges to all those countries who may at one time or another, through the depreciation of their currency or some other cause, have defaulted in their payments. But when a case is presented of deliberate, wilful and contumacious repudiation, then I am of opinion that these indulgences should not apply, and it is for the Government to say whether or not contumacious default has taken place. There are defaulting States in the American Union. There are loans given to friendly and allied nations on the Continent, but the gravamen of the charge we are making against any country which is sought to be affected by this Amendment is that it is a deliberate and flagrant repudiation of contractual obligations.

We cannot for a moment exclude from our minds the fact that these defaults may recur in the future. The weapons which one great Power has against another in the matter of the enforcement of debt are very limited. Here is one of your weapons; a small means of putting pressure on a defaulting State; a small minor, non-violent, non-military, method of indicating that certain practices places a country on a lower plane in the civilisation of the world. It is not a question of violent action. You have no power to take violent action, and it would be folly for any country to go to war to collect its debts. More money would be squandered in the first month of the war than the amount of the debt. But let us use the means we have; they are few enough and small enough. In this Amendment we have one method by which we can express our abhorrence and detestation of those practices which places a country guilty of them on a definitely lower level than others. Again I say that we have not raised this matter. We were content to let it lie in the calm and obscure atmosphere to which the custom of generations had relegated it. But the Government, going out of their way in looking for trouble, trying to extend the wider controversy between the parties, have insisted upon our giving these new facilities in statutory form. If these advantages are to be extended, if these courtesies and harmonious usages are to be extended, on a reciprocal basis, at least let it be said that there are some exceptions which we have the wisdom to proclaim and the resolution to enforce.

8.0 p.m.

The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)

The right hon. Member for Wood Green (Mr. G. Locker-Lampson) moved the Amendment in his accustomed courteous manner, and the right hon. Member for Epping (Mr. Churchill) followed in his accustomed exuberant manner. Both right hon. Gentlemen addressed themselves to the heinousness of default in meeting financial obligations. That point, I submit, has very little to do with the Amendment. It might be used as an argument for refusing to accord recognition to a country which has defaulted, but in all the cases to which the right hon. Member for Camborne (Mr. Leif Jones) referred we have accorded recognition for many years past. The question whether we should accord recognition to the country which has figured largely in this debate is not being decided now. It was decided by the appeal which was made to the country a little more than a year ago, and the position was settled once and for all by the verdict of the country at that election. What we are called upon to decide now is something very different. We are called upon to decide whether, when we have recognised a country—whether it be a country that hon. Members have in mind or any of the other countries mentioned—and have admitted an embassy and consulate, we are going to single out a few individuals who are the personal representatives of that country, in order to work our spite on hem. That is so. It is all very well for the right hon. Gentleman opposite to shake hs head, but the main issue is the recognition of that country. That issue has been decided. To attempt to exercise the animosity, whether justified or not, which you have against a nation, on the two or three individuals who represent it in consulates of this country, is unworthy of a great nation, and, I should have thought, unworthy of any party in the House.

In these circumstances it is obviously quite impossible for the Government to accept the Amendment. This Clause is designed to deal with foreign representatives in the only way which is really practicable and sensible. It would be quite impossible to attempt to make the kind of condition which is envisaged in the Amendment—a condition which in many cases it would be impossible or difficult to prove, and which would be a matter of dispute leading to all sorts of trouble, and if proved would be most unfair.

Sir WILLIAM MITCHELL-THOMSON

I would not have intervened but for the fact that the Financial Secretary to the Treasury has not attempted to deal with the main principle which underlies the Amendment. The question is whether the taxpayers of this country are to be called upon to find large sums in taxation when at the same time a foreign country to whose subjects the Government propose to extend a special favour by this Clause, is in default. The class of defaults which I have in mind is covered by the words of the Amendment: Provided that this section shall not apply to the income of any consul or official agent in the service of any foreign state which has made default in meeting its financial obligations.

Mr. MILLS

Since when?

Sir W. MITCHELL-THOMSON

Let me give the most recent cases of countries which have made default and are in default. When I mention the class of cases I am certain that the Financial Secretary and hon. Members generally will agree with my contention. Take the class of States, of which there are quite a number, which are in default with their subscriptions to the League of Nations. Take the class of States which are in default with their subscriptions to the international Labour Office. Why should we be asked to put ourselves in the position that British subjects are to suffer in taxation in order that favours may be extended to the subjects of those States? That is the question which underlies the Amendment. If this matter had been left to slumber on peacefully under the shade of the Treasury Bench, as it has done for 100 years, the question would not have arisen, but since the Government have dragged it into the light of day and are now proposing to give the subjects of these various States this special privilege, it is necessary that the Committee should scrutinise carefully the words that are put into the Clause. I do not think there is any hon. Member who will not agree that when we are dealing with a State which at the moment is flagrantly in default with its most reasonable obligations to an international body, the Government ought not to pick out the subjects of that State for special monetary favour.

Captain EDEN

I hope the Committee will not lose sight of the very important principle embodied in the Amendment because of a rather natural desire to apply it to any particular country, for there is a principle of considerable substance in the Amendment. I do not suppose that my right hon. Friend whose name appears first to the Amendment is particularly tied to this form of words, but the purpose which we have in mind is sufficiently important and serious to deserve the attention of hon. Gentlemen opposite. What the Government are doing in this Clause is to grant entirely new privileges, which have never been granted before in a Finance Bill passed by this House. It is not for me to discuss the Government's motives. But the fact that I have mentioned has entirely changed the position with which the Committee is confronted. We are faced with this Clause based upon a Treasury Minute about which no one knew anything until a short time ago. The existence of the Clause brings about an entirely new state of affairs, and in the light of that fact the Amendment should be considered. Surely hon. Gentlemen opposite can see that without being angry about raising the bogey of Russia. We surely have a right in Committee to ensure that these privileges shall be given only to countries to which we consider it worthy to extend them because they have fulfilled their obligations towards British citizens? It seems to me that that is an extraordinary simple criterion to take, and an eminently reasonable one. It is the criterion that would be taken in any business. If you grant a man certain favoured conditions in business, it is because you have been doing business with him at other times and have always been treated fairly and squarely. All we ask is that a simple limitation shall be put in to make sure that these exceptional and new privileges shall be given only in cases where they are fully justified. It is not true to say that the Amendment is aimed at any individual State. Nothing of the kind.

Mr. LEIF JONES

The speech of the Mover of the Amendment showed that it was aimed at a particular State.

Mr. G. LOCKER-LAMPSON

I was simply using that as an example.

Captain EDEN

My right hon. Friend was giving an illustration which might be stretched broadly to meet other cases in point. But there is a matter of principle in the Amendment, and we are not concerned with any particular State to the exclusion of others; we are concerned only with individuals in their official capacity. What agreements are there in favour of our own representatives in countries which have recently defaulted? Have we got anything in return for this concession? The Government might give us at least that information.

Mr. WARDLAW-MILNE

The only reason why I do not follow the points raised by the hon. Member for Dartford (Mr. Mills), is that it would be out of order to do so. Had it been in order I should have liked to have shown him from practical experience how bitter are the views of those who have suffered by the default of Russia. The point I want to raise specially is to ask the Financial Secretary whether, in considering the Amendment, he has considered the fact that Russia occupies and will occupy a totally different position under this Clause from any other State. The Clause excludes from its operation an official agent in the United Kingdom for any foreign state, not being an employment exercised by a British subject or exercised in connection with any trade, business or other undertaking. I think I am correct in saying that there is no country in the world whose official diplomatic agents are in any way concerned directly with trade or industry, except Russia. Has the Financial Secretary considered the possibility and the practicability of differentiating between the purely diplomatic services of the agents of Russia and the trade services of the agents of Russia? Without some such proviso as that in the Amendment will he not find himself in great difficulty, or rather will not the Income Tax Commis- sioners find great difficulty in deciding whether the operations of certain official agents or consuls are not in fact trade operations and should be excluded, or whether they are purely diplomatic salaries and can properly come under the Clause? The point is one of substance. I do not raise it in order to attack the Russian Government, but as a practical difficulty.

Sir A. STEEL-MAITLAND

I would like to reinforce what has been said. The reason for the Amendment has been explained fully and I do not want to labour it. Nearly every speech from this side of the Committee has been made the subject of a running obligato of criticisms and interruptions from the right hon. Member for Camborne (Mr. Leif Jones). The right hon. Gentleman did not appear to object so much to the principle of the Amendment as to the fact that he said it singled out Russia. On the other hand he made a point of the fact that it might apply to countries which had been in default in their obligations 10, 20, 100 or 200 years ago. The terms of the Amendment are by no means sacrosanct; there are no particular virtues in any one of its words. I would ask the right hon. Gentleman to be a little more helpful and constructive and to suggest what are the limits which he would like to impose on the Amendment.

Mr. LEIF JONES

Since the right hon. Gentleman appeals to me, I would say to him that, instead of having a general statement such as that which appears on the Order Paper, he ought to make the Amendment read in this way: Provided that this section shall not apply to the income of any consul or official agent in the service of Russia. Such an Amendment would at least have the advantage of saying what the Members of the Opposition have been saying in their speeches and of expressing what they mean and the Committee would not be in the unreal atmosphere in which we have been discussing this question.

Sir A. STEEL-MAITLAND

Then the course of the right hon. Gentleman is perfectly simple. He ought to hand in a further Amendment at the Table to leave out all the concluding words of the Amendment on the Paper—"any foreign state" and so on—and to insert the word "Russia."

Mr. JONES

As the right hon. Gentleman is perpetually appealing to me, may I say that it does not matter to me whether I vote against this Amendment in the form in which I say it ought to appear, or in the form in which it is being moved. To me it is equally objectionable either way.

Sir A. STEEL-MAITLAND

The right hon. Gentleman says that in no case would he vote for the Amendment either as we have it down or as he in himself would have it. That is one of the most paradoxical statements I have ever heard outside of "Alice in Wonderland."

Mr. JONES

It is quite intelligent.

Sir A. STEEL-MAITLAND

There are lots of things in "Alice in Wonderland" which are quite intelligent, but at the same time not such as are generally debated on the Floor of the House of Commons. The real point here is that this is a comparatively minor concession but a concession which is valued and, that being so, it is a concession which ought to be deserved by those to whom it is granted. Are there not cases—I am not referring to Russia particularly—in which it might properly be said that a concession of this kind has not been deserved. There are some obligations which ought to be observed by States. These may be obligations to us in the way of debts or they may be international obligations of various kinds. I have here, for instance, a table of the amounts owing by various countries in subscriptions either to the League of Nations or to the International Labour Office. It is perfectly clear that there is a distinction to be drawn and that if a country defaults either in its obligations to us, or in its international obligations otherwise, it has no special claim on us that we should make a concession of this kind at the expense of the taxpayers here.

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

The Committee divided: Ayes, 123: Noes, 272.

Division No. 353.] AYES. [8.21 p.m.
Acland-Troyte, Lieut.-Colonel Grattan-Doyle, Sir N. Peake, Captain Osbert
Albery, Irving James Greaves-Lord, Sir Walter Penny, Sir George
Allen, Sir J. Sandeman (Liverp'l., W.) Greene, W. P. Crawford Percy, Lord Eustace (Hastings)
Atholl, Duchess of Gritten, W. G. Howard Ramsbotham, H.
Atkinson, C. Gunston, Captain D. W. Remer, John R.
Baldwin, Rt. Hon. Stanley (Bewdley) Hacking, Rt. Hon. Douglas H. Rentoul, Sir Gervais S.
Balfour, George (Hampstead) Hail, Lieut.-Col. Sir F. (Dulwich) Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Berry, Sir George Hamilton, Sir George (Ilford) Ruggles-Brise, Lieut.-Colonel E. A.
Bevan, S. J. (Holborn) Hannon, Patrick Joseph Henry Russell, Alexander West (Tynemouth)
Birchall, Major Sir John Dearman Harvey, Major S. E. (Devon, Totnes) Salmon, Major I.
Bird, Ernest Roy Haslam, Henry C. Samuel, A. M. (Surrey, Farnham)
Boothby, R. J. G. Henderson, Capt. R. R. (Oxl'd, Henley) Samuel, Samuel (W'dsworth, Putney)
Bourne, Captain Robert Croft Herbert, Sir Dennis (Hertford) Sandeman, Sir N. Stewart
Bowyer, Captain Sir George E. W. Hope, Sir Harry (Forfar) Savery, S. S.
Bracken, B. Howard-Bury, Colonel C. K. Shepperson, Sir Ernest Whittome
Brass, Captain Sir William Hurd, Percy A. Smith, Louis W. (Sheffield, Hallam)
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Hurst, Sir Gerald B. Smith, R. W. (Aberd'rl & Kinc'dine, C.)
Buckingham, Sir H. Jones, Sir G. W. H. (Stoke Naw'gton) Smith-Carington, Neville W.
Cautley, Sir Henry S. Kindersley, Major G. M. Smithers, Waldron
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.) King, Commodore Rt. Hon. Henry D. Somerville, A. A. (Windsor)
Cobb, Sir Cyril Lewis, Oswald (Colchester) Somerville, D. G. (Willesden, East)
Colfox, Major William Philip Locker-Lampson, Rt. Hon. Godfrey Southby, Commander A. R. J.
Colman, N. C. D. Long, Major Eric Spender-Clay, Colonel H.
Courtauld, Major J. S. MacRobert, Rt. Hon. Alexander M. Stanley, Maj. Hon. O. (W'morland)
Courthope, Colonel Sir G. L. Maitland, A. (Kent, Faversham) Steel-Maitland, Rt. Hon. Sir Arthur
Cranborne, Viscount Makins, Brigadier-General E. Stuart, Hon. J. (Moray and Nairn)
Crookshank, Cpt. H. (Lindsey, Gainsbro) Margesson, Captain H. D. Thomas, Major L. B. (King's Norton)
Croom-Johnson, R. P. Marjoribanks, E. C. Todd, Capt. A. J.
Dalkeith, Earl of Meller, R. J. Train, J.
Davidson, Major-General Sir J. H. Merriman, Sir F. Boyd Vaughan-Morgan, Sir Kenyon
Davies, Dr. Vernon Mitchell-Thomson, Rt. Hon. Sir B. Ward, Lieut.-Col. Sir A. Lambert
Davies, Maj. Geo. F. (Somerset, Yeovil) Mond, Hon. Henry Wardlaw-Milne, J. S.
Dawson, Sir Philip Monsell, Eyres, Com. Rt. Hon. Sir B. Wayland, Sir William A.
Duckworth, G. A. V. Moore, Sir Newton J. (Richmond) Wells, Sydney R.
Dugdale, Capt. T. L. Morrison, W. S. (Glos., Cirencester) Windsor-Clive, Lieut.-Colonel George
Eden, Captain Anthony Morrison-Bell, Sir Arthur Clive Winterton, Rt. Hon. Earl
Edmondson, Major A. J. Muirhead, A. J. Withers, Sir John James
Elliot, Major Walter E. Nicholson, O. (Westminster) Womersley, W. J.
Fison, F. G. Clavering Nicholson, col. Rt. Hn. W. G. (Ptrsf'ld) Worthington-Evans, Rt. Hon. Sir L.
Forestler-Walker, Sir L. Nield, Rt. Hon. Sir Herbert
Ganzoni, Sir John O'Connor, T. J. TELLERS FOR THE AYES.—
Graham, Fergus (Cumberland, N.) Ormsby-Gore, Rt. Hon. William Captain Wallace and Sir Victor
Warrender.
NOES.
Adamson, Rt. Hon. W. (Fife, West) Chater, Daniel Gray, Milner
Adamson, W. M. (Staff., Cannock) Church, Major A. G. Grenfell, D. R. (Glamorgan)
Addison, Rt. Hon. Dr. Christopher Clarke, J. S. Griffith, F. Kingsley (Middlesbro' W.)
Aitchison, Rt. Hon. Craigie M. Cluse, W. S. Griffiths, T. (Monmouth, Pontypool)
Alexander, Rt. Hon. A. V. (Hillsbro') Clynes, Rt. Hon. John R. Groves, Thomas E.
Alpass, J. H. Cocks, Frederick Seymour Grundy, Thomas W.
Ammon, Charles George Compton, Joseph Hall, F. (York, W. R., Normanton)
Arnott, John Cove, William G. Hall, G. H. (Merthyr Tydvil)
Aske, Sir Robert Cowan, D. M. Hall, Capt. W. P. (Portsmouth, C.)
Attlee, Clement Richard Daggar, George Harbord, A.
Ayles, Walter Dallas, George Hardie, George D.
Baker, John (Wolverhampton, Bilston) Dalton, Hugh Harris, Percy A.
Baldwin, Oliver (Dudley) Denman, Hon. R. D. Hartshorn, Rt. Hon. Vernon
Batey, Joseph Dickson, T. Haycock, A. W.
Bellamy, Albert Dudqeon, Major C. R. Hayday, Arthur
Benn, Rt. Hon. Wedgwood Dukes, C. Hayes, John Henry
Benson, G. Ede, James Chuter Henderson, Right Hon. A. (Burnley)
Bentham, Dr. Ethel Edmunds, J. E. Henderson, Arthur, Junr. (Cardiff, S.)
Birkett, W. Norman Edwards, C. (Monmouth, Bedwellty) Henderson, Thomas (Glasgow)
Blindell, James Edwards, E. (Morpeth) Henderson, W. W. (Middx., Enfield)
Bondfield, Rt. Hon. Margaret Egan, W. H. Herriotts, J.
Bowen, J. W. Elmley, Viscount Hirst, G. H. (York W. R. Wentworth)
Bowerman, Rt. Hon. Charles W. Evans, Capt. Ernest (Welsh Univer.) Hirst, W. (Bradford, South)
Brockway, A. Fenner Freeman, Peter Hollins, A.
Bromfield, William Gardner, B. W. (West Ham, Upton) Hore-Belisha, Leslie
Brooke, W. Gardner, J. P. (Hammersmith, N.) Horrabin, J. F.
Brothers, M. George, Major G. Lloyd (Pembroke) Hudson, James H. (Huddersfield)
Brown, C. W. E. (Notts. Mansfield) Gibbins, Joseph Hunter, Dr. Joseph
Brown, Ernest (Leith) Gibson, H. M. (Lancs. Mossley) Hutchison, Maj.-Gen. Sir R.
Brown, W. J. (Wolverhampton, West) Gill, T. H. Isaacs, George
Buchanan, G. Gillett, George M. Jenkins, W. (Glamorgan, Neath)
Burgess, F. G. Glassey, A. E. John, William (Rhondda, West)
Buxton, C. R. (Yorks. W. R. Elland) Gossling, A. G. Johnston, Thomas
Caine, Derwent Hall- Gould, F. Jones, F. Llewellyn- (Flint)
Cameron, A. G. Graham, D. M. (Lanark, Hamilton) Jones, Henry Haydn (Merioneth)
Carter, W. (St. Pancras, S. W.) Graham, Rt. Hon. Wm. (Edin., Cent.) Jones, J. J. (West Ham, Silvertown)
Charleton, H. C. Granville, E. Jones, Rt. Hon. Leif (Camborne)
Jones, Morgan (Caerphilly) Morrison, Robert C. (Tottenham, N.) Smith, Frank (Nuneaton)
Jones, T. I. Mardy (Pontypridd) Mort, D. L. Smith, H. B. Lees- (Keighley)
Jowett, Rt. Hon. F. W. Moses, J. J. H. Smith, Rennie (Penistone)
Jowitt, Rt. Hon. Sir W. A. Mosley, Lady C. (Stoke-on-Trent) Smith, Tom (Pontefract)
Kelly, W. T. Mosley, Sir Oswald (Smethwick) Smith, W. R. (Norwich)
Kennedy, Thomas Muff, G. Snell, Harry
Kenworthy, Lt.-Com. Hon. Joseph M. Muggeridge, H. T. Snowden, Rt. Hon. Philip
Kinley, J. Murnin, Hugh Snowden, Thomas (Accrington)
Kirkwood, D. Nathan, Major H. L. Sorensen, R.
Lansbury, Rt. Hon. George Naylor, T. E. Stamford, Thomas W.
Lathan, G. Newman, Sir R. H. S. D. L. (Exeter) Stephen, Campbell
Law, Albert (Bolton) Noel Baker, P. J. Stewart, J. (St. Rollox)
Law, A. (Rosendale) Oldfield, J. R. Sullivan, J.
Lawrence, Susan Oliver, George Harold (Ilkeston) Sutton, J. E.
Lawson, John James Oliver, P. M. (Man., Blackley) Taylor, R. A. (Lincoln)
Lawther, W. (Barnard Castle) Owen, Major G. (Carnarvon) Taylor, W. B. (Norfolk, S. W.)
Leach, W. Owen, H. F. (Hereford) Thorne, W. (West Ham, Plaistow)
Lee, Frank (Derby, N. E.) Palin, John Henry. Thurtle, Ernest
Lee, Jennie (Lanark, Northern) Paling, Wilfrid Tillett, Ben
Lees, J. Perry, S. F. Tinker, John Joseph
Lewis, T. (Southampton) Pethick-Lawrence, F. W. Toole, Joseph
Lindley, Fred W. Phillips, Dr. Marion Townend, A. E.
Lloyd, C. Ellis Picton-Turbervill, Edith Turner, B.
Logan, David Gilbert Potts, John S. Vaughan, D. J.
Longbottom, A. W. Price, M. P. Viant, S. P.
Longden, F. Quibell, D. J. K. Walkden, A. G.
Lovat-Fraser, J. A. Ramsay, T. B. Wilson Walker, J.
Lowth, Thomas Raynes, W. R. Wallace, H. W.
Lunn, William Richardson, R. (Houghton-le-Spring) Wallhead, Richard C.
Macdonald, Gordon (Ince) Riley, Ben (Dewsbury) Watkins, F. C.
MacDonald, Rt. Hon. J. R. (Seaham) Riley, F. F. (Stockton-on-Tees) Watson, W. M. (Dunfermline)
MacDonald, Malcolm (Bassetlaw) Ritson, J. Watts-Morgan, Lt.-Col. D. (Rhondda)
McElwee, A. Roberts, Rt. Hon. F. O. (W. Bromwich) Wellock, Wilfred
McEntee, V. L. Romeril, H. G. Welsh, James (Paisley)
MacLaren, Andrew Rosbotham, D. S. T. Welsh, James C. (Coatbridge)
MacNeill-Weir, L. Rowson, Guy West, F. R.
McShane, John James Russell, Richard John (Eddisbury) Westwood, Joseph
Malone, C. L'Estrange (N'thampton) Salter, Dr. Alfred White, H. G.
Mansfield, W. Samuel, H. W. (Swansea, West) Whiteley, Wilfrid (Birm., Ladywood)
March, S. Sanders, W. S. Whiteley, William (Blaydon)
Marcus, M. Sandham, E. Wilkinson, Ellen C.
Markham, S. F. Sawyer, G. F. Williams, David (Swansea, East)
Marley, J. Scrymgeour, E. Williams, Dr. J. H. (Lianelly)
Marshall, Fred Scurr, John Williams, T. (York, Don Valley)
Mathers, George Sexton, James Wilson, C. H. (Sheffield, Attercliffe)
Matters, L. W. Shepherd, Arthur Lewis Wilson, J. (Oldham)
Messer, Fred Shield, George William Wilson, R. J. (Jarrow)
Middleton, G. Shiels, Dr. Drummond Winterton, G. E. (Leicester, Loughb'gh)
Millar, J. D. Shillaker, J. F. Wise, E. F.
Mills, J. E. Short, Alfred (Wednesbury) Wright, W. (Rutherglen)
Milner, Major J. Simmons, C. J. Young, R. S. (Islington, North)
Montague, Frederick Simon, E. D. (Manch'ter, Withington)
Morley, Ralph Sinkinson, George TELLERS FOR THE NOES.—
Morris, Rhys Hopkins Smith, Alfred (Sunderland) Mr. Allen Parkinson and Mr. A.
Morrison, Herbert (Hackney, South) Smith, Ben (Bermondsey, Rotherhithe) Barnes.

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

Sir A. STEEL-MAITLAND

This Clause is perhaps one of the most typical Clauses one could wish not to have in a Finance Bill. In the first place, it is typical of the unwisdom of not letting sleeping dogs lie. Here we have had a practice which, by common consent, has lasted for a large number of years and on the whole has not given dissatisfaction. There have been few complaints made with respect to it, and little would have been heard of it if it had not been desired to give it a new legislative form and substance. We are told that nothing is really added to the administrative practice of the last 100 years, that it has not been substantially altered or enlarged. Under these circumstances we have an instance of what usually occurs when people are not content with an administrative practice which, on the whole, has given satisfaction, and proceed to bring it within the four corners of a Clause in a Bill. It is at once seen that it is very difficult, when you try to narrow it down to actual definition, to give satisfaction or to meet the varying needs and cases in the same way as can be done under an ordinary, strict, but adaptable administration.

It is obvious that when you have an administration of the kind that has gone on, it has been able to give to consuls and consular agents exemption from Income Tax in those cases where it was wise that it should be given. It has been able, on the other hand, to refuse to do so, as one gathers, in those cases where trade is carried on for profit. The moment you try to bring this within the four corners of an Act of Parliament, you begin to have defects and difficulties and impossibilities of a kind which by now even the Financial Secretary to the Treasury and the Chancellor of the Exchequer must recognise as probably productive of hardship and inequality. If I were asked what would be one of the most undesirable effects of a Clause of this kind, I should say that it is that which occurs in Sub-section (2, b), and, moreover, it is one of those results which one might expect from the kind of legislation that would be proposed by the party opposite.

I am not proposing to go into the question of Free Trade, but I am quite sure that, if there is a kind of preference given to the foreigner which the most rigid Free Trader would dislike, it would be the kind of preference given in Sub-section (2, b). It is one thing to say that you will allow foreign goods to come in and compete with the employment of people here, and that you are determined to have that practice continued, but in this Sub-section it is obvious that we are giving preference to the employment of foreigners over here, and we are quite distinctly enabling it to be given more cheaply and to undercut our own countrymen. When you have the employment of an official agent in the United Kingdom for any foreign state, not being an employment exercised by a British subject or exercised in connection with any trade. … for the purposes of profit, he is to enjoy this exemption. The moment that you have a British subject in this country, performing precisely the same work, for precisely the same master, he is to be liable to Income Tax at the same time as his foreign competitor for the job is to go scot free. If you take the cost of living in this country, and if a salary is given which would enable a person to live according to a certain standard of comfort, it makes all the difference whether or not Income Tax is to be reckoned in that salary. It makes quite clear that if the same standard of living is to be enjoyed by the two employés, the foregn employé and the British employé, the foreigner will be employed here rather than the British subject if his salary is to be free of Income Tax and the salary of the British subject is not, because, in order to give them the same standard of living, a higher nominal pay will have to be given to the British subject, so that when Income Tax is taken off he is put on a level with the foreigner.

We are told by the Chancellor of the Exchequer that if you give this exemption from Income Tax to the British subject, you will again be creating an inequality, for the British subject who is employed by a foreign consular agent will get some form of exemption, whereas the British subject who is employed in any other business will not. That was the whole defence of the Chancellor of the Exchequer of this Clause. If you cannot get complete equality all round, and if a preference is to be given, I would sooner that the British subject were given the preference than that a foreign subject should be given a preference over the British subject. If there is to be inequality, I would prefer inequality as between British subjects to inequality in which a foreign resident here gets a definite advantage in the commercial world over the British subject. I think that probably that is the actual effect of this Sub-section, and that it will be appreciated by hon. Members opposite. For the first time we are definitely imposing by Statute an obligation on people which will tend to drive them, despite the present state of unemployment, to give employment to a foreigner in this country rather than to a British subject.

The next question is concerned with the words "for the purposes of profit." There is no question that what are exempted by Sub-section (3) of this Clause are what would normally be trading operations if they had been carried out by a normal company or corporation existing for the purpose. On the other hand, the Clause is too wide. It really gives an exemption to a corporation, whether a country or a corporation set up by a country, that does not profess to trade for profit, and I can only imagine that it may be liked by hon. Members opposite, because such a corporation can compete with traders in this country who have to make some profit on which to live, for it gives them exemption which puts them at an advan- tage as compared with the British competitor, or with the colonial competitor and importer here. The Chancellor, in his reply, said that when all was said and done, a body like a co-operative society was in fact trading for profit. It is quite clear that it is not. Its dividends, except to outsiders, consist of a rebate upon purchase price. It is not trading for profit. [Interruption.]

Mr. LEES

The right hon. Gentleman did not always say that.

Sir A. STEEL-MAITLAND

I am accepting it, and if the hon. Member approves of it, I take it that he cannot give his support to this Sub-section. I am putting forward the argument that hon. Members have so often used. [Interruption.] If the dividends of a co-operative society are given to non-members, they are profit. Their exemption from income Tax is due to the fact that when they are given to members, they are not profit, but rebate. Under these circumstances, a co-operative society is quite clearly not an undertaking for the purposes of profit; and here the exemption is given to an agency, not being a department or agency which carries on any trade, business or other undertaking for the purposes of profit. Therefore, you give exemption in this country to representatives of companies which I mentioned earlier in the debate, and which quite clearly are competing with traders in this country, who, because the Sub-section is drawn so widely, are at an unfair disadvantage. I am not going into details about the Australian or American Shipping Boards, but, as time goes on, it is clear that we shall get more instances of this kind of company trading under this exemption. The Chancellor of the Exchequer made a comment on the length of time that this Clause has taken. The time that it has taken, however, is almost the Chancellor's own fault. There are these vital flaws in the substance of the Clause, and the reason why it has taken so long is the way in which the Chancellor has treated the Committee in regard to it. It is his method even more than the substance of the Clause that has made Members on this side resentful of the way in which the Committee has been treated. As regards the authorities for it, the Chancellor of the Exchequer said no Government representative could be expected to come down armed with all the documents and all the Blue Books on any particular point that might be raised, but what we can expect with reason is that when there are one or two fundamental documents on which the whole Clause is based he should be able to deal with questions concerning them. That is what he has refused to do this afternoon. We have been told that this Clause is based upon a Treasury Minute. We have asked for that Treasury Minute. The Chancellor has been asked whether it is, in fact, in existence, and whether it can be produced or will be produced. [HON. MEMBERS: "Say it again!"] Those of us who are cognisant of the ordinary conventions under which alone business can be properly carried on in this House will be prepared to press our point home, whatever may be said by hon. Members opposite. We are asked to pass a Clause on the mere ipse dixit of a Member of the Government. The Chancellor says that it is based on a Treasury Minute, is based on a recommendation of the Public Accounts Committee, and thinks it is quite sufficient to state that without quoting the Minute or the recommendation or without giving references by which we could endeavour to trace them. Therefore, we shall oppose this Clause to the utmost of our ability.

Major COLFOX

I consider that this Clause is very undesirable——[HON. MEMBERS: "Really!"]—and I consider that I have a perfect right to express my opinion upon it. In the first place, I regard it as undesirable because it puts into statutory and legislative form and in an inflexible way a custom which, I understand, bas been followed for a good many years. [HON. MEMBERS: "Is that so!"] The Chancellor told us that it is so, but he will not produce evidence to prove it. I presume it is so, but I have only his ipse dixit to go on. If this procedure were to continue to rest upon custom and precedent it would be more easy to administer fairly than it will be when it is put into a statutory form with an appeal to the courts of law. It is another instance of the difference between a written constitution and a constitution which has grown up by precedent and custom. I object to the Clause because it gives immunity from taxation to all consular officers and agents, no matter what the custom or the law of the country which they represent. I should not so much object to this Clause if it represented a reciprocal arrangement. [Interruption.] I may say that these ignorant interruptions from the Government benches do not really disturb me, and I shall have my say, provided, of course, that I get the protection of the Chair.

The CHAIRMAN

The hon. and gallant Member can leave it to me to intervene. Up to the moment I do not know that anything has occurred which should justify him in making that special appeal to me, because it carries a reflection.

Major COLFOX

Certainly, Mr. Young. I quite see your point. I merely wish to point out that these vulgar interruptions only prolong the proceedings, which have already been unduly lengthened by the action of the Chancellor. As I say, I object to this Clause because once it is the law this custom will become inflexible and hard, and therefore much more difficult to administer.

Lieut.-Colonel HENEAGE

On a point of Order. May I call attention to the fact that there are constant interruptions from the Front Bench below the Gangway opposite. Every time the hon. and gallant Member comes to the end of a sentence one of the hon. Members below the Gangway makes an interjection.

The CHAIRMAN

I did not notice interruptions or interjections from hon. Members below the Gangway, but I notice that when there are interjections from one side they are replied to by the other side, which makes it more difficult for the Chair. In any case, I would remind the hon. and gallant Member for West Dorset (Major Colfox) of the rule against repetition of arguments.

Mr. WALLHEAD

On a point of Order. May I draw attention to the continual repetition of arguments not only in the same speech——

The CHAIRMAN

The hon. Member need not rise to a point of Order when I have already referred to that matter.

Mr. WALLHEAD

What I wish to refer to is the repetition of each other's arguments by hon. Members opposite.

Major COLFOX

When one is continually interrupted one's train of thought is broken and it is obviously difficult to keep a connected argument going by careful stages to one's point. [Laughter.] This kind of thing makes it extremely difficult to avoid some slight repetition occasionally. I was saying that I should not object so much to this Clause if it were a reciprocal Clause, and that was leading me up to ask——[Laughter].

The CHAIRMAN

Hon. Members ought not to be induced to interrupt in the way they are doing.

Major COLFOX

I know that the loud laugh proclaims the vacant mind, but it is rather disturbing to the thread of one's arguments. What I was leading up to was to ask the Chancellor of the Exchequer what countries, if any, there are which grant us reciprocal terms in this matter, that is to say, who grant immunity from taxation to our consular and diplomatic representatives. I know that he told us earlier that some countries did, but I should like him to amplify that statement and to tell us the names of those countries. If he is unable to get that information, as he seems to be unable to get any information, perhaps he could at least tell us the number of countries which give us reciprocity and the number which do not. Then we should be in a better position to weigh up the justice of this Clause.

There is another and to my mind very important objection to the Clause. It is really another instance of protective legislation of which we have had many during the period in which the present Government have been in office, protecting some interest or other. This is another example of the Government forcing through this House Measures, not to protest English people or English business, but to protect the foreigner and the foreign competitors of English people and English business. There can be no doubt that that form of protection must be harmful to this country. I know that you, Mr. Young, will rule me out of order if I discuss the general principles of Protection, but there can be no doubt whatever that the protection, of foreigners as against British competitors must be extremely harmful. That is another reason why, in my judgment, this Clause should not be passed into law.

Mr. SMITHERS

The Chancellor of the Exchequer has reminded us that the method adopted in this Clause of relieving of Income Tax foreign representatives in consular positions and those in the service of consuls has been in force for 100 years. It is a curious thing that the right hon. Gentleman should have brought that argument to his aid in the very year in which we have resumed diplomatic relations with the Soviet Government. It is still more curious that this proposal should be put forward at a time when a foreign Government is doing its very best to overthrow the Empire.

The CHAIRMAN

Any references of that kind on this Clause must fee in general terms applying to all nations, and not to any particular country.

Mr. SMITH ERS

Every country which is doing its best to overthrow this Empire

by its propaganda will look upon this concession as another step gained in their activities in the direction of trying to overthrow the British Empire and civilisation as a whole. This is another sign of the weakness of the present Government. I believe that there are certain Members of the Government who do not desire that this Empire should be overthrown, but I am quite convinced that the concession which is put forward in this Clause will encourage political propagandists in this country to go on with their propaganda, and consequently the Government, by this proposal, are aiding and abetting the enemies of the King and the Empire.

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

The Committee divided: Ayes, 273; Noes, 128.

Division No. 354.] AYES. [9.1 p.m.
Adamson, Rt. Hon. W. (Fife, West) Dudgeon, Major C. R. Hudson, James H. (Huddersfield)
Adamson, W. M. (Staff., Cannock) Dukes, C. Hunter, Dr. Joseph
Addison, Rt. Hon. Dr. Christopher Ede, James Chuter Hutchison, Maj.-Gen. Sir R.
Aitchison, Rt. Hon. Craigie M. Edge, Sir William Isaacs, George
Alexander, Rt. Hon. A. V. (Hillsbro') Edmunds, J. E. Jenkins, W. (Glamorgan, Neath)
Alpass, J. H. Edwards, E. (Morpeth) John, William (Rhondda, West)
Ammon, Charles George Egan, W. H. Johnston, Thomas
Arnott, John Elmley, Viscount Jones, F. Llewellyn- (Flint)
Aske, Sir Robert Evans, Capt. Ernest (Welsh Univer) Jones, Henry Haydn (Merioneth)
Attlee, Clement Richard Freeman, Peter Jones, Rt. Hon. Leif (Camborne)
Ayles, Walter Gardner, B. W. (West Ham, Upton) Jones, Morgan (Caerphilly)
Baker, John (Wolverhampton, Bilston) Gardner, J. P. (Hammersmith, N.) Jones, T. I. Mardy (Pontypridd)
Batey, Joseph George, Major G. Lloyd (Pembroke) Jowett, Rt. Hon. F. W.
Bellamy, Albert Gibbins, Joseph Jowitt, Rt. Hon. Sir W. A.
Benn, Rt. Hon. Wedgwood Gibson, H. M. (Lancs. Mossley) Kelly, W. T.
Benson, G. Gill, T. H. Kennedy, Thomas
Bentham, Dr. Ethel Gillett, George M. Kenworthy, Lt.-Com. Hon. Joseph M.
Bevan, Aneurin (Ebbw Vale) Glassey, A. E. Kinley, J.
Birkett, W. Norman Gossling, A. G. Kirkwood, D.
Blindell, James Gould, F. Lansbury, Rt. Hon. George
Bondfield, Rt. Hon. Margaret Graham, D. M. (Lanark, Hamilton) Lathan, G.
Bowen, J. W. Graham, Rt. Hon. Wm. (Edin., Cent.) Law, Albert (Bolton)
Bowerman, Rt. Hon. Charles W. Granville, E. Law, A. (Rosendale)
Brockway, A. Fenner Gray, Milner Lawrence, Susan
Bromfield, William Grenfell, D. R. (Glamorgan) Lawson, John James
Brooke, W. Griffith, F. Kingsley (Middlesbro' W.) Lawther, W. (Barnard Castle)
Brothers, M. Griffiths, T. (Monmouth, Pontypool) Leach, W.
Brown, C. W. E. (Notts, Mansfield) Groves, Thomas E. Lee, Frank (Derby, N. E.)
Brown, Ernest (Leith) Grundy, Thomas W. Lee, Jennie (Lanark, Northern)
Buchanan, G. Hall, F. (York, W. R., Normanton) Lees, J.
Burgess, F. G. Hall, G. H. (Merthyr Tydvil) Lewis, T. (Southampton)
Buxton, C. R. (Yorks. W. R. Elland) Hall, Capt. W. P. (Portsmouth, C.) Lindley, Fred W.
Caine, Derwent Hall- Harbord, A. Lloyd, C. Ellis
Cameron, A. G. Hardie, George D. Logan, David Gilbert
Carter, W. (St. Pancras, S. W.) Harris, Percy A. Longbottom, A. W.
Charleton, H. C. Hartshorn, Rt. Hon. Vernon Longden, F.
Chater, Daniel Haycock, A. W. Lovat-Fraser, J. A.
Church, Major A. G. Hayday, Arthur Lowth, Thomas
Clarke, J. S. Hayes, John Henry Lunn, William
Cluse, W. S. Henderson, Right Hon. A. (Burnley) Macdonald, Gordon (Ince)
Clynes, Rt. Hon. John R. Henderson, Arthur, Junr. (Cardiff, S.) MacDonald, Rt. Hon. J. R. (Seaham)
Cocks, Frederick Seymour Henderson, Thomas (Glasgow) MacDonald, Malcolm (Bassetlaw)
Compton, Joseph Henderson, W. W. (Middx., Enfield) McElwee, A.
Cove, William G. Herriotts, J. McEntee. V. L.
Daggar, George Hirst, G. H. (York W. R. Wentworth) MacNeill-Weir, L.
Dallas, George Hirst, W. (Bradford, South) McShane, John James
Dalton, Hugh Hollins, A. Malone, C. L'Estrange (N'thampton)
Denman, Hon. R. D. Hore-Belisha, Leslie Mander, Geoffrey le M.
Dickson, T. Horrabin, J. F. Mansfield, W.
March, S. Quibell, D. J. K. Sullivan, J.
Marcus, M. Ramsay, T. B. Wilson Sutton, J. E.
Markham, S. F. Rathbone, Eleanor Taylor, R. A. (Lincoln)
Marley, J. Raynes, W. R. Taylor, W. B. (Norfolk, S. W.)
Marshall, F. Richards, R. Thorne, W. (West Ham, Plaistow)
Mathers, George Richardson, R. (Houghton-le-Spring) Thurtle, Ernest
Matters, L. W. Riley, Ben (Dewsbury) Tillett, Ben
Messer, Fred Riley, F. F. (Stockton-on-Tees) Tinker, John Joseph
Middleton, G. Ritson, J. Toole, Joseph
Millar, J. D. Roberts, Rt. Hon. F. O. (W. Bromwich) Tout, W. J.
Mills, J. E. Romeril, H. G. Townend, A. E.
Milner, Major J. Rosbotham, D. S. T. Trevelyan, Rt. Hon. Sir Charles
Montague, Frederick Rowson, Guy Turner, B.
Morgan, Dr. H. B. Russell, Richard John (Eddisbury) Vaughan, D. J.
Morley, Ralph Salter, Dr. Alfred Viant, S. P.
Morris, Rhys Hopkins Samuel, H. W. (Swansea, West) Walkden, A. G.
Morrison, Herbert (Hackney, South) Sanders, W. S. Walker, J.
Morrison, Robert C. (Tottenham, N.) Sawyer, G. F. Wallace, H. W.
Mort, D. L. Scrymgeour, E. Wallhead, Richard C.
Moses, J. J. H. Scurr, John Watkins, F. C.
Mosley, Lady C. (Stoke-on-Trent) Sexton, James Watson, W. M. (Dunfermline)
Mosley, Sir Oswald (Smethwick) Shepherd, Arthur Lewis Watts-Morgan, Lt.-Col. D. (Rhondda)
Muff, G. Shield, George William Wedgwood, Rt. Hon. Josiah
Muggeridge, H. T. Shiels, Dr. Drummond Wellock, Wilfred
Murnin, Hugh Shillaker, J. F. Welsh, James (Paisley)
Nathan, Major H. L. Short, Alfred (Wednesbury) Welsh, James C. (Coatbridge)
Naylor, T. E. Simmons, C. J. West, F. R.
Newman, Sir R. H. S. D. L. (Exeter) Sinkinson, George Westwood, Joseph
Noel Baker, P. J. Smith, Alfred (Sunderland) White, H. G.
Oldfield, J. R. Smith, Ben (Bermondsey, Rotherhithe) Whiteley, Wilfrid (Birm., Lady wood)
Oliver, George Harold (Ilkeston) Smith, Frank (Nuneaton) Williams, David (Swansea, East)
Oliver, P. M. (Man., Blackley) Smith, H. B. Lees (Keighley) Williams, Dr. J. H. (Lianelly)
Owen, Major G. (Carnarvon) Smith, Rennie (Penistone) Williams, T. (York, Don Valley)
Owen, H. F. (Hereford) Smith, Tom (Pontefract) Wilson, C. H. (Sheffield, Attercliffe)
Palin, John Henry Smith, W. R. (Norwich) Wilson, J. (Oldham)
Paling, Wilfrid Snell, Harry Wilson R. J. (Jarrow)
Parkinson, John Allen (Wigan) Snowden, Rt. Hon. Philip Winterton, G. E. (Lelcester, Loughb'gh)
Perry, S. F. Snowden, Thomas (Accrington) Wise, E. F.
Pethick-Lawrence, F. W. Stamford, Thomas W. Wright, W. (Rutherglen)
Phillips, Dr. Marion Stephen, Campbell Young, R. S. (Islington, North)
Picton-Turbervill, Edith Stewart, J. (St. Rollox)
Potts, John S. Strachey, E. J. St. Loe TELLERS FOR THE AYES.—
Price, M. P. Strauss, G. R. Mr. Charles Edwards and Mr. A.
Barnes.
NOES.
Acland-Troyte, Lieut.-Colonel Ganzoni, Sir John Mond, Hon. Henry
Albery, Irving James Gibson, C. G. (Pudsey & Otley) Monsell, Eyres, Com. Rt. Hon. Sir B.
Allen, Sir J. Sandeman (Liverp'l., W.) Graham, Fergus (Cumberland, N.) Moore, Sir Newton J. (Richmond)
Atholl, Duchess of Grattan-Doyle, Sir N. Morrison, W. S. (Glos., Cirencester)
Atkinson, C. Greaves-Lord, Sir walter Morrison-Bell, Sir Arthur Clive
Baldwin, Rt. Hon. Stanley (Bewdley) Greene, W. P. Crawford Mulrhead, A. J.
Balfour, George (Hampstead) Gretton, Colonel Rt. Hon. John Nicholson, O. (Westminster)
Berry, Sir George Gritten, W. G. Howard Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Bevan, S. J. (Holborn) Gunston, Captain D. W. Nield, Rt. Hon. Sir Herbert
Birchall, Major Sir John Dearman Hacking, Rt. Hon. Douglas H. O'Connor, T. J.
Bourne, Captain Robert Croft Hall, Lieut.-Col. Sir F. (Dulwich) Ormsby-Gore, Rt. Hon. William
Bowyer, Captain Sir George E. W. Hamilton, Sir George (Ilford) Percy, Lord Eustace (Hastings)
Bracken, B. Hannon, Patrick Joseph Henry Ramsbotham, H.
Brass, Captain Sir William Harvey, Major S. E. (Devon, Totnes) Remer, John R.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Haslam, Henry C. Rentoul, Sir Gervais S.
Buckingham, Sir H. Henderson, Capt. R. R. (Oxf'd, Henley) Richardson, Sir P. W. (Sur'y, Ch't'sy)
Cautley, Sir Henry S. Heneage, Lieut.-Colonel Arthur P. Ruggles-Brisc, Lieut.-Colonel E. A.
Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Herbert, Sir Dennis (Hertford) Russell, Alexander West (Tynemouth)
Cobb, Sir Cyril Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Salmon, Major I.
Colfox, Major William Philip Hope, Sir Harry (Forfar) Samuel, A. M. (Surrey, Farnham)
Courtauld, Major J. S. Howard-Bury, Colonel C. K. Samuel, Samuel (W'dsworth, Putney)
Courthope, Colonel Sir G. L. Hurd, Percy A. Sandeman, Sir N. Stewart
Cowan, D. M. Iveagh, Countess of Savery, S. S.
Crookshank, Cpt. H. (Lindsey, Gainsbro) Jones, Sir G. W. H. (Stoke New'gton) Shepperson, Sir Ernest Whittome
Croom-Johnson, R. P. Kindersley, Major G. M. Smith, Louis W. (Sheffield. Hallam)
Dalkeith, Earl of King, Commodore Rt. Hon. Henry D. Smith, R. W. (Aberd'n & Kinc'dine, C.)
Davies, Dr. Vernon Leighton, Major B. E. P. Smith-Carington, Neville W.
Davies, Maj. Geo. F. (Somerset, Yeovil) Lewis, Oswald (Colchester) Smithers, Waldron
Dawson, Sir Philip Locker-Lampson, Rt. Hon. Godfrey Somerville, A. A. (Windsor)
Duckworth, G. A. V. Long, Major Eric Somerville, D. G. (Willesden, East)
Eden, Captain Anthony MacRobert, Rt. Hon. Alexander M. Southby, Commander A. R. J.
Edmondson, Major A. J. Maitland, A. (Kent, Faversham) Spender-Clay, Colonel H.
Elliot, Major Walter E. Makins, Brigadier-General E. Stanley, Maj. Hon. O. (W'morland)
Erskine, Lord (Somerset, Weston-s.-M.) Margesson, Captain H. D. Stewart, W. J. (Belfast, South)
Falle, Sir Bertram G. Marjoribanks, E. C. Stuart, Hon. J. (Moray and Nairn)
Fielden, E. B. Meller, R. J. Thomas, Major L. B. (King's Norton)
Fison, F. G. Clavering Merriman, Sir F. Boyd Tinne, J. A.
Forestier-Walker, Sir L. Mitchell-Thomson, Rt. Hon. Sir W. Todd, Capt. A. J.
Train, J. Wayland, Sir William A. Womersley, W. J.
Turton, Robert Hugh Wells, Sydney R. Worthlngton-Evans. Rt. Hon. Sir L.
Vaughan-Morgan, Sir Kenyon Williams, Charles (Devon, Torquay)
Wallace, Capt. D. E. (Hornsey) Windsor-Clive, Lieut.-Colonel George TELLERS FOR THE NOES.—
Ward, Lieut.-Col. Sir A. Lambert Winterton, Rt. Hon. Earl Sir George Penny and Sir Victor
Wardlaw-Milne, J. S. Withers, Sir John James Warrender.