Commons Sitting of 25 June 1930

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

PRIVATE BUSINESS.
Ministry of Health Provisional Order (Brighton) Bill,
Ministry of Health Provisional Orders (Doncaster, Saint Ives (Cornwall), and Scarborough) Bill,
Ministry of Health Provisional Order (South Molton Rural) Bill,
Read the Third time, and passed.
Ministry of Health Provisional Orders (Accrington, Bognor Regis, and Newton Abbot) Bill,
Ministry of Health Provisional Orders (Great Torrington, Minehead, and Taf Fechan Water Supply Board) Bill,
Ministry of Health Provisional Order (Uxbridge Joint Hospital District) Bill,
As amended, considered; to be read the Third time to-morrow.

ORAL ANSWERS TO QUESTIONS.

  FIXED EASTER.
  Mr. DAYasked the Secretary of State for Foreign Affairs whether any conversations are taking place between His Majesty's Government and other Governments for the purpose of fixing a regular date for Easter, and can he give particulars?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Arthur Henderson): His Majesty's Government are in communication with the other European Governments on the subject, but it is not possible to give particulars at present, as the replies are not yet complete.
  Mr. DAY: Have any replies been received, and can the right hon. Gentleman state the gist of them?
  Mr. HENDERSON: I am afraid I can not.
  Miss PICTON-TURBERVILL: Is the right hon. Gentleman aware that there is strong opposition throughout the country to the suggestion of a fixed Easter?

  EUROPEAN FEDERAL UNION (FRENCH MEMORANDUM).
  Mr. FREEMANasked the Secretary of State for Foreign Affairs whether he has any further information with regard to the proposed United States of Europe?
  Mr. A. HENDERSON: As I have already informed the House, His Majesty's Government are giving their most earnest consideration to the Memorandum of the French Government.

  LEAGUE OF NATIONS.

    ARMS, AUSTRIA (PRIVATE PERSONS).
    Mr. MANDERasked the Secretary of State for Foreign Affairs whether the League of Nations has received any communication from the Austrian Chancellor with reference to legislation which is being introduced in the Austrian Parliament, in order to prevent the illegal retention of arms by private individuals; and whether this legislation has now been passed?
    Mr. A. HENDERSON: The League was informed on 13th March last by the Austrian Federal Chancellor of his intention to introduce legislation increasing the powers of the Federal Government to restrict the possession of arms by private persons. This Bill, having passed through the Austrian Parliament, is now law, and will come into force shortly on publication in the Federal Law "Gazette."

    MINORITIES.
    Colonel WEDGWOODasked the Secretary of State for Foreign Affairs whether the Assembly of the League of Nations has agreed to the alterations in the method of dealing with the complaints of minorities; and, if so, in what particular direction the change improves the position of the minorities before the League?
    Mr. A. HENDERSON: The answer to the first part of the question is in the

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    affirmative. With regard to the second part of the question, my right hon. Friend will find full information on the subject of the changes involved in the revised procedure dealing with minorities in the League of Nations Official Journal Special Supplement No. 73 for 1929, of which I will send him a copy.

  MALTA.
  Mr. MANDERasked the Secretary of State for Foreign Affairs whether it is proposed to press for the report of the Apostolic delegate, Monsignor Robinson, with reference to his visit to Malta, already promised by the Vatican, and to publish it when received?
  Mr. FOOTasked the Secretary of State for Foreign Affairs if any reply has been received from the Vatican in reply to the statement handed to the Cardinal Secretary of State by Mr. Ogilvie-Forbes on 30th May, 1930?
  Mr. A. HENDERSON: I am taking steps to place in the Library of the House copies of the White Book just issued by the Vatican. This White Book contains a report by Monsignor Robinson, and also the Vatican's reply to His Majesty's Government's statement of the 30th of May last.
  Lieut.-Commander KENWORTHY: Could not they be issued as a White Paper, as the other White Paper was issued?
  Mr. HENDERSON: I have already answered a question on that subject.

  ROYAL NAVY.

    BUILDING PROGRAMME, 1930.
    Mr. GRAHAM WHITEasked the First Lord of the Admiralty if he is now in a position to make an announcement with regard to the additional naval programme for this year?
    Sir ROBERT GOWERasked the First Lord of the Admiralty whether he is yet in a position to state what additional cruisers, submarines, and other vessels, respectively, he proposes to include in this year's naval programme?
    Captain W. G. HALLasked the First Lord of the Admiralty if he is now in a position to make a statement
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    on the naval building programme for the current year?
    The FIRST LORD of the ADMIRALTY (Mr. A. V. Alexander): The Government's naval construction programme for 1930, is as follows:

    Cruisers—Three. All of the 6-inch gun type.

    Destroyers—One Flotilla (comprising one Leader and eight Destroyers).

    Submarines—Three.

    Sloops—Four.

    Netlayer and Target Towing Vessel—One.

    A Supplementary Estimate will be introduced shortly for the small sum required to be spent in this financial year on these vessels, orders for the laying down of which will not be given until the last quarter of the financial year. I would emphasise that these ships are required, in replacement of others, which will have passed the age limit, to enable the Royal Navy to carry out its current duties in time of peace, and the programme has no relation to those of other Powers. A full explanation of all the details of the programme will be issued in a White Paper before the Supplementary Estimate is considered by Parliament. It is intended that the allocation of the vessels to be built should be as follows:
    By contract.

    One Cruiser.

    Eight Destroyers.

    One Submarine.

    In the Royal Dockyards.

    Portsmouth.

    One Cruiser.

    One Leader.

    Devonport.

    One Cruiser.

    Three Sloops.

    Chatham.

    One Netlayer.

    Two Submarines.

    One Sloop.

    Colonel ASHLEY: How long does the right hon. Gentleman expect it will take to build these ships?
    Mr. ALEXANDER: I could not give a time as to months, but I should say a little less than the "Kent" class in the last programme. We have not had full

    1119
    experience yet of this size of ship, but I should say rather more than two years.
    Lieut. - Commander KENWORTHY: First of all, are these ships to be additional to those the right hon. Gentleman has already announced since the conclusion of the Conference, and, secondly, can he give the total cost?
    Mr. ALEXANDER: The ships the hon. and gallant Gentleman refers to were the suspended ships of the 1929 programme. I must remind the House of that point, that of the original 1929 programme the Government cancelled more than a half, and, therefore, they had to take that into account when considering the 1930 programme.
    Mr. HORE-BELISHA: Does the right hon. Gentleman contemplate that the allocation of this cruiser to Devonport will maintain the present rate of employment?
    Mr. ALEXANDER: It is very difficult to give an exact estimate on that point I think the hon. Member has a question on the Paper with regard to casual labour. With regard to other labour, I think we shall be able to do so, but he must not bind me to that estimate.
    Mr. WHITE: Did I understand the right hon. Gentleman to say the destroyer flotilla would be built by contract in private yards?
    Mr. ALEXANDER: All with the exception of the leader.
    Major ROSS: What about the size of the 6-inch gun cruisers?
    Mr. ALEXANDER: A lot of these points will be much better dealt with in the debate later on, but I should think something more than 6,500 tons.
    Lieut. - Commander KENWORTHY: May we be told the total cost?
    Mr. ALEXANDER: The total cost spread over three years will be about £9,000,000.

    CRUISERS (GUNS).
    Sir BERTRAM FALLEasked the First Lord of the Admiralty whether, under the terms of the Naval Treaty, our smaller 6-inch gun cruisers are to be armed with 6-inch guns or with 155-mm. guns?
    Mr. ALEXANDER: It is our present intention that cruisers to be built of the sub-category (b) class referred to in Article 16 of the London Naval Treaty shall be armed with guns of 6-inch calibre.
    Sir B. FALLE: Is the right hon. Gentleman aware that the 155-mm. gun is superior to our present 6-inch gun, and does he propose to arm the new cruisers with the old-fashioned 6-inch gun which is inferior to that of the United States and Japan?
    Mr. SPEAKER rose—
    Sir B. FALLE: If other nations are building 6-inch gun cruisers with a larger and better gun, have I not a right to ask if we are using the old-fashioned guns?
    Mr. SPEAKER: The hon. Baronet asks whether the cruisers are to be armed with 6-inch guns. If he wants any further information, he must put a Question on the Paper.

    ACTING MATES.
    Mr. T. LEWISasked the First Lord of the Admiralty (1) whether he will state the reasons why acting mates promoted from able seamen spend three months only at Greenwich College, though it is considered necessary for sub-lieutenants who have spent three years and eight months at Dartmouth College to remain for six months;
    (2) what practical difficulties exist to prevent acting mates spending a second term at Greenwich College to undergo the much more general course for sub-lieutenants (vide OFFICIAL REPORT, column 1889) after the existing more directly professional course;
    (3) whether, in view of the recently increased syllabus for acting mates, he will consider allowing them to remain at Greenwich College for a second term and to receive instruction in French as do sub-lieutenants?
    Mr. ALEXANDER: The question of giving additional education to acting mates at Greenwich was carefully considered in 1923, but the advantages obtained by increasing the period spent on theoretical instruction were not considered to outweigh the disadvantages entailed by the consequent loss of sea training in an officer's duties. As my

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    hon. Friend has drawn my attention to the matter I am taking the opportunity of looking into it afresh.

    DOCKYARD EMPLOYÉS.
    Mr. HORE-BELISHAasked the First Lord of the Admiralty whether alternative work has been found in Devonport Dockyard for those employés who have been displaced owing to the introduction of the clocking system?
    Mr. ALEXANDER: No clocks have yet been installed in His Majesty's Dockyard, Devonport, and no employés, therefore, have been displaced by the introduction of the clocking system at that yard.
    Mr. HORE-BELISHA: Is it intended to introduce the system or not and will the right hon. Gentleman give the undertaking asked for?
    Mr. ALEXANDER: It is intended to introduce the system, as already stated, at Devonport in the near future and I think I have already stated that we shall make every endeavour to absorb the labour which may be displaced thereby.
    Mr. HORE-BELISHAasked the First Lord of the Admiralty how many discharges of employés, casual and otherwise, have taken place during the last three weeks in Devonport dockyard; and how many further discharges are contemplated in the near future?
    Mr. ALEXANDER: 333 employés were discharged from the dockyard, victualling yard and armament supply depot at Devonport during the three weeks ended the 21st June, 1930; of this number, 287 Were employed on a casual basis, and of this latter number 165 were specially engaged for a few days only. As regards the last part of the question, I would refer the hon. Member to the reply made to him on the 8th May (OFFICIAL REPORT, col. 1462).
    Mr. HORE-BELISHAasked the First Lord of the Admiralty how many established men have been discharged from each of His Majesty's dockyards during the last three months; and whether all these discharges have taken place because of the superannuation age having been reached?
    Mr. ALEXANDER: The numbers discharged were:

    Portsmouth

    61

    Devonport

    49

    Chatham

    28

    Sheerness

    10

    Portland Base

    1

    Of the total of 149, 119 were for age, 10 were invalided, one was released on request and 19 died.

    EX-MATES.
    Captain HALLasked the First Lord of the Admiralty what is the earliest age at which a lieutenant-commander (cadet entry) can obtain the maximum retired pay of his rank under normal conditions; and the earliest age at which lieutenant-commanders (ex-mate), other than those retired under special retirement schemes, have so far been able to retire with the maximum?
    Mr. ALEXANDER: The earliest age at which a lieutenant-commander (cadet entry) can, under normal conditions, obtain the maximum retired pay of his rank is 43 years. No lieutenant-commander (ex-mate), other than those retired under special schemes, has so far earned the maximum rate of retired pay. This is due to the fact that the numerous officers who were selected young enough retired under the special schemes, or are still serving. Promotions are now being made as young as 21 years, and an officer promoted at 21 or 22 could earn the maximum retired pay at the age of 43, while those promoted at from 23 to 26 could earn the maximum at the age of 44.
    Captain HALLasked the First Lord of the Admiralty if lieutenant-commanders (ex-mate) are eligible for appointment as officer instructors of Royal Naval Volunteer Reserve Divisions, as assistant inspectors of naval ordnance, and in other employment under the Director of Naval Ordnance; and the numbers so employed?
    Mr. ALEXANDER: Yes, Sir. Lieutenant-Commanders (ex-mate) are eligible for the same appointments, under the same conditions, as Lieutenant-Commanders (ex-cadet). No Lieutenant-Commanders (ex-mate) are at present employed in the appointments mentioned.

    DESTROYERS AND SUBMARINES (GREAT BRITAIN AND ITALY).
    Major ROSSasked the First Lord of the Admiralty the strength of the British Empire and Italy, respectively, in destroyers and submarines in the Mediterranean?
    Mr. ALEXANDER: The numbers of destroyers and submarines in the Mediterranean are:—

    —

    Destroyers (including Flotilla Leaders).

    Submarines.

    Great Britain

    …

    40

    6

    Italy

    …

    81

    44

    Major ROSS: If we are to obtain parity in that sea with that Power, will it not be necessary to concentrate our entire destroyer and submarine forces?
    Mr. ALEXANDER: That matter can better be raised in debate, because obviously it is a matter of opinion. The hon. and gallant Member in putting questions like that, must remember that

    —

    Building.

    Projected.

    Destroyers (including Flotilla Leaders).

    Submarines.

    Destroyers (including Flotilla Leaders).

    Submarines.

    British Commonwealth of Nations

    14

    10

    3

    1

    Italy

    9

    13

    6

    22

    The above figures do not include any programme for 1930.

    PERSONNEL (REDUCTIONS).
    Major ROSSasked the First Lord of the Admiralty whether he intends to make any special provision for ranks and ratings discharged into civil life as a result of the Naval Treaty?
    Mr. ALEXANDER: No ratings will be discharged as a result of the Naval Treaty. Reductions will be effected by limiting entries. The method of effecting any small reduction in officers who cannot be absorbed is under consideration.
    Sir B. FALLE: Will any man be prevented from continuing for a pension?
    we are on perfectly friendly relations with Italy, and we do not want to have a matter raised in this House which would make the position appear to be otherwise.
    Major ROSSasked the First Lord of the Admiralty the number of destroyers and submarines building or projected by the British Empire and Italy, respectively?
    Mr. ALEXANDER: As the reply is in tabular form, I will circulate it in the OFFICIAL REPORT.
    Major ROSS: Is not the balance going further in favour of Italy as against this country as a result of this Conference?
    Mr. ALEXANDER: We debated that point at great length on two previous days, and I pointed out that we are safeguarded in the future by the actual wording of the Treaty.
    Major ROSS: Does the right hon. Gentleman suppose that he will have to avail himself of Clause 21 of the Treaty fairly soon?
    Following is the reply:
    Mr. ALEXANDER: Not so far as I am aware, but I should like notice of that question.

  EX-ENEMY WARSHIPS (SALVAGE).
  Mr. DOUGLAS HACKINGasked the First Lord of the Admiralty the total cost of raising the German fleet that was scuttled in Scapa Flow in 1919?
  Mr. ALEXANDER: No expenditure from naval funds has been incurred in raising these ships. The vessels were sold outright before they were raised.
  Mr. THORNE: Does not my right hon. Friend think that it is very much better

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  to allow these ships to remain where they are from the point of view of the workmen instead of wasting money in raising them?
  Mr. ALEXANDER: Naturally, I considered that point when I saw the question on the Paper, but I would remind my hon. Friend that this was carried out under arrangements made by the previous Government.
  Mr. HACKING: If the ships were allowed to remain, would they not be dangerous to other ships?

  PALESTINE.

    IMMIGRATION.
    Lieut.-Commander KENWORTHYasked the Under-Secretary of State for the Colonies, whether he is aware of the uneasiness among Jewish people in many parts of the Empire and in foreign countries at the suspension of Jewish immigation into Palestine; and whether he has any further statement to make on the subject?
    Mr. DENMANasked the Under-Secretary of State for the Colonies whether he is aware that the interference with the normal process of granting immigration certificates into Palestine has caused inconvenience and uncertainty as to the intention of British policy; and whether the customary procedure will now be resumed until the Government has any change in policy to announce?
    The UNDER-SECRETARY of STATE for the COLONIES (Dr. Drummond Shiels): I am fully aware of all the circumstances. The policy of His Majesty's Government in this respect is explained in the reply given on the 21st of May to the questions put by the hon. Member for Orkney and Shetland (Sir R. Hamilton) and the hon. Member for Dundee (Mr. Marcus), and I do not think I could usefully make any further statement at present.
    Lieut.-Commander KENWORTHY: Will my hon. Friend be good enough to say whether conditions have developed since the answer was given to the hon. Member for Orkney and Shetland (Sir R. Hamilton)? Has he no further statement to make on the matter?
    Dr. SHIELS: No, Sir. As my hon. and gallant Friend is aware, we are awaiting the report from Sir John Hope Simpson in regard to this matter before we reach any decision.
    Colonel HOWARD-BURY: Has the attention of the hon. Gentleman been drawn to the great uneasiness which is felt by the Arab population at the increasing Jewish immigration?
    Colonel WEDGWOOD: Will my hon. Friend be able, in the course of the debate to-morrow, to give a rather fuller answer on this question?
    Dr. SHIELS: As far as I understand, the time available to-morrow for the Colonial Office Vote would not give an opportunity to do full justice to this question. If I had to deal with the question of Palestine, I should like an opportunity to deal with it fully. As far as I can gather at present, to-morrow does not appear to give that opportunity.
    Colonel WEDGWOOD: Does not my hon. Friend know that to-morrow we hope to raise the question of Palestine and expect an answer from the Government upon it?
    Dr. SHIELS: No, Sir. I have had no intimation on that point.
    Mr. DENMAN: May we have an assurance that an announcement will be made as early as possible in this matter?
    Dr. SHIELS: Certainly.

    EGYPTIAN LABOUR.
    Lieut.-Commander KENWORTHYasked the Under-Secretary of State for the Colonies whether Egyptian labourers are still being imported into Palestine for stevedore and similar work?
    Dr. SHIELS: Yes, Sir. Egyptian labourers are still admitted to Palestine for temporary employment, but the Chief Immigration Officer does not grant permission for their entry unless he is satisfied that the labour is needed and cannot be found in Palestine. The prospective employers are placed under bond to secure the repatriation of such labourers as soon as the authorised period of stay, which is usually under three months, has expired. From the 1st January last some 285 foreign labourers have been admitted under this arrangement.
    Lieut.-Commander KENWORTHY: What becomes of the argument that there is no work in Palestine and that Jewish immigration certificates have had to be cancelled?
    Mr. McSHANE: Is my hon. Friend aware that for the first time in Palestine, owing to the introduction of such widespread Jewish immigration, there is actually unemployment in Palestine; and what is the purpose of introducing further people into it when already the land is afflicted by them?
    Dr. SHIELS: It is my lot to hear many of these statements, but I pointed out in the answer that Egyptian labourers are only admitted for temporary employment and in cases where no Palestine labour is available. I think it will be obvious that every safeguard is taken in regard to this matter.
    Mr. THORNE: Has my hon. Friend been able to settle the quarrel which has been going on for a long time now between the Arabs and Jewish labourers as to who shall do this class of work?

  IRAQ (BRITISH RAILWAY OFFICIALS)).
  Captain PETER MACDONALDasked the Under-Secretary of State for the Colonies if he is now in a position to state what arrangements have been made to secure the position of British officials in the service of the Iraq railways?
  Dr. SHIELS: I am not at present in a position to add anything to the reply given to the hon. and gallant Member on the 20th of March last. The matter is still the subject of active negotiation.
  Mr. AMERY: Can the Under-Secretary of State give us any indication of the possible date when the matter may be settled? These officials have now been waiting for a very long time.
  Dr. SHIELS: Yes, Sir, they have been waiting a long time. They were waiting before the present Government came into office. We are pressing these negotiations very actively, and I am glad to say that we have some reason to hope that a settlement of the matter will not be long delayed.

  FEDERATED MALAY STATES (WORKMEN'S COMPENSATION).
  Mr. WELLOCKasked the Under-Secretary of State for the Colonies, what is the cause of the postponement of the operation of the Workmen's Compensation Act in the Federated Malay States; and if he can now say when the Act is to come into force?
  Dr. SHIELS: The Federated Malay States Enactment has no doubt been delayed by the postponement Of a similar Bill in the Straits Settlements to await consideration of the report of the Labour Commission in India and any consequential revision of the Indian legislation on which the Malayan measures have been modelled. As I promised in answering a question by the hon. Member for Southwark Central (Mr. Day), my Noble Friend has made inquiry of the High Commissioner, whose reply is awaited, as to when the law will be brought into force.
  Mr. WELLOCK: Will my hon. Friend keep in mind that this matter has been held up three or four years, from one year to another, and that there is very great delay?
  Dr. SHIELS: Yes, Sir. His Majesty's Government are very anxious that measures of this kind should be in operation in all Colonies and Dependencies, and we are doing our very best to expedite the operation or introduction of these Measures.

  EAST AFRICA (GOVERNMENT PROPOSALS).
  Mr. ORMSBY-GOREasked the Under-Secretary of State for the Colonies what steps are being taken to ensure that the proposed joint select committee on the Government's proposals in regard to closer union and Native policy in East Africa will obtain the considered views of the Colonial Governments and the various communities concerned; whether the governors of the three territories have been asked to prepare despatches embodying such views; and whether it is contemplated that the joint select committee will hear oral as well as receive written evidence?
  Dr. SHIELS: The question of the method of procedure of the proposed

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  joint committee is primarily one for the consideration of the chairman and members of that committee, if and when it is appointed. So is the question whether it will hear oral as well as written evidence. The Governors of the three territories concerned have not yet been asked for their views on the proposals, but my Noble Friend naturally proposes to obtain these.
  Sir HERBERT SAMUEL: Is it proposed to move the appointment of the joint select committee this Session?
  Dr. SHIELS: Yes, Sir. My Noble Friend proposes to move for the setting up of this select committee in another place on the 3rd July.
  Mr. ORMSBY-GORE: Will the hon. Member move a similar Motion in this House?
  Dr. SHIELS: Yes, Sir.
  Mr. ORMSBY-GORE: Are we to understand from the memorandum signed by the Secretary of State that persons interested in this reform shall have the opportunity of putting their views before the Select Committee?
  Dr. SHIELS: As I pointed out, there is a good deal of freedom generally left to the Committee itself to decide not only its procedure but who shall appear, and I think we may quite safely leave it to them.
  Mr. ORMSBY-GORE: Does the hon. Gentleman recognise that persons in East Africa are most anxious to know at an early date how they can submit their views to the Select Committee?
  Dr. SHIELS: I have no doubt that every opportunity will be given for the views of all concerned to be available to the Committee, and, if necessary, later on, ways and means of bringing this about will be intimated.
  Mr. ORMSBY-GOREasked the Under-Secretary of State for the Colonies whether it is his intention to move for a Joint Select Committee on the Government's proposals in regard to East Africa; and will the reference be so drawn that questions of policy in East Africa may be discussed, or is it proposed to confine it to procedure?
  Dr. SHIELS: My Noble Friend, the Secretary of State for the Colonies, proposes shortly to move in another place that it is desirable that a Joint Committee of both Houses be appointed to consider the Reports on Closer Union in East Africa drawn up by the Hilton-Young Commission and by Sir Samuel Wilson, together with the Statement of the Conclusions of His Majesty's Government published on the 19th June, and to report thereon. It will be seen that it is not proposed that the deliberations of the Joint Committee should be confined to questions of procedure.
  Colonel WEDGWOODasked the Under-Secretary of State for the Colonies whether the memorandum on Native Policy in East Africa and the principles laid down therein is intended to apply also to Nyasaland and to Northern Rhodesia?
  Dr. SHIELS: Yes, Sir.

  TANGANYIKA (RAILWAY DEVELOPMENT).
  Mr. ORMSBY-GOREasked the Under-Secretary of State for the Colonies what action is being taken in regard to the reports of General Hammond and Mr. Gillman suggesting alternative routes for the proposed railway through South Western Tanganyika; whether a committee has been appointed to determine the definite route; and who is chairman of the committee and what are its terms of reference?
  Dr. SHIELS: The Governor has decided to appoint a commission to consider proposals for railway development in Tanganyika with special reference to the reports mentioned. I am glad to be able to say that Sir Sydney Henn, K.B.E., has consented to be chairman.
  Mr. ORMSBY-GORE: Am I to understand that the committee under Sir Sydney Henn will report to the Colonial Development Committee, under Sir Basil Blackett?
  Dr. SHIELS: It will report to the Governor, who will communicate with us and ultimately, no doubt, it will go before the Colonial Development Committee through the Colonial Office.

  ROYAL AIR FORCE.

    PARACHUTES.
    Mr. DAYasked the Under-Secretary of State for Air whether the whole of the machines of the Royal Air Force have provided for them a parachute for every seat?
    The UNDER-SECRETARY of STATE for AIR (Mr. Montague): Parachutes have been provided on a scale sufficient to equip every pilot and member of the crews of all aircraft. As has been previously stated, there have been difficulties in the carriage or use of parachutes with certain types of aircraft, but these difficulties are in process of being surmounted.
    Mr. DAY: Can the hon. Gentleman say whether these parachutes are fitted with quick release gear?
    Mr. MONTAGUE: Quick release gear experiments have been developed, and that is included in the remark with regard to surmounting difficulties. Great progress has been made.

    LEAGUE OF NATIONS.
    Mr. MANDERasked the Under-Secretary of State for Air if he will state whether the Government have complied with the request made by the League of Nations that three or four aeroplanes should be earmarked for League use in case of emergency; if so, will he state the type and numbers of the machines and the names of the pilots; and what distinguishing mark it is proposed that the machines shall bear?
    Mr. MONTAGUE: I think that the hon. Member is under a misapprehension. The facilities to be afforded in times of emergency to aircraft used for communications of importance to the working of the League are the subject of a resolution to be submitted to the next session of the Assembly, but this resolution (which is, of course, not yet approved by the Assembly) contains no request for the earmarking of aircraft or of pilots in the manner suggested in the question. The answer to the first part of the question is accordingly that no such request has been made, and the second and third parts do not arise.

    HOSPITAL PATIENTS, IRAQ (COLONIAL ALLOWANCE).
    Captain Sir GEORGE BOWYERasked the Under-Secretary of State for Air whether he is aware that members of the Royal Air Force in Iraq, whilst in hospital, are deprived of their Colonial allowance and have to pay 2s. 6d. a day as a hospital charge, thus undergoing a total loss of 11s. 6d. a day; and whether he will see that this Colonial allowance is restarted forthwith and/or what other help he can give?
    Mr. MONTAGUE: My Noble Friend is aware of the facts stated by the hon. and gallant Member, but he does not see his way to alter the regulations upon this subject. The charge of 2s. 6d. a day is the normal hospital stoppage for officers, and the issue of Colonial allowance is also properly suspended since it is not an ordinary emolument, but an additional allowance granted solely to meet the extra cost of living in a command abroad as compared with the coat at home. When an officer is in hospital and is not subject to the additional expenses which the allowance is intended to cover its continued issue is clearly not justified.
    Sir G. BOWYER: Will the hon. Gentleman call for a report on this matter from Iraq and thus learn of the great difficulties and distress of feeling which there is in that country upon this subject at this time?
    Mr. MONTAGUE: I would point out to the hon. and gallant Gentleman that there is no marriage rate in Iraq at all. The marriage state is not recognised in that respect there.

  TRANSPORT.

    ROAD WORKS.
    Sir KINGSLEY WOODasked the Minister of Transport the number of years which the expenditure of the present road programme is spread over; and whether it exceeds to any appreciable extent the programme in operation before June last year?
    The MINISTER of TRANSPORT (Mr. Herbert Morrison): The Trunk Road and Five Years Programmes inaugurated last year relate to works intended to be

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    carried out by the local authorities over a period of five years. The answer to the latter part of the right hon. Member's question is in the affirmative.
    Sir K. WOOD: Can the hon. Gentleman reconcile this reply with the recent statement of the late Chancellor of the Duchy?
    Mr. LLEWELLYN-JONESasked the Minister of Transport whether, in regard to the grants already made from the Road Fund to schemes involving an estimated expenditure of approximately £13,500,000 for improvements of classified roads, he will state whether the local authorities concerned can proceed to put the work in hand forthwith without further reference to the Ministry of Transport in respect of specifications, acceptance of tenders, or sanctions for loans?
    Mr. HERBERT MORRISON: The grants made in respect of the schemes referred to by the hon. Member were issued to enable the local authorities concerned to put the work in hand forthwith. I am anxious to facilitate the operations of local authorities in every way, and to reduce formalities and delays wherever possible, but I do not think that the examination of specifications and other similar documents can be dispensed with, in cases where the documents were not available when the grant was issued, especially when it is remembered that the grants from public funds are so substantial. The sanction of my right hon. Friend, the Minister of Health, to a loan proposed to be raised by a local authority for defraying expenditure on road works is a statutory requirement.
    Colonel ASHLEY: Will the hon. Member see that in all these works proper tenders are sent out and accepted by the local authorities?
    Mr. MORRISON: That is so. Before a local authority gets a tender it must prepare specifications, and we might as well have them at the same time.

    LOWER THAMES TUNNEL.
    Rear-Admiral SUETERasked the Minister of Transport if he can say when work on the lower Thames tunnel will commence; how many will be employed on this work; and how long will the tunnel take to construct?
    Mr. HERBERT MORRISON: As the Bill for the promotion of this scheme has not yet passed through all its stages, and various points still remain to be settled with the local authorities concerned, the hon. and gallant Member will understand that I am not yet in a position to answer his question. I am, however, making every effort to expedite all the preliminary stages.
    Mr. ALBERY: Can the hon. Gentleman give an approximate estimate of the number of men likely to be employed?
    Mr. MORRISON: No, Sir. That would be premature at this stage.

    RAILWAY SERVICE, LONDON AND WEMBLEY.
    Mr. DAYasked the Minister of Transport whether his attention has been drawn to the annual report of the medical officer of health for Wembley, in which he draws particular attention to the fact of the serious overcrowding of trains running between London and Wembley; and can be state whether any representations have been made by his Department to the railway authorities for the purpose of providing increased travelling accommodation from and to Wembley during the rush hours?
    Mr. HERBERT MORRISON: The answer to both parts of the question is in the negative, but I will draw the attention of the railway companies concerned to my hon. Friend's suggestion to the effect that increased travelling facilities are required in the district to which he refers.
    Mr. DAY: Has the hon. Member's attention been called to this being general throughout London?

    SOUTH CIRCULAR ROAD.
    Mr. SNELLasked the Minister of Transport if he is aware that work on the south circular road at Woolwich has been held up for some time; that this work would give employment to a considerable number of men; and will he state what is the present position in regard to it and when it will be possible to proceed with the work?
    Mr. HERBERT MORRISON: Work is temporarily held up at one point by reason of difficulties with respect to the lay-out of the junction with Well Hall Road. Negotiations are proceeding for the acquisition of land, but I am unable

    1135
    to say when these will be completed. Work is proceeding on other sections of the road and tenders for the new bridge to carry the Southern Railway over the road will be advertised by the London County Council early next month.
    Mr. SNELL: Will the Minister of Transport try to expedite a conclusion of this matter?
    Mr. MILLS: As a temporary measure, will my hon. Friend set back the road so as to give pedestrians a safer chance of walking between the wide margin of the uneven road which at present exists?
    Mr. MORRISON: That point has been under consideration. The hon. Member for Woolwich, East (Mr. Snell) knows that I will do everything I can to expedite the matter. In another capacity I have been engaged on this task since 1922.
    Colonel ASHLEY: Can the Minister of Transport say when this circular road will be completed?
    Mr. MORRISON: I cannot say. I understand that these schemes were inaugurated under the Coalition Government, many years ago, and doubtless the right hon. and gallant Member knows what happened during the period when he was Minister of Transport. I am doing my best in the matter.

    TOLL BRIDGE, SELBY.
    Mr. WOMERSLEYasked the Minister of Transport whether any offer has yet been made by the West Riding of Yorkshire County Council to acquire the toll bridge at Selby; and whether, in view of the inconvenience that has been caused to local residents by the recent accident to this bridge, he will suggest to the county council in question the necessity of dealing with this matter and constructing an adequate free bridge at the earliest opportunity?
    Mr. HERBERT MORRISON: I am not aware that the West Riding County Council have made an offer to acquire the toll bridge. The desirability of constructing a by-pass to Selby, including the provision of a new bridge, was discussed with a deputation of the East and West Riding County Councils recently received by the Parliamentary Secretary
    1136
    of my Department and is now forming the subject of discussion between these authorities.

    ROAD SURFACE (EXPERIMENTS).
    Mr. EDEasked the Minister of Transport if it is proposed to establish an experimental section of road surfacing on the Kingston by-pass road; and, if so, if the National Physics Laboratory will supervise the construction and watch the results?
    Mr. HERBERT MORRISON: Negotiations are in progress with a view to laying test sections of various types of surfacing materials on the Kingston by-pass. The work will be supervised and the experiments conducted by the Experimental Branch of my Department.
    Mr. EDE: Will my hon. Friend say whether in this and similar cases his Department acts in conjunction with the National Physical Laboratory?
    Mr. MORRISON: Yes, I have already said so.
    Sir GEORGE PENNY: Is it contemplated to put down a section of rubber road in view of its great durability as compared with other surfaces?
    Mr. MORRISON: That is a matter for consideration. There is the cost of the rubber and the supply of the material to be taken into account.
    Sir G. PENNY: Is not rubber a British material?
    Mr. LOUIS SMITH: In resurfacing roads will the Minister of Transport consider the question of not tarring roads for miles on end without putting on pebbling to the great inconvenience of the travelling public?
    Mr. MORRISON: That is one of the points on the question of road surface which is now under consideration.

  UNEMPLOYMENT.

    ADMINISTRATION.
    Sir K. WOODasked the Prime Minister whether he intends to inform the House from time to time of the conclusions that are arrived at by the new Advisory Committee on Unemployment?
    The PRIME MINISTER (Mr. Ramsay MacDonald): The only conclusions that could appropriately be made public will be the conclusions of the Government.
    Sir K. WOOD: Would it be possible for the House to appoint an observer to see how the Prime Minister gets on with the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George)?
    Mr. KIRKWOODasked the Prime Minister whether, in view of its greater convenience for the purpose of eliciting comprehensive information, he will revert to the previous system by which a single Minister was responsible to the House for all aspects of the Government's unemployment policy?
    The PRIME MINISTER: No, Sir. I would refer my hon. Friend to the answer which I gave on the 5th June in reply to a question by the Noble Lord the right hon. Member for Aldershot (Viscount Wolmer).
    Lieut.-Commander KENWORTHY: Does this mean that, with the exception of the First Commissioner of Works, there is no Minister who is specially responsible for unemployment under the new arrangement?
    The PRIME MINISTER: It means the opposite. It means that the Departments become responsible for their proper share of the work.
    Sir AUSTEN CHAMBERLAIN: Has the Prime Minister abandoned the idea of a central brain. May not the House consult the central brain if it still exists?
    The PRIME MINISTER: The right hon. Member for West Birmingham (Sir A. Chamberlain) has always been under a misapprehension about "the central brain." To begin with we took over what was left by our predecessors. We then improved it and appointed an Economic Advisory Council, to which I referred when I used that expression.
    Mr. CHURCHILL: Is there to be no one Minister in this House to whom the House and the country may look as the person specially charged with an endeavour to resolve the problem of unemployment as far as possible?
    The PRIME MINISTER: No; that such should have been the case was an innovation. The body responsible for Government policy, which cannot be concentrated in any one Department, is the Cabinet, the Government itself.
    Sir A. CHAMBERLAIN: Am I to understand that the Prime Minister, having tried his own cure, has now reverted to the example set by his predecessors and is going to allow individual Departments to discharge their individual functions?
    The PRIME MINISTER: It is much more than that, as I have explained.
    Mr. ERNEST BROWN: May I ask whether the Lord Privy Seal has anything to do now with unemployment grants?
    The PRIME MINISTER: Yes, the Lord Privy Seal is one of the Members of the Cabinet Committee which is responsible for unemployment policy.
    Lieut.-Commander KENWORTHYasked the Prime Minister whether he is now in a position to state the nature of the reorganisation of Ministerial duties to deal with unemployment?
    The PRIME MINISTER: As I have already stated, there will be no one Minister responsible for unemployment questions. Each Departmental Minister will be responsible under the Cabinet for matters arising within his own field. The Cabinet in exercising its general responsibility will have the assistance of a special Committee of Ministers. I would also refer my hon. and gallant Friend to the answer which I gave on Monday last in reply to a question by the right hon. Gentleman the Member for Woolwich West (Sir K. Wood).
    Lieut.-Commander KENWORTHY: If it is convenient, and he is in a position to do so, can the Prime Minister tell us what will be the duties of this organisation to which he has just referred, of the Lord Privy Seal, and of the Chancellor of the Duchy of Lancaster?
    The PRIME MINISTER: As I have just stated, the Lord Privy Seal is a member of the Committee, and the Chancellor of the Duchy is not.
    Mr. HARRIS: What duties has the Lord Privy Seal, besides sealing documents, in order to earn his salary?
    The PRIME MINISTER: The Lord Privy Seal has heavy responsibilities placed upon him to co-operate with his fellow-Ministers in this Committee in dealing with unemployment policy.
    Mr. CHURCHILL: Is it not a fact that as a result of this reorganisation of offices another brand-new first-class office with £5,000 a year has been created and added to the Ministerial list, without any countervailing economy?
    The PRIME MINISTER: That is perfectly incorrect. The two offices were in existence before, but for certain reasons that were totally inadequate they were not actually separated. Two Under-Secretaries have been appointed, and what has been done is to give the Dominions the proper status that they ought to have in the government of the country.
    Mr. CHURCHILL: Setting aside all these details, is it not the fact that we are actually paying more for the present Administration than for any other Cabinet which has ever yet been seen?
    The PRIME MINISTER: So far as the new appointments to the Dominions are concerned, His Majesty's Government have no intention of asking that work should be done by charity.

  WEST INDIES (SUGAR INDUSTRY).
  Sir K. WOODasked the Prime Minister whether he has received a copy of the recent resolution, passed on the initiative of the West Indian chambers of commerce by the congress of chambers of the British Empire, calling upon the Government to save the sugar industry of the Empire and to recognise the necessity of immediate relief; and what action he is taking in the matter?
  The PRIME MINISTER: The answer to the first part of the question is in the negative. The second part, therefore, does not arise.
  Sir K. WOOD: Is not the right hon. Gentleman aware of the anxiety which exists in this particular quarter?

  INSTALMENT PURCHASE SYSTEM.
  Mr. ARTHUR MICHAEL SAMUELasked the Prime Minister whether he will for the guidance of British firms producing for home consumption, request the Committee of Civil Research to examine and report upon the ultimate reaction upon employment caused by inflation of power to purchase unreproductive luxuries and the effect the creation of consumers' credit by the instalment system has had upon the financial and industrial crisis in the United States of America?
  The PRIME MINISTER: I am obliged to the hon. Member for his suggestion which will be noted.

  PUBLIC PARKS.
  Mr. ALBERYasked the First Commissioner of Works whether he proposes to make arrangements by which the public parks will remain open at night?
  Mr. BEN SMITH (Treasurer of the Household): My right hon. Friend does not at present contemplate any alteration in the times for opening and closing the public parks under his Department's charge.
  Mr. ALBERY: Is the hon. Member aware that his right hon. Friend has described the closing of the parks at night as tomfoolery?

  IMPERIAL CONFERENCE.
  Captain P. MACDONALDasked the Secretary of State for Dominion Affairs whether it is intended by the Empire Marketing Board to hold a special display or exhibition in connection with the Imperial Conference, or otherwise, to acquaint the delegates with the nature of its activities?
  The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): The work of the Empire Marketing Board will no doubt be reviewed at the Imperial Conference, but it is not the Board's present intention to organise any special display or exhibition.
  Captain MACDONALDasked the Secretary of State for Dominion Affairs whether he intends to make any statement

  1141
  as to the composition of the agenda for the forthcoming Imperial Conference and as to the items to be placed thereon by the Government?
  Mr. THOMAS: I would refer the hon. and gallant Member to the reply which I gave to the hon. Member for Newcastle North (Sir N. Grattan-Doyle) on the 18th June and to which I am not in a position to add anything.
  Mr. CHURCHILL: Surely there is ample precedent for a very full preliminary statement by the Government in respect of the Imperial Conference as to the main topics which will be admissible at their discussions?
  Mr. THOMAS: I am not concerned with precedents, but the common sense on the situation, which the right hon. Gentleman knows better than anybody else, is this, that the agenda must be agreed upon by those participating in the Conference. Negotiations are taking place now, and, when they are completed and we have an agenda set up by agreement there will be no objection, as far as the Government are concerned, to answer any question in the House. I indicated last week, in the reply to a question on this point, that, as far as the Government were concerned, we intend that no subject shall be excluded which will be of general benefit to the Empire.
  Mr. CHURCHILL: May we take it that there will be a statement made on behalf of the Dominions Office and the Government generally as to the scope and character of the Conference before we separate for the holidays?
  Mr. THOMAS: There will be no objection, but I understand that my salary, which I have not yet earned, is to be reduced to-morrow, and perhaps that will be an appropriate opportunity for the right hon. Gentleman.

  INDIA (PATIALA STATE).
  Colonel WEDGWOODasked the Secretary of State for India on what grounds an official connected with Patiala State has been selected to investigate the charges against the Maharaja and invested with absolute powers for such investigation?
  The SECRETARY of STATE for INDIA (Mr. Wedgwood Benn): It is in accordance with the usual and natural procedure for investigating allegations of the kind in question that the inquiry to which my right hon. and gallant Friend refers should be conducted by the Agent to the Governor-General in the Punjab States in whose agency Patiala is included.
  Colonel WEDGWOOD: Will exactly the same procedure be followed as in the case of the inquiry into Nabha and Indore? Was the agent then the person holding the inquiry?
  Mr. BENN: As regards individual cases I require notice.
  Colonel WEDGWOOD: It has been the invariable practice, I believe?
  Mr. BENN: It has been the usual and natural procedure.
  Mr. THURTLE: Is my right hon. Friend aware that the Montagu-Chelmsford report suggested that in cases of maladministration in native States the inquiry should be of a judicial character conducted by a judicial commission, and not of the nature of the inquiry that my right hon. Friend is proposing now?
  Mr. MARLEY: Is the Secretary of State not aware that the people of the native States made a request that there should be three High Court Judges appointed to this inquiry and that this name was actually suggested by Patiala as the person who should conduct the inquiry?
  Mr. BENN: I do not deny any of the assertions made. That may be so; but I stated in my reply that we have followed the usual and natural procedure in this case.
  Earl WINTERTON: Is this the inquiry that the Maharaja himself asked for, or did the request made by the Maharaja to the Government of India refer to a pending libel action which he is bringing?
  Mr. BENN: I would be grateful for notice of that question.
  Mr. MACLEAN: Seeing that the natural and usual procedure is being objected to, will the Secretary of State not depart from it in this case?

  WAR OFFICE LANDS.
  Mr. EDEasked the Secretary of State for War if he will state the acreage of land belonging to his Department and subject to rights of common at the time of its acquisition by his Department which was sold by auction in the seven years ended 31st December, 1929?
  The SECRETARY of STATE for WAR (Mr. T. Shaw): During the seven years ended 31st December, 1929, no such land was sold by auction.

  COMMONS AND WASTE LANDS.
  Mr. EDEasked the Minister of Agriculture if he has yet issued a circular to lords of the manor pointing out the advantages to them and to the public of executing deeds under Section 193 of the Law of Property Act, 1925?
  The MINISTER of AGRICULTURE (Dr. Addison): As the names of most lords of manors and other persons entitled to the soil of commons are unknown to my Department, the issue of a circular, such as my hon. Friend suggests, would not be practicable. I am, however, arranging for the publication of a notice dealing with the matter.

  SMALL HOLDINGS.
  Mr. ROSBOTHAMasked the Minister of Agriculture whether he can give an estimate of the latest demand for small holdings from suitable applicants if facilities were provided direct by the State?
  Dr. ADDISON: The number of unsatisfied applicants registered by councils in England and Wales at the 31st December, 1929, was 5,369, of whom 2,152 had been definitely approved as suitable and the remainder were awaiting investigation of their qualifications. These figures take no account of a latent demand which undoubtedly exists. No data exist for estimating the extent of the demand that would be revealed if facilities were provided direct by the State, but it would certainly be considerable.

  SCOTLAND.

    EDUCATION (SIZE OF CLASSES).
    Mr. SCOTTasked the Secretary of State for Scotland (1) whether he can state the average number of pupils per teacher in post-qualifying classes for the 1st, 2nd, 3rd, 4th, 5th, and 6th years, respectively;
    (2) whether he can state the number of primary classes in Scottish schools in which one teacher has to teach 30, 40, 50, or more pupils; and whether he will take steps to ensure that these classes are limited to a maximum of 30 pupils for each teacher?
    The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Johnston): The information available in the Department does not permit me to give all the figures asked for. In October, 1929, there were in the first three years of post-qualifying instruction, 4,758 classes with 40 pupils and under on the roll, and 221 with more than that number on the roll. In the later years of post-qualifying instruction there were at the same date 600 classes with 30 pupils and under and 47 classes with more than 30 pupils. As to the primary classes, the number exceeding the Code limit of 50 pupils habitually under the charge of one teacher is now negligible. I am afraid that it is impracticable at the present time to reduce that limit to 30.

    FISHING INDUSTRY (SEINE NETS).
    Mr. SCOTTasked the Secretary of State for Scotland whether he is aware that the Order of the Fishery Board for Scotland, dated 17th June, 1929, fixing the length of boat for seine-net fishing at 40 feet and the mesh of the net at 2¾ inches, and the size of flat fish caught at 10 inches, is causing hardship to the fishermen on the Kincardineshire coast, and particularly at Gourdon, in respect that many of their boats are slightly over 40 feet and that they would have to purchase new nets to comply with the Order as to the mesh but have no funds to do so and no Government assistance has been offered to fishermen for this purpose, and that the catch of fish at Gourdon has been reduced in consequence of the Order; if he will state whether evidence of the fishermen was taken in regard to these matters before the Order was issued; and whether he will, in the

    1145
    circumstances, be prepared to hear evidence now as to whether the Regulations previously in force were prejudicial to the fishing and to consider a modification of the terms of the Order on the matters mentioned in order to prevent many fishermen in the district being deprived of their livelihood and the fishing industry there being crippled?
    Mr. JOHNSTON: The limit as to the size of boat has not been changed since the concession to use this particular method of fishing in the area in question was sanctioned in 1917. The amended by-law made last year was duly advertised and opportunity was given to fishermen affected to make representations, but no objection with regard to the alteration in the mesh, which affects only part of the net, was received either from Gourdon or elsewhere. I understand that some Gourdon fishermen have complied with the new requirements, which are requisite for the conservation of the stock of fish. Any representations which the fishermen may wish to make will be fully considered.

    CREAM PRESERVATIVES (REGULATIONS).
    Dr. HUNTERasked the Secretary of State for Scotland if he has made any decision in connection with the request which he recently received from a deputation representing the creamery proprietors and wholesale dairymen throughout the country to rescind or amend the Cream Preservative Order?
    Mr. JOHNSTON: After careful consideration of all the medical and other evidence available and after consultation with my right hon. Friend the Minister of Health, She Secretary of State regrets that he cannot see his way to authorise the withdrawal or amendment of the provisions of the Preservatives Regulations relating to cream.
    Dr. HUNTER: Is the hon. Gentleman aware that this Order has had a disastrous effect on the cream industry? Does he not think that the decision reached will hasten the industry's ruin, and does he think it justifiable that the public should be robbed of this highly nutritous food?
    Mr. JOHNSTON: As the hon. Gentleman is aware, we did hear very careful representations made on behalf of the cream industry, but the hon. Gentleman
    1146
    may not be aware that we have had representations from other sections of the cream industry which have built up a trade under the new Regulations, and that they have protested against the Regulations being cancelled or amended; and, further, the overwhelming weight of medical testimony was against any amendment.
    Mr. MACLEAN: Do we understand that the Regulations of the Scottish Office are made in order to safeguard trade rather than help?
    Mr. JOHNSTON: No. The Regulations are made primarily in the interests of health.
    Mr. MACQUISTEN: Is the Under-Secretary satisfied that the creamery industry can be carried on without these Regulations?

  MR. GIALDINI (PROSECUTION).
  Mr. WHITEasked the Secretary of State for the Home Department if any communications have been exchanged recently with the Italian Government in reference to Mr. Gialdini; and if there is any change in the position of this matter?
  The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Short): Gialdini is being prosecuted in Italy by the Italian authorities. A request in the usual form for certain evidence to be taken in this country has been received and is being complied with. Some of the evidence has already been sent and the remainder will follow in due course.
  Mr. WHITE: Does that mean that an application will be made to expedite this process in due course?

  POLICE COURTS (MATRIMONIAL CASES).
  Mr. MILLSasked the Home Secretary if his attention has been called to the proportion of marital cases coming before local justices; and whether he proposes to introduce a Bill to establish matrimonial courts?
  Mr. SHORT: Many applications for separation and for maintenance come before justices. My right hon. Friend is unable to promise legislation transferring them to a new kind of court.

  INCOME TAX.

    CONSOLS AND CONSULAR AGENTS (TREASURY CONCESSION).
    Sir A. CHAMBERLAINasked the Chancellor of the Exchequer in which report and paragraph of the Public Accounts Committee during the period when the President of the Board of Trade was chairman was the continuance of the relief of Consuls from Income Tax under a Treasury concession criticised?
    The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): I do not know of any report of the Public Accounts Committee which referred expressly to the relief of Consuls from Income Tax. What I had in mind was the Committee's well-known desire that the extra-statutory exemption of which this was an instance should be strictly limited and legalised whenever possible. Numerous references can be found to the subject in the recent proceedings of the Committee, as for instance in their Minutes of Evidence of the 28th February, 1928, Questions 121 and 150, and 29th January, 1929, Questions 86 and 103.
    Sir A. CHAMBERLAIN: The Chancellor of the Exchequer referred specifically to a report of the Public Accounts Committee made while his colleague the President of the Board of Trade was Chairman. He now refers me only to the minutes of evidence. Is there no passage in the report such as he led us to suppose existed?
    Mr. SNOWDEN: As I stated before, the Public Accounts Committee have—I believe on many occasions—drawn attention to this question of extra-statutory concessions and have recommended that as far as possible legal sanction should be given to them. One part of their report deals with a matter which I believe arises from the right hon. Gentleman's next question and perhaps I had better wait until then before referring to it, but the point which appears to be in the mind of the right hon. Gentleman is as to whether there has been a specific reference to the case of consuls. Well, perhaps my first reference to that matter did give that impression, but, as the right hon. Gentleman is aware, I later on corrected that, and said that the case of consuls was included in the general reference which the Committee had made.
    Sir A. CHAMBERLAIN: I am grateful to the right hon. Gentleman for his statement and indeed I put down my question in order to give him an opportunity of correcting what I thought was a misapprehension. May I ask him whether there is any other reference on which he relies except the one in the report of 1913, to which he has referred, made at a time when the President of the Board of Trade was not only not Chairman but was not even a member of the Committee?
    Mr. SNOWDEN: I think that the reply to the next question, in which the right hon. Gentleman asks if reports have been made to the Accountant-General in regard to how far these recommendations of the Public Accounts Committee have been carried out, will probably clear up that point.
    Sir A. CHAMBERLAINasked the Chancellor of the Exchequer whether all cases covered by the recommendation which concludes paragraph 14 of the Second Report of the Public Accounts Committee, 1913, have now been given statutory sanction; if not, what cases still remain uncovered; and whether a periodical return of such cases is made by the Board of Inland Revenue to the Treasury and is accessible to the Comptroller and Auditor-General, as recommended by the Committee?
    Mr. SNOWDEN: No, Sir, it has not been practicable to give statutory sanction to all of them. Periodical returns are made by the Board of Inland Revenue to the Treasury and are accessible to the Comptroller and Auditor-General. The last returns were made in 1928 and were dealt with by the Comptroller and Auditor-General in his report on the Revenue Departments Appropriation Accounts for 1927.

    UNEMPLOYMENT GRANTS.
    Mr. E. BROWNasked the Minister of Labour whether, in her negotiations with local authorities and other bodies in respect of unemployment grants for accelerated works of a revenue-producing character, such as electricity undertakings, they are informed that such grants are liable to Income Tax at the full rate; if so, in what circular is this information contained; and will she make it available to Members of this House?
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Lawson): The answer to the first part of the question is in the negative and the second and third parts therefore do not arise.

  NEW COINAGE.
  Mr. FREEMANasked the Financial Secretary to the Treasury when the first issue of new coinage for 1930 was made?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): The first issue of new coinage for 1930 was made on the 14th February, 1930.
  Mr. FREEMAN: Is it not possible for the new coinage to be issued on 1st January of each year?
  Mr. McSHANE: And for a supply to be given to Members of this House?
  Mr. PETHICK-LAWRENCE: The hon. Member must put down that question.

  AIRSHIP R100.
  Mr. CHARLES WILLIAMS (for Mr. D. G. SOMERVILLE)asked the Under-Secretary of State for Air the cost of repairing R100 after her recent flight; what was the exact nature of the damage sustained; what are the plans for her Canadian visit; what is the annual upkeep of an airship; and how much of the total cost is written off annually for depreciation?
  Mr. MONTAGUE: The answer to the first part of the question is, exclusive of overhead charges, £675, of which £490 has been spent or incurred to date. As regards the second part, I would refer the hon. Member to my reply to him on 28th May. As regards the third part, the repairs are due for completion by the end of this month, but, at the request of the Canadian authorities, the flight to Canada is being postponed until after the close of the Canadian elections on 28th July. The airship will probably stay some 14 days in Canada; the question of flights from Montreal will be settled between the Canadian authorities and the Director of Airship Development after her arrival. With regard to
  1150
  the two last parts of the question, one of the objects of the present scheme of development is to obtain information as to the normal cost of maintenance and length of life of airships of this type; it is, however, less than nine months since R100 and R101 started their trials and further experience will be necessary before any reliable figures can be given.

  QUESTIONS TO MINISTERS.
  The following Question stood on the Order Paper in the name of Mr. FOOT:
  28. "To ask the Under-Secretary of State for the Colonies if he can now make any communication to the House relative to the consultations between the Prime Minister of Malta and His Majesty's Ministers?"
  Colonel WEDGWOOD: On a point of Order. May I call attention to the fact, Sir, that you have passed over Question No. 28 in the name of the hon. Member for Bodmin (Mr. Foot) which I have been requested to ask.
  Mr. SPEAKER: The hon. Member was not present, and so I did not call the question again.

BUSINESS OF THE HOUSE.
Mr. STANLEY BALDWIN: May I ask the Prime Minister if he can make any statement as to the business for the remainder of the Session?
The PRIME MINISTER: The Government propose to proceed with the following major Bills which are already well advanced, with a view to their passage into law before the close of the Session:

Coal Mines Bill.

Road Traffic Bill.

Housing (No. 2) Bill.

Housing (Scotland) Bill.

Land Drainage (No. 2) Bill.

The situation arising from the action taken in another place on the Coal Mines Bill is engaging the attention of the Government, and, in considering the programme for the rest of the Session, provision must be made for time on that Measure. In addition, it is proposed to complete the following Bills which, being mainly of a non-controversial character, and having already made considerable

1151
progress, are not expected to entail a large expenditure of Parliamentary time:

Air Transport (Subsidy Agreements) Bill.

Overseas Trade Bill.

Sea Fisheries Regulation (Expenses) Bill.

Reservoirs (Safety Provisions) Bill.

Workmen's Compensation (Silicosis) Bill.

Collecting Charities (Regulation) Bill.

Navy and Marines (Wills) Bill.

Invergordon Water Supply Bill.

Board of Education Scheme (Devon Crediton Exhibition Foundation) Confirmation Bill.

It is proposed to introduce in another place a Bill for the establishment of a Court of Criminal Appeal in Northern Ireland and a Bill to amend the British North America, Acts to give effect to an agreement recently reached between His Majesty's Government in Canada and the Provinces of Manitoba, British Columbia, Alberta and Saskatchewan.
I am informed that these Bills are likely to command general assent; in that event, time will be found for their passage into law as early as possible. It will be necessary also to pass a Bill making provision for additional resources for the Unemployment Insurance Fund, and it is hoped to find time to pass through all stages a Bill to give statutory effect to certain provisions of the London Naval Treaty affecting shipbuilding firms in this country.
There remains the normal essential financial business of the Session, including the business of Supply, the Appropriation Bill, the further stages of the Finance Bill, and the Public Works Loans and Isle of Man (Customs) Bills.
The question as to whether emergency legislation is necessary relating to unemployment is under consideration at the present moment between representatives of local authorities and the Government, and should the Government come to a decision that something has to be done in that respect, time will have to be provided.
It is the intention of the Government to advise the prorogation of Parliament as soon as this programme is completed.
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It is not possible to forecast precisely the time that will be required for this purpose, but I am hopeful that it will be possible, by conversations through the usual channels, to arrange for adequate discussion of the Measures included in this statement and for the conclusion of the Session about the end of July.
It is a matter of great regret to me that the exigencies of time do not permit of the inclusion in the above programme of the Consumers' Council Bill and the Education Bill. I wish to make it clear, however, that these important Bills could not receive adequate consideration this Session without unduly prolonging our proceedings. It is proposed to carry out our intention to pass into law before the end of the calendar year a Measure to extend the school-leaving age. The Consumers' Council Bill will be reintroduced on the re-assembly of the House and passed into law as soon as possible.
In order to deal with the postponed business, it is our intention that Parliament should re-assemble before the end of October.
Colonel WEDGWOOD: May I ask my right hon. Friend whether all question of the Land Valuation Bill is dropped? And is he aware that the Land Drainage Bill will certainly meet with considerable opposition in this House?
The PRIME MINISTER: Regarding the first Bill, it will be postponed so far as this Session is concerned only. Regarding the second Bill, I think it would be a great loss of time if that Bill were not proceeded with now that it has gone through another place and is in Committee upstairs.
Mr. MACPHERSON: Could not the Government give facilities for the Bill introduced by my hon. Friend the Member for Kincardine (Mr. Scott), dealing with Scottish land, which has already gone through its Committee stage upstairs and a part of its Report stage?
The PRIME MINISTER: I regard that Bill with profound sympathy, but unfortunately there are about 13 other Bills in the same list, and it is quite impossible to select one and sacrifice all the others.
Mr. S. BALDWIN: I have not had the time to study this programme. We are all anxious to get away at the end of July if possible, but I do not know

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whether the right hon. Gentleman has realised that if you allow for Supply and the Appropriation Bill, it will only leave 14 Parliamentary days for the whole programme, and I am afraid I must warn him that, however pleasantly the usual channels may flow, it is a physical impossibility, if I may use a metaphor which will be familiar to everybody in the House, even the Noble Lady the Member for the Sutton Division (Viscountess Astor) to get a quart into a pint pot.
The PRIME MINISTER: We are always coming across the truth of the homely metaphor that has just been used, but the Bills that have been read out in the first instance—the Coal Mines Bill and so on—have already occupied a good deal of the attention of this House, and their stages are as near as no matter now the winding-up stages.
Sir A. CHAMBERLAIN: Is not one Bill, the last named, I think, of those in his first list, a Bill which only received its Second Reading yesterday and has not yet gone through Committee? [Interruption.] I agree that it is not a controversial Bill, but it is a Bill which requires some discussion, and you cannot call a Bill which was only read a Second time yesterday an advanced Bill. A further question that I should like to ask the right hon. Gentleman is this: In the sketch which he has made of the programme of business which he thinks will enable us to wind up the Session by the end of July, how much time has he allowed for the rest of the Committee and the later stages of the Finance Bill? I think he will find there is not enough.
The PRIME MINISTER: As a matter of fact, we have allowed a certain number of days which I think is very liberal. We have compared them with what has been done in previous years. After to-day, if the right hon. Gentleman will put his question, I think we shall be able to venture upon a figure. I could give him a figure now, but I would prefer to wait until the end of to-day's sitting. This programme of Bills, I am afraid, must be gone through before we adjourn in July.
Mr. WISE: Is it the intention of the Government to propose to the House any
1154
emergency Measures dealing with unemployment before the House adjourns? If so, will the Government ask the House to sit into August and to pass those Measures?
The PRIME MINISTER: I have included that in my statement.
Sir K. WOOD: What about the Trade Disputes Bill?
Mr. DENMAN: Is my right hon. Friend aware that a clear majority of the party submitted, in writing, a request that they should be able to sit into August so as to carry the remaining stages of any Bills delayed, and can he give any assurance that children of 14 will begin to be taken off the market in April of next year unless that Bill is passed?
The PRIME MINISTER: If I could get a guarantee from any section of this House that that business would be done by sitting into August, the business would be done, but there is no such guarantee possible.
Mr. E. BROWN: Is the trouble not so much inside this House as outside this House?

REDUCTION OF WAGES (PREVENTION).
Mr. KIRKWOOD: I beg to move:
"That leave be given to bring in a Bill to make the reduction of wages illegal."
In introducing this Bill, I am asking the House to agree to one partial solution of the problem of unemployment. My proposal is that there should be no further reduction of the workers' wages in Great Britain. It is possible that there will be opposition, one reason being that a Bill of this description has never before been put before the House, and therefore, because there is no precedent for it, there is a certain mentality, not only in the House but in the country, which considers that it is no good. There is also another type, again not only in the House but also in the country, which always considers, when

1155
we are in any industrial trouble, that the way out of that trouble is a reduction in wages. Thirdly, there are amongst my colleagues those who say that this is not a question for this House, and that we politicians should leave it to the trade unions and the employers. I have been a member of a trade union, the Amalgamated Engineering Union, for the last 37 years, and I am satisfied, as I go all over Britain, that it is not the workers who will object to my introducing this Bill, that if they had thought, as some trade union leaders think, that this is a business for the trade unions, there would have been no use in their financing the Labour party. It is because I, as a Labour Member of Parliament and a Socialist, believe that we are here giving political expression to the great trade union movement, that this Bill going through this House will leave the trade union movement free to fight for better conditions of labour and reduction of hours, aye, and increased wages.
My own union is a clear example of what I mean. For years, and not a matter of months, we have been negotiating, through the Engineering and Shipbuilding Federation of Great Britain, for increased wages for the shipbuilding and engineering workers of the country, and, after years of negotiations, and with all the power of the unions behind the negotiations, all that we were able to get was a farthing an hour. What is pressing me on to introduce this Bill is that we are faced in this country at the moment with the fact that the great trade union movement was not able to save a great reduction of wages in the cotton industry, and it is not able to save a reduction of wages in the woollen industry. Now I fear that, unless the Government safeguard the workers by the passing of this Measure, we shall be confronted with a reduction of wages in engineering and general shipbuilding, iron and steel, coal mining, and, immediately before us, the great building industry. I always have at the back of my mind that it was my great colleague, the late Minister of Health in the Labour Government of 1924, who gave the building industry in this
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country a fillip at that time, and I see nothing in the immediate future that is going to save it than for the Government to push this Bill of mine through the House immediately.
We are faced, as has been said by all authorities and all parties in this House, with a serious world-wide unemployment problem, not with a scarcity of anything, but all over the world a superabundance of shipping, of coal, of food and clothing—in fact, of all the necessaries and even the luxuries of life, and, alongside of that, millions of hungry men, women and children, not only hungry but unemployed. Along come the experts, and now there is suggested to us an Economic Council to deal with the situation. Why, the Tories had all these experts and so had the Liberals! These are the men, if there are any to blame, who have brought us into this mess, and it is because I believe that the only solution for the strange phenomena before us at the moment, is the Socialist solution. Since 1920, the weekly reduction in the workers' wages in this country amounts to the colossal sum of £11,808,850. Britain should take the lead in this matter. That is why I am bringing in this Bill.
Question put, and agreed to.
Mr. SPEAKER: Who is prepared to bring in the Bill?
Mr. KIRKWOOD: Mr. Maxton, Mr. Buchanan, Mr. Stephen. Mr. Sandham, Mr. Brockway, Mr. Wallhead, Mr. Kinley, Mr. Beckett, Mr. Brown, Mr. Kelly, myself, and a host of others.

REDUCTION OF WAGES (PREVENTION).

  REDUCTION OF WAGES (PREVENTION) BILL,
  "to make the reduction of wages illegal," presented accordingly, and read the First time; to be read a Second time upon Monday, 7th July, and to be printed. [Bill 217.]
  Sir A. CHAMBERLAIN: On a point of Order. When you called upon the hon. Member to give the names of those who are prepared to introduce the Bill, he used an unusual and, I think, an unprecedented formula. I should like to know whether, as a matter of Order, any names can appear on the back of the Bill except the names given by the hon. Member to you when called upon?
  Mr. SPEAKER: I understand that there are 11 names on the back of the

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  Bill, which is quite proper. It was only that the hon. Member used rather picturesque language in describing them.

STANDING ORDERS.
Resolution reported from the Select Committee:
"That, in the case of the London County Council (Improvements) [Lords], Petition for Bill, the Standing Orders ought to be dispensed with:—That the parties be permitted to proceed with their Bill."
Resolution agreed to.

MESSAGE FROM THE LORDS.
That they have agreed to,—

Ministry of Health Provisional Orders (Ashby-de-la-Zouch and Slough) Bill,

Ministry of Health Provisional Orders (Aylesbury, Chesham and Guildford) Bill,

Ministry of Health Provisional Order (Hexham) Bill,

Ministry of Health Provisional Orders (Chippenham and Grimsby) Bill,

Ministry of Health Provisional Orders (Brantford and Chiswick and Ramsgate) Bill, without Amendment.

Stockton-on-Tees Corporation (No. 1) Bill (Certified Bill), with Amendments.

Amendments to—

Epsom Rural District Council Bill [Lords],

Guildford Rural District Council Bill [Lords], without Amendment.

That they have passed a Bill, intituled, "An Act to authorise the London United Tramways, Limited, to provide services of trolley vehicles and to abandon their tramways and light railways; to confer upon them additional powers; and for other purposes." [London United Tramways Bill [Lords.]
Coal Mines Bill,—That they do not insist on certain of their Amendments to the Coal Mines Bill to which the Commons have disagreed, but propose an Amendment to one of the said Amendments, and an Amendment in lieu of one other of the said Amendments; that they
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have made a consequential Amendment to the Bill; and that they insist on certain other of their Amendments, for which insistence they assign their Reasons.

MESSAGE FROM THE LORDS.
  STOCKTON-ON-TEES CORPORATION (No. 1) BILL (CERTIFIED BILL).
  Lords Amendments to be considered To-morrow, pursuant to the Order of the House of 11th December.
  LONDON UNITED TRAMWAYS BILL [Lords].
  Read the First time; and referred to the Examiners of Petitions for Private Bills.
  COAL MINES BILL.
  Lords Reasons for insisting on certain of their Amendments, Lords Amendment to one Amendment, and Lords Amendment in lieu of one other Amendment to which the Commons have disagreed, and Lords consequential Amendment to the Bill, to be considered upon Monday next, and to be printed. [Bill 218.]
SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE A.
  Mr. FREDERICK HALL reported from the Committee of Selection; That they had added the following Ten Members to Standing Committee A (in respect of the Workmen's Compensation (Silicosis) Bill [Lords]); Dr. Vernon Davies, Major Elliot, Lieut.-Colonel Fremantle, Mr. Kingsley Griffith, Mr. Hacking, Dr. Hastings, Mr. Hoffman, Mr. Hollins, Mr. Short, and Mr. Watkins.
  Mr. FREDERICK HALL further reported from the Committee; That they had added the following Ten Members to Standing Committee A (in respect of the Reservoirs (Safety Provisions) Bill [Lords]); Mr. Balfour, Mr. Thomas Griffiths, Mr. Llewellyn-Jones, Major Llewellin, Mr. Mathers, Sir Basil Peto, Mr. Short, Mr. Solicitor-General, Commander Southby, and Mr. Watkins.
  Mr. FREDERICK HALL further reported from the Committee; That they had added the following Ten Members to Standing Committee A (in respect of the Navy and Marines (Wills) Bill): Mr. Ammon, Read-Admiral Beamish, Sir Bertram Falle, Mr. David Grenfell, Mr. Hore-Belisha, Commodore King, Mr.

  1159
  Lawrie, Mr. Longden, Major Ross, and Mr. Solicitor-General.

  STANDING COMMITTEE B.
  Mr. FREDERICK HALL further reported from the Committee; That they had added the following Ten Members to Standing Committee B (in respect of the Prevention of Corruption Bill): Mr. Attorney-General, Sir Godfrey Dalrymple-White, Mr. Arthur Henderson (Cardiff, S.), Mr. McEntee, Mr. MacRobert, Mr. Mander, Sir Assheton Pownall, Mr. Short, Mr. Watkins, and Viscount Wolmer.
  STANDING COMMITTEE C.
  Mr. FREDERICK HALL further reported from the Committee; That they had added the following Twenty Members to Standing Committee C (in respect of the Land Drainage (No. 2) Bill [Lords]): Dr. Addison, Sir Henry Cautley, Viscount Elmley, Mr. Guinness, Mr. Haslam, Captain Robert Henderson, Lieut.-Colonel Heneage, Mr. Kedward, Sir Joseph Lamb, Major Milner, Mr. Raynes, Mr. Benjamin Riley, Mr. Rosbotham, Lieut.-Colonel Ruggles-Brise, Mr. Walter Smith, Mr. Annesley Somerville, Mr. Robert Taylor, Mr. William Taylor, Mr. Wells, and Mr. Thomas Williams.

  SCOTTISH STANDING COMMITTEE.
  Mr. FREDERICK HALL further reported from the Committee; That they had added the following Ten Members to the Standing Committee on Scottish Bills (in respect of the Adoption of Children (Scotland) Bill): Viscountess Astor, Mr. Cameron, Countess of Iveagh, Mr. Lovat-Fraser, Mr. Malcolm MacDonald, Mr. MacLaren, Sir Robert Newman, Mr. Philip Oliver, Major Graham Pole, and Miss Rathbone.
  Reports to lie upon the Table.

CHAIRMEN'S PANEL.
Mr. FREDERICK HALL reported from the Chairmen's Panel; That they had appointed Mr. Cecil Wilson to act as Chairman of Standing Committee A (in respect of the Workmen's Compensation (Silicosis) Bill [Lords], the Reservoirs (Safety Provisions) Bill [Lords], and the Navy and Marines (Wills) Bill); Mr.
1160
James Gardner to act as Chairman of Standing Committee B (in respect of the Prevention of Corruption Bill); Mr. Leif Jones to act as Chairman of Standing Committee C (in respect of the Land Drainage (No. 2) Bill [Lords]); and Mr. James Brown to act as Chairman of the Standing Committee on Scottish Bills (in respect of the Adoption of Children (Scotland) Bill).
Report to lie upon the Table.

ORDERS OF THE DAY.

  FINANCE BILL.
  Further considered in Committee. [Progress, 23 rd June.]
  [Mr. ROBERT YOUNG in the Chair.]

  FINANCE BILL.

    CLAUSE 29.—(Estate Duty where property of deceased has been transferred to private company.)
    Sir DENNIS HERBERT: Before the Committee enters upon the discussion of this Clause, I desire to submit to you a matter for your Ruling, Mr. Young, of which I have already given you notice. May I make this preliminary observation? I raise this point, not as a party matter, but as a matter affecting the control of the House of Commons over financial procedure as against the executive Government of whatever party, and it is, therefore, for a very much more serious reason than any of those questions which we are accustomed to discuss across the Floor of the House on the Finance Bill. May I also say, by way of supporting that, that in the event of my contention being correct, no time would be lost in regard to this Bill, for the reason that the result of my intervention, if successful, would be, at the worst, that the Chancellor of the Exchequer would have to put down new Clauses in place of these, either with or without any new Resolution. And now that he has heard the criticisms and seen the large number of Amendments on the Paper, many of which, I understand, he is willing to accept, at least in principle, if he were to put down new Clauses on the lines of the Amendments he is prepared to accept, probably the time occupied would be very much less.
    With that observation to explain my submission, I would say that the submission I desire to make to you is, that Clauses 29 to 33, both inclusive, are out of order, on the ground that they are not authorised by the necessary Financial Resolution. The Clauses, apparently, are based on the 13th Resolution, which, in dealing with what may be described as the subject to be taxed, refers to "a company." The Clauses, on the other hand, propose to tax, under the definition given of private companies, companies which
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    are not within the jurisdiction of this Parliament. There will be several points which I shall have to submit to you in the course of raising the whole question, and, if at any time you can see fit to say that on a particular point you are with me, it may possibly save time. I must, in a matter of this importance, put my points very carefully in compartments, and not fail to draw attention to each point in proper sequence. The first point is that Clauses which tax companies outside the jurisdiction of this Parliament are not within the 13th Resolution, which deals only with "company." On that, I suggest that the matter is clear beyond dispute, for this reason, that in all our proceedings here—Motions, Resolutions and Acts of Parliament—the word "company" is habitually used without qualification or addition, and, as we endeavour not to do absurd things in this House, it cannot under these circumstances apply to companies which are not under the jurisdiction of Parliament.
    May I refer in support of that to another word, the use of which is analogous to the use of the word "company"; that is, the word "person"? The word "person" appears in our Parliamentary proceedings very frequently in all Acts of Parliament without any qualification limiting it in words to persons who are within the jurisdiction of this Parliament. If, therefore, it were to be held that the word "person," when used in our proceedings, was not confined to persons within the jurisdiction of this Parliament, it would have the curious result that all our legislation and all our proceedings would purport to affect and to bind all foreigners who are the subjects of other countries all over the world, who might be described as persons, although they may never have resided in or have had any connection with this country. I ought also to call attention to the fact that the word "company" with which we are dealing here is included in the word "person" under the Interpretation Act of 1889. Therefore, I think that I am justified in saying that the analogy between the use of the word "company" and the use of the word "person" is complete, and that it would reduce matters to an absurdity if the word "company," used without qualification, were to be held to extend to foreign

    1185
    companies not within the jurisdiction of this Parliament. I use that expression "not within the jurisdiction of this Parliament" because, of course, companies which are registered outside this country are sometimes within the jurisdiction of Parliament, because they carry on business here and have a registered office here. The same thing applies, of course, to the word "person." Our legislation properly applies to persons in this country, whether British subjects or not, but they must be within the jurisdiction of this Parliament. That is a matter which is almost self-evident, and is a matter of common sense.
    I am able to quote a definite precedent for what I am advocating, as a position similar I think in every respect to the point which I am raising now, arose as lately as 1922 in connection with the Finance Bill of that year. Hon. Members who were in the House then, and a great many others, will remember that in that year the Finance Bill contained Clauses to deal with what were popularly known as one-man companies. In considering the proposals of the then Chancellor of the Exchequer in that Finance Bill, the word "company" was used in the same kind of way in which it is proposed to be used in these Clauses here. The hon. Member for Watford (Sir D. Herbert) at that time pointed out that the object of the Clause might be defeated by not getting in foreign companies, and being a much less experienced Member of Parliament than he is now, he put down an Amendment to add after the word "company" the words "whether incorporated in the United Kingdom or elsewhere"—practically the same as is done in this Bill where, after the word "company," appear the words "wheresoever incorporated." The Amendment was ruled out of order by the then Chairman of Ways and Means (Mr. James Hope), and the point is explained in a speech which follows immediately after the announcement of the Chairman, who said:
    "The Amendment standing in the name of the hon. Member for Watford (Mr. D. Herbert) is not in order, but he has put in a revised version which would be in order."—[OFFICIAL REPORT, 20th June, 1922; col. 1222, Vol. 155.]
    The revised version of the Amendment being moved, the hon. Member explained that he had been obliged to make the
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    alteration to bring the Amendment in order, because it had been ruled out on the ground that the Money Resolution, upon which the Clause was founded, was confined to companies registered in this country. It was only confined to companies registered in this country, because it simply used the word "company" in precisely the same way as the word "company" is used in the 13th Resolution, which is one of the Resolutions upon which this Bill is founded. Perhaps I am not going too far in quoting in support of this contention the fact that that particular Ruling was referred to in the subsequent debate on the Clause in question—or rather on a revised Clause which was put in, the original one having been withdrawn—by Sir Halford Mackinder, who, in discussing the matter, said that he would have preferred a Clause drawn in the form suggested by the hon. Member for Watford, but he realised that, in, order to do that, it would require a fresh Resolution in Ways and Means. It is also important that the then Chancellor of the Exchequer, the right hon. Gentleman the Member for Hillhead (Sir R. Horne)—whose business, of course, it is to know, and who in fact is necessarily some authority on matters of this kind—at a later stage of the debate, in referring to the fact that an attempt had been made to deal with foreign companies, said that the Resolution on which this Clause was based would not allow him to deal with the matter which the hon. Gentleman raised—namely, the taxation of foreign companies.
    I hope that I have made my point to your satisfaction, that these Clauses are outside the 13th Budget Resolution. Many of my hon. and right hon. Friends on this side, and I feel sure many Members on all sides of the Committee, will realise that this is a point of far greater importance than the mere importance of it as applied to this particular instance. In those circumstances, my friends and I have gone into the matter with the greatest care, and we have endeavoured to see whether we could raise, in order to be able to meet them, any arguments against the position as we submit it to you. Therefore, I have a word or two to say in support of what I am going to ask you to do. I ask, as these Clauses transgress the Financial Resolution, that you should rule, in accordance with the

    1187
    precedent which I will quote in a moment, that you can put no question whatever upon these Clauses; in other words, that the Clauses cease to be a part of the Bill. The result, if you do that, would be that the right hon. Gentleman would then have a choice of two alternatives—he could either bring in another Resolution in Ways and Means, which would extend to companies wherever incorporated, and then put down the Clauses again in revised form, or put down new Clauses without any further Financial Resolution, if his revisions included the leaving out of foreign companies.
    It has been intimated to me that it might be suggested that this was not a proper time at which to raise this particular question, and that it ought to have been raised on the Second Reading of the Bill. It is proper that I should address myself to you on that particular point. I considered very carefully whether we ought to raise this point on Second Reading, and, having taken the best advice that I could obtain on the subject, I came to the conclusion, in accordance with that advice, that the Second Reading was not the proper time on which to raise it, but that it should be raised on reaching the Clauses in Committee. I submit that it is a well-known and recognised practice in this House that, if a portion of a Bill, which is not the main object of the Bill, requires a Money Resolution, that Resolution is usually not introduced at all, not passed through Committee, and not agreed to by the House, until after the Bill has had its Second Reading, but it is passed through Committee and agreed to by the House before the time that particular Clause is reached in Committee. In this case, the particular Clauses with which we are dealing are by no means an essential part of the Finance Bill. They are Clauses which, in accordance with a comparatively recent custom, have been introduced into the Finance Bill to stop certain loopholes whereby taxpayers avoided paying what was regarded by the Revenue as their fair share of taxation. Therefore, I submit that it is in accordance with the general practice of the House that no objection could properly be raised to these particular Clauses being outside the Resolution until the time was
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    approaching for those Clauses to be considered on the Committee Stage; and the obvious reason for that is that in this particular case it was open to the right hon. Gentleman at any moment to introduce another Money Resolution in Committee of Ways and Means to cure the defect. Again I do not need to rely entirely upon what I suggest is the practice and Well-known custom of the House. I can submit to you many important precedents on the point which I respectfully suggest cannot be over-ridden without some very serious and good reason. I am sure the Committee will understand that I speak with nothing but the greatest respect for the Chair at any time, but these were decisions not of the Chairman of Committee of Ways and Means but decisions of two of the greatest Speakers this House has had in modern times, Mr. Speaker Peel and Mr. Speaker Lowther. In the Finance Bill of 1914 there were two Clauses which it was alleged—and it was afterward admitted that it was so—were not covered by any Money Resolution which had been passed when the Budget Resolutions were passed. On the Order for Second Reading of the Finance Bill being called the matter was raised by Mr. Cassel and Sir Frederick Banbury, and Mr. Speaker Peel dealt with the matter. The reference is found in Volume 62 of the Fourth Series of the OFFICIAL REPORT, in column 1567 and the following columns.
    The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): It could not have been Mr. Speaker Peel in 1914.
    Sir D. HERBERT: I apologise if I said Mr. Speaker Peel. It was, of course, Mr. Speaker Lowther. He said:
    "The objection taken by the hon. and learned Member is that this Finance Bill goes beyond the 'leave to introduce' or its equivalent, the Bill having been introduced upon Resolutions."
    In other words, goes beyond Resolutions existing when the Order for Second Reading was made; there has been some slight alteration in our procedure since then—we have got rid of the leave to introduce. Mr. Speaker Lowther proceeded to deal with the suggestion which had been made that the Bill should be withdrawn, and said:
    "The answer which I give to that is, that the irregularity can be cured without any

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    injustice being done to any section of the House or to any interest concerned."—[OFFICIAL REPORT, 22nd June, 1914; cols. 1569–70, Vol. 63.]
    Cured, that is to say, by the bringing in of a Resolution which would be sufficient to carry those Clauses. Then Mr. Lowther, having taken the position that the proper time to make this particular point was when those Clauses were reached in Committee, quoted in support the decision of Mr. Speaker Peel in 1894. I am going to refer to that, but I may mention now, as a matter of some interest, that in that case the Chancellor of the Exchequer apparently changed his mind. No Resolution was introduced to support those Clauses, and when they were reached in Committee the Chairman of Committee of Ways and Means, who, I think I am right in saying, was Mr. Whitley, the late Speaker of this House, without the question being raised any further by anybody—and I submit, Mr. Chairman, that this is a question which you should deal with on your own initiative as soon as the point is brought to your knowledge—said:
    "I put no question on Clauses 13 and 14. There is no Resolution to authorise their consideration."
    An hon. Member, Mr. Fell, afterwards Sir Arthur Fell, asked:
    "Do they disappear entirely from the Bill?"
    And the Chairman said:
    "That is so."
    The right hon. Gentleman who is now the Member for St. George's (Sir L. Worthington-Evans), then Mr. Worthington Evans, asked whether the Chairman's attention had been drawn to an Amendment on the Order Paper in the name of the Chancellor of the Exchequer. As I say, apparently the Chancellor of the Exchequer had changed his mind and had decided not to proceed with the Clauses, and had put down an Amendment to leave them out. In accordance with what he had already done, the Chairman said:
    "My duty overrides the Amendments on the Paper."—[OFFICIAL REPORT, 15th July, 1914; col. 1798, Vol. 64.]
    In other words, no question on the Amendments could be put to the House. The Clauses simply were not in the Bill.
    Mr. DENMAN: May I ask whether we cannot get on to Clause 29?
    The CHAIRMAN: This is a point of Order, and I must listen to it. We
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    cannot have two points of Order at one time.
    Sir D. HERBERT: I hope the hon. Member will have a little patience. The point I am endeavouring to put is not a very easy matter to explain—[Interruption.] If the hon. Member will not have patience I must continue my address to the Chair and to leave his remarks to be answered at some other time. The other precedent to which I am referring was a decision of Mr. Speaker Peel given on the Finance Bill of 1894. The reference is in Volume 24 of the Fourth Series of the OFFICIAL REPORT, Column 1200 and the following columns. In that case objection was taken to Clause 15 of the Finance Bill by Mr. Gibson Bowles on the order for Committee being read, which was just before going into the Committee stage. Mr. Speaker Peel, having said that the hon. Member had done right in referring to the importance of the matter and drawing attention to the Clause, said:
    "In my opinion the original Resolution in Committee of Ways and Means did not contemplate the extra imposition of duty involved in the operation of Clause 15."
    Having declined to interfere then, saying that that was not the proper time, he said:
    "Therefore, when Clause 15 is reached in the Committee stage the House will take no cognisance of it unless a Resolution of the Committee of Ways and Means authorising the additional duties imposed by the Clause has been 'previously agreed to. It will be necessary for the House to go into Committee of Ways and Means and pass a Resolution which will cover the additional duties before the Committee can consider the Clause."
    I feel that I owe some apology to you and the Committee for having occupied some time in putting this point. It may be said, I think, that when one really goes into it the point is not an intricate one to those who are familiar with our financial procedure, and my only excuse for having submitted it at such length and in such detail is that I regard this as a matter of the very greatest importance—the preservation of the peculiar financial procedure upon which alone rests the control of the House of Commons over financial matters. I hope I have shown to the satisfaction of the Chancellor of the Exchequer that under the peculiar circumstances and the somewhat intricate nature of these Clauses it

    1191
    will be better for him to put down the Clauses in a form which would occupy very much less time than they are likely to occupy in the form in which they are at present. I ask you, Sir, to rule that these Clauses, not being covered by any Financial Resolution, cannot now be considered in Committee; and if there is a point against my submission with which I have not yet dealt, I hope you will allow me an opportunity of dealing with it, if I am able to do so, when you have given your opinion on this point.
    The CHAIRMAN: I am very much obliged to the hon. Member for Watford (Sir D. Herbert) for giving me notice that he intended to raise this point of Order. He has put it to me this afternoon in three stages. First, he called attention to the Budget Resolutions, and he contends that these Clauses are not covered by the Budget Resolutions and therefore ought not to be recognised as being in the Bill. In reply to that, I have to say that, if that were the only point raised, this stage would be too late for that point to be made; he should have raised the point before Mr. Speaker at the beginning of the Second Reading of the Bill. The second point he put to me was that on a certain occasion he himself moved an Amendment in Committee and that the then Chairman ruled the Amendment out of order. It was clearly within the competence of the Chairman to rule that Amendment out of order. He was not called upon to deal with the Clause in any other way than to look at it from the point of view of the hon. Member's Amendment, and the contention of the hon. Member that he could move his Amendment in another way is a different thing from asking me to exclude five Clauses from the Bill.
    Further, he submitted that it has not been the practice of the House to deal with Clauses in Committee which were outside the Money Resolution and he has cited two Clauses of the Finance Bill of 1914. Again, on that point, I suggest to him that he is too late in raising his point of Order. In the 1914 Bill there were two Clauses on which no question was put. It is perfectly true that those two Clauses, were not dealt with in the Ways and Means Resolutions, and that before they could be considered new Money Resolutions would have been necessary.
    1192
    Those two Clauses were italicised in the Bill, and, being italicised, they were for all practical purposes not part of the Bill. Before they could be considered a Money Resolution was necessary, and, no Money Resolution having been brought in, the Chairman refused to entertain any question on those two Clauses. It was admitted generally, I think, by the whole House, that they were beyond the scope of the Money Resolution on which the Bill was based, but, as they were italicised Clauses, they were outside the scope of the Bill, they were for all practical purposes dead Clauses, and could not be made alive until a Money Resolution had been introduced. The case is quite different in relation to this Bill, because there are no italicised Clauses in this Bill. The Bill as it stands is just the same as it was introduced and as it was read a second time and, on those grounds, I suggest that, not having any italicised Clauses, the Committee is in Order in considering these Clauses. In the circumstances, I decline to add anything more to my Ruling beyond saying that the further point of Order which has been raised falls to the ground.
    Sir D. HERBERT: You are quite correct, Mr. Young, and I ought to have mentioned that the particular sections in the Act of 1914 to which I referred were in italics. You have now ruled that for practical purposes those Clauses were not in the Bill, but may I suggest two things? It is the practice to put Clauses of that kind, which are not authorised, in a Bill in order that the House may consider them from a Second Reading point of view. That is done in order that hon. Members may know what is the intention of the promoters of the Bill, and I submit, in the first place, that the Clauses which are not authorised, and which will require a Money Resolution before they can be dealt with in Committee, are necessarily printed somewhere in the Bill when it gets to Second Reading. A Bill which reaches its Second Rending with Clauses in italics is put to the House with the knowledge that those Clauses have to be proceeded with, and will be part of the Bill.
    May I suggest that the printing of Clauses in italics, if I may respectfully say so, has no effect whatever, and that

    1193
    the Measure is not altered by the fact that they are in italics in the Bill. The mere fact that they are printed in italics is only to draw the attention of the House and of everybody concerned during the subsequent stages of the Committee to the fact that this matter has to be dealt with before those Clauses are reached in Committee. Therefore, I respectfully suggest that the precedent of 1914 is by no means one which can be departed from merely by reason of the fact that in that case the Clauses were printed in italics. I believe I am right in saying that there have been cases in recent years of Clauses requiring a Money Resolution which have not been printed in italics, but they have been in the Bill which passed its Second Reading, In those circumstances anyone who attempted, on Second Reading, to have those Clauses struck out, and not sent to the Committee, would be laughed at by anyone acquainted with our procedure. He would be told there is no need for those Clauses to have a Money Resolution at the time of the Second Reading, and they do not require a Money Resolution until they reach the Committee stage.
    These Clauses are not an essential part of the Finance Bill of 1930, and I suggest that there is no doubt that, if I had raised this point during the Second Reading stage, Mr. Speaker would probably have said, "The hon. Gentleman is right in calling attention to the fact, and the Chancellor of the Exchequer will no doubt take note of it, and will say that if the hon. Member is right in his contention, he will bring in a fresh Resolution before these Clauses reach the Committee stage." I hope that you, Mr. Young, on further consideration, will reconsider your decision. I am sure no one has more respect for, and more sympathy with the occupant of the Chair than I have, but the matter I have raised is of such great general importance that I must ask you very earnestly to reconsider your decision in the light of what I have just said. So far as I am concerned, I feel that this is a question of setting a precedent which cannot be allowed to remain, and if other hon. and right hon. Gentlemen take the same view, I am afraid that we shall have to take such steps as are open to us to
    1194
    have this question raised again and decided, after we have argued the matter further.
    The CHAIRMAN: The hon. Gentleman has again referred to the 1914 Bill in relation to the italicised Clauses. In that case the question was raised on the Second Reading. Those Clauses were italicised, and a Money Resolution was necessary; consequently, as I said before, those Clauses, for all practical purposes, were dead, and nothing could give them life until a Money Resolution was passed. We have to deal to-day with the Clauses of this Bill. This Bill has had a Second Reading, and it has been committed to a Committee of the Whole House. It is not the practice, as far as I can make out after consulting the authorities, for the Chairman to order the withdrawal of any Clauses that have been committed by the House. On page 384 of Erskine May's Parliamentary Practice it is laid down that:
    "Such objections, however, should be taken before the Second Reading; for it is not the practice to order Bills to be withdrawn, after they are committed, on account of any irregularity which can be cured while the Bill is in Committee, or on recommittal."
    [Interruption.] The word "Bill" is used there. There are here a number a Clauses, those Clauses are part of the Bill, and this statement seems to me to have the same effect as if it were a whole Bill. Therefore, I have no more power to withdraw these Clauses from the Bill than I should have to withdraw the Bill.
    Sir D. HERBERT: I was relying upon that opinion of Sir Erskine May in order to support my case. Surely, I made it perfectly plain that this matter could not be raised and dealt with on the Second Reading. If this Bill had been introduced without any Budget Resolutions, of course it could have been thrown out on the Second Reading. Nobody will suggest that a Bill should be thrown out on the Second Reading because there is no Resolution to authorise its financial Clauses. Therefore, I submit that, so far as Financial Resolutions are necessary for the essential, main principles of a Bill, they have to be passed and agreed to by the House before the Bill is introduced. If they refer only to Clauses which are auxiliary or a subsidiary part of the Bill, not only

    1195
    can the Bill not be objected to on the Second Reading because there is no Financial Resolution to support it, but it is not the practice of the House that the Financial Resolution should he introduced or dealt with until after the time when the Bill has had a Second Reading, and when it gets to the Committee stage. The precedents I have quoted show, on the ruling of one distinguished Chairman of this House and two distinguished Speakers of this House and another distinguished Chairman, Mr. Whitley, that Clauses in a Finance Bill which have been submitted to the Committee by means of a Second Reading given by this House have been in recent years properly thrown out, or no question put on them in the Committee stage at the time when they have been reached. In these circumstances, I maintain that this question should be reconsidered.
    Mr. DENMAN: I submit that the points which have been raised by the hon. Member for Watford (Sir D. Herbert) do not arise until we reach Clause 33. There is nothing beyond the scope of the Resolution in Clauses 29 to 32, and the hon. Member is not entitled to prejudge what definition the Committee will apply to the words "private company" when we reach Clause 33.
    5.0 p.m.
    Sir D. HERBERT: I have had that particular point in mind, and if the hon. Member for Central Leeds (Mr. Denman) will read Clause 29, he will find that it is a charge Clause. Clause 30 is also a charge Clause. Those Clauses charge certain subjects, and in order to ascertain what those charges are, we have to refer to Clause 33 I agree for purpose of argument to the suggestion that this question would not arise until we come to Clause 33. The hon. Member for Central Leeds and other hon. Members will no doubt follow me in this. It is not a very difficult argument, but it does need to be followed very clearly. Assuming for the purposes of this argument that my point of Order is right in its main contention that the 13th Resolution does not cover foreign companies, then, if that Resolution does not cover foreign companies, and some part of the
    1196
    Bill does touch foreign companies, that part of the Bill cannot be entertained until it is supported by a sufficient Resolution. I take it that the hon. Member follows me so far. Some part of the Bill, therefore, has got to be left out until that Resolution has been provided. This particular Clause is one of a block of five Clauses, namely, Clauses 29 to 33, which are affected, and, if the hon. Member were right in his suggestion that we should wait until we get to the definition Clause at the end, we should arrive at a state of absurdity, for this reason. The hon. Member would have the Committee pass Clause 29. That Clause would be amended, presumably, in accordance with the Amendment on the Order Paper in the name of the Chancellor of the Exchequer. It would be amended so as to strike out the words "private company," and put something else in their place. It would be possible to go on to amend every one of the four Clauses by striking out all reference to private companies in them, and putting something else in its place. We should then come to Clause 33, and there we should find a definition making private companies include foreign companies—[Interruption]. It includes foreign companies, and my point of Order on the whole block of Clauses was that they should come out because they transgress the Resolution. One would then find that in Clause 33 private companies, and the foreign companies included in that expression, are not charged, because of the alterations which had been made in the previous Clauses. That would result in an absurdity.
    A certain part of the Bill is not covered by a Resolution, and, therefore, a certain part of the Bill must go out. We have not yet come to it, says the hon. Member for Central Leeds, but the result of saying that we have not yet come to it is that in the end nothing goes out. That, surely, is an absurdity. It is making ridiculous the rule which says that any part of a Bill—it does not matter whether it is a single Clause or whether it is 20 Clauses—which exceeds the Resolution, must go out, or cannot be considered in Committee until there is a sufficient Resolution. I submit, Mr. Young, that the argument which I have endeavoured to place before you shows that these Clauses, which are all

    1197
    devoted to charging some particular subject, must be taken in such a group as to show, not only the effect of the charge, but upon whom the charge is put, and, therefore, the whole group of Clauses must go. I have shown, I hope, that it would result in absurdity if any other line of conduct were followed, such as that suggested by the hon. Member for Central Leeds.
    The CHAIRMAN: The hon. Gentleman has referred to the words "private company" in the Budget Resolution, but the word "company" is not limited or restricted in any way, as far as I can gather. I am not here for the purpose of debating whether the word "company" means what it means in the Resolution, but it seems to me that the word "company" is not in the least limited in any direction. That is how I read the Resolution. If the hon. Gentleman thinks that the word "company" is being interpreted too widely, the proper time for him to discuss it will be when we come to the interpretation Clause.
    Sir D. HERBERT: Would you allow me—[Interruption.]—I am only anxious to help, but I think you made a slip there, if I may respectfully say so, which you will forgive me for pointing out. The whole essence of my argument, the whole essence of our submission, is that nothing which is wrong with these Clauses can be put right by an Amendment. That is the whole point. If our submission is right, what should happen would be that, following the course adopted by Mr. Speaker Whitley, when he was Chairman, no Question should be put on these Clauses—that they cannot be called.
    The CHAIRMAN: The hon. Gentleman himself has given his interpretation of the word "company," and that is why I replied to it. I do not accept his interpretation of the word "company," and we will leave the matter there so far as the word "company" is concerned, though I do not think it is limited in the Budget Resolution. As to the Ruling of the Chairman—I do not remember who it was—in 1914, again I have to say that the Chairman on that occasion did not put any question on the Clauses concerned because they were italicised and no Money Resolution had been brought in to give them life. I hold the opinion that
    1198
    I have no power, as Chairman of this Committee, to order the withdrawal of five Clauses which have been committed to the Committee by the Order of the House on Second Reading. That is my judgment after very careful consideration arising out of the notice which the hon. Gentleman gave to me several days ago.
    Sir AUSTEN CHAMBERLAIN: I hope that you will allow me to make a further submission. In the first place, as to the time at which the objection has to be taken, as I understand the Ruling of Mr. Speaker Peel, which was adopted and expounded by Mr. Speaker Lowther, it really turns upon certain words which were used by Mr. Speaker Lowther. An irregularity, he said, could be cured at that stage by the introduction of a Resolution, without injury or injustice to any party. I think the meaning of that is that, where the defect can be cured during the Committee stage, the proper time to take objection is in Committee, and not on the Second Reading, when the objector would obviously be met by the statement that he was premature, that there was still time, before the Clause to which he was objecting was reached, for the defect to be cured, and that that could be done without injustice to any individual or interest. I submit, therefore, that Mr. Speaker Peel's and Mr. Speaker Lowther's Rulings are really deprived of all meaning if it be said that, once a Bill has been committed, the fact that there is no authority for proceeding with certain Clauses ceases to have any bearing upon those Clauses, and the remedy is out of our hands.
    I desire to make a further submission with regard to a second point which you have taken. I understand you to lay great stress upon the fact that the Clauses about which a Ruling was sought in 1914 were italicised, while these Clauses are not. I submit that Clauses are italicised for the convenience of the House, but not in order to dictate to the House or to the Chair what the nature of those Clauses is. If you laid it down that you cannot look behind the character of the print to the substance of the Clause, any Minister would only have to direct the draftsman or the authorities who supervise these matters to avoid italics in future, to deprive the Chairman

    1199
    of his eyes and to render him incapable of preserving the liberties of the House. I respectfully submit, on the first point, that Mr. Speaker Peel's Ruling, adopted by Mr. Speaker Lowther, is to the effect that, where a defect can be cured in Committee without injustice to anyone, in Committee is the proper time, and not before Committee, to raise the point of Order. On the second point, I respectfully submit that whether a particular Clause or passage is printed in italics or not is wholly irrelevant to the duty of the Chairman, which is to regard the substance of the Clause and not the nature of the print.
    The CHAIRMAN: On the second point which the right hon. Gentleman has raised, in relation to italicised Clauses, I still hold the opinion that italicised Clauses are not part of any Bill, and have no life, and therefore that they need not be taken cognisance of until a Money Resolution dealing with them has been introduced and passed in the proper form.
    Mr. CHURCHILL: Does the whole point turn upon the typography?
    The CHAIRMAN: Not necessarily. I am giving my view of what italicised Clauses mean in a Bill. They are there for the purpose of directing attention to the fact that a Money Resolution is necessary, and, if a Money Resolution has not been passed before they are reached, the Chairman does not pay any attention to them, and in my opinion ought not to pay any attention to them. That is what happened in 1914.
    Sir D. HERBERT: He mentioned them by number, and said he could put no Question upon them.
    The CHAIRMAN: Certainly, he said he could put no Question upon them; they were not in the Bill. The hon. Gentleman, however, who raised this point of Order, raised the point that the word "company" governed the situation. I regard the word "company" as covering the Clause in the Bill, but I say that, if it does not cover the Clauses in the Bill, the preliminary objection should have been taken at the beginning of the Second Reading. That is my view, and I do not think that anything has been said up to now to cause me in the slightest to alter it.
    Sir A. CHAMBERLAIN: Would you be good enough to explain, following the Ruling of Mr. Speaker Lowther, when we may raise these matters in Committee, or what are the Questions on which it is necessary that they should be raised before the House goes into Committee? At present we are in danger of relying on these previous Rulings and raising such matters in Committee, and then finding, when we are in Committee, that we have omitted to do what is necessary.
    The CHAIRMAN: I am obliged to the right hon. Gentleman. In all these cases the question was raised before the Speaker of the day, but in this case the question has not been raised until the Committee stage. The Bill has been committed to the Committee without any preliminary objection such as was taken in those cases, and I am, therefore, bound to accept the Clauses.
    Sir LAMING WORTHINGTON-EVANS: Was it not the case, in the other cases to which reference has been made, that, when they were raised before Mr. Speaker on the Second Reading, he said that it was not necessary, that that was not the right time at which to raise them; and that the real decision that he gave was to this effect: "Do not come to me on Second Reading, because this is one of the Clauses with which you ought to deal in Committee"? May I submit to you, Sir, that there is a real difference between the two classes of Clauses? The whole Bill depends in the one case on a Resolution, while in the other case, as now, there are, I think, some 15 Resolutions. Most of the Bill is perfectly in order, and it is only to that, part of the Bill which, in our submission, is not based on a sufficiently wide Resolution that objection can be taken. It would have been wrong, I submit, to take that objection on the Second Reading, because we should have been treated in exactly the same way as before. Mr. Speaker would have said that that was not the time at which to raise the matter in accordance with those precedents. If I may submit one word on the question of italics, because this also is rather important, do I understand you to say that, if a Bill or Clause was printed in italics, one result would follow, and that a different result would follow if it were

    1201
    printed in ordinary print, even if it were the same Clause in the same words?
    The CHAIRMAN: I say that a Clause printed in italics is for all practical purposes not part of the Bill. In the example quoted there were two Clauses printed in italics, and no Money Resolution had been passed to put life into those two Clauses. Therefore, the Chairman declined to put any Question on those Clauses. My point here is that these are not italicised Clauses, and the Bill is in the form in which it was presented to the Committee by the Order of the House. The House has committed this Bill in its entirety to us to be considered. Had there been any italicised Clauses, we should have known that there was something for which a further Money Resolution was necessary—[Interruption.] If it is based on the word "company," then again I must say there is nothing in the Budget Resolution limiting the meaning of the word "company," and on that ground also I think the point of Order fails.
    Sir L. WORTHINGTON-EVANS: I want to say a word on the question of "company" in a moment. I was trying to understand your Ruling with regard to the difference between a Clause that is in italics and a Clause that is not. I was going to submit that, if the words of the Clause are the same, the results are the same. The only difference of the italics is that they call attention to the fact that a Money Resolution is required. If it is not in italics but in ordinary print in the same words, a Money Resolution is still required, although the danger signal, which the italics are, has not been shown. The word "company" here must either be used in its legal meaning or in the popular meaning, if a popular meaning attaches to it which is different from the legal meaning. So far as I know, it has not two meanings but only one. Companies in this country are regulated by the Companies Act of 1929. I quite admit that there is no definition in that Act that I can quote. It refers to two sets of companies. It refers to a company registered under the Companies Act as an English company, and a company that is registered abroad, but it only refers to a company that is registered abroad if it comes into this country to carry on business.
    1202
    It then prescribes that it shall fulfil certain conditions. But this word "company" goes far outside those two definitions. Even if you say "company" includes everything that is in the Companies Act, 1929, this Resolution still goes outside it, because it creates a charge upon a subject who transfers his property in certain circumstances to a company registered abroad whether that company comes to this country or does not. There are therefore two sorts of companies registered abroad. One might be covered by the word "company" in this Resolution but the other, in my submission, is certainly not. I do not know whether that point has occurred to you and I would ask you to consider your ruling on it.
    The CHAIRMAN: I am not versed in the law, and therefore I take the words as I find them in the Budget Resolution.
    Sir L. WORTHINGTON-EVANS: It must have a meaning.
    The CHAIRMAN: It has a meaning, but the only meaning that I can read in it is that in the Budget Resolution the word "company" is not limited. From my reading of the Budget Resolution, there is no limit to the word "company," and, therefore, on that ground, the point of Order fails. I also wish to say that the significance of an italicised Clause is this, that a Bill introduced with italicised Clauses on Second Reading and sent to the Committee is practically a Bill with Clauses not recognised as part of the Bill. But all the Clauses here are without italics, and each Clause is recognised as part of the Bill. I again say, with all respect to the Committee, that I do not see any limit to the meaning of the word "company" so far as the Resolution is concerned and, in the second place, I say again that I do not think I have any power as Chairman of the Committee to order the withdrawal of the Clauses.
    Sir L. WORTHINGTON-EVANS: I do not want to press it unduly, but this is a matter of extreme importance. You have given an interpretation of the word "company," or perhaps more accurately you have declined to give any definition of the word. I hope you will not misunderstand me if I suggest that we ought have guidance on a legal question,

    1203
    because you have very properly said you are not a lawyer. I am not a lawyer, at least I have not been for 20 years, and this is a matter of real importance, and the Committee, therefore, should have the guidance of the Attorney-General as to what "company" means.
    The CHAIRMAN: I think the Committee will be entitled to a legal opinion when it comes to the word in the Bill. At the moment the point is put to me, and my understanding of the word is that it has no limit. If I were asked what it meant, I should say it has no limit. I do not know what lawyers may say about it, but I do not think anything further can be said on the matter. If I am wrong I am wrong, but I firmly believe I am right.
    Mr. CHURCHILL: The Ruling which you have given, Sir, as the result of so much care and reflection, for which we are indebted to you, raises in my judgment the most serious and grave issues, and I feel bound, in accepting any Ruling that falls from you, to express, on behalf of those who sit on this side of the House, deep anxiety at some constructions which may be placed upon the Ruling which you have, in your duty and in your unchallengeable authority at this stage, thought right to give. I feel bound to place on record now some of those grave points which as I gather you have decided——
    The CHAIRMAN: I think the right hon. Gentleman is now launching out on a criticism of my Ruling. I think, having given my Ruling and believing that I am right, the Committee should now proceed.
    Mr. CHURCHILL: With very great respect to you, Sir, it is, as you will readily admit, the duty of Members of the Committee, with proper submission to the Chair, to discharge what they regard as their proper Parliamentary functions and not in any way to be deterred by impatience or disorderly clamour from any part of the House. I am only submitting to you the grave anxiety and the doubt that arises on account of some of the points upon which decisions have been given, which decisions, no doubt, have complete validity as far as this episode is concerned but which, unless they are accompanied by further and fuller Rulings on your part, might easily lead to misconception and
    1204
    to misinterpretation in the future. May I ask, before these very grave Rulings pass into the definite acceptance of our Parliamentary system and custom, whether we are to take it that you have definitely ruled that the word "companies" in itself embraces all companies wherever situated and, if so, how are we to discriminate between the principle which extends the word "companies" to cover all companies and the principle which limits the word "person" to cover only persons of British jurisdiction. That seems to me to be almost a turning point in our Parliamentary procedure and, in accepting your decision. I would only ask for the judgment to be couched in terms which will deal with the far-reaching reactions which must spring from that.
    I would also ask you whether, having been called upon in the execution of your office to give these formal and important Rulings which are now passing into our procedure and taking a definite part in the procedure of the House of Commons—precedents which will be cited perhaps for generations—could you explain definitely what is the virtue in italicisation? I had always understood that the typography was purely a matter of convenience—that there was no inherent virtue in the typography, that whether a Clause could or could not be entered upon by the House, ruled on by the Chair and passed by a Committee, depended not at all on whether it was printed in large or small type, in italics or in Roman or any other form, any more than it does upon the colour or character or thickness of the paper on which it is printed. It is a mere device for Parliamentary convenience. But I gather from your Ruling that an entire alteration in the inherent and essential character of Clauses depends upon whether they should be printed in Roman or in italic type, and from that it would appear that your Ruling to some extent is giving the necessary information which would enable the Committee to guard itself against those Ministerial encroachments which my right hon. Friend has mentioned, and which would easily be possible if it were found that Clauses might be altered in their intrinsic character merely by a change in the typography easily and readily at the disposition of the Ministers of the day.
    There is one other point. You have said we have lost our right to raise

    1205
    this point of Order because we did not raise it in the Second Reading. You have pointed out that there have been occasions in the past, if I understand your ruling, where these points have been admitted by the Chair in Committee because they had previously been brought to the notice of Mr. Speaker when the Bill was in its Second Reading. If that argument stands upon anything, it stands upon a wrong submission to Mr. Speaker on the Second Reading. Mr. Speaker has said, when the point has been raised, that it is not the time to raise it. Is it possible to establish a claim for the subsequent validity of an objection because it has been raised at a time when it was inadmissible? Are we to lose our opportunity of raising this question at the right time because we failed to raise it at the wrong time previously? I venture to say that these grave changes and innovations in the whole character of our procedure——
    The CHAIRMAN: I object to the right hon. Gentleman using the word "innovation."
    Mr. CHURCHILL: I withdraw the word "innovation" and I substitute the word "interpretation." The interpretations of these very difficult matters which you have been compelled to make in consequence of your duties and in your difficult position require from you further amplification in order that conclusions may not be drawn from them that may sensibly narrow and stiffen the ordinary and long-established procedure of the House. I would venture to ask that these points might receive from you some further elucidation.
    The CHAIRMAN: On the word "company"—again, I am no lawyer—I take the Budget Resolution, and the word there, to me, is not limited in any sense. That is the only ruling which I can give from the Chair in relation to the word "company." When Clauses are italicised and a Bill has passed its Second Reading, it is an intimation to the Committee that a Money Resolution is necessary before the Clauses can have any life in them. Consequently, if there is no Money Resolution introduced to give life to them, they are not part of the Bill at all.
    Mr. CHURCHILL: With great respect——
    HON. MEMBERS: Order!
    Mr. THURTLE: On a point of Order. May I submit to you—
    The CHAIRMAN: I have not called upon the hon. Gentleman.
    Mr. THURTLE: Mr. Young!
    HON. MEMBERS: Name!
    The CHAIRMAN: I have not called the hon. Gentleman. The point raised by the right hon. Gentleman has to be settled first.
    Mr. THURTLE: That is my point of Order.
    Mr. CHURCHILL: I venture, with great respect, to intervene to ask you whether the nature of the Clauses would in any way be altered by the fact that they were in italics, and whether if they were not in italics it would not equally be obligatory upon the Chair to deny them existence and to refuse to put them to the Committee?
    The CHAIRMAN: If the Clauses are not italicised they are part of the Bill as it passes Second Reading. If they are italicised, they are for all practical purposes not part of the Bill committed to the Committee. I also indicated in regard to a Bill which came up for Second Reading with no italicised Clauses, that if there was any objection, such as that which has been raised to-day, it should have been raised before Mr. Speaker. In my opinion, I have no power to order the withdrawal of these Clauses which have been committed by the House. I hope that that is sufficient, and that it is not necessary for me to go any further into the matter. I want to say now directly to the right hon. Gentleman, that I have given my Ruling, and I shall abide by it.
    Mr. CHURCHILL: Of course, now that you have definitely given your Ruling, and, if I may say so, have shown very great patience in hearing fully the various objections which we felt bound to submit to you and to argue, it is our duty to accept the Ruling you have given for the purposes of this debate and we do so, but I am sure you will not take it as in the slightest degree reflecting either upon the validity of your Ruling or upon your conduct of this difficult matter if I say that we shall feel

    1207
    bound to bring this matter before the House in order that the grave reactions following from this Ruling may be fully debated and decided upon.
    The CHAIRMAN: Whether the right hon. Gentleman desires to bring the matter before the House as a House or not does not concern me at the moment.
    Sir D. HERBERT: I desire to move, "That the Chairman do report Progress, and ask leave to sit again," for the purpose of explaining the position in which some of us find ourselves as a result of, I think I am right in saying, the somewhat unexpected Ruling. My right hon. Friend has suggested, as indeed I indicated a short time ago, that he might think it necessary to put down a Motion upon the Order Paper to discuss this Ruling in a proper way as permitted by the Rules of the House.
    The CHAIRMAN: The hon. Member cannot move to report Progress on any grounds of my Ruling. This is the second time he has referred to my Ruling.
    Sir D. HERBERT: I am very sorry if I have transgressed your Ruling in moving to report Progress. I have no intention whatever——[Interruption.]
    Mr. BROAD: I think it is time that this foolery was stopped in the interests of Parliamentary proceedings.
    The CHAIRMAN: The hon. Gentleman has no right to interrupt when the hon. Member for Watford (Sir D. Herbert) is on his feet.
    Sir D. HERBERT: I apologise if I have said anything which appears to interfere with your Ruling. My intention in moving to report Progress is to submit the position——
    Mr. ERNEST EVANS: On a point of Order. Is there any Motion at the present moment before the Committee? If no Motion has been put by the Chair, is the hon. Member in order in moving to report Progress?
    The CHAIRMAN: I think that the hon. Member is in order in moving to report Progress.
    Sir D. HERBERT: I shall take much less time in giving my reasons for moving to report Progress than some
    1208
    hon. Members of the Committee have spent in irresponsible talk on the subject. I wish to move to report Progress for the reason that some of us who desire to raise certain points of Order similar to those raised to-day in the House on subsequent stages of this Bill, and by other means, find ourselves in this difficulty, that if we were to be logical we should take no further part in the proceedings on these Clauses in the Committee. I do not think that it would be for the convenience of the House and the Committee as a whole that anything of that kind should take place. In these circumstances, I desire to take this opportunity of saying that we do not, if we remain in the Committee and discuss these Clauses and Amendments, take any responsibility by reason of the fact that we may have joined in the discussion in Committee, for in our opinion when these Clauses come to the House they cannot be regarded as being authorised.
    The CHAIRMAN: I cannot accept the Motion at this stage.
    Mr. CHURCHILL Mr. CHURCHILL rose——
    The CHAIRMAN: I am exercising my powers as Chairman. I do not think that this is a proper Motion at this stage. [Interruption.] The right hon. Gentleman could hear what I am saying if there was not so much noise. I am exercising my power as Chairman, and I do not think that this is a proper Motion to put at this stage, and therefore I decline to accept it, and that should put an end to the matter.
    Mr. CHURCHILL: With great respect, your Ruling, of course, terminates the Motion—
    The CHAIRMAN: That is not a point of Order.
    Mr. CHURCHILL: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
    I renew this Motion in order particularly to give the Chancellor of the Exchequer the opportunity of making a general statement, which he had given notice of his intention to make on the whole character of the Clause. I submit that it would be a most convenient procedure for us to take it, after this protracted discussion in which heat has been

    1209
    generated, on a Motion to report Progress so that the matter may generally and thoroughly be discussed across the Floor of the House. I make this submission to you with very great respect, hoping that, at any rate, you will give it consideration at this stage.
    The CHAIRMAN: The right hon. Gentleman has given different reasons from those given by the hon. Member behind him, and if there is an understanding that the Chancellor of the Exchequer should make some statement I will accept the Motion to report Progress.
    Mr. P. SNOWDEN: As the right hon. Gentleman has stated, I rise to take advantage of this Motion—shall I say to pour oil upon troubled waters—and I hope that I shall succeed in bringing back the Committee to a spirit of conciliation. I think that it would be convenient, before we enter upon the discussion of Amendments to this Clause, if I were to state what my attitude will be to the main Amendments which appear upon the Paper. The purpose of this and succeeding Clauses is one which I think commends itself to every section of the Committee. Indeed, the right hon. Member for Epping (Mr. Churchill) at the very earliest opportunity after the Budget Statement said that he would be prepared to help me to secure the object at which I was aiming in these proposals. The purpose of these Clauses is to deal with what is known as one-man companies. That is to say, where a man transfers his property and continues to receive an income which is appropriate to or approximates to the income that he received from the property before the transfer took place. There is, I think, no division of opinion in the Committee that so far as such transfers are made for the purpose of avoiding Estate Duty, the House of Commons should do the best it can to circumvent such action as that, but the difficulty which always arises in attempts to circumvent evasions of taxation is to frame the legislation in such a way that it will hit the guilty only and will not inflict hardship where guilt is not required to be punished. That has been my difficulty, and it has been the difficulty of everybody who has made similar attempts to circumvent evasion.
    We must look at the facts, and it follows that any attempt to distinguish
    1210
    between the legitimate and the illegitimate and to protect the genuine transaction as against the non-genuine transaction must lead to exceptions and provisos and complications of all sorts. I hope the Committee will, at least, give me this credit, that the complications in these Clauses arise from a sincere desire to be scrupulously fair, and I am sure that I shall have the co-operation of the Committee in trying to frame Clauses which will attain the object we have in view and will, at the same time, inflict no unmerited hardship. That is my position. I have examined very carefully, with the help of my expert advisers, the Amendments, and I want frankly to admit that the examination has laid bare certain flaws in the Clauses. Therefore, I want to begin with a short statement of how far I shall be able to meet the object of those who have put down the Amendments, and I think I shall be able to satisfy the Committee that I have gone a long way, if not the full way, to meet the objections or the criticisms, or the fears, shall I say, that have been indicated in the Amendments which have been placed upon the Order Paper.
    If right hon. and hon. Members have the Amendment Paper before them they will be able to follow me as I deal with the Amendments successively. The first two Amendments in my name are (on page 2491 of the Order Paper) in page 24, line 20, leave out the word "private" from the designation of the company, and after the word "company" to insert the words "to which this Part of this Act applies." This Amendment will not in any way prevent consideration of the definition of such companies when we come to Clause 33, but it will meet the point raised by the hon. Member for Watford (Sir D. Herbert) as to the undesirability of having in two Statutes two separate definitions of a private company, and will meet his Amendment on that point. My next Amendment is, in page 24, line 35, after the word "thereon" to insert the words "and as property in which the deceased had an interest." That Amendment is on page 2493 of the Order Paper. The Amendment will remove any doubt that what was always intended in relation to this Clause is actually its effect, namely, that what is deemed to pass upon the

    1211
    death should be aggregated with other property passing at the death.
    My next Amendment is in page 24, line 39 (page 294 of the Order Paper), after the word "that" to insert the words:
    "(a) the sum computed as aforesaid shall be reduced by the amount, if any, by which the principal value of the subject of the transfer at the date of the transfer or the principal value thereof at the date of the death, whichever is the greater, is shown to the satisfaction of the Commissioners of Inland Revenue to fall short of the said sum; and
    (b)"
    I do not desire or intend to impose in this Clause a charge greater than would have accrued had the property not been transferred, and this Amendment is designed to secure that result. I quite realise that it may be possible that under the Clause, as drafted, cases may occur where double taxation could be imposed. That is to say, that there would come into the estate money which had been received and also which might still be included in the estimate of the value of the estate. That I want to avoid. I do not want to tax twice over anything that has been transferred during the course of these transactions. My next Amendment is in page 25, line 20 (page 249 of the Order Paper), to leave out the words "for full consideration," and to insert instead thereof the words:
    "where the consideration for the sale was received wholly by the deceased for his own use or benefit and is satisfied in one or more of the following manners, that is to say, by a sum of money of an amount determined at the time of the transfer or by shares or debentures of the company."
    This Amendment raises a very difficult point, on which I have endeavoured to meet hon. Members opposite, or what, I understand is the point that they have in their minds. As the matter is an important one I will, with the Committee's consent, indicate what it is intended to do in this Clause in regard to the question of consideration of the transfer of property. I hope that the explanation will allay some of the apprehensions of hon. Members in regard to the matter. This subject can be approached from various points of view. What I am proposing will, I think, on consideration, be found to be satisfactory and will secure what, I think, will be regarded as just and proper in the
    1212
    opinion of the Members of the Committee. I will give the best and simplest explanation that I can.
    Where the transferor of property takes the whole consideration of the property transferred, in money or shares or expressed to be payable at the time of transfer, and no part of it is paid to other persons, the transfer will not fall within the terms of the Clause. That is what it is intended to secure by the Amendment that I have put down and which I am now trying to explain. That is a clear case of out-and-out sale by the deceased for his own benefit. This property is replaced by the consideration that he receives, which will be liable to duty on his death. It is somewhat similar to the case that I described a few moments ago where I proposed an Amendment which would prevent double taxation. Where, however, other persons than the transferor get part of the consideration paid or payable, or the transferor, in addition to the money or shares, reserves or in any manner secures to himself a benefit such as the right to participate in profits otherwise than by way of dividend on any shares, or computed capital, the transferor will not be excluded from the operations of the Clause.
    6.0 p.m.
    It is only if the complete necessary conditions of the Clause are fulfilled, and if some other benefit is reserved which is, in effect, the fruit of capital with which the transferor has parted—that a claim for duty arises on his death. In such cases the question arises whether, in computing the transferor's benefits for the purposes of the Clause which the transferor takes, all payments made to him by way of cash should be excluded. It will be obvious to the Committee that some limitation must be imposed; otherwise what are in effect annual payments payable out of income of the company could be labelled purchase money and a legitimate claim for Estate Duty would be avoided. I think, however, it will be safe to exclude from the "benefits," for the purpose of the Clause, all cash payments made to the transferor, provided they are made to him at the time of the transfer or secured to him at the time and are genuine instalments of purchase money and not payments that terminate at death.
    Major NATHAN: I observe in the Amendment as printed on the Paper a

    1213
    slight difference in the form in which it appears in the Blue Paper. There is a change of the word "is" in the Blue Paper to the word "was" in the White Paper. I do not know whether any significance is to be attached to the change.
    Mr. SNOWDEN: The Attorney-General assures me that it does not matter which word is used. Probably the draftsman, going through the Clause last night, came to the conclusion that this slight verbal alteration is necessary. Now I come to the Amendment in Sub-section (2), to insert the words:
    "situate in Great Britain."
    This point, was raised by the hon. and gallant Member for Oxford (Captain Bourne) and the Amendment is designed to make it clear that the Clause is confined to transfers of real property wholly situate in this country. The next Amendments are in paragraph (c) to insert after the first "of" the words:
    "or any interest in"
    and then at the end of the first paragraph (c) to insert the words:
    "transfers of personal chattels not yielding income."
    These Amendments deal with the transfer of non-income producing properties and are designed to exclude cases which might come under the Clause but which obviously should not. There are such cases as the transfer of such property by an employé or some person who obtains benefits which are incidental to his employment but which have no relation at all to the transfer of property. These Amendments with regard to transfers are purely drafting. Now I come to the Amendment on line 35, to leave out the words "and for the purposes of this section" and to insert instead the words:
    "(3) In ascertaining for the purposes of this section the value of a benefit—
    (a) in the case of a benefit consisting of a payment, a deduction shall be made in respect of any Income Tax (other than Sur-tax) paid or borne by the deceased in respect of that payment; and"
    and the Amendment on line 38, to insert at the end of Sub-section (2) the words:
    "due allowance being made in respect of any rent paid by the deceased."
    The first of these Amendments is designed to meet the point raised by the hon. and gallant Member for Newbury
    1214
    (Brigadier-General Brown) and the second to meet the point raised by several hon. Members, including the hon. Member for Orkney and Shetland (Sir R. Hamilton) and the right hon. Member for Tamworth (Sir A. Steel-Maitland). If I may be permitted to detain the Committee for a moment or so may I indicate briefly what further Amendments I shall be ready to accept as they stand, or to meet the case in some other way. There are some Amendments which I am ready to accept but which might be improved by a change in drafting. That will present no difficulty. I desire to assure hon. Members that I do not rule out of consideration other Amendments, apart from those which I have decided to accept. I do not rule them out, and if during our discussions they can be reasonably and properly met, within the general framework and principle of the Clause, I will do my utmost to meet the wishes of the Committee. There is one other concession I have to announce and it is in connection with the Amendment in the name of the hon. Member for Watford (Sir D. Herbert), which substitutes the average of the benefits taken in the three years in place of the highest proportion. I have no objection to that. There may be some consequential alterations necessary following on the acceptance of that Amendment. I am also ready to accept the Amendment on page 25 standing in the name of the hon. Member for Bethnal Green North East (Major Nathan) and other hon. Members. They propose in Sub-section (2) to insert the words:
    "which, had it remained in the disposition of the deceased at his death, would have passed thereon for the purposes of Estate Duty."
    This is an important Amendment. It was not contemplated that the Clause should apply otherwise than in the sense suggested, but the Amendment makes it quite clear and I am prepared to accept it. There are Amendments in the name of various hon. Members which seek to exclude from the benefits remuneration taken by the transferor for services, and remuneration paid to employés. It is somewhat difficult to agree with this without effecting an easy means of avoiding the operation of the Clause, and I cannot see my way to admit the principle. When we come to discuss it on some appropriate

    1215
    Amendment the ingenuity of some hon. Member may find a means of overcoming the various substantial difficulties which I foresee. I think I have met the case of the genuine employé by limiting the sum of money chargeable under the Clause to the value of the property transferred at the date of the transferor's death or at the date of the transfer whichever is the higher. I am accepting the proposal to take the average of the benefit for the three years preceding the death. In that way I think I have met a very large number of the Amendments, certainly the most important Amendments, and I hope I have succeeded in bringing greater clarity into the Clause. I do not claim to have an absolutely full knowledge of the difficulties and intricacies and complications of the Bill. The Minister can hardly be expected to do that. It is the function of the Minister to say what he wants; what objects he wants to achieve; and it is for the draftsman to put it into the Bill.
    Sir KINGSLEY WOOD: The Minister is responsible.
    Mr. SNOWDEN: I am not seeking to evade any of my responsibilities, but every Minister must rely upon the expert knowledge at his disposal and upon the advice of the Law Officers of the Crown. I hope that this explanation and the very conciliatory spirit I have shown will greatly facilitate the progress of the Bill.
    Sir L. WORTHINGTON-EVANS: Of course, we welcome the conciliatory attitude of the Chancellor of the Exchequer. I do not want to say that he surprised us, though he certainly has done so with the explanation which he has given. We thank him for accepting some Amendments and for explaining a great many others. But has anyone in this Committee ever seen a Bill conducted in this way before? A Clause is brought down which the Chancellor of the Exchequer says is lacking in clarity. He says that he cannot be expected fully to understand it, and before we enter upon the discussion of it he has to explain that he is going to accept Amendments. For the last 10 minutes we have been chasing all over the Order Paper to find out, first of all, the Amendments to which the Chancellor of the Exchequer refers. He lost his place and we lost
    1216
    our places. It is almost impossible to follow this Clause even as printed in the Bill, and it is very much more difficult now that we have a lot of Amendments put down by the Chancellor of the Exchequer.
    What I suggest is that the right hon. Gentleman should reprint the Clause, showing exactly what Amendments he has accepted, what he himself has put on the Paper, and what the Clause will look like, so that we can have an opportunity of seeing whether the concessions that he claims to have made—I think he has made some concessions—are sufficient to meet the very substantial points that we have upon the Clause, and an opportunity of putting down further Amendments if the accepted Amendments are not sufficient. I can see one or two of the right hon. Gentleman's Amendments which do not go far enough, and we should require to put some more Amendments on the Paper. I do not know whether you, Mr. Deputy-Chairman, are going to conduct this Committee with manuscript Amendments thrust at you all the time. Those Amendments of which the Chancellor of the Exchequer has given notice are starred on the Amendment Paper and were put down last night. The right hon. Gentleman has now explained them for the first time, and it is obvious, certainly as regards two of them, that they do not go far enough, and that other Amendments would be necessary.
    It is most inconvenient for the Committee to discuss without any notice what is really a new Clause. I say this not with any desire to harass the Chancellor of the Exchequer. [Interruption.] It is a matter of complete indifference to me whether hon. Members who jeer believe me or not. These Clauses are so difficult that probably the hon. Members who are jeering have never begun to contemplate the meaning of a single word of them. The alterations make the difficulty greater for the moment, because we have never had an opportunity of seeing them set out. Perhaps a Motion to report Progress will enable us to have an interval so that we can see the Clause reprinted and put down Amendments that we consider necessary. I do not know whether the Chancellor of the Exchequer feels disposed to postpone further discussion upon the Clause. I assure him that it seems to me much more likely

    1217
    that we shall make good progress if we see the Clause before we discuss it.
    Mr. LEIF JONES: The right hon. Gentleman's memory seems a little short. I remember many Bills, with some of which the right hon. Gentleman was concerned, in which very great alterations were made in a Clause, and usually the Opposition have been grateful to the Minister who has accepted Amendments and taken the trouble before discussion began to indicate what their purport was. I am extremely obliged to the Chancellor of the Exchequer for explaining the effect of the Amendments. I agree that these Clauses are most complicated. They deal with a subject which has been before Parliament for a great many years. We know the design and object in view and we are all agreed upon it. I do not agree that it is necessary to postpone discussion of the Clauses. As we reach the Amendments one by one I think we shall find that the matter is cleared before us. The Chancellor's speech has not darkened counsel, but the contrary. We know now what the Chancellor of the Exchequer is going to do in these complicated matters about companies.
    Sir BOYD MERRIMAN: I rise to ask the learned Attorney-General to be good enough to tell us, as the result of what has been stated by the Chancellor of the Exchequer, whether I followed correctly what the present position is, so that we may appreciate what is the general effect of the Amendments referred to. Am I right in supposing that, in spite of the Amendments, it is still immaterial how long ago the transfer was made to the company, provided that the transferor is still alive? Am I right in supposing that it does not matter now whether the company is an English company or a foreign company; that it does not matter whether the company was or was not formed with any sort of connection with the evading of Death Duties; that it does not matter even now whether the deceased had or had not any proprietary interest in or any control over the company; that it does not matter whether the company is or is not still a private company, however that is going to be defined, at the time of the deceased's death—the test is that it was a private company at the time when the transfer was made, may be 20 or 30 years ago, though it may have become a public company by now—that it does not matter whether or not the
    1218
    transfer was made to the company for any purpose connected with the evasion of Death Duties; and that so long as the thing was not at the time of sale a transfer connected with the transfer of a business and is not one of the things caught by the next Clause as a life interest, it does not matter whether the transfer was or was not made for good and valuable consideration?
    The ATTORNEY-GENERAL (Sir William Jowitt): If the transfer is made for consideration—leave out "good"—so long as the consideration is paid to the transferor the company and transfer are out of the Clause altogether.
    Sir B. MERRIMAN: Is that not only limited to sale?
    The ATTORNEY-GENERAL: Certainly.
    Sir B. MERRIMAN: I said, assuming that there was not a sale or one of the other things—assuming it is not a sale there may be other transfers which are for good consideration but are not sales at all. If a premium apprentice pays a premium to a company it is not a sale, but it is for valuable consideration. I hope that the Attorney-General will think the matter over again. If it would not be within the Clause why is it necessary to except bona fide sales? If a man in any form whatever transfers money to the company, if you find it necessary to except the transfer of money as the consideration for a bona fide sale, you are not excepting transfers of money for other valuable considerations, surely? I do not expect the Attorney-General to wispier these questions off-hand but I invite him to consider them. Is it still immaterial whether the payment by way of benefit which the transferor receives is or is not for full consideration and has or has not any relation whatever to the original transfer?
    The DEPUTY-CHAIRMAN (Mr. Dunnico): The hon. and learned Member is now departing far from the Motion to report Progress. The Chancellor of the Exchequer has explained the purpose of some of the Amendments, and within reason the hon. and learned Member is entitled to ask general questions, but obviously at this moment he cannot discuss the whole merits or demerits of that part of the Bill contained in Clauses 29 to 33.
    Sir B. MERRIMAN: I had concluded my catalogue of questions. I am perfectly certain that anyone who tried to follow the Chancellor of the Exchequer must have found it impossible on the spur of the moment to decide what was the effect of the concessions which have been made. It is very desirable that we should appreciate what are the general principles which still survive as a result of the concessions. When we know on general lines what the result is, we shall be able to see how much it is necessary to discuss this, that or the other Amendment. I have not put these questions with a view to obstruction, but with a view to elucidation. I shall be prepared, if necessary, to give an illustration or two, but after what you have said I will leave the matter where it is.
    The ATTORNEY-GENERAL: It is not from any disrespect or discourtesy to the hon. and learned Gentleman that I do not attempt to answer the catalogue of questions which, quite naturally, he has put to me. I do not think it would conduce to the elucidation of the matter if I were to attempt to answer the various unrelated questions which he has asked. I think it is inevitable that we should wait until we get to the detailed discussion of these matters before dealing with them, and, indeed, conscious as I am of the limitation of my own powers in connection with such a complicated matter as this Clause, I do not think I could cause my mind to jump about and deal with one separate point after another in answer to these questions. If I tried to do so, I fear I should only make the matter confusing for myself and for the Committee. On the other hand, I think I can help the hon. and learned Gentleman to this extent. He asked a question as to whether motive was in any way material. Let me point out, at once, that the whole trouble and complication of a Clause of this sort is that motive cannot be material. We all agree that we would do our best to hit the tax evader and let the innocent man go free. With that principle everybody would agree, and, in that way, motive comes into it; but when you have to define to a court of law the canons which are going to enable you to tell the tax evader from the innocent man, you cannot introduce Motive at all. You must actually have concrete
    1220
    tests of what people do and not the intentions with which they do things.
    As an illustration, the hon. and learned Member asked if this Clause would apply to a company which was formed without any idea of evading Death Duties. But the common practice of evaders is to utilise an existing company which perhaps has been formed for a wholly different purpose—to buy a company and then utilise it for the purpose of tax evasion. I merely give that as an illustration of the impossibility of allowing the motives, which the formers of the company had in mind, to enter into the matter. I think, however, the Committee will find that the matter is not very difficult to get on with—at least not more difficult than the Clause must be, of necessity, because it deals with an exceedingly difficult question. The large main differences involved are, first, that with regard to the three years period. The next main difference is that we take care to show that the area upon which Estate Duty is to be collected, cannot be larger than the area of the thing transferred. You cannot get an obligation for Estate Duty arising out of a trumpery or small transfer. The third large point is that instead of sales for "full consideration" we except bona fide sales so long as the consideration, whatever it may be, is payable to the transferor, and the fourth point is that in calculating the benefits, we allow to be deducted, capital payments as part of the purchase price. Of course there are other small Amendments which we can only consider when we come to the detailed examination of the Clause, but these are the four main broad principles and I think the Committee will find that the matter is no more difficult now than it was before, or than it must be, since we are considering such an exceedingly complicated question.
    Mr. CHURCHILL: We are in a very difficult position—almost an impossible position. The Chancellor of the Exchequer has studied the Amendments which my hon. Friends on this side, both above and below the Gangway, have had on the Paper for a long time past. He has considered them with the aid of his accomplished advisers, and he has seen that there is considerable validity, even from his own point of view, in many of them. In consequence, he has adopted a number of them; he has put down other

    1221
    Amendments of his own, and, in regard to a third class of Amendments, he has said that he will accept them with some alteration in the wording. The result is that be has virtually transformed this Clause and it is now, to all intents and purposes, a new Clause entirely different in its general presentation and in its general approach to this subject from the Clause originally in the Bill. The right hon. Gentleman said that this was a complicated matter, and the Attorney-General has also admitted its complexity. In such a complicated matter every part, or almost every part, depends upon every other part, and, consequently, if a number of essential points are subject to alteration, the view which one takes of the Clause as a whole and its method of treating the subject, must naturally be subject to change also. I know that the right hon. Gentleman wants to get on with his Bill, but I cannot believe, in view of the situation which has developed, and without a reprint of the Clause in the form in which the right hon. Gentleman now presents it, that a discussion embarked upon to-night is going to carry us very far. I listened to the right hon. Gentleman's very careful and patient exposition of the changes which he is making, and I am bound to say that I found great difficulty in following their actual effect upon the Clause. The hon. Member for Plaistow (Mr. Thorne), no doubt, understood them at once——
    Mr. THORNE: Yes, and I understand your scientific method of obstruction. [HON. MEMBERS: "Order!"]
    Mr. CHURCHILL: Of course, it would be very easy to get on with our business if every difficult point or argument which was advanced from one side were to be merely swept away by the other side under the general heading of "obstruction." Even if obstruction were a Parliamentary charge, which it is not, even if the hon. Member were allowed under the Rules of Order to apply much harsher terms than that to me, it would in no way induce me to abridge my remarks or shirk any aspect of my Parliamentary duty. I am asking the Chancellor of the Exchequer if he would not be well advised to accept the Motion and allow us to address ourselves to the consideration of this Clause when we have it before us in the form in which the right hon. Gentleman means to propose it. I
    1222
    certainly do not want to appear uncharitable, but the right hon. Gentleman has admitted that flaws have been shown in his original proposals by the Amendments which my hon. Friends have placed on the Paper, and it is not necessarily a very great concession on his part, when a mistake in the drafting of his Clause or in the statement of his proposals has been pointed out to him by the Opposition, that he should seek to put it right. It is not a concession which one need spend all the rest of one's days in being grateful for. If the right hon. Gentleman has profited by the improved drafts suggested from this side of the Committee, so far from our being grateful to the right hon. Gentleman—except that we are always grateful to him when he is kind to us in manner—it is he who ought to be deeply grateful to my hon. Friends who, without the expert knowledge at their disposal which the right hon. Gentleman enjoys, without the prolonged and profound consideration which he has been giving to these matters for months past, have been able to point out to him a way in which he can achieve his object with greater advantage and in a clearer manner. I do not think there is much gratitude to be brought into this proposal.
    Mr. THORNE: On a point of Order. Has the discussion which has been going on for the last 10 minutes anything to do with the question of reporting Progress?
    The DEPUTY-CHAIRMAN: I am afraid that, from the outset, this discussion has been rather out of order, but the Chancellor of the Exchequer took advantage of the Motion to make certain statements explanatory of the Amendments which he proposes to move and I cannot properly refuse to hon. Members on the other side of the Committee a reasonable opportunity of expressing their opinions on those explanations. I think, however, that the discussion should now be confined to reasons for or against reporting Progress.
    Mr. CHURCHILL: I think, Mr. Dunnico, that you will admit—and fortify yourself in your authority by the reflection—that nothing could have been more precisely directed to the exact Motion before the Committee than the argument which I was advancing. Owing to the concession which the Chancellor has

    1223
    made, not to our entreaties, but to our arguments, not a concession made necessarily out of good will to us, but made in submission to reasoning which has appealed to him and his advisers, this Clause has been so completely transformed that it is virtually a new Clause and it is not possible for the Committee to understand it until they see it in its integrity as now presented, and until they see exactly what they are being asked to do. It is only committing us to a long and laborious discussion, which cannot possibly reach a fruitful conclusion, to persist in going further with this debate and from that it follows, I think with reasonable assurance, that the Chancellor of the Exchequer would be well advised to accept the Motion and to put the Clause in its amended form on the Paper in order that when we meet again next week we shall have been able to study fully the new situation which has developed. It is quite true that the right hon. Gentleman may feel that this course would entail some loss of time, but I do not believe that in the long run such would be the case. I certainly cannot conceive that, in the present state of affairs, we are likely to progress far, however late we sit to-night. I am precluded from suggesting that the right hon. Gentleman should postpone the Clause in order to take another Clause because we agreed to withdraw that proposal, but I suggest that he would be well advised to accept the Motion which we shall certainly press to a Division.
    Mr. P. SNOWDEN: The right hon. Gentleman said that he appreciated the kindness which I had shown.
    Mr. CHURCHILL: Of manner.
    Mr. SNOWDEN: I wish the right hon. Gentleman would take some other way of showing his appreciation. I certainly am not encouraged to be conciliatory by the reception which he has given to my suggestion. We have now been sitting for three hours, and we have not yet entered upon the discussion of the Amendments. I certainly do not accept the suggestion which has been made by the right hon. Gentleman opposite. I have taken the very unusual, almost unprecedented, course of explaining to the Committee beforehand the line which I intended to take on these Amendments. It has been
    1224
    urged first by the right hon. Gentleman the Member for St. George's (Sir L. Worthington-Evans) and later by the right hon. Gentleman the Member for Epping (Mr. Churchill) that it is necessary that they should see the Amendments which I am prepared to accept incorporated in the Clause, before they can arrive at an understanding of how they will affect the Bill. Really, if, as the right hon. Gentleman says, he is anxious to facilitate business, he has shown us a very strange way of facilitating business since a quarter to four o'Clock this afternoon. Something like two hours were, I will not say wasted, because I might not be permitted to use that word, but, at any rate, two hours have been taken on a point of Order of the most trivial importance, and now advantage has been taken of my unusual courtesy—[Interruption]—of my doing something which is very unusual for the convenience of the Committee, and this is the way in which it has been met. If the right hon. Member for Epping and the right hon. Member for St. George's are not prepared to co-operate, there is only one course open. The right hon. Member for Epping made a most defiant speech one day last week, when he said, "We shall use all our resources in order to prevent your getting this Bill."
    Mr. CHURCHILL: No, I did not.
    Mr. SNOWDEN: The right hon. Gentleman knows he did. If that is the attitude of the right hon. Gentleman now, if he and his party are not prepared to co-operate, and if they are not prepared to accept, except after these prolonged discussions, concessions that I make, there is only one thing we can do, and that is that we shall have to ask the House of Commons to support a Guillotine Resolution. I would remind hon. Members opposite that the Prime Minister has announced the programme of business that must be carried through—[An HON. MEMBER: "Must?"] Yes, that must be carried through, and will be carried through, before this Session is prorogued, and before hon. Members can go away upon their holidays. Therefore, I would remind them that every day they delay progress with the consideration of this or other Measures which will be passed before the House rises, they are detaining themselves from taking their own holidays. I shall certainly not accept the

    1225
    suggestion of the right hon. Gentleman. I think it is most unreasonable, and I think it, is high time that the tomfoolery we have had this afternoon ceased.
    HON. MEMBERS: Withdraw!
    Sir KINGSLEY WOOD: I should like—
    Mr. MILLS Mr. MILLS rose in his place, and claimed to move, "That the Question be now put," but the CHAIRMAN withheld his assent, and declined then to put that Question.
    Sir K. WOOD: I suggest to the Chancellor of the Exchequer and to the Committee that he has only himself to thank for the position in which he finds himself this afternoon. Few hon. Members of the House can have witnessed such a total lack of the proper method of conducting a Bill as we have seen this afternoon with regard to these Clauses, and it is for this reason that I press the Motion which is before the Committee. The right hon. Gentleman said we ought to be grateful and pleased with the way in which the Chancellor of the Exchequer had dealt with this Clause, but it is perfectly evident that neither the Chancellor of the Exchequer nor the Attorney-General had been through this Clause as we should expect Ministers to do before it was presented to the House.
    Mr. WESTWOOD: On a point of Order. Are we to understand that the right hon. Gentleman is discussing the merits of the Clause or the Motion to report Progress?
    Sir K. WOOD: I will proceed by saying that it is perfectly evident that neither the Chancellor of the Exchequer nor the Attorney-General has made himself acquainted with the Bill which they have presented to this House, and what in fact has happened is that, after the Bill had been presented and the Amendments had been put upon the Paper, for the first time they have addressed themselves to the proposals in this Clause; and they now come forward and place you, Mr. Dunnico, and the Committee at an obvious disadvantage by only this morning placing on the Order Paper certain important Amendments. I should not for a moment criticise the Government if one or two Amendments had been put down for the first time this morning, but it is unpardonable,
    1226
    from the point of view both of the Chair and of the Members of the Committee, to ask us to deal with all these Amendments that have been put on the Paper in this way. The right hon. Gentleman has no right to thank the Chancellor. [Interruption.] It is not a matter of congratulating Ministers for bringing in Amendments and putting them on the Paper at this very late hour. The proper course, and the course which has always been taken by men who have occupied the high position of Chancellor of the Exchequer, has been to present their Bills in a proper form to the House. From that point of view alone, it is only fair to the Committee that we should be able to examine these Amendments and to see what they imply and whether in fact they carry out the suggestions of the Chancellor of the Exchequer.
    He has sought to refer to incidents which have occurred at previous sittings in connection with this Bill. No doubt for his own purposes, he quite wrongly stated what had been said by my right hon. Friend the Member for Epping (Mr. Churchill), and if we are to have a controversy as to what was said upon some occasion last week, we are quite prepared to have it, but I do not propose myself to follow that, point. I wish to address myself to the two threats which, not for the first time, the Chancellor of the Exchequer has made to the Committee. He has made the threat, first, that he will apply a guillotine to this Bill if he can get the House to agree to it. Secondly, he has threatened the Committee with sitting, I suppose, for some considerable time in August. It is not the first time that the Chancellor of the Exchequer has threatened the Committee in the course of this Bill. Only a night or two ago he threatened to get seven or eight Clauses, and he got one. Whatever reasons or threats the Chancellor of the Exchequer likes to bring forward, we on this side propose to do our duty in connection with this Bill, and if the Chancellor of the Exchequer so mismanages his Bill——
    Mr. W. THORNE: On a point of Order. May I ask whether you think the discussion has gone on long enough?
    Sir K. WOOD: No threat that the Chancellor addresses to this Committee

    1227
    will make the least difference to us. If he had frankly stated that the real reason for the course which has had to be taken to-day was the fact that he has put down very late Amendments on the Paper, I think the Committee would have been prepared to give him every consideration, but the tone and temper of the Chancellor of the Exchequer are such that he is the
    man who is really responsible for what has occurred.
    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, 284; Noes, 144.

    Division No. 387.]

    AYES.

    [6.55 p.m.

    Adamson, Rt. Hon. W. (Fife, West)

    England, Colonel A.

    Lambert, Rt. Hon. George (S. Molton)

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

    Evans, Capt. Ernest (Welsh Univ.)

    Lansbury, Rt. Hon. George

    Addison, Rt. Hon. Dr. Christopher

    Foot, Isaac

    Lathan, G.

    Aitchison, Rt. Hon. Craigie M.

    Forgan, Dr. Robert

    Law, Albert (Bolton)

    Alpass, J. H.

    Freeman, Peter

    Law, A. (Rosendale)

    Ammon, Charles George

    Gardner, B. W. (West Ham, Upton)

    Lawrence, Susan

    Arnott, John

    George, Rt. Hon. D. Lloyd (Car'vn)

    Lawrie, Hugh Hartley (Stalybridge)

    Aske, Sir Robert

    George, Major G. Lloyd (Pembroke)

    Lawson, John James

    Attlee, Clement Richard

    George, Megan Lloyd (Anglesea)

    Lawther, W. (Barnard Castle)

    Baker, John (Wolverhampton, Bilston)

    Gibbins, Joseph

    Leach, W.

    Baldwin, Oliver (Dudley)

    Gibson, H. M. (Lancs, Mossley)

    Lee, Frank (Derby, N. E.)

    Barnes, Alfred John

    Gill, T. H.

    Lee, Jennie (Lanark, Northern)

    Barr, James

    Gillett, George M.

    Lees, J.

    Bellamy, Albert

    Glassey, A. E.

    Lewis, T. (Southampton)

    Benn, Rt. Hon. Wedgwood

    Gossling, A. G.

    Lindley, Fred W.

    Bennett, Capt. Sir E. N. (Cardiff C.)

    Gould, F.

    Logan, David Gilbert

    Bennett, William (Battersea, South)

    Graham, D. M. (Lanark, Hamilton)

    Longbottom, A. W.

    Benson, G.

    Graham, Rt. Hon. Wm. (Edin., Cent.)

    Longden, F.

    Bentham, Dr. Ethel

    Granville, E.

    Lowth, Thomas

    Bevan, Aneurin (Ebbw Vale)

    Greenwood, Rt. Hon. A. (Colne)

    Lunn, William

    Birkett, W. Norman

    Grenfell, D. R. (Glamorgan)

    Macdonald, Gordon (Ince)

    Blindell, James

    Griffith, F. Kingsley (Middlesbro' W.)

    MacDonald, Rt. Hon. J. R. (Seaham)

    Bondfield, Rt. Hon. Margaret

    Griffiths, T. (Monmouth, Pontypool)

    MacDonald, Malcolm (Bassetlaw)

    Bowen, J. W.

    Groves, Thomas E.

    McElwee, A.

    Bowerman, Rt. Hon. Charles W.

    Grundy, Thomas W.

    McEntee, V. L.

    Broad, Francis Alfred

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

    McKinlay, A.

    Brockway, A. Fenner

    Hall, G. H. (Merthyr Tydvil)

    MacLaren, Andrew

    Bromfield, William

    Hall, Capt. W. P. (Portsmouth, C.)

    Maclean, Sir Donald (Cornwall, N.)

    Brooke, W.

    Harbord, A.

    Maclean, Nell (Glasgow, Govan)

    Brothers, M.

    Hardie, George D.

    MacNeill-Weir, L.

    Brown, C. W. E. (Notts, Mansfield)

    Harris, Percy A.

    McShane, John James

    Brown, Ernest (Leith)

    Hartshorn, Rt. Hon. Vernon

    Malone, C. L'Estrange (N'thampton)

    Brown, Rt. Hon. J. (South Ayrshire)

    Haycock, A. W.

    Mander, Geoffrey le M.

    Buchanan, G.

    Hayday, Arthur

    Mansfield, W.

    Burgess, F. G.

    Hayes, John Henry

    March, S.

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

    Henderson, Rt. Hon. A. (Burnley)

    Marley, J.

    Caine, Derwent Hall-

    Henderson, Arthur, Junr, (Cardiff, S.)

    Marshall, F.

    Cameron, A. G.

    Henderson, Thomas (Glasgow)

    Mathers, George

    Cape, Thomas

    Henderson, W. W. (Middx., Enfield)

    Matters, L. W.

    Carter, W. (St. Pancras, S. W.)

    Herriotts, J.

    Messer, Fred

    Charleton, H. C.

    Hirst, G. H. (York W. R. Wentworth)

    Middleton, G.

    Chater, Daniel

    Hirst, W. (Bradford, South)

    Millar, J. D.

    Church, Major A. G.

    Hoffman, P. C.

    Mills, J. E.

    Clarke, J. S.

    Hollins, A.

    Milner, Major J.

    Cluse, W. S.

    Hopkin, Daniel

    Montague, Frederick

    Clynes, Rt. Hon. John R.

    Hore-Belisha, Leslie

    Morgan, Dr. H. B.

    Cocks, Frederick Seymour.

    Horrabin, J. F.

    Morley, Ralph

    Compton, Joseph

    Hudson, James H. (Huddersfield)

    Morrison, Herbert (Hackney, South)

    Cove, William G.

    Hunter, Dr. Joseph

    Morrison, Robert C. (Tottenham, N.)

    Cowan, D. M.

    Hutchison, Maj.-Gen. Sir R.

    Mort, D. L.

    Daggar, George

    Jenkins, W. (Glamorgan, Neath)

    Moses, J. J. H.

    Dallas, George

    John, William (Rhondda, West)

    Mosley, Sir Oswald (Smethwick)

    Dalton, Hugh

    Johnston, Thomas

    Muff, G.

    Davies, E. C. (Montgomery)

    Jones, F. Llewellyn- (Flint)

    Muggeridge, H. T.

    Day, Harry

    Jones, Henry Haydn (Merioneth)

    Murnin, Hugh

    Denman, Hon. R. D.

    Jones, J. J. (West Ham, Silvertown)

    Nathan, Major H. L.

    Dickson, T.

    Jones, Rt. Hon. Leif (Camborne)

    Naylor, T. E.

    Dudgeon, Major C. R.

    Jones, Morgan (Caerphilly)

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

    Dukes, C.

    Jones, T. I. Mardy (Pontypridd)

    Noel Baker, P. J.

    Duncan, Charles

    Jowett, Rt. Hon. F. W.

    Oldfield, J. R.

    Ede, James Chuter

    Jowitt, Rt. Hon. Sir W. A.

    Oliver, George Harold (Ilkeston)

    Edge, Sir William

    Kedward, R. M. (Kent, Ashford)

    Oliver, P. M. (Man., Blackley)

    Edmunds, J. E.

    Kelly, W. T.

    Owen, Major G. (Carnarvon)

    Edwards, C. (Monmouth, Bedwellty)

    Kennedy, Thomas

    Palin, John Henry

    Edwards, E. (Morpeth)

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

    Palmer, E. T.

    Egan, W. H.

    Kirkwood, D.

    Parkinson, John Allen (Wigan)

    Elmley, Viscount

    Knight, Holford

    Pethick-Lawrence, F. W.

    Phillips, Dr. Marion

    Sherwood, G. H.

    Townend, A. E.

    Picton-Turbervill, Edith

    Shield, George William

    Trevelyan, Rt. Hon. Sir Charles

    Pole, Major D. G.

    Shillaker, J. F.

    Turner, B.

    Potts, John S.

    Short, Alfred (Wednesbury)

    Vaughan, D. J.

    Pybus, Percy John

    Simmons, C. J.

    Viant, S. P.

    Quibell, D. J. K.

    Sinclair, Sir A. (Caithness)

    Walkden, A. G.

    Rathbone, Eleanor

    Sinkinson, George

    Walker, J.

    Raynes, W. R.

    Smith, Frank (Nuneaton)

    Wallace, H. W.

    Richards, R.

    Smith, H. B. Lees (Keighley)

    Watkins, F. C.

    Richardson, R. (Houghton-le-Spring)

    Smith, Rennie (Penistone)

    Watson, W. M. (Dunfermline)

    Riley, F. F. (Stockton-on-Tees)

    Smith, Tom (Pontefract)

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

    Ritson, J.

    Smith, W. R. (Norwich)

    Wellock, Wilfred

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

    Snell, Harry

    Welsh, James C. (Coatbridge)

    Robinson, Sir T. (Lancs, Stretford)

    Snowden, Rt. Hon. Philip

    West, F. R.

    Romeril, H. G.

    Snowden, Thomas (Accrington)

    Westwood, Joseph

    Rosbotham, D. S. T.

    Sorensen, R.

    White, H. G.

    Rowson, Guy

    Stamford, Thomas W.

    Whiteley, William (Blaydon)

    Russell, Richard John (Eddisbury)

    Strachey, E. J. St. Loe

    Wilkinson, Ellen C.

    Salter, Dr. Alfred

    Strauss, G. R.

    Williams, Dr. J. H. (Llanelly)

    Samuel, Rt. Hon. Sir H. (Darwen)

    Sullivan, J.

    Williams, T. (York, Don Valley)

    Sanders, W. S.

    Sutton, J. E.

    Wilson, C. H. (Sheffield, Attercliffe)

    Sawyer, G. F.

    Taylor, R. A. (Lincoln)

    Wilson, J. (Oldham)

    Scott, James

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

    Wilson, R. J. (Jarrow)

    Scrymgeour, E.

    Thorne, W. (West Ham, Plaistow)

    Winterton, G. E. (Leicester, Loughb'gh)

    Scurr, John

    Thurtle, Ernest

    Wright, W. (Rutherglen)

    Sexton, James

    Tillett, Ben

    Young, R. S. (Islington, North)

    Shaw, Rt. Hon. Thomas (Preston)

    Tinker, John Joseph

    Shepherd, Arthur Lewis

    Tout, W. J.

    TELLERS FOR THE AYES.—

    Mr. B. Smith and Mr. Paling.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Edmondson, Major A. J.

    Mitchell, Sir W. Lane (Streatham)

    Albery, Irving James

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

    Mond, Hon. Henry

    Allen, Sir J. Sandeman (Liverp'l., W.)

    Everard, W. Lindsay

    Nicholson, O. (Westminster)

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

    Falle, Sir Bertram G.

    Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)

    Atholl, Duchess of

    Ferguson, Sir John

    Nield, Rt. Hon. Sir Herbert

    Baldwin, Rt. Hon. Stanley (Bewdley)

    Fermoy, Lord

    O'Neill, Sir H.

    Balfour, George (Hampstead)

    Fison, F. G. Clavering

    Peto, Sir Basil E. (Devon, Barnstaple)

    Balniel, Lord

    Ganzoni, Sir John

    Ramsbotham, H.

    Beamish, Rear-Admiral T. P. H.

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

    Reid, David D. (County Down)

    Beaumont, M. W.

    Glyn, Major R. G. C.

    Remer, John R.

    Berry, Sir George

    Grace, John

    Rentoul, Sir Gervais S.

    Betterton, Sir Henry B.

    Graham, Fergus (Cumberland, N.)

    Reynolds, Col. Sir James

    Bevan, S. J. (Holborn)

    Greaves-Lord, Sir Walter

    Richardson, Sir P. W. (Sur'y, Ch't'sy)

    Birchall, Major Sir John Dearman

    Grenfell, Edward C. (City of London)

    Roberts, Sir Samuel (Ecclesall)

    Bird, Ernest Roy

    Gretton, Colonel Rt. Hon. John

    Ross, Major Ronald D.

    Bourne, Captain Robert Croft

    Gritten, W. G. Howard

    Ruggles-Brise, Lieut.-Colonel E. A.

    Bowater, Col. Sir T. Vansittart

    Guinness, Rt. Hon. Walter E.

    Russell, Alexander West (Tynemouth)

    Bowyer, Captain Sir George E. W.

    Gunston, Captain D. W.

    Salmon, Major I.

    Bracken, B.

    Hacking, Rt. Hon. Douglas H.

    Samuel, A. M. (Surrey, Farnham)

    Brass, Captain Sir William

    Hamilton, Sir George (Ilford)

    Samuel, Samuel (W'dsworth, Putney)

    Briscoe, Richard George

    Hammersley, S. S.

    Sandeman, Sir N. Stewart

    Brown, Col. D. C. (N'th'l'd., Hexham)

    Hanbury, C.

    Shepperson, Sir Ernest Whittome

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

    Hartington, Marquess of

    Smith, R. W. (Aberd'n & Kinc'dine, C.)

    Buckingham, Sir H.

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

    Smith-Carington, Neville W.

    Bullock, Captain Malcolm

    Heneage, Lieut.-Colonel Arthur P.

    Smithers, Waldron

    Butler, R. A.

    Hennessy, Major Sir G. R. J.

    Somerset, Thomas

    Cadogan, Major Hon. Edward

    Herbert, Sir Dennis (Hertford)

    Somerville, A. A. (Windsor)

    Carver, Major W. H.

    Hills, Major Rt. Hon. John Waller

    Southby, Commander A. R. J.

    Cayzer, Maj. Sir Herbt, R. (Prtsmth, S.)

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

    Spender-Clay, Colonel H.

    Cazalet, Captain Victor A.

    Hope, Sir Harry (Forfar)

    Stanley, Lord (Fylde)

    Chapman, Sir S.

    Howard-Bury, Colonel C. K.

    Steel-Maitland, Rt. Hon. Sir Arthur

    Christie, J. A.

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

    Thomas, Major L. B. (King's Norton)

    Churchill, Rt. Hon. Winston Spencer

    Hunter-Weston, Lt.-Gen. Sir Aylmer

    Titchfield, Major the Marquess of

    Cobb, Sir Cyril

    Jones, Sir G. W. H. (Stoke New'gton)

    Train, J.

    Colfox, Major William Philip

    King, Commodore Rt. Hon. Henry D.

    Tryon, Rt. Hon. George Clement

    Colville, Major D. J.

    Lamb, Sir J. Q.

    Vaughan Morgan, Sir Kenyon

    Cranborne, Viscount

    Lane Fox, Col. Rt. Hon. George R.

    Wallace, Capt. D. E. (Hornsey)

    Crichton-Stuart, Lord C.

    Law, Sir Alfred (Derby, High Peak)

    Waterhouse, Captain Charles

    Croft, Brigadier-General Sir H.

    Lewis, Oswald (Colchester)

    Wells, Sydney R.

    Crookshank, Capt. H. C.

    Locker-Lampson, Rt. Hon. Godfrey

    Williams, Charles (Devon, Torquay)

    Culverwell, C. T. (Bristol, West)

    McConnell, Sir Joseph

    Wilson, G. H. A. (Cambridge U.)

    Dalkeith, Earl of

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

    Windsor-Clive, Lieut.-Colonel George

    Dalrymple-White, Lt.-Col. Sir Godfrey

    Macquisten, F. A.

    Wolmer, Rt. Hon. Viscount

    Davidson, Rt. Hon. J. (Hertford)

    MacRobert, Rt. Hon. Alexander M.

    Womersley, W. J.

    Davidson, Major-General Sir J. H.

    Maitland, A. (Kent, Faversham)

    Wood, Rt. Hon. Sir Kingsley

    Davies, Dr. Vernon

    Makins, Brigadier-General E.

    Worthington-Evans, Rt. Hon. Sir L.

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

    Margesson, Captain H. D.

    Dixon, Captain Rt. Hon. Herbert

    Mason, Colonel Glyn K.

    TELLERS FOR THE NOES.—

    Duckworth, G. A. V.

    Merriman, Sir F. Boyd

    Sir Frederick Thomson and Sir

    George Penny.

    Question put accordingly, "That the Chairman do report Progress, and ask leave to sit again."
    The Committee divided: Ayes, 149; Noes, 287.

    Division No. 388.]

    AYES.

    [7.6 p.m.

    Acland-Troyte, Lieut.-Colonel

    Dugdale, Capt. T. L.

    Mond, Hon. Henry

    Albery, Irving James

    Edmondson, Major A. J.

    Nicholson, O. (Westminster)

    Allen, Sir J. Sandeman (Liverp'l., W.)

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

    Nield, Rt. Hon. Sir Herbert

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

    Everard, W. Lindsay

    O'Neill, Sir H.

    Atholl, Duchess of

    Falle, Sir Bertram G.

    Peake, Captain Osbert

    Atkinson, C.

    Ferguson, Sir John

    Penny, Sir George

    Baldwin, Rt. Hon. Stanley (Bewdley)

    Fermoy, Lord

    Peto Sir Basil E. (Devon, Barnstaple)

    Balfour, George (Hampstead)

    Fison, F. G. Clavering

    Ramsbotham, H.

    Balniel, Lord

    Ganzoni, Sir John

    Rawson, Sir Cooper

    Beamish, Rear-Admiral T. P. H.

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

    Reid, David D. (County Down)

    Beaumont, M. W.

    Grace, John

    Remer, John R.

    Berry, Sir George

    Graham, Fergus (Cumberland, N.)

    Rentoul, Sir Gervais S.

    Betterton, Sir Henry B.

    Greaves-Lord, Sir Walter

    Reynolds, Col. Sir James

    Bevan, S. J. (Holborn)

    Grenfell, Edward C. (City of London)

    Richardson, Sir P. W. (Sur'y, Ch't'sy)

    Birchall, Major Sir John Dearman

    Gretton, Colonel Rt. Hon. John

    Roberts, Sir Samuel (Ecclesall)

    Bird, Ernest Roy

    Gritten, W. G. Howard

    Ross, Major Ronald D.

    Bourne, Captain Robert Croft

    Guinness, Rt. Hon. Walter E.

    Ruggles-Brise, Lieut.-Colonel E. A.

    Bowater, Col. Sir T. Vansittart

    Gunston, Captain D. W.

    Russell, Alexander West (Tynemouth)

    Bowyer, Captain Sir George E. W.

    Hacking, Rt. Hon. Douglas H.

    Salmon, Major I.

    Bracken, B.

    Hamilton, Sir George (Ilford)

    Samuel, A. M. (Surrey, Farnham)

    Brass, Captain Sir William

    Hammersley, S. S.

    Samuel, Samuel (W'dsworth, Putney)

    Briscoe, Richard George

    Hanbury, C.

    Sandeman, Sir N. Stewart

    Brown, Col. D. C. (N'th'l'd., Hexham)

    Hartington, Marquess of

    Shepperson, Sir Ernest Whittome

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

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

    Smith, R. W. (Aberd'n & Kinc'dine, C.)

    Buckingham, Sir H.

    Heneage, Lieut.-Colonel Arthur P.

    Smith-Carington, Neville W.

    Bullock, Captain Malcolm

    Hennessy, Major Sir G. R. J.

    Smithers, Waldron

    Butler, R. A.

    Herbert, Sir Dennis (Hertford)

    Somerset, Thomas

    Cadogan, Major Hon. Edward

    Hills, Major Rt. Hon. John Waller

    Somerville, A. A. (Windsor)

    Carver, Major W. H.

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

    Southby, Commander A. R. J.

    Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)

    Hope, Sir Harry (Forfar)

    Spender-Clay, Colonel H.

    Cazalet, Captain Victor A.

    Howard-Bury, Colonel C. K.

    Stanley, Lord (Fylde)

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

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

    Steel-Maitland, Rt. Hon. Sir Arthur

    Chapman, Sir S.

    Hunter-Weston, Lt.-Gen. Sir Aylmer

    Stuart, Hon. J. (Moray and Nairn)

    Christie, J. A.

    Jones, Sir G. W. H. (Stoke New'gton)

    Thomas, Major L. B. (King's Norton)

    Churchill, Rt. Hon. Winston Spencer

    King, Commodore Rt. Hon. Henry D.

    Titchfield, Major the Marquess of

    Cobb, Sir Cyril

    Lamb, Sir J. Q.

    Train, J.

    Colfox, Major William Philip

    Lane Fox, Col. Rt. Hon. George R.

    Tryon, Rt. Hon. George Clement

    Colville, Major D. J.

    Law, Sir Alfred (Derby, High Peak)

    Vaughan-Morgan, Sir Kenyon

    Cranborne, Viscount

    Lewis, Oswald (Colchester)

    Waterhouse, Captain Charles

    Crichton-Stuart, Lord C.

    Llewellin, Major J. J.

    Wells, Sydney R.

    Croft, Brigadier-General Sir H.

    Locker-Lampson. Rt. Hon. Godfrey

    Williams, Charles (Devon, Torquay)

    Crookshank, Cpt. H. (Lindsey, Gainsbro)

    McConnell, Sir Joseph

    Wilson, G. H. A. (Cambridge U.)

    Culverwell, C. T. (Bristol, West)

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

    Windsor-Clive, Lieut.-Colonel George

    Dalkeith, Earl of

    Macquisten, F. A.

    Wolmer, Rt. Hon. Viscount

    Dalrymple-White, Lt.-Col. Sir Godfrey

    MacRobert, Rt. Hon. Alexander M.

    Womersley, W. J.

    Davidson, Rt. Hon. J. (Hertford)

    Maitland, A. (Kent, Faversham)

    Wood, Rt. Hon. Sir Kingsley

    Davidson, Major-General Sir J. H.

    Makins, Brigadier-General E.

    Worthington-Evans, Rt. Hon. Sir L.

    Davies, Dr. Vernon

    Margesson, Captain H. D.

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

    Mason, Colonel Glyn K.

    TELLERS FOR THE AYES.—

    Dixon, Captain Rt. Hon. Herbert

    Merriman, Sir F. Boyd

    Sir Frederick Thomson and Captain

    Duckworth, G. A. V.

    Mitchell, Sir W. Lane (Streatham)

    Wallace.

    NOES.

    Adamson, Rt. Hon. W. (Fife, West)

    Bondfield, Rt. Hon. Margaret

    Cluse, W. S.

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

    Bowen, J. W.

    Clynes, Rt. Hon. John R.

    Addison, Rt. Hon. Dr. Christopher

    Bowerman, Rt. Hon. Charles W.

    Cocks, Frederick Seymour

    Aitchison, Rt. Hon. Craigie M.

    Broad, Francis Alfred

    Compton, Joseph

    Alpass, J. H.

    Brockway, A. Fenner

    Cove, William G.

    Ammon, Charles George

    Bromfield, William

    Cowan, D. M.

    Arnott, John

    Brooke, W.

    Daggar, George

    Aske, Sir Robert

    Brothers, M.

    Dallas, George

    Attlee, Clement Richard

    Brown, C. W. E. (Notts, Mansfield)

    Dalton, Hugh

    Ayles, Walter

    Brown, Ernest (Leith)

    Davies, E. C. (Montgomery)

    Baker, John (Wolverhampton, Bilston)

    Brown, Rt. Hon. J. (South Ayrshire)

    Day, Harry

    Baldwin, Oliver (Dudley)

    Buchanan, G.

    Denman, Hon. R. D.

    Barnes, Alfred John

    Burgess, F. G.

    Dickson, T.

    Barr, James

    Burgin, Dr. E. L.

    Dudgeon, Major C. R.

    Bellamy, Albert

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

    Dukes, C.

    Benn, Rt. Hon. Wedgwood

    Caine, Derwent Hall-

    Duncan, Charles

    Bennett, Capt. Sir E. N. (Cardiff C.)

    Cameron, A. G.

    Ede, James Chuter

    Bennett, William (Battersea, South)

    Cape, Thomas

    Edge, Sir William

    Benson, G.

    Carter, W. (St. Pancras, S. W.)

    Edmunds, J. E.

    Bentham, Dr. Ethel

    Charleton, H. C.

    Edwards, C. (Monmouth, Bedwellty)

    Bevan, Aneurin (Ebbw Vale)

    Chater, Daniel

    Edwards, E. (Morpeth)

    Birkett, W. Norman

    Church, Major A. G.

    Egan, W. H.

    Blindell, James

    Clarke, J. S.

    Elmley, Viscount

    England, Colonel A.

    Lawrie, Hugh Hartley (Stalybridge)

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

    Evans, Capt. Ernest (Welsh Univer.)

    Lawson, John James

    Robinson, Sir T. (Lancs, Stretford)

    Foot, Isaac

    Lawther, W. (Barnard Castle)

    Romeril, H. G.

    Forgan, Dr. Robert

    Leach, W.

    Rosbotham, D. S. T.

    Freeman, Peter

    Lee, Frank (Derby, N. E.)

    Rowson, Guy

    Gardner, B. W. (West Ham, Upton)

    Lee, Jennie (Lanark, Northern)

    Russell, Richard John (Eddisbury)

    George, Rt. Hon. D. Lloyd (Car'vn)

    Lees, J.

    Salter, Dr. Alfred

    George, Major G. Lloyd (Pembroke)

    Lewis, T. (Southampton)

    Samuel, Rt. Hon. Sir H. (Darwen)

    George, Megan Lloyd (Anglesea)

    Lindley, Fred W.

    Sanders, W. S.

    Gibbins, Joseph

    Logan, David Gilbert

    Sawyer, G. F.

    Gibson, H. M. (Lancs, Mossley)

    Longbottom, A. W.

    Scott, James

    Gill, T. H.

    Longden, F.

    Scrymgeour, E.

    Gillett, George M.

    Lowth, Thomas

    Scurr, John

    Glassey, A. E.

    Lunn, William

    Sexton, James

    Gossling, A. G.

    Macdonald, Gordon (Ince)

    Shaw, Rt. Hon. Thomas (Preston)

    Gould, F.

    MacDonald, Rt. Hon. J. R. (Seaham)

    Shepherd, Arthur Lewis

    Graham, D. M. (Lanark, Hamilton)

    MacDonald, Malcolm (Bassetlaw)

    Sherwood, G. H.

    Graham, Rt. Hon. Wm. (Edin., Cent.)

    McElwee, A.

    Shield, George William

    Granville, E.

    McEntee, V. L.

    Shillaker, J. F.

    Greenwood, Rt. Hon. A. (Colne)

    McKinlay, A.

    Short, Alfred (Wednesbury)

    Grenfell, D. R. (Glamorgan)

    MacLaren, Andrew

    Simmons, C. J.

    Griffith, F. Kingsley (Middlesbro' W.)

    Maclean, Sir Donald (Cornwall, N.)

    Sinclair, Sir A. (Caithness)

    Griffiths, T. (Monmouth, Pontypool)

    Maclean, Neil (Glasgow, Govan)

    Sinkinson, George

    Groves, Thomas E.

    MacNeill-Weir, L.

    Smith, Frank (Nuneaton)

    Grundy, Thomas W.

    McShane, John James

    Smith, H. B. Lees (Keighley)

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

    Malone, C. L'Estrange (N'thampton)

    Smith, Rennie (Penistone)

    Hall, G. H. (Merthyr Tydvil)

    Mander, Geoffrey le M.

    Smith, Tom (Pontefract)

    Hall, Capt. W. P. (Portsmouth, C.)

    Mansfield, W.

    Smith, W. R. (Norwich)

    Harbord, A.

    March, S.

    Snell, Harry

    Hardie, George D.

    Marley, J.

    Snowden, Rt. Hon. Philip

    Harris, Percy A.

    Marshall, Fred

    Snowden, Thomas (Accrington)

    Hartshorn, Rt. Hon. Vernon

    Mathers, George

    Sorensen, R.

    Haycock, A. W.

    Matters, L. W.

    Stamford, Thomas W.

    Hayday, Arthur

    Messer, Fred

    Strachey, E. J. St. Loe

    Hayes, John Henry

    Middleton, G.

    Strauss, G. R.

    Henderson, Right Hon. A. (Burnley)

    Millar, J. D.

    Sullivan, J.

    Henderson, Arthur, Junr, (Cardiff, S.)

    Mills, J. E.

    Sutton, J. E.

    Henderson, Thomas (Glasgow)

    Milner, Major J.

    Taylor, H. A. (Lincoln)

    Henderson, W. W. (Middx., Enfield)

    Montague, Frederick

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

    Herriotts, J.

    Morgan, Dr. H. B.

    Thorne, W. (West Ham, Plaistow)

    Hirst, G. H. (York W. R. Wentwortn)

    Morley, Ralph

    Thurtle, Ernest

    Hirst, W. (Bradford, South)

    Morrison, Herbert (Hackney, South)

    Tillett, Ben

    Hoffman, P. C.

    Morrison, Robert C. (Tottenham, N.)

    Tinker, John Joseph

    Hollins, A.

    Mort, D. L.

    Tout, W. J.

    Hopkin, Daniel

    Moses, J. J. H.

    Townend, A. E.

    Hore-Belisha, Leslie

    Mosley, Sir Oswald (Smethwick)

    Trevelyan, Rt. Hon. Sir Charles

    Horrabin, J. F.

    Muff, G.

    Turner, B.

    Hudson, James H. (Huddersfield)

    Muggeridge, H. T.

    Vaughan, D. J.

    Hunter, Dr. Joseph

    Murnin, Hugh

    Viant, S. P.

    Hutchison, Maj.-Gen. Sir R.

    Nathan, Major H. L.

    Walkden, A. G.

    Jenkins, W. (Glamorgan, Neath)

    Naylor, T. E.

    Walker, J.

    John, William (Rhondda, West)

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

    Wallace, H. W.

    Johnston, Thomas

    Noel Baker, P. J.

    Watkins, F. C.

    Jones, F. Llewellyn- (Flint)

    Oldfield, J. R.

    Watson, W. M. (Dunfermline)

    Jones, Henry Haydn (Merioneth)

    Oliver, George Harold (Ilkeston)

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

    Jones, J. J. (West Ham, Silvertown)

    Oliver, P. M. (Man., Blackley)

    Wellock, Wilfred

    Jones, Rt. Hon Leif (Camborne)

    Owen, Major G. (Carnarvon)

    Welsh, James C. (Coatbridge)

    Jones, Morgan (Caerphilly)

    Palin, John Henry

    West, F. R.

    Jones, T. I. Mardy (Pontypridd)

    Palmer, E. T.

    Westwood, Joseph

    Jowett, Rt. Hon. F. W.

    Parkinson, John Allen (Wigan)

    White, H. G.

    Jowitt, Rt. Hon. Sir W. A.

    Pethick-Lawrence, F. W.

    Whiteley, William (Blaydon)

    Kedward, R. M. (Kent, Ashford)

    Phillips, Dr. Marion

    Wilkinson, Ellen C.

    Kelly, W. T.

    Picton-Turbervill, Edith

    Williams, Dr. J. H. (Llanelly)

    Kennedy, Thomas

    Pole, Major D. G.

    Williams, T. (York, Don Valley)

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

    Potts, John S.

    Wilson, C. H. (Sheffield, Attercliffe)

    Kirkwood, D.

    Pybus, Percy John

    Wilson, J. (Oldham)

    Knight, Holford

    Quibell, D. J. K.

    Wilson, R. J. (Jarrow)

    Lambert, Rt. Hon. George (S. Molton)

    Rathbone, Eleanor

    Winterton, G. E. (Leicester, Loughb'gh)

    Lansbury, Rt. Hon. George

    Raynes, W. R.

    Wood, Major McKenzie (Banff)

    Lathan, G.

    Richards, R.

    Wright, W. (Rutherglen)

    Law, Albert (Bolton)

    Richardson, R. (Houghton-le-Spring)

    Young, R. S. (Islington, North)

    Law, A. (Rosendale)

    Riley, F. F. (Stockton-on-Tees)

    Lawrence, Susan

    Ritson, J.

    TELLERS FOR THE NOES.—

    Mr. B. Smith and Mr. Paling.

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

    The DEPUTY-CHAIRMAN: Sir Laming Worthington-Evans.
    Sir L. WORTHINGTON-EVANS: This Clause is now so much amended that I do not know really where I am. May I ask you which particular Amendment I am called upon to move?
    The DEPUTY - CHAIRMAN: The Amendment which I called is the first on the Order Paper standing in the name of the right hon. Gentleman—In page 24, line 18, after the word "person," to insert the words:

    1235
    "having a proprietary or other interest in a company and not being merely an employé of a private company."
    I made inquiries as to whether the right hon. Gentleman wished to move this, having regard to the statement of the Chancellor of the Exchequer, and I understood that he wished to move it.
    Sir L. WORTHINGTON-EVANS: I am not by any means certain that the point which I had in mind requires to be protected in this way. [Interruption.] The point was that in the Bill, as originally drafted in Clause 29—[Interruption.]
    Mr. MACLEAN: On a point of Order. May I ask which right hon. Member on the Front Opposition Bench is addressing this Amendment to the Committee?
    The DEPUTY-CHAIRMAN: I understood that the right hon. Gentleman was moving the Amendment.
    Sir L. WORTHINGTON-EVANS: I was saying that, owing to the alteration made in the Bill by the Chancellor of the Exchequer, I was not sure whether it was now necessary to move this Amendment. The point was that I wanted to protect the employé of a private company, who might have transferred to a private company some property, from having his Death Duties increased because of that transfer, even though he had no proprietary interest whatever in the company. That was the absurd position which Clause 29 was in as it was submitted to the Committee, but I believe that the Amendments which the Chancellor has indicated will meet that point, and therefore I do not now move this Amendment.
    Sir HENRY BETTERTON: I beg to move, in page 24, line 20, after the word "made," to insert the words, "not more than 10 years prior to his death."
    The purpose of the Amendment is to ensure that there shall be some limit to the operation of the Clause. I suggest 10 years, but that is purely arbitrary, and might be more or less. It is not fair or right that there should be no limit at all to the time. As the Clause stands now, if a person who dies has at any time—it may be 20, 30, or 40 years—before his death made a transfer of property to a company, he is covered by the Clause. I submit that it is only fair that a reasonable
    1236
    period should be stated in the Bill beyond which the Clause is not operative. It is unfair that it should be unlimited in point of time.
    The ATTORNEY-GENERAL: I am afraid that we cannot accept this Amendment. The Committee will realise that we are only following precedent in that all Finance Bills when dealing with Estate Duties always consider the state of affairs prevailing at the date of death. If you are going to make the Bill apply to settlements that have already been made with regard to events that take place in the future, it will be quite illogical to attempt to draw any arbitrary division in point of time. For instance, a transfer nine years ago would be within, and a transfer 10 years ago would be without. That cannot be right. Surely the right principle to consider is this. So long as you confine your legislation to the state of affairs prevailing at the date of the death—and of course we do not make it apply to deaths that have taken place, but only to deaths that take place after the passing of the Bill—that is all that can be expected. The area on which this duty is imposed is limited to the extent of the transfer. The right hon. Gentleman argued that it was necessary to have an Amendment lest a small gift might bring about the obligation to pay a large duty. This is now a misapprehension, because, in view of the Amendments we have got, the area upon which the duty is to be calculated cannot be larger than the thing transferred. If you transfer a plot of ground worth £100 to a private company, the only part of the estate of the private company on which duty can be calculated is £100. The argument which the right hon. Gentleman raised does not apply now, as it did before.
    Mr. ARTHUR MICHAEL SAMUEL: I am not opposing the Clause, but, having listened to every word that the Attorney-General said, I am in a fog as to what the Clause means. What does the hon. and learned Gentleman mean when he talks about the extent of the transfer? He must remember that many of us on this side are not lawyers, but plain business men, and all we want is to understand what we are dealing with. He talks about the extent of the transfer, and it is abracadabra to us.
    The DEPUTY-CHAIRMAN: The only point raised here is that of time. We cannot discuss the whole general question. The only point before the Committee is whether there should be a time limit imposed restricting the operation of this Clause.
    Mr. SAMUEL: I agree, but the hon. and learned Gentleman made use of the words "extent of transfer." I am not attacking the point; I want to know what he means. He then talked about nine years quite arbitrarily, and then made use of the expression "eleven years." Why arbitrarily 11 years? My hon. Friend who moved the Amendment made use of the expression "10 years" as a peg on which to hang a question as to how the time is to be limited. It is unfair to have an unlimited period in this case. A transfer of property may have been made years ago, long before the death of the person concerned, and it is only fair that some limit should be put in the Clause to make it operate only in respect of transfers that were made within a reasonable period prior to death. What objection can there be to that? The Attorney-General says that he does not like 10 years; he mentioned nine, so let him put in some limit, and let us know where we are, so that there will be no chance later on of an unbounded amount of litigation to the annoyance and cost of everyone. The House ought to fight against passing legislation which we ourselves do not understand, so that when it comes before the taxpayers and questions arise, we may not have the scandal of taxpayers being forced into the Law Courts to fight out points which ought to be decided here. I have no intention to obstruct in this matter, and we may not go to a Division, but we ought to insist on having a thorough examination of what the effect of this Clause will be if no limit of time is put into it.
    Major GEORGE DAVIES: The Attorney-General's explanation of his objection to this Amendment sounded all right to him, but I have two grave objections to put forward. My first point is that we have to consider the bearing of this Amendment on some future Amendment which the Chancellor of the Exchequer has indicated he will accept. That shows the difficulty under which we are working. As a humble back bencher I have taken a great deal of
    1238
    trouble to study the implications of this extraordinarily complicated Measure. It hangs together in a very intricate way, and it is difficult to understand the extent to which an Amendment which is adumbrated will affect the situation with which we are dealing at the moment. My other objection is this. The Attorney-General has stated that he does not propose to make this Clause retroactive with respect to the date of death, that is, make it apply to anyone who dies prior to the Bill becoming an Act of Parliament. I suggest that another date which is just as important is the date on which some individual had conveyed certain property, under certain conditions, with no idea that what he did would be affected by this subsequent legislation. While it may not be retroactive with regard to the date of death, it certainly is going to affect transactions which were carried through prior to its passing.
    There are two vital dates concerned, the date of the transfer and the date of the death of the transferor or the transferee, and I maintain that we should receive the protection of a time limit such as is asked for in the Amendment. In regard to other taxation there is a time limit between the date of a gift and the death of the donor. If a gift is made within a period of less than three years before the death of the donor then taxation falls upon it, but if the gift were made earlier than three years it escapes taxation. I suggest that is a good precedent for our request that this Amendment ought to be accepted. No one is suggesting that there is anything sacrosanct about the figure 10 which is mentioned in the Amendment. It is taken as a round figure. It happens to end with an 0 and to be divisible by five. It is possible to have another figure giving a slightly longer or a slightly shorter period.
    There is a great deal of agreement on both sides of the Chamber on what we want to do in this Measure. No one wants to allow other people to escape their fair share of taxation. There is a selfish motive, because if they escape their share it will have to be borne by the rest of us. The whole point is how to avoid damaging the innocent when trying to secure the guilty. This Amendment provides a reasonable exception for those who cannot be regarded as being

    1239
    in the category of the guilty. That consideration would apply particularly to transfers that took place seven or eight years before this time. The people who made those transfers were supremely unconscious that any Chancellor of the Exchequer was going to be so bold—and the present Chancellor will regret that boldness before we have parted with the Clause—as to bring forward proposals for dealing with a complicated problem which his predecessors had tried to tackle and had left alone because it bristled with difficulties. I would welcome any really watertight proposal to catch tax evaders, but it is useless to plug up the holes in a ship if that can only be done at the cost of impairing the stability and the fair sailing properties of the ship. There were many cases seven, eight or nine years ago in which people made conveyances without any intention of trying to evade taxation, with no idea of forming one-man companies, and they will be hit by this legislation unless we insert a time limit. I do not regard the period of 10 years as like a decree of the Medes and Persians, but I think the principle at stake should have a little further consideration from the Treasury, and that they ought to meet us in this matter. In their endeavour to scoop in the guilty they are catching a whole lot of innocent people, and we wish to see that equity is done.
    Major HILLS: I foresee great difficulties and possible injustices unless some time limit is inserted here. Supposing that some 20 or 30 years before his death a man made a transfer to a company as defined by this Clause. The onus is then on his executors to prove that the transfer comes within the exceptions provided for in Sub-section (2) of the Clause. The Sub-section says that taxation will be payable unless the executors can show that the transfer was one where all the consideration of the sale was received wholly by the deceased for his own use and benefit. Surely the Attorney-General must see that it will be very hard for an executor to prove the exception. Is not that so?
    The ATTORNEY-GENERAL: The onus will not be on the executor. In order that Death Duties shall not attach to some property which was not at the date of death the property of the deceased, it
    1240
    must be shown that the property comes within a particular category or class. It is not enough merely to prove it is a transfer, you have to prove that it is a transfer of a particular designation. I do not thank it is right to say that there will be any onus on the executors at all. I think it will be for the tax officials to show that the transfer came within the particular class. The right hon. Gentleman will agree that we can define a class in this way: First define a larger class and then subtract from it. For example, six is seven minus one. We can define six in that way. I am sure he will see what I mean. They are first of all putting up the seven class—which is the seven in the example I have quoted—and they subtract certain things—which are the one—and it will be for the tax collector to show that this transfer comes within the six.
    Major HILLS: Of course, that would remove a great deal of the difficulty, but according to my reading of Sub-section (2) it refers to all transfers. I appreciate what the right hon. Gentleman has said about a class of property to which this Clause relates, and if he assures me that the onus will be on the taxing authority to prove that the contingency has arisen which makes the tax payable, that removes one of the difficulties I feel. All the same, I cannot see that it is consistent with justice to go back 20, 30 or 40 years. The transaction may have taken place long before there was any contemplation of a duty in the mind of the transferor. The transaction might go back to a time anterior to the imposition of Estate Duties at all, and surely it would be an absurd result that we should be taking steps to meet the evasion of a duty which had never been imposed at the time the transaction took place. Possibly 10 years is too short a time, but I think there ought to be some time limit.
    Further, these provisions will impose great expense on the estate. The revenue authorities, in discharge of their duty, will ask for a return of all transfers of property which have been made by the deceased person, and there will have to be a search through the accounts of the deceased. It will be an enormous business, and a very expensive one in the case of a man who has had large transactions in stocks and shares, or who

    1241
    has been an active man of business. Either the executor will have to prove that a transaction is outside the rule or the taxing authority will bring it inside the rule, and in either event all the accounts and business transactions will have to be gone through. The results to the revenue will not be very large but there will be an enormous expense to the estate of the deceased and a great deal of work for the officials of the Department.
    Major NATHAN: I rise to support this Amendment, but not for the reason given by the hon. Gentleman who moved it. The Attorney-General, in reply to the observations of that hon. Member, suggested that the Amendment ceased to be of importance now that the Chancellor of the Exchequer had agreed to insert a provision which will limit the amount on which the duty will be payable. With great respect to the Attorney-General I do not think that meets the point any more than I think his reply to the right hon. and gallant Member for Ripon (Major Hills) met the latter's point. The obligation imposed under this Clause is not upon the executors but upon the company. I would refer the Attorney-General to Clause 31, which makes the duty a debt chargeable against the company and puts upon the company the obligation of notifying the Commissioners of Inland Revenue of the death of the deceased. If the company wilfully fail to do so they are to be liable to a fine of £500. It may be a company incorporated outside these realms, and a company which has never heard of this Finance Bill at all. It may be a company in which the transfer was made many years ago in which the shareholders and the directors have changed more than once during the intervening period. It may be the case that at the time of the death not a single person connected with the company knows what was the origin of the particular transaction. Nevertheless the obligation is imposed on the company of notifying the death, and the duty is a debt due to the Crown from that company.
    I do not wish to pursue this matter unduly, but I desire to direct the attention of the Attorney-General to this point, and to stress the view that it is essential for the protection of the company which may become liable that there should be a time limit—I am not particular
    1242
    whether it is five, 10 or 15 years. I think, however, that there should be some time limit, so that the directors have no responsibility beyond a certain period.
    Mr. ATKINSON: The Attorney-General has told us that the debt could not be charged on more than the value of the property. This Amendment raises a rather serious question, because there are two dates at which the value of the property transferred is valued. In the first place there is the value at the date when the transfer is made, and the value at the date of the death, and the further those dates are apart the greater may be the discrepancy between the two values. It may be that property worth only £500 when transferred may be worth several thousand pounds 20 years hence, and the question which arises on this Clause is upon which value is the Estate Duty to be collected. [Interruption.] I will postpone any further remarks on this question until I know exactly the effect of the Amendments which the Chancellor of the Exchequer has promised to accept.
    Mr. CHURCHILL: I beg to move, "That the Chairman do report Progress and ask leave to sit again."
    I make this Motion in order that I may suggest an arrangement which I think will be for the convenience of the Committee. My suggestion is that we should postpone this Clause until we have received the Amendments printed in their amended form and proceed now with the rest of the Bill. I have been looking at the Clauses from Clause 34 to 47, and, after consulting some of my hon. Friends, I am prepared to say that, as far as we are concerned, if Clauses 29 to 33 were postponed, there would be very good prospects of passing Clauses 34 to 47 to-night. I know those Clauses contain one or two points of substance, but I wish to make it perfectly clear that we should reserve the Schedules for further discussion on another day, and we re serve the fullest liberty in regard to the new Clauses. There is also Clause 12, but I do not think it is suggested that that Clause should be dealt with to-night.
    Mr. P. SNOWDEN: I am quite prepared to consider the suggestion which the right hon. Gentleman the Member for Epping (Mr. Churchill) has made. With regard to the Clauses we should take at this sitting, I understand the suggestion is that we should get to the end of

    1243
    Clause 47 to-night. If that is so, then I am willing to fall in with the suggestion that we should postpone Clause 29 and reproduce it later on with the Amendments which I propose to incorporate. The right hon. Gentleman has stated that it would be inconvenient to proceed now with Clauses 30, 31, 32 and 33 and I understand the suggestion is that we should postpone those Clauses until we have reached Clause 47. I am prepared to fall in with that suggestion.
    Mr. ERNEST BROWN: May I say, on behalf of those sitting on these benches, that we have no objection to the course which has been suggested, although I think it will be rather awkward for us to proceed with the other Clauses at once.
    Lieut.-Colonel Sir FREDERICK HALL: The Chancellor of the Exchequer has stated that he will have the Amendments printed which he has suggested in time for the next meeting of the Committee. May I ask the right hon. Gentleman to let us have them on the Amendment on the Paper as soon as possible.
    Mr. SNOWDEN: Yes, I will.
    Mr. SMITHERS: I presume that we have to discuss the Clauses as they are printed in the Bill. I would like to know what form the Chancellor of the Exchequer proposes for the presentation of his new Clauses and Amendments. Will they be issued in the form of a White Paper?
    Mr. SNOWDEN: No, they will be issued on the Amendment Paper in the ordinary way.
    Sir D. HERBERT: I wish to thank the Chancellor of the Exchequer for agreeing to the course which has been suggested by the right hon. Gentleman the Member for Epping. I am sure that we shall get through the contentious Clauses much quicker if we can have them placed before us in the amended form. I know the difficulties, and I am aware of the big changes which are being made.
    Mr. CHURCHILL: I beg to ask leave to withdraw my Motion.
    Motion, by leave, withdrawn.
    Question again proposed, "That those words we there inserted."
    Sir H. BETTERTON: I beg to ask leave to withdraw my Amendment.
    Amendment, by leave, withdrawn.
    Mr. P. SNOWDEN: I beg to move, "That the consideration of Clauses 29, 30, 31, 32 and 33 be postponed."
    The DEPUTY-CHAIRMAN: I think the best course would be to postpone the consideration of those Clauses until Clause 47 has been disposed of.
    Mr. CHURCHILL: I suggest that we should postpone them until after Clause 47 has been disposed of, and then we can see if any further postponement is necessary.
    Motion made and Question proposed, "That the consideration of the Clause be postponed until after the consideration of Clause 47."—[Mr. P. Snowden.]

    CLAUSE 30.—(Estate duty where life-interest is transferred to private company.)
    Motion made and Question proposed, "That the consideration of the Clause be postponed until after the consideration of Clause 29."—[Mr. P. Snowden.]
    Mr. MOND: I make an appeal to the Chancellor of the Exchequer to give us an opportunity for a general discussion of these Clauses, because I am afraid that we shall find some difficulty in dealing with the Amendments one by one. The interests of many people connected with the industrial and commercial side of the questions raised in those Clauses have not, up to the present, been considered at all, and that is the reason why I should like to ask for a general discussion. This is a very important point and ought not to be overlooked.
    The DEPUTY-CHAIRMAN: I think that would be the best course to take.

    CLAUSE 31.—(Charge of duty and powers of recovery.)
    Motion made the Question "That the consideration of the Clause be postponed until after the consideration of Clause 30," put, and agreed to.—[Mr. P. Snowden.]
    CLAUSE 32.—(Valuation of shares in private companies.)
    Motion made and Question "That the consideration of the Clause be postponed until after the consideration of Clause 31," put, and agreed to.—[Mr. P. Snowden.]
    CLAUSE 33.—(Interpretation.)
    Motion made and Question "That the consideration of the Clause be postponed until after the consideration of Clause 32," put, and agreed to.—[Mr. P. Snowden.]

    CLAUSE 34.—(Death duties on property subject to an annuity which has been surrendered.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    8.0 p.m.
    Sir ARTHUR STEEL-MAITLAND: Perhaps the Chancellor or the Attorney-General would give us very briefly the purport of the Clause and reassure us. The Clause looks quite a simple one, and there is only one point which causes any doubt in my mind, that property subject to periodical payments "shall be deemed to pass," and so on. It is really to try to prevent evasion of Death Duties by purporting to convey more than three years before a death and yet retaining in fact the benefit. It is to prevent evasion of just the same kind as was dealt with in Clauses 29 to 33. You get the case of a person who has an annuity and who conveys it to another person. If it is a bona fide transaction and he survives for another three years, no Death Duty is payable on his death owing to that annuity. But in certain cases, as I understand it, the so-called transferor has bargained for some kind of payment himself in return, so that he evades duty in a manner somewhat similar to that in Clauses 29 to 33. I think that that is really all that is intended by the Clause. The only point that raises any doubt is that of the words "or payment secured." Perhaps the Attorney-General will look at that. The case contemplated was one in which the annuity was transferred, but that in return the person to whom it was transferred gave the transferor some benefit during his life. A substituted
    1246
    annuity I can understand would quite properly be excluded, but the words seem to me to be somewhat wide. If the Attorney-General or the Chancellor would consider it and let us know, I should be willing not to make any further remarks on this Clause.
    The ATTORNEY-GENERAL: The right hon. Gentleman has appreciated exactly the object of this Clause. It appears that Section 11 of the Finance Act, 1900, which said that where a person entitled to an interest or annuity, or anything of that sort, surrendered that annuity to a remainderman, that on death within a certain period of time the property was deemed to pass, has been largely cut into by a decision of the learned Judge who heard the case, Attorney-General v. Lane Fox. He decided that the release by an annuitant of his annuity to the person entitled to the property charged would not, if that person were in possession of the property on which the annuity was charged, come within the terms of Section 11, for the reason that the person being in possession of the property was not a remainderman. He was in possession of the property subject to an annuity, and consequently could not be described as a remainderman. The utility of Section 11 has been largely cut into. If the right hon. Gentleman wants the reference it is the Lane Fox case, 1924, 2 King's Bench, No. 498. With regard to the words "payment secured," I am not prepared on the spur of the moment to give an answer, but I will look into that, and if I find there is any danger I will communicate with the right hon. Gentleman and tell him so, and will if necessary take steps to see that the proper action is taken, but I do not anticipate any trouble.
    Captain BOURNE: The Committee, I think, is very much obliged to the learned Attorney-General for his explanation of this somewhat formidable Clause. I am glad to hear that it is intended to deal with this particular law case and will not affect the right of the ordinary annuitant. I take it it is merely where the person in possession of property is technically not a remainder, and therefore in an annuity rendered in such circumstances the person who benefits escapes duty. I looked into this Clause, thinking it might affect a great number

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    of cases, and I am very grateful to the Attorney-General for his explanation.

    CLAUSE 35.—(Exemption from death duties of objects of national, scientific, historic or artistic interest.)
    The DEPUTY-CHAIRMAN: There are a large number of Amendments in the name of the hon. Member for the Scottish Universities (Mr. Buchan), and they all hang together.
    Lady CYNTHIA MOSLEY: I beg to move, in page 31, line 37, to leave out the word "pass," and to insert instead thereof the word "passes."
    I did not anticipate that the Clause would come on so soon, and I expect I shall be the only one here of the hon. Members who put down this Amendment. What we want to persuade the Government to do by this Amendment is to remit Death Duties on such properties, buildings of historical value, that are left to the National Trust. I put my name to this Amendment because I happen to be interested in a particular way, from the point of view that my father left two very beautiful castles to the National Trust and the Trust had to pay fairly heavy Death Duties. The value put on these buildings for Death Duties was not anything like as high as the real value. They had to pay in the case of one castle on £5,185, the value put on it, and in the other case on £1,500. The total Death Duties were £1,731 on the one and £501 on the other. It does not sound very much from the point of view of what the country got, but from the point of view of the National Trust it was a fairly excessive amount, and if it had been any higher these buildings would have had to be given back, and, therefore, the country would not have received any benefit. I quote only these two cases, because they are cases in which I am interested, but there are many buildings of great historical interest and places of great beauty that have been given to the National Trust. We would like to urge on the Chancellor of the Exchequer that when these buildings are bequeathed to the National Trust they should be exempt
    1248
    from having to pay Death Duties, and the Trust should be treated in the same way as if the buildings were left to the State. I only want to put in a personal plea to explain why I put my name to this Amendment, and I very much hope that we can persuade the Government to accede to this small demand. It would not make a very great difference to the Chancellor of the Exchequer, but it would make a great difference to the National Trust, if they were not called upon to pay Death Duties when these buildings were left to them.
    The DEPUTY-CHAIRMAN: I pointed out that all these Amendments in the name of the hon. Member for the Scottish Universities (Mr. Buchan) hang together, and consequently I must save the Amendment standing in the name of the hon. and gallant Member for North-East Bethnal Green (Major Nathan).
    Mr. EDE: This series of Amendments is designed to place real estate left for national purposes in exactly the same position as is now occupied by artistic objects and matters of personal estate. There appears to be no sound reason for differentiation between these two classes of bequest, and it has been a matter of very great difficulty to the National Trust when they have had left to them estates which have involved the payment of substantial sums in these Duties. The effect has been that the very trifling income that this great society enjoys has been almost entirely absorbed in trying to pay to the Exchequer the sums that were levy-able upon the real estate that which has been given to the nation. The case mentioned by the Noble Lady is an outstanding case and one which it is hoped will be followed by others who have similar property that they desire to bequeath. In order that they should be encouraged in this, and that the National Trust will be encouraged to receive such gifts, it is highly desirable that, if possible, the Chancellor of the Exchequer should make this concession. It cannot cost very much in the way of revenue, but it means that there will be available for the general enjoyment of the people objects of beauty and historic interest which, in other circumstances, might never be fully available for the public enjoyment. I sincerely hope the right hon. Gentleman will be able to meet us.
    Mr. P. SNOWDEN: I have a good deal of sympathy with the object that is aimed at in the Amendment, but it is not quite so simple as might appear. The Noble Lady referred to the National Trust, but the Amendment would extend it much further than that. A few months ago a memorial was sent to the Prime Minister urging what is sought in the Amendment, and we considered it quite sympathetically, but on examination we found that there would be repercussions and extensions which would require very careful consideration. We propose to give that full consideration to the matter. In fact there has been a committee sitting for some time past, under the chairmanship of the new Minister of Agriculture, which considered the matter, although perhaps it is not strictly within their terms of reference, and they found that it was not quite as simple as might appear. I would ask those who have put forward the Amendment not to insist upon it this year, and between now and next year we will give it full consideration, and I hope we may then be in the position to give a favourable answer.
    Captain CROOKSHANK: Will the right hon. Gentleman tell us what kind of committee is considering this? Is it a departmental committee or is he going to get some of the Members who have put their names down to this Amendment, for instance, to help him?
    Mr. SNOWDEN: The committee, as I say, is presided over by the present Minister of Agriculture, and they found certain difficulties that they referred to me. I gave them what practically amounted to an understanding that we would go further into the matter. All the points that are involved in it can be considered by the Departments themselves.
    Captain CROOKSHANK: By the Treasury?
    Mr. SNOWDEN: Yes.
    Sir A. STEEL-MAITLAND: Many of us have a great deal of sympathy with these Amendments, and there are difficulties which those who put them down naturally did not realise at the time, but surely business is passing sufficiently quickly to enable the right hon. Gentleman to think over the matter now. We were prepared to vote for them quite apart from any party considerations.
    1250
    Personally, I am quite willing to assent to the withdrawal of the Amendment, if necessary, but we are asked to accept rather blindly the statement that there are difficulties.
    Mr. SNOWDEN: I cannot go into details now as regards the difficulties which came under the notice of the Committee, but they were mainly concerned with the kind of purposes that were to be included within such an Amendment as is now proposed, for instance. The object sought to be obtained by the further consideration was to give more definiteness, so that the Clause would not apply to bequests which it was never intended should enjoy the benefit.
    Captain CROOKSHANK: I hardly like to press the right hon. Gentleman, but perhaps he could indicate this. Did the Committee take into account the form of words which have been devised in the Amendment?
    Mr. SNOWDEN: They could not have done that.
    Captain CROOKSHANK: It was before the Amendment was put down?
    Mr. SNOWDEN: I should think it would be about three or four months since the Chairman of the Committee came to see me and we had a long talk about it.
    Captain CROOKSHANK: Since then, the Amendment has been put down which seems to cover the case the Noble Lady had in mind, but the Chancellor is not prepared to say it would cover the case, and it wants further investigation?
    Mr. SNOWDEN indicated assent.
    Mr. EDE: We are grateful for the consideration the right hon. Gentleman has given to the matter. We recognise that it may be difficult to devise a form of words which does not allow things to slip through which no one would desire to slip through, though we have gone to some very considerable trouble to get a form of words devised by agents who have frequently advised Members whose Amendments on similar matters have been accepted by previous Chancellors of the Exchequer. Relying on the promise that it shall have sympathetic consideration during the year, and that an endeavour will be made to include it in the Finance Act of next year, and realising that the right hon. Gentleman

    1251
    will be there to redeem his pledge, I have much pleasure in asking leave to withdraw.
    Amendment, by leave, withdrawn.
    Major NATHAN: I beg to move, in page 32, line 10, to leave out from the word "leviable" to the word "and," in line 12, and to insert instead thereof the words:
    "so however that such objects shall not be aggregated with the said estate but shall form an estate by themselves."
    This is a business Amendment which will not give rise to very mach passion or feeling in any part of the Committee. The object of putting it on the Paper is to obtain an explanation as to what precisely is the object in view. The whole question of relieving objects of national historical and artistic interest from Estate Duties to a greater or less degree has a history behind it. As one follows the history through, one observes that there has, over a long period of years, been a growing appreciation shown by Parliament of the importance of works of national, historical and artistic interest. By Section 15 of the Finance Act, 1894, the Treasury was, for the first time, given power to remit Death Duties in respect of articles of national and artistic interest when they were the subject of a bequest to the National Gallery or to some public institution of that kind as defined in the Act. Under the Act of 1894, the Treasury had power to remit the whole of the duty. In Section 20 of the Finance Act, 1896, the exemption was extended, with a modification, to settled objects of national and artistic importance. It was in a modified form, because in the case of settled objects on the death of a person competent to dispose of them, and only then, they became liable to Estate Duty.
    As long as the use of them was enjoyed by a beneficiary under a settlement they were liable to no duty at all. It was only on disposal that duty came to attach, and then it only came to attach to those objects and articles considered as a separate estate. It is a matter of great importance as affecting the rate of duty attaching. In 1910, by Section 63 of the Finance Act of that year, the exemption from Estate Duty was extended still further so that it came to
    1252
    relate not merely to objects of national and artistic interest bequeathed to national institutions or to settled articles as long as they were enjoyed by the beneficiary, but to the whole of those articles as long as they remained unsold. When they were sold they were to form an estate by themselves. In other words, the value of these objects was not to be aggregated with the estate of the deceased and thereby the rate of duty increased.
    It is a little difficult, in some respects, to follow Clause 35 in the Bill now before the Committee. I observe from the Schedule that it is proposed to repeal the three Sections of the three Acts to which I have referred, but under this Bill the discretionary power reposed in the Treasury still remains. I think that my Amendment is one which the Chancellor of the Exchequer will be able to accept whatever his answer may be to the question which I am about to ask him. I want to ask him whether this Clause is a consolidation of the three previous Sections or whether it alters the law previously obtaining as to aggregation? If it is merely consolidation I do not see the purpose of repealing the existing provisions merely to insert another Clause into this Bill more convenient in form. I am rather troubled by the words in Sub-section (2) which defines the rate payable in respect of the objects of national and artistic interest and all the rest of it when sold as being
    "at the rate appropriate to the principal value of the estate passing on that death upon which Estate Duty is leviable"—
    these are the words which trouble me—
    "and with which the objects would have been aggregated if they had not been objects to which this section applies."
    I ask the Chancellor of the Exchequer whether the object of those words is to secure aggregation with the principal estate. If it is so, I must press my Amendment because not only would there be a very startling change in the law as it has gradually developed since 1894 but it would open up a question of very grave public policy as to whether objects of national, artistic and historical interest and so on should or should not be exempted from aggregation, and therefore the paying of a higher rate of duty than would attach to them if they were considered

    1253
    as an estate by themselves. This Amendment has been put by me upon the Paper as a result of practical experience because the question has been put to me. I have, in fact, been asked to advise as to whether the operation of this Clause would or would not be to involve aggregation. I would like to have that difficulty cleared out of the way. I rather suspect that it does not involve aggregation and that the real object of the Clause is—and I have no doubt that the Chancellor of the Exchequer or the Financial Secretary to the Treasury will inform me whether my understanding of it is correct—to ensure that the rate, instead of being, as in the past, a rate which would attach if the objects in question were considered a separate estate taken by themselves, shall be the same rate as was applicable to the principal estate upon the death of the last deceased. I suspect that that may be the real object. I entertain some apprehension that it may possibly be directed at securing aggregation and I consider that aggregation should strongly be resisted.
    I believe that in these times, when articles and objects of historical, national and artistic interest are becoming rarer and rarer in this country and are making their way more and more readily abroad, it is desirable to give owners an inducement to retain them in this country, and that aggregation would be a step in the wrong direction. If, on the other hand, the object of the Clause is to increase the rate of duty so that it may be a rate applicable to the principal estate, the chancellor of the Exchequer ought to opine forward with a strong reason for producing this proposal which varies substantially the practice of the last 30 years or so.
    It has to be borne in mind that the value of pictures, for instance, may in these days, when they are growing dearer and dearer, be vastly in excess of the value of the principal estate of the deceased, and in that event, under the provisions of this Clause, if my last interpretation of them re correct, the Revenue may obtain a great deal less than it would obtain by taking the pictures or whatever they may be as a separate estate. It is a toss up whether the Revenue will benefit or not, if I have correctly interpreted this Clause, according
    1254
    to the relationship in value between the principal estate and the articles of artistic interest, and so on; but if it is aggregation that is aimed at, I must press my Amendment. If it is to bring the rate of duty into line with that on the principal estate, then I suggest that my Amendment might be accepted, because it will do no harm and will clear up the situation.
    Mr. A. M. SAMUEL: I have been a museum trustee for a number of years in my native city and take a great interest in this matter. From what the Financial Secretary told me at an earlier stage, I thought that my fears had been put at rest. He gave me an answer which made me hope that we were receiving an advantage from the Exchequer, but I am not so sure since reading the Clause and listening to the hon. and gallant Member for North-East Bethnal Green (Major Nathan). There is a suspicion growing in my mind that owing to some ambiguity in drafting the Clause or that I did not understand that there was a catch in it, there may be something about the aggregation which I did not suspect at the time, If that is not so, I hope that the Chancellor of the Exchequer will put our fears at rest. I am not taking any hostile action about this Clause but am trying to find out how it will operate. Is the Chancellor of the Exchequer taking back some of the little advantage that the law gave to the owner of beautiful things whose possessions were not sold at his death?
    When works of art are not sold at the death of the owner I understand that in future they are not to be valued for duty to be paid upon them if they are kept in the owner's possession, but when they are sold I understand that they are to be valued at the price they realise, and that duty has to be paid upon that price. When they are sold, and the value upon them is the figure which they fetch, what is the rate of duty? Is the rate of duty payable the same rate as the rate on the rest of the estate of their last owner, under whose will they passed? Supposing that an estate pays upon so many thousands of pounds at 16 per cent., and that the money has been paid, and six months afterwards the pictures are sold and fetch a certain sum. Whatever they

    1255
    fetch, would 16 per cent. be paid on their value, or are they to be aggregated, thereby increasing the value of the estate and bringing about a higher rate of percentage to be payable as a result of the aggregation? I assume that their value has not to be agregated to the other part of the estate of which they formed a part, and upon which duty has been paid.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): Under the existing law, without this Clause, works of art form a separate estate. They are valued at the time of the death of the owner, but they do not pay duty until they are sold. With the Clause as it will be, assuming that we carry the Clause, a different procedure will be adopted. All the different works of art are not aggregated but when one particular work of art comes to be sold, and only then, the price which it fetches will be the price attributed to that work of art and then and only then will duty be paid upon it. The rate of duty will be calculated in this way. Let me say that the rest of the estate, exclusive of works of art, paid the fictitious amount of 16 per cent., which was suggested by the hon. Member for Farnham (Mr. A. M. Samuel). 16 per cent. will be the rate charged on the amount realised by the sale of the picture, and not an additional rate. If the work of art fetched, say, £5,000, that amount will not be added to the whole value of the estate, so as to bring the amount of duty up to, 17 or 18 per cent. What will be paid on the work of art when it is sold will be the rate which the estate paid, exclusive of works of art.
    The Committee will see that it could not be done in any other way which would be fair to the Exchequer and reasonable to the taxpayer. So long as the taxpayer retains his works of art, the law recognises, and the Clause continues to recognise, that he pays no Estate Duty, but if and when he actually realises cash on the sale there is no reason why that cash should not be liable to the same rate of duty as the estate has already paid. This really is a concession in that it does not increase the rate, and I think it meets the points that have been raised. If I understood the hon. and gallant Member for North-East
    1256
    Bethnal Green correctly, he asks that when a work of art is sold it should itself form a separate estate and should pay duty as a separate estate. That is an unreasonable suggestion and could not be accepted. You must take each work of art as it is sold, and the fair rate to be paid is the rate which has been paid on the estate, exclusive of the works of art.
    Major NATHAN: I hope the Financial Secretary will not misunderstand me. I did not suggest that each article should be taken as a separate estate by itself. I was asking for an explanation, which the Financial Secretary has given to us, but I should like to press the point that in my practical experience the question of aggregation has arisen for discussion and consideration. I mean aggregation as between the whole or any of the objects of art and the principal estate. It is clear from what the Financial Secretary has said that there is to be no aggregation, but as the case has arisen in my own professional experience I would suggest that, for the purpose of clarity, he might see his way to accept my Amendment.
    Sir A. STEEL-MAITLAND: What exactly happens at the present time? He mentioned something which surprised me. I thought that at the present time objects of art were valued as a separate estate.
    Mr. PETHICK-LAWRENCE: Yes, they are valued at the time of death, but that has proved a very great inconvenience to the testator. It is very undesirable that the value at the time of death should be taken and then it should be dealt with seriatim as the articles come to be sold. In the proposed way no valuation need be made at the death, so long as the articles remain in the possession of the estate. If the articles are not sold their value is not questioned at all. It is only when they come to be sold, and then the value is the value that is realised at the sale.
    Sir A. STEEL-MAITLAND: I know that at the present moment they are valued at the time of death, but supposing that subsequently they come to be sold, at what rate is the Estate Duty payable? Are they taken as a separate estate or do they pay at the rate of duty which is applicable to the estate as a whole? Suppose there is an estate

    1257
    worth £100,000 which would pay 20 per cent. duty. The pictures at the moment are valued. Suppose they are sold under the present law, do they have to pay at the rate of 20 per cent., which is the rate payable by the rest of the estate, or do they have to pay the rate of duty on works of art valued as a seperate estate?
    Mr. PETHICK-LAWRENCE: All works of art are valued as a separate estate, and it is on that basis that the duty is paid.
    Sir A. STEEL-MAITLAND: The real effect of this Clause is this—I hope the hon. Member for North-East Bethnal Green (Major Nathan) will note it. Take the hypothetical case of an estate which, apart from works of art, is worth £100,000. The pictures may be worth £20,000. Under the present practice they are valued at the time of the death of the owner, but when they come to be sold subsequently they pay Estate Duty at a rate applicable to a separate estate of £20,000. Under this Bill each one of these pictures will pay at a rate applicable to the whole estate of £100,000. The effect of this Clause will be that in the majority of cases the amount of duty paid will be very much larger than it is at present. I can conceive cases in which the value of pictures may go down, but the general tendency of works of art is to increase in value, and the fact that they will pay Estate Duty at the same rate as the principal estate means in the great majority of cases that the amount of the duty will be very much higher than it has been hitherto.
    Sir BASIL PETO: The point which has been raised expresses precisely the difference between the Amendment and the Bill. The Financial Secretary has made the position in regard to these duties on works of art so clear that even I can understand it, but he did not deal with the justification for the words in the Bill as against the words of the Amendment. The Amendment seems to make it clear that the value of these objects of art will not be aggregated with the whole estate, but form an estate by themselves. Take the hypothetical case referred to by the right hon. Member for Tamworth (Sir A. Steel-Maitland), which is worth £100,000; and the works of art, £20,000. The Amendment says that these works of art shall form an estate by themselves. That, obviously, means that the
    1258
    rate of duty shall be the duty appropriate to an estate of £20,000, not to an estate of £100,000. If the Chancellor of the Exchequer thinks this is a reasonable proposal, there is no reason why these words should not be inserted in the Bill, At the death of the owner these works of art are priced and the Treasury knows precisely their value. If their value is £20,000, and one of them is sold for £5,000, then the Amendment provides that the £5,000 shall pay Estate Duty at the rate appropriate to an estate of £20,000 and not at the rate appropriate to an estate of £100,000; which is what the Financial Secretary says is the purport of the Clause.
    There is a perfectly clear issue between the Amendment and the Clause. The question the Committee have to settle is which is in the interests of the country as a whole. The Government should offer every reasonable encouragement to people to keep works of art in this country and to transfer them as often as possible to the nation. Anything which means that they have to dispose of them rapidly in order to provide in advance for Death Duties, sell them for what they will fetch during the lifetime of the owner, is a positive disadvantage. We are constantly hearing protests against all our works of art going oversea and I suggest that this is an opportunity for the Chancellor of the Exchequer to temper the wind to the shorn lamb by making Estate Duty applicable only to the value of that part of the estate which is incorporated in these works of art.
    Mr. A. M. SAMUEL: The spirit and intention of the Financial Secretary no doubt meets my case, and if the law is carried out on the lines he has suggested I should be satisfied; but the Clause itself does not convey that intention. If he cannot accept the Amendment I would suggest an alternative form of words, and that on line 8 of page 32, after the word "at" we should insert the word "same."
    The CHAIRMAN: We cannot do that now. We are now on line 10.
    Mr. SAMUEL: If I cannot go back I would suggest to the Financial Secretary that on Report he should put in after the word "at" the word "same" and after the word "rate" the words "as is." That would clarify the matter and

    1259
    the intentions of the Financial Secretary would be expressed by the Bill. The rate on pictures when sold would be the same as the rate on the estate. That is what he wants to carry out.
    Mr. PETHICK-LAWRENCE: It says so in the Clause. It says:
    "at the rate appropriate to the principal value of the estate passing on that death upon which Estate Duty is leviable, and with which the objects would have been aggregated if they had not been objects to which this section applies."
    What the hon. Member wants is set out almost precisely in the words of the Clause. The intention is really quite clear, but I am prepared to look into the matter and see if there is the smallest doubt about it. The hon. Member may rest assured that the intention is that objects of art which come up for sale shall pay at the rate which was paid by the whole estate of which they would have formed a part if they had not been kept out of the estate.
    Mr. T. GRIFFITHS: The discussion is being confined to pictures, but there are other objects of art. Will the proposal apply to Chelsea figures or Derby figures or Worcester china or Swansea china?
    Mr. P. SNOWDEN: I know that my hon. Friend is very much interested in Swansea and Chelsea china, and his intervention may have been prompted by something of a personal interest in the matter. I can set his mind at rest at once. The proposal is not confined to pictures. The wording relates to pictures, manuscripts, works of art, scientific collections and so forth.
    Sir A. STEEL-MAITLAND: I would like to make a final appeal to the Chancellor of the Exchequer. Up to the present time, when an estate has been valued, the works of art, whether pictures or Chelsea china, have been valued separately and, if and when sold, have been subject to a rate of duty which in most cases has been on a sum much lower than that at which the works of are were valued. For instance, take an estate worth £100,000. It would pay a duty of 20 per cent. There may be works of art
    belonging to the same owner and worth, say, £8,000. At present, those works of art will be subject to a comparatively slight charge for Estate Duty, because it would be only the rate attaching to the £8,000, namely, four per cent. But if this Clause passes, those articles will be subject to the whole 20 per cent. duty. Though there may be some cases where it will be different, as a rule they will pay the much higher rate of duty. There is a change also as to the date of valuation. We know that certain works of art, pictures for instance, might go out of fashion and be worth less five years hence than they are worth to-day, but on the whole the tendency is for the value of works of art to rise.
    What the Chancellor of the Exchequer is really doing is very largely to increase the rate of duty that will be payable on these works of art if and when they have to be sold. There may not be sympathy in many quarters with those people with estates large enough to pay these Estate Duties. Take the case of estates which have been in the hands of a family for many generations. Such estates might very easily have to be broken up under present conditions because of the weight of the Death Duties, and what will almost certainly happen in a number of cases is that the old family pictures will have to be sold. It will mean the dispersal of collections which are most highly prized possessions. Does that do any good? The sum of money which the Chancellor of the Exchequer will receive will not be very great. The owners of these pictures are not drawing an income from them. I know that if the pictures are sold to the British Museum or other public bodies they are relieved of Death Duties, but in all probability the majority of the pictures will be sold to buyers abroad. In the cases that I have in mind the pictures are now open to the public to see on many occasions. I ask the Chancellor of the Exchequer to allow the existing alleviation to continue.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 233; Noes, 133.

    Division No. 389.]

    AYES.

    [9.5 p.m.

    Adamson, Rt. Hon. W. (Fife, West)

    Aitchison. Rt. Hon. Craigie M.

    Arnott, John

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

    Alpass, J. H.

    Attlee, Clement Richard

    Addison, Rt. Hon. Dr. Christopher

    Ammon, Charles George

    Ayles, Walter

    Baker, John (Wolverhampton, Bilston)

    Hirst, G. H. (York W. R. Wentworth)

    Phillips, Dr. Marion

    Baldwin, Oliver (Dudley)

    Hirst, W. (Bradford, South)

    Picton-Turbervill, Edith

    Barnes, Alfred John

    Hoffman, P. C.

    Pole, Major D. G.

    Barr, James

    Hollins, A.

    Potts, John B.

    Batey, Joseph

    Hopkin, Daniel

    Quibell, D. J. K.

    Bellamy, Albert

    Herrabin, J. F.

    Rathbone, Eleanor

    Bennett, Capt. sir E. N. (Gardiff C.)

    Hudson, James H. (Huddersfield)

    Raynes, W. R.

    Bennett, William (Battersea, South)

    Jenkins, W. (Glamorgan, Neath)

    Richards, R.

    Benson, G.

    Johns William (Rhondda, West)

    Richardson, R. (Houghton-le-Spring)

    Bentham, Dr. Ethel

    Johnston, Thomas

    Riley, F. F. (Stockton-on-Tees)

    Bevan, Aneurin (Ebbw Vale)

    Jones, J. J. (West Ham, Silvertown)

    Ritson, J.

    Bondfield, Rt. Hon. Margaret

    Jones, Morgan (Caerphilly)

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

    Bowen, J. W.

    Jones, T. I. Mardy (Pontypridd)

    Romeril, H. G.

    Bowerman, Rt. Hon. Charles W.

    Jowett, Rt. Hon. F. W.

    Rosbotham, D. S. T.

    Broad, Francis Alfred

    Jowitt, Rt. Hon Sir W. A.

    Rowson, Guy

    Brockway, A. Fenner

    Kelly, W. T.

    Salter, Dr. Alfred

    Bromfield, William

    Kennedy, Thomas

    Sanders, W. S.

    Brothers, M.

    Kirkwood, D.

    Sawyer, G. F.

    Brown, C. W. E. (Notts. Mansfield)

    Lansbury, Rt. Hon. George

    Scrymgeour, E.

    Brown, Rt. Hon. J. (South Ayrshire)

    Lathan, G,

    Scurr, John

    Burgess, F. G.

    Law, Albert (Bolten)

    Sexton, James

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

    Law, A. (Rossendale)

    Shaw, Rt. Hon. Thomas (Preston)

    Caine, Derwent Hall-

    Lawrence, Susan

    Shepherd, Arthur Lewis

    Cameron, A. G.

    Lawrie, Hugh Hartley (Stalybridge)

    Sherwood, G. H.

    Cape, Thomas

    Lawson, John James

    Shield, George William

    Carter, W. (St. Pancras, S. W.)

    Lawther, W. (Barnard Castle)

    Shillaker, J. F.

    Chater, Daniel

    Leach, W.

    Short, Alfred (Wednesbury)

    Clarke, J. S.

    Lee, Frank (Derby, N. E.)

    Simmons, C. J.

    Cluse, W. S.

    Lee, Jennie (Lanark, Northern)

    Sinkinson, George

    Clynes, Rt. Hon. John R.

    Lees, J.

    Smith, Frank (Nuneaton)

    Cocks, Frederick Seymour

    Lewis, T. (Southampton)

    Smith, H. B. Lees- (Keighley)

    Compton, Joseph

    Lindley, Fred W.

    Smith, Rennie (Penistone)

    Cove, William G.

    Logan, David Gilbert

    Smith, Tom (Pontefract)

    Daggar, George

    Longbottom, A. W.

    Smith, W. R. (Norwich)

    Dallas, George

    Longden, F.

    Snell, Harry

    Dalton, Hugh

    Lowth, Thomas

    Snowden, Rt. Hon. Philip

    Day, Harry

    Lunn, William

    Snowden, Thomas (Accrington)

    Dickson, T.

    MacDonald, Rt. Hon. J. R. (Seaham)

    Sorensen, R.

    Dudgeon, Major C. R.

    MacDonald, Malcolm (Bassetlaw)

    Stamford, Thomas W.

    Dukes, C.

    McElwee, A.

    Strachey, E. J. St. Loe

    Duncan, Charles

    McEntee, V. L.

    Sullivan, J.

    Ede, James Chuter

    McKinlay, A.

    Sutton, J. E.

    Edge, Sir William

    MacLaren, Andrew

    Taylor, R. A. (Lincoln)

    Edmunds, J. E.

    Maclean, Nell (Glasgow, Govan)

    Thorne, W. (West Ham, Plaistow)

    Edwards, C. (Monmouth, Bedwellty)

    McShane, John James

    Thurtle, Ernest

    Edwards, E. (Morpeth)

    Malone, C. L'Estrange (N'thampton)

    Tillett, Ben

    Egan, W. H,

    Mansfield, W.

    Tinker, John Joseph

    Fergan, Dr. Robert

    March, S.

    Tout, W. J.

    Freeman, Peter

    Marley, J.

    Townend, A. E.

    Gardner, B. w. (West Ham, Upton)

    Marshall, Fred

    Trevelyan, Rt. Hon. Sir Charles

    George, Rt. Hon. D. Lloyd (Car'vn)

    Mathers, George

    Turner, B.

    Gibbins, Joseph

    Matters, L. W.

    Vaughan, D. J.

    Gibson, H. M. (Lancs, Mossley)

    Messer, Fred

    Viant, S. P.

    Gill, T. H.

    Middleton, G.

    Walkden, A. G.

    Gillett, George M.

    Mills, J. E.

    Walker, J.

    Gossling, A. G.

    Montague, Frederick

    Wallace, H. W.

    Gould, F.

    Morgan, Dr. H. B.

    Watkins, F. C.

    Graham, D. M. (Lanark, Hamilton)

    Morley, Ralph

    Watson, W. M. (Dunfermline)

    Graham, Rt. Hon. Wm. (Edin., Cent.)

    Morrison, Herbert (Hackney, South)

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

    Grenfell, D. R. (Glamorgan)

    Mort, D. L.

    Wellbek, Wilfred

    Griffiths, T. (Monmouth, Pontypool)

    Moses, J. J. H.

    Welsh, James C. (Coatbridge)

    Groves, Thomas E.

    Mosley, Lady C. (Stoke-on-Trent)

    West, F. R.

    Grundy, Thomas W.

    Muff, G.

    Westweod, Joseph

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

    Muggeridge, H. T.

    Wilkinson, Ellen C.

    Hall, G. H. (Merthyr Tydvil)

    Murnin, Hugh

    Williams Dr. J. H. (Llanelly)

    Hall, Capt. W. P. (Portsmouth, C.)

    Naylor, T. E.

    Williams, T. (York, Don Valley)

    Harbord, A.

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

    Wilson, G. H. (Sheffield, Attercliffe)

    Hardie, George D.

    Noel Baker, P. J.

    Wilson, J. (Oldham)

    Hartshorn, Rt. Hon. Vernon

    Oldfield, J. R.

    Wilson, R. J. (Jarrow)

    Haycock, A. W.

    Oliver, George Harold (Ilkeston)

    Winterton, G. E. (Leicester, Loughb'gh)

    Hayday, Arthur

    Palin, John Henry

    Wright, W. (Ruthergien)

    Henderson, Rt. Hon. A. (Burnley)

    Paling, Wilfrid

    Young, R. S. (Islington, North)

    Henderson, Arthur, Junr. (Cardiff, S.)

    Palmer, E. T.

    Henderson, Thomas (Glasgew)

    Parkinson, John Allen (Wigan)

    TELLERS FOR THE AYES.—

    Henderson, W. W. (Middx., Enfield)

    Perry, S. F.

    Mr. Hayes and Mr. William Whiteley.

    Herriotts, J.

    Pethick-Lawrence, F. W.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Balniel, Lord

    Birkett, W. Norman

    Aske, Sir Robert

    Beamish, Rear-Admiral T. P. H.

    Blindell, James

    Atkinson, G.

    Beaumont, M. W.

    Bourne, Captain Robert Groft

    Baldwin, Rt. Hon. Stanley (Bewdley)

    Betterton, Sir Henry B.

    Braithwaite, Major A. N.

    Balfour, George (Hampstead)

    Bird, Ernest Roy

    Brass, Captain Sir William

    1262

    1263

    Briscoe, Richard George

    Hills, Major Rt. Hon. John Waller

    Rentoul, Sir Gervais S.

    Brown, Col. D. C. (N'th'l'd., Hexham)

    Hope, Sir Harry (Forfar)

    Richardson, Sir P. W. (Sur'y, Ch't'sy)

    Brown, Ernest (Leith)

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

    Roberts, Sir Samuel (Ecclesall)

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

    Hutchison, Maj.-Gen. Sir R.

    Ross, Major Ronald D.

    Bullock, Captain Malcolm

    Iveagh, Countess of

    Ruggles-Brise, Lieut.-Colonel E. A.

    Butler, R. A.

    Jones, Sir G. W. H. (Stoke New'gton)

    Russell, Alexander West (Tynemouth)

    Carver, Major W. H.

    Jones, Henry Haydn (Merioneth)

    Russell, Richard John (Eddisbury)

    Chapman, Sir S.

    Kindersley, Major G. M.

    Salmon, Major I.

    Christie, J. A.

    King, Commodore Rt. Hon. Henry D.

    Samuel, A. M. (Surrey, Farnham)

    Cobb, Sir Cyril

    Lamb, Sir J. Q.

    Samuel, Samuel (W'dsworth, Putney)

    Colfox, Major William Philip

    Law, Sir Alfred (Derby, High Peak)

    Sandeman, Sir N. Stewart

    Cowan, D. M.

    Leigh, Sir John (Clapham)

    Sassoon, Rt. Hon. Sir Philip A. G. D.

    Crookshank, Cpt. H. (Lindsey, Gainsbro)

    Lewis, Oswald (Colchester)

    Savery, S. S.

    Croom-Johnson, R. P.

    Llewellin, Major J. J.

    Shepperson, Sir Ernest Whittome

    Culverwell, C. T. (Bristol, West)

    Locker-Lampson, Rt. Hon. Godfrey

    Smith, R. W. (Aberd'n & Kinc'dine, C.)

    Dalkeith, Earl of

    Lymington, Viscount

    Smith-Carington, Neville W.

    Davies, Dr. Vernon

    Macdonald, Sir M. (Inverness)

    Smithers, Waldron

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

    Macquisten, F. A.

    Somerset, Thomas

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

    MacRobert, Rt. Hon. Alexander M.

    Somerville, A. A. (Windsor)

    Dixey, A. C.

    Maitland, A. (Kent, Faversham)

    Somerville, D. G. (Willesden, East)

    Dixon, Captain Rt. Hon. Herbert

    Makins, Brigadier-General E.

    Stanley, Lord (Fylde)

    Duckworth, G. A. V.

    Mander, Geoffrey le M.

    Steel-Maitland, Rt. Hon. Sir Arthur

    Dugdale, Capt. T. L.

    Margesson, Captain H. D.

    Stuart, Hon. J. (Moray and Nairn)

    Edmondson, Major A. J.

    Mason, Colonel Glyn K.

    Sueter Rear-Admiral M. F.

    Elmley, Viscount

    Merriman, Sir F. Boyd

    Thomson, Sir F.

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

    Millar, J. D.

    Train, J.

    Everard, W. Lindsay

    Mitchell, Sir W. Lane (Streatham)

    Tryon, Rt. Hon. George Clement

    Ferguson, Sir John

    Mond, Hon. Henry

    Warrender, Sir Victor

    Fison, F. G. Clavering

    Morrison, W. S. (Glos., Cirencester)

    Waterhouse, Captain Charles

    Foot, Isaac

    Nathan, Major H. L.

    Wells, Sydney R.

    Forestier-Walker, Sir L.

    Nicholson, O. (Westminster)

    Wilson, G. H. A. (Cambridge U.)

    George, Major G. Lloyd (Pembroke)

    Oliver, P. M. (Man., Blackley)

    Windsor-Clive, Lieut.-Colonel George

    George, Megan Lloyd (Anglesea)

    Peake, Capt. Osbert

    Wolmer, Rt. Hon. Viscount

    Graham, Fergus (Cumberland, N.)

    Penny, Sir George

    Womersley, W. J.

    Gunston, Captain D. W.

    Peto, Sir Basil E. (Devon, Barnstaple)

    Wood, Rt. Hon. Sir Kingsley

    Hacking, Rt. Hon. Douglas H.

    Pownall, Sir Assheton

    Worthington-Evans, Rt. Hon. Sir L.

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Pybus, Percy John

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

    Ramsay, T. B. Wilson

    TELLERS FOR THE NOES.—

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

    Ramsbotham, H.

    Major Sir George Hennessy and

    Heneage, Lieut.-Colonel Arthur P.

    Rawson, Sir Cooper

    Major the Marquess of Titchfield.

    Herbert, Sir Dennis (Hertford)

    Reid, David D. (County Down)

    Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.

    Viscount WOLMER: I beg to move, in page 32, line 23, after the word "such," to insert the word "buildings."
    This Amendment is somewhat analogous to a point which we have been discussing earlier, though not quite the same. I am not asking for any particular drafting, but I want to put this point, because it is one of real importance Under the law as it is and as it will be amended by the right hon. Gentleman, pictures and other objets d'art will not pay duty until they are sold, but in quite a number of cases the houses in which they hang or stand are of quite as much historic interest as the pictures, and I want to ask the right hon. Gentleman whether he really wishes to force the owners of these historic houses to sell them. It is quite easy for him to do that, and if the law is not amended in the direction that I suggest, that in most cases is what will happen.
    I want to put it to the right hon. Gentleman whether anybody will be benefited by these beautiful historic houses being sold to American millionaires or plutocrats. I am not personally affected, but I know several such
    1264
    houses, and there is one in my constituency which is very famous and certainly comes in this category. In most cases the owners of these houses are old families who have been located in that part of the country for a long time and whose fortune is, generally speaking, wrapped up in agriculture, and they have felt to the full, during the last 100 years, the depression in agriculture. For the most part, the owners of these historic houses are not millionaires, but they were able to pay Death Duties until the crushing scale of Death Duties arose.
    Some of these houses, such as Bramshill, have a value, from a Death Duty point of view, which must run into many thousands of pounds. In many cases the owner is making nothing out of it, but is trying to keep the estate together and to do his duty by his neighbours and his tenants. On a death, the State comes down and says, "This is an object of tremendous value"; and it is, and you have to pay full duty on it. It means that that family goes out, and you get some plutocrat, some American millionaire, or some profiteer coming in instead. Do hon. Members opposite think the

    1265
    people in that neighbourhood or anybody in the country is going to be benefited by the acceleration of that process? What differentiation can you really make in principle between the pictures and the house in cases like that?
    I quite admit that there is a very small number of these houses, comparatively speaking, but there is quite a definite number of them, and they are just as historic and just as famous as the pictures and other objects of art which are in them. All that I am asking the right hon. Gentleman to do is to keep them exactly on a parallel with the pictures inside them. If the owner sells the house and gets a fancy price, he ought to pay Death Duty, but if he does not sell the house, and if he does not make money out of it, but lives in it, he ought not to be asked to pay Death Duties on something which brings him in no cash, any more than the right hon. Gentleman is asking him to pay Death Duty on the pictures. I am aware that the Treasury might say that these houses are actually yielding income because they are assessed for Income Tax, but I submit that that is a technicality. They are not bringing in any cash to the owner, and therefore they ought to be treated on the same basis as the objets d'art. I believe that many hon. Members opposite have sympathy with such an appeal.
    Mr. PETHICK-LAWRENCE: This Amendment falls somewhat along the same lines as that which was discussed earlier in the Clause. My right hon. Friend expressed the view that he had considerable sympathy with that Amendment; he could not see his way to incorporate it in the present Finance Bill, but he said he would consider it between now and next year. My right hon. Friend has already promised, so far as the other matter was concerned, to give sympathetic attention to it between now and next year, and on the strength of that, the other Amendment was withdrawn. I am afraid it would not be possible for me, on his behalf, to promise more than the same with regard to this particular Amendment.
    Viscount WOLMER: I think some of my hon. Friends were not present earlier when the other Amendment was discussed. The Chancellor of the Exchequer then explained that a special committee was sitting to inquire into cases of this
    1266
    sort. May I have the assurance of the hon. Gentleman that this matter will be considered exactly on all fours with the matter that was touched on in the other Amendment, and will be dealt with by the same committee and treated with the same sympathy by the Chancellor of the Exchequer as he promised in the previous case? If the hon. Gentleman can give me that assurance, I shall be perfectly willing to have this matter adjourned for a year and for the Government to consider it sympathetically.
    Mr. PETHICK-LAWRENCE: I think I can give the undertaking that the same committee which is considering the other matter will also consider the question of buildings.
    Viscount WOLMER: On that understanding, I beg to ask leave to withdraw my Amendment.
    Amendment, by leave, withdrawn.
    Mr. GODFREY LOCKER-LAMPSON: I beg to move, in page 32, line 26, after the word "then," to insert the words:
    "after consultation in any case in which they may be in doubt with persons appointed for the purpose from time to time, one by the trustees of the British Museum, one by the trustees of the National Gallery, one by the president of the Royal Society, and one by the chairman of the National Art Collections Fund."
    The object of this Amendment is to give the Treasury some kind of competent committee which may advise them on the subject as to whether any important work of art is really an object of national, scientific, historic, or artistic interest. The Clause, as it stands, does not provide any expert advice for the Treasury at all, and although I know perfectly well that members of the Treasury are very able gentlemen indeed, they have got an immense number of duties to perform, and I do not think that they can possibly be required to pass an expert opinion in regard to works of art. It is clearly ridiculous to suppose that the Treasury or a committee in the Treasury could pass an opinion as to whether a picture was by Raphael or only by one of his followers, or whether a manuscript was really in the handwriting of John Milton. I think that this is a perfectly reasonable Amendment. Under the Clause, the Treasury are asked to answer this kind of question: If a picture is by one of Raphael's followers, it is obviously worth

    1267
    practically nothing as compared with what is would be worth if it were by Raphael himself.
    All I suggest is that the Treasury should have at its command a committee of experts who in every case would be able to say whether such an object was of national and historic interest. I propose in this Amendment that they should take the advice of persons appointed by the trustees of the British Museum, the trustees of the National Gallery, the president of the Royal Society and the chairman of the National Art Collections Fund. I think those four bodies would cover the ground completely. I am not in the least committed to the particular form of words, but I think the principle I advocate is the right one, and I very much hope the hon. Gentleman Will be able to accept it.
    Mr. PETHICK-LAWRENCE: The object of the Amendment is, of course, one which must appeal to every Member of the Committee, but I suggest that the insertion of the actual words proposed is really unnecessary. Of course, the Treasury does not attempt to form a judgment without consultation with just the kind of people whom the right hon. Gentleman has in mind. I think it is not only unnecessary, but rather unwise, to specify a particular panel of people of this kind belonging to certain institutions who shall be consulted. It is much safer to allow the Treasury to consult particular authorities. In the circumstances, I hope that the right hon. Gentleman will not press his Amendment.
    Mr. J. JONES: Not being exactly an art expert, I am interested only in the financial side of the Clause. I cannot for the life of me understand why a picture by Carnera should not be included in this case. We have got various organisations mentioned to give expert opinions on the subject. Lately in the Press we have read of certain pictures of outstanding notoriety, if not ability, being forged. What guarantee have we that some of the great masterpieces may not be copied by some expert forger? Is the expert forger going to get away with it? Is the gentleman who bought a pup going to be sold a dog? And is the Treasury going to bear the responsibility? I venture to suggest that, in addition to the organisations
    1268
    already mentioned, we ought to have Madame Tussauds. The directors of that world-famous institution ought to be allowed to have a voice in saying whether these things are real or not. Of course, I understand the serious nature of the proposition. The gentlemen who own great castles in this country, of which they are gradually getting rid, form limited liability companies and try to avoid their taxes in every possible direction. People are leaving the West End flats, and we in the East End are the biggest flats to stand it. They are doing everything they possibly can legally to avoid taxation. They are the people who say they are bleeding for their country. They have never bled for anything except for bleeding the people. Therefore, I say the Amendments which have been moved have gone too far. The Chancellor has accepted too many Amendments.
    The CHAIRMAN: The hon. Member must keep to this Amendment.
    Mr. JONES: I will stick to it hard. The only people who are capable of sticking to this Amendment are the artful dodgers who are responsible for it. They have got the pictures, and we have got the results. They have got the estates and all we have got is the consequences of their misdeeds. I think it is nearly time that they paid up and looked pleasant.
    Mr. FOOT: I hope that the right hon. Gentleman is not going to press the Amendment, because it is really unnecessary. I have had to deal with some of these cases, and I know from experience that the revenue authorities are most ready to consult the very best experts in the matter, whether a collection of pictures or other objects of art are concerned. They have invariably sent down people who are thoroughly trustworthy to inspect. I really think that by setting up this unnecessary committee, drawn from a somewhat limited sphere, we should only be creating machinery which would clog the wheels of valuation in regard to these collections. I do not think the right hon. Gentleman, who is interested in this matter and desires to safeguard the Exchequer, would wish to adopt machinery which would only be a complication and not a help.
    Mr. G. LOCKER-LAMPSON: I never had any intention of trying to divide

    1269
    the Committee on this Amendment, and in reply to the hon. Member for Silvertown (Mr. J. Jones) I would say that this Amendment is merely proposed with the idea of protecting the Treasury from people who sometimes act in that way. It is in order to meet the case of forgeries which are not real works of art that such a committee would be useful. I understand from the Financial Secretary that the Treasury before making up their minds, do consult whether a work of art or manuscript is of national importance. Do I understand there is a committee? Are there certain persons selected to whom the Treasury can apply when they want to find out?
    Mr. PETHICK-LAWRENCE: I am not sure that there is an actual committee, but the Treasury do consult appropriate persons as the cases arise. I think that is better than having a committee, because it would be an entirely different set of persons. The Treasury select appropriate persons to consult.
    Mr. LOCKER-LAMPSON: In view of the Financial Secretary's statement, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    CLAUSE 36.—(Amendment of s. 55 of 17 & 18 Geo. 5. c. 10.)
    Mr. WOMERSLEY: I beg to move, in page 32, line 37, to leave out from the first word "shall," to the word "the," in line 38, and to insert instead thereof the words:
    "(1) as from the commencement of this Act have effect as if."
    This and the following Amendment in page 32, line 40, to leave out the words "there were," and to insert instead thereof the words:
    "were not contained therein; and
    (2) be deemed to have had effect up to the commencement of this Act as if after the said words there had been"—
    hang together. If this Amendment is accepted, I shall have formally to move the second one in order to make the scheme of Amendments complete. A later Amendment which I have on the Paper has the same object in view. It is in page 32, line 40, after the word "words," to insert the words:
    1270
    "(including in the case of a company registered prior to the sixteenth day of May, eighteen hundred and eighty-eight, under the Companies Act of 1862 or otherwise incorporated prior to the thirty-first day of May, eighteen hundred and eighty-nine, an amount equal to the nominal capital of such company as existing at the date a registration or incorporation, as the case may be)."
    I hope that the Chancellor of the Exchequer will be able to accept the first two Amendments; we shall then have no need to proceed with the others. The object of this Clause is to remedy a defect in the drafting of Section 55 of the Finance Act, 1927. That Section was introduced for the purpose of encouraging healthy amalgamations by granting relief from Capital and Transfer Stamp Duty which had previously been payable by amalgamations. Previously, we had the same thing applied to amalgamations of railways and many other things, and it was undoubtedly the intention at the time Section 55 of the 1927 Act was introduced, that these amalgamations of companies which had been formed prior to that time should have the same privileges as were extended to the railway companies and others a year or two before. The object of the Amendments is to remedy this anomaly. As the Section is now drafted, relief from Capital Duty on amalgamation can only be obtained in respect of capital on which Duty has previously been paid. The result is that companies with capital which was authorised before the imposition of the Capital Duty cannot obtain relief. This is felt more particularly by the statutory companies, such as public utility companies, because the capital in many of these cases was subscribed long before there was any obligation to pay the Duty at all. As the law stands it no doubt acts as a great deterrent to amalgamation. We have heard a good deal about the benefits of amalgamation and rationalisation, and it is with the object of making it easier, that I am moving the Amendment.
    Mr. PETHICK-LAWRENCE: I have much pleasure in telling my hon. Friend that the Chancellor of the Exchequer is able to accept the first two Amendments, but not the third. The object, therefore, that he has in view will be achieved, that is, "after the commencement of this Act" the amalgamations will not have to pay the Duty where the amalgamation

    1271
    is of companies that were formed before Capital or Transfer Stamp Duty was charged.
    Amendment agreed to.
    Mr. WOMERSLEY: I beg to move, in page 32, line 40, to leave out the words "there were," and to insert instead thereof the words:
    "were not contained therein; and
    (2) be deemed to have had effect up to the commencement of this Act as if after the said words there had been"
    May I express my gratitude to the Chancellor of the Exchequer and the Financial Secretary for accepting these Amendments, which I am sure will be of great use to the people they are intended to benefit.
    Amendment agreed to.

    CLAUSE 39.—(Remission of stamp duty in respect of capital of certain companies.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Sir L. WORTHINGTON-EVANS: We ought to have an explanation of this Clause. It seems to me that we are creating a precedent here. I am not prepared to oppose it at the moment, but I want to know what the Financial Secretary has to say about it. He has picked out two companies, both of which are excellent in themselves, and no doubt fulfil a national purpose—certainly the second one does; he has picked out these two companies in order to give them special treatment, and to exempt them from payment of duties which every other company registered in this country has to pay. The second company undoubtedly fulfils a national purpose, and I should have thought that the first one did, namely, the Imperial and International Communications, Limited, but that is the very company which the Government are not supporting through the Post Office. The Treasury come here and propose
    1272
    exceptional treatment and national support—for it is nothing less if we are going to exempt them specially from Stamp Duty—and yet in another Department of the Government, instead of giving them national support, they are giving them what seems to be a jealous, sulky opposition. The Financial Secretary ought to explain upon what principle these exemptions are being made, and, when I have heard what he has to say, I will reserve my liberty to consider it further.
    Mr. PETHICK-LAWRENCE: The exemption in the first Sub-section of the Clause relates to Imperial and International Communications, Limited. The Government have included that company because of a promise given to them by the late Government. We felt that promise ought to be implemented. The second company is one formed for the purpose of assisting unemployment, and it is for that reason that the Government thought it right to single it out for this exemption.
    Sir K. WOOD: I think the general reply of the Financial Secretary will be regarded as satisfactory. As an undertaking was given to the first company I think all hon. Members will agree that the present Government should implement it. Of course it was open to the Government, if they disagreed with the promise which had been given, frankly to come to the House and say so, but I am very glad they have decided to keep it. With regard to the Bankers Industrial Development Company, Limited, I agree that it is a company which is deserving of the consideration of the Committee, but it is rather strange that the present Government should have taken this action in view of the fact that the object of the company is to further the interests of private enterprise and private capital. I notice that the hon. Member for the Dartford Division (Mr. Mills) assents to that view. I am sure he will agree with what the Government have done, because he is an ardent supporter of private enterprise so far as munitions are concerned; therefore, when the Government propose to support a company which is endeavouring to assist private enterprise, I know he will agree with them. I am glad to see, also, that the hon. Member for Silvertown (Mr. J. Jones) is in full agreement

    1273
    with the Government on this matter, especially after all he has been saying for the last 30 or 40 years. I appreciate these concessions, and I am sure they will receive the support of the Committee, and especially of hon. Members opposite, who are now taking a very different view of things from that which they expressed at the last Election.
    Mr. MILLS: I am not rising on account of anything which the right hon. Member for West Woolwich (Sir K. Wood) said, but because I regard the action which is being taken here as furnishing a very dangerous precedent. Exemption may be a very admirable thing in the case of these two companies, but the giving of these exemptions will have the same effect as imposing tariffs; it will lead to a growing appetite for them. For that reason I wish to register my protest against the remission of Stamp Duty to these two companies.
    Sir K. WOOD: But how about voting against it?
    Mr. SMITHERS: The hon. Member for Dartford (Mr. Mills) and I are in strong opposition politically, but we happen to be neighbours and we happen to be friends. [Interruption.] Why should it be strange? It is not at all strange. In the county of Kent we have the cricketing spirit, and we know how to play the game. [Interruption.] One interruption at a time.
    The CHAIRMAN: We cannot have these answers to interruptions. We must confine ourselves to the Amendment.
    Mr. SMITHERS: With respect to you, Sir, it was a very rude interruption, and I was trying to reply to it.
    The CHAIRMAN: I must trust to the hon. Member to ignore interruptions.
    Mr. SMITHERS: Then I will only repeat that the hon. Member for Dartford and I, although we differ on political grounds, are good friends behind the scenes. I never thought we should ever agree across the Floor of the House, but I suppose great minds think alike and my hon. Friend has already thought of the argument which I was going to put. I am in sympathy with these two companies, and for the reasons stated they should have all the help we can possibly give them. At the same time it must
    1274
    be remembered that these companies, which are working in competition with others, are being given privileges which their competitors have not got. Therefore I agree with the hon. Member for Dartford that this is a dangerous precedent. There is one important question I wish to ask the Financial Secretary. The Chancellor of the Exchequer began the evening in great good humour and gave way to our request to postpone certain Clauses. When the Committee are in this kind of "let-the-thing-go-through-easily" mood they are apt to let a lot of things through without proper consideration, and I wish to know from the Financial Secretary what this concession will cost the revenue.
    Sir HENRY CAUTLEY: I entirely agree with what the Financial Secretary said as regards the first company. I think that company was formed on a distinct promise in regard to this matter given by the last Government, and that promise must be implemented. At the time the promise was given I understood that this company was regarded as being of an international character, and I have been a little surprised since to find that it is not now regarded so favourably by this Government. I make no comment with regard to that company; but I do not at all understand the reason the Financial Secretary has given for the exemption of the second company. In so far as I understand the company it is nothing but a promoting company; there are dozens of them in the City of London. These bankers are not receiving financial assistance from the Government, they are not under Government control. This is not a Government business of any kind, this is nothing but a private arrangement among bankers to assist the amalgamation of companies. There are many concerns in London and in some provincial towns which carry through the very same business. Will the Financial Secretary explain to me why they should not receive the substantial advantage of being exempt from capital tax which is given to this Bankers Industrial Development Company? I do not think that these individuals and private companies are the kind of people whom the Government intended to relieve, and I hope the Financial Secretary will agree that this particular body should be struck out of the Bill.
    Mr. J. JONES: I am rather surprised that those in the Labour movement should be called upon to give relief of this kind to financial concerns which we have been up against ever since we were boys. If these companies were bound by any kind of tie to work on behalf of the nation regardless of their own financial interests, then I could understand this proposal. Here we are proposing a remission of taxation on behalf of the certain companies which may or may not be working in the public interest. What guarantee have we, in the event of some future international trouble, that these very companies will not use their financial power to subsidise people who may be fighting against us? I suggest that taxation of companies ought not to be relieved in that way. It will be quite easy for companies to be formed to escape taxation, and I admit that there are clever people in both camps. I believe there are some financiers in the Labour party who might become shareholders in a financial international trust. Some of us do not understand the principle upon which this kind of remission is being established, and so far as I am concerned, my knowledge of finance is limited by the lack of it.
    I want to say, frankly, that what is now being proposed seems to me to be a concession to concessionaires, and to people who exploit national interests for their own purposes. Who are the bankers? We know some of them by their nationality. Some of them are people who sing "God save the King" in broken English. They always try to escape national responsibilities, and they belong to every country, and they are only nationalists in their own country for the time being. I believe that the public should have control of all our national machinery, financial and otherwise, and, when a proposition is made to give concessions of this kind, we are not carrying out the programme for which Labour men stand. In this particular case, we are allowing great financiers to escape their legitimate share of taxation, and that is a bad Principle.
    10.0 p.m.
    Mr. MOND: I am always interested in the remarks of the hon. Member for Silvertown (Mr. J. Jones), but he does not seem to have a particular grasp of
    1276
    the matter we are discussing. The hon. Member opposes this Clause, and there I agree with him. I think we are establishing by this proposal quite an unnecessary precedent. A great many companies have had to pay Stamp Duties which are necessary for reorganisation and rationalisation schemes. They have had to pay very heavily, and they have not had any taxation remitted. It is now proposed that there should be a remission of Stamp Duty in respect of the share capital of the Imperial and International Communications, Limited, and the Bankers Industrial Development Company, Limited. I cannot see any particular reason why the latter company should escape the ordinary duties which are payable by companies.
    It has been said that these companies have been brought into existence for the national interest, but I would like to point out that they are profit-making concerns. They are both in an admirable position to make profits, and I do not see why they should not share with the other financial institutions in the City the same burdens which we all have imposed upon us. There is no company in this country that is so well situated to manage its affairs profitably as the Bankers Industrial Development Company, which has the support of all the great financial institutions of the country behind it, and it is under the initiative of very distinguished and recognised authorities in financial matters. It is inconceivable to me that this particular body should ever make a loss, and I see no reason at all why it should be relieved of the ordinary taxation which every other financial institution in the City of London is bound to pay. The Imperial and International Communications, Limited, stands on a different footing, but there again I see no reason why they should not pay their share of taxation, as they can afford to do so a great deal better than many other large trading companies which have intense competion to meet. For these reasons, I hope that this Clause will be dropped by the Government.
    Mr. HAMMERSLEY: We seem to have placed ourselves in a very embarrassing position, because we have made such rapid progress to-day. I think there is something to be said for exempting from Stamp Duty the Imperial and International

    1277
    Communications, Limited. Subsection (2) refers to the Bankers Industrial Development Company, Limited, which is a new concern, the shareholders of which are almost entirely financial magnates in the City of London. I understand that the reason given by the Government for putting forward this proposal is that this perfectly new company has some right to be exempted from Stamp Duty to which other companies in the Kingdom are subject because it is going to assist employment. I would like to know in what particular sense this collection of financial magnates can be said to have assisted the country in the relief of unemployment.
    It seems to me an astonishing thing that a Socialist party should be supporting a collection of purely monetary and financial interests and exempting them from the ordinary process of law whereby commercial individuals are expected to contribute in the form of the Stamp Duty to the revenue of the country. I am referring entirely to the Bankers' Industrial Development Company. If it can be shown that this particular company has helped unemployment, I would willingly agree that we should give them some financial assistance in this sense. But, in fact, no argument can be put forward or any evidence given to suggest that they have helped in this problem, and when it is realised that the purpose of ordinary industrial activities is to help unemployment, and that this particular one is less likely to help in this matter than any other industrial activity, surely we can reasonably ask for the support not only of the members of the Liberal party who, I notice, are absent, but also the back benchers of the Labour party. It seems to me to be an iniquitous state of affairs that we should be asked, without proper and adequate explanation, to say that some particular and selected company consisting entirely of financial individuals should be exempted from the ordinary channels of taxation, and I ask that before we pass this Clause some further and more satisfactory explanation should be given by the Chancellor of the Exchequer.
    Mr. HARDIE: In connection with this question of the Imperial and International Communications Limited, considering the late Government's position in regard to the amalgamation—[An HON. MEMBER:
    1278
    "That is not the point."] The position is this: I do not agree for a moment that because they were able as a Government to take something from the Post Office, that should be a ground for receiving now from the Government any remission of Stamp Duty. They put on the pressure and they pinched from the Government that which they said was, and which they believed to be, something different, and out of which they were going to make a profit. If they had found that they were not as capable as the Post Office in running that business which they took from it, why should they receive any kind of relief? On the industrial view of the case, if you are going to give relief to one, you must give relief to all. If this had been something in which the Government themselves had been interested, it would have been different, but, knowing that the thing was stolen from the Government, I can see no reason why any consideration should be given. In fact, it would seem to me that the proper thing would be, that since they were successful as a Tory Government in taking this from the nation, then those who took it should have something more put upon them.
    I do not know what may be meant by helping unemployment in regard to this, because if you take the question of numbers employed in that service before and after amalgamation, then when you come to Sub-section (2), if the Industrial Development Company had been something in which the nation had had some say, if it had been something workable for the nation, then there might have been something in it. But all this is individual, private enterprise. Why, then, should anyone with a sense of justice seek to give any form of relief? Unless there is some good reason, seeing that the Labour party is not responsible, and that something must be done following the decision of the previous Government, I hope that the Chancellor of the Exchequer will say that this Clause has got to be dropped.
    Mr. P. SNOWDEN: I am in agreement with what my hon. Friend has said about the transaction that took place resulting in the formation of this Imperial Communications Company.
    Sir L. WORTHINGTON-EVANS: That the Government were wrong?
    Mr. SNOWDEN: I say I agree; but that is not the question at all. A Clause which has already been passed exempts from payment of Capital Duty companies which reorganise or amalgamate. This is precisely a similar case. Companies amalgamated in the Imperial Communications group. They are in exactly the same position as those companies which amalgamate and which are free from Capital Duty. Therefore, if you were not to extend to the Imperial Communications Company that which all industrial concerns have, you would put them in a prejudiced position. Therefore, the question of what was done then does not arise now. Whatever criticism may be made of the scheme which amalgamated these cable companies, it does not alter the fact that they are an amalgamation of old companies which paid Stamp Duty originally, and therefore if they paid Stamp Duty now they would be paying it twice over. I have been trying in other connections this afternoon to avoid double taxation of any kind.
    The hon. Member for Stockport (Mr. Hammersley) asked if this company had been formed for the purpose of dealing with unemployment, to which I reply "Yes." The purpose of rationalisation is to improve the efficiency of industry, and it is to be assumed that when an organisation for production becomes more efficient as the result of rationalisation it will improve employment sooner or later. The hon. Member's description of it as a combination of financiers operating for profit was not correct. Perhaps some hon. Members would object if I were to describe it as a sort of public utility concern, but that is really in effect what it is. Those who have organised themselves have done so in order that they might be able to provide finances for companies that want money for the reorganisation, and are not themselves in a position to provide the necessary funds. The hon. Member for East Toxteth (Mr. Mond) assumes that they were going to be a profit-making concern or, at any rate, that they would not make losses. It is clearly understood that it is not a profit-making concern, and I cannot see how an organisation of this sort could be a profit-making concern. It is in its essential features and characteristics what I have just described as a public utility society, and I am sure that men who have interested themselves in the
    1280
    organisation are public-spirited men who are doing this simply and solely in the hope of being able to encourage reorganisation.
    Mr. SMITHERS: I ask the Financial Secretary what is the cost to the Exchequer of the relief given to these two companies? Can the right hon. Gentleman tell me?
    Mr. SNOWDEN: In the case of the Bankers Industrial Development Company it amounts to about £60,000, and in the case of the Communications Company to £216,000.
    Sir L. WORTHINGTON-EVANS: The Chancellor of the Exchequer commenced by endorsing the description of his hon. Friend behind him that Imperial and International Communications, Limited, had pinched—
    Mr. SNOWDEN: The right hon. Gentleman grossly misrepresents me. The extent to which I associated myself with my hon. Friend's remarks was that I criticised the action of the late Government in forming that amalgamation.
    Sir L. WORTHINGTON-EVANS: I am in the recollection of the Committee. I do not want to misrepresent the right hon. Gentleman. I was surprised that he did not repudiate the ground on which his hon. Friend was opposing the Clause. He opposed it on the ground that this company had pinched from the Post Office the subject matter of the company, and I understood the right hon. Gentleman to say he endorsed what his hon. Friend had said, and that was all I was going to say. The OFFICIAL REPORT to-morrow, if it is not corrected, will show exactly what was said and whether I have misrepresented the position. On the merits, as we have, as the previous Government, given an undertaking to the Imperial and International Communications Company that they should be relieved of this duty, it is clear that, so far as my friends are concerned, they are going to support it and they are not going back on the undertaking given to that company.
    When we come to the Bankers' Industrial Development Company, apparently some of my hon. Friends would like further to criticise that, but the Question that is going to be put is that the Clause stand part, and it is not open to us to deal with Section 2 apart from

    1281
    Section 1, and if the public faith has been pledged to carry out the undertaking given in the first Clause we have to accept both the first and the second or else run the risk of repudiating the pledge given in public faith. Personally, I have no difficulty, because I agree that the Bankers' Industrial Development Company is not an ordinary issuing house, is not an ordinary financial corporation or promoting house. The subscribers to it have come forward not with the idea of making a profit, and I very much doubt whether it ever will, but they came forward with public spirit and in the public interest to try to form an organisation which will look into the rationalisation schemes and really to help the Government of the day if any of those schemes require public assistance. So I hope the Clause will now be allowed to go through.
    Mr. SNOWDEN: I should not like the party opposite to vote under a possible misapprehension. I am not quite sure at the moment whether a pledge was given by the previous Government.
    Sir L. WORTHINGTON-EVANS: The Financial Secretary said so.
    Mr. SNOWDEN: He possibly was not quite clearly informed. The matter was brought to my notice almost as soon as I came into office, and I am under the impression at the moment that it had been under negotiation at the time. I do not know that in any case I should be impressed by what had taken place previous to that being brought to my attention. I decided the matter upon the grounds I have already stated. This amalgamation, having been forced upon the company, and Stamp Duty having already been paid by the amalgamated companies, I think that it was only just that the relief should be extended to them.
    Sir H. CAUTLEY: I should like to ask the Chancellor of the Exchequer two questions. First, with regard to the Imperial and International Communications, Limited, why does not that company come under the old law? Why is this special provision necessary now? The second question relates to the Bankers' Industrial Development Company. Is this company formed under the ordinary law, is there any limitation of dividends, or is it formed under the Provident
    1282
    Societies Act, the same as public utility companies? I had an idea that it was formed under the ordinary company law, and that it is not limited as to dividends and as to capital. The Chancellor of the Exchequer gave us to understand that it was a public utility company.
    Mr. P. SNOWDEN indicated dissent.
    Sir H. CAUTLEY: I do not wish to misrepresent the right hon. Gentleman. He gave us to understand that it was in the nature of a public utility company. I have heard that it is not, in fact, a public utility company. How is it in the nature of one? Is it limited as to dividends or to not making profits? Is it not an ordinary profit-making company? If it is an ordinary profit-making company, why should it be treated differently from other companies which exist in such numbers all over the country? I should have been prepared to accept the explanation of the Chancellor of the Exchequer if it had been according to the real facts, and there was no limitation of profits or anything which might show that it was not a profit-making company or not able to make profits. I am speaking here as a Conservative in favour of the making of profits and of private enterprise, and I am surprised that the Chancellor of the Exchequer is bringing this matter forward, unless he can substantiate what he has said that it is not a profit-making company.
    Mr. MOND: I am glad that the discussion elicited from the right hon. Gentleman a warm tribute paid to the firms who have formed the Bankers' Industrial Development Company. He stated his fullest confidence in them as public-spirited individuals. But I cannot agree that it is a public utility company. It is a company which has no limit whatever on its profit-making capacity, and it is well situated to make profits. All that I wish to say on the matter further is that I hardly thought it was consistent with the dignity of that institution or with the size, power and scope which it commands to have a remission of taxation on such sums as £60,000, and to raise controversial points as to what other companies may at some time be considered to fall into the same scope of public utility companies. I should not think that those

    1283
    who promoted the company would desire to place this House in an invidious position or that the House should be asked to give such an important and influential concern so small a concession.
    Mr. HAMMERSLEY: Before we pass this Clause it is necessary to say that those of us on this side of the House who strongly object to Sub-section (2) of the Clause do so not because we impugn in any way the motives of the Bankers' Industrial Development Company. We believe that they are actuated by the highest motives, but so are the ordinary industrial concerns. They each endeavour to provide employment for the people, and it seems to be a most extraordinary precedent that because a
    certain selected number of people get together, they should be singled out in this way by the Chancellor of the Exchequer. It has been suggested that they are going to relieve unemployment and to help the various schemes of rationalisation. We have not had one word, one item, one single jot or tittle of evidence that would indicate to us how in any particular way the question of rationalisation has been helped by this particular company. By voting for this Clause the party opposite as well as others among ourselves are creating a precedent which is extremely undesirable.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 250; Noes, 44.

    Division No. 390.]

    AYES.

    [10.26 p.m.

    Adamson, Rt. Hon. W. (Fife, West)

    Dickson, T.

    Jones, F. Liewellyn- (Flint)

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

    Dudgeon, Major C. R.

    Jones, Henry Haydn (Merioneth)

    Addison, Rt. Hon. Dr. Christopher

    Dukes, C.

    Jones, J. J. (West Ham, Silvertown)

    Aitchison, Rt. Hon. Craigie M.

    Duncan, Charles

    Jones, Morgan (Caerphilly)

    Alexander, Rt. Hon. A. V. (Hillsbro')

    Ede, James Chuter

    Jones, T. I. Mardy (Pontypridd)

    Alpass, J. H.

    Edge, Sir William

    Jowett, Rt. Hon. F. W.

    Ammon, Charles George

    Edmunds, J. E.

    Jowitt, Rt. Hon. Sir W. A.

    Arnott, John

    Edwards, E. (Morpeth)

    Kelly, W. T.

    Attlee, Clement Richard

    Egan, W. H.

    Kennedy, Thomas

    Ayles, Walter

    Elmley, Viscount

    Kirkwood, D.

    Baker, John (Wolverhampton, Bilston)

    England, Colonel A.

    Lansbury, Rt. Hon. George

    Barnes, Alfred John

    Evans, Capt. Ernest (Welsh Univer.)

    Lathan, G.

    Barr, James

    Fielden, E. B.

    Law, Albert (Bolton)

    Batey, Joseph

    Forgan, Dr. Robert

    Law, A. (Rosendale)

    Bellamy, Albert

    Freeman, Peter

    Lawrence, Susan

    Bennett, Capt. Sir E. N. (Cardiff C.)

    Gardner, B. W. (West Ham, Upton)

    Lawrie, Hugh Hartley (Stalybridge)

    Bennett, William (Battersea, South)

    Gardner, J. P. (Hammersmith, N.)

    Lawson, John James

    Benson, G.

    Gibbins, Joseph

    Lawther W. (Barnard Castle)

    Bentham, Dr. Ethel

    Gibson, H. M. (Lancs, Mossley)

    Leach, W.

    Bevan, Aneurin (Ebbw Vale)

    Gill, T. H.

    Lee, Frank (Derby, N. E.)

    Birkett, W. Norman

    Gillett, George M.

    Lee, Jennie (Lanark, Northern)

    Bondfield, Rt. Hon. Margaret

    Gossling, A. G.

    Lees, J.

    Bowen, J. W.

    Gould, F.

    Lewis, Oswald (Colchester)

    Bowerman, Rt. Hon. Charles W.

    Graham, D. M. (Lanark, Hamilton)

    Lewis, T. (Southampton)

    Bowyer, Captain Sir George E. W.

    Graham, Rt. Hon. Wm. (Edin., Cent.)

    Lindley, Fred W.

    Braithwaite, Major A. N.

    Grattan-Doyle, Sir N.

    Llewellin, Major J. J.

    Broad, Francis Alfred

    Griffiths, T. (Monmouth, Pontypool)

    Logan, David Gilbert

    Brockway, A. Fenner

    Groves, Thomas E.

    Longbottom, A. W.

    Bromfield, William

    Grundy, Thomas W.

    Longdon, F.

    Brooke, W.

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

    Lowth, Thomas

    Brothers, M.

    Hall, G. H. (Merthyr Tydvil)

    Lunn, William

    Brown, C. W. E. (Notts, Mansfield)

    Hall, Capt. W. P. (Portsmouth, C.)

    Macdonald, Gordon (Ince)

    Brown, Rt. Hon. J. (South Ayrshire)

    Harbord, A.

    MacDonald, Rt. Hon. J. R. (Seaham)

    Buchanan, G.

    Hartshorn, Rt. Hon. Vernon

    MacDonald, Malcolm (Bassetlaw)

    Burgess, F. G.

    Haycock, A. W.

    MacDonald, Sir M. (Inverness)

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

    Hayday, Arthur

    McEntee, V. L.

    Caine, Derwent Hall-

    Hayes, John Henry

    McKinlay, A.

    Cameron, A. G.

    Henderson, Right Hon. A. (Burnley)

    Maclean, Neil (Glasgow, Govan)

    Cape, Thomas

    Henderson, Arthur, Junr. (Cardiff, S.)

    McShane, John James

    Carter, W. (St. Pancras, S. W.)

    Henderson, Thomas (Glasgow)

    Makins, Brigadier-General E.

    Chapman, Sir S.

    Henderson, W. W. (Middx., Enfield)

    Malone, C. L'Estrange (N'thampton)

    Chater, Daniel

    Heneage, Lieut.-Colonel Arthur P.

    Mansfield, W.

    Clarke, J. S.

    Herriotts, J.

    March, S.

    Cluse, W. S.

    Hirst, G. H. (York, W. R., Wentworth)

    Marley, J.

    Clynes, Rt. Hon. John R.

    Hirst, W. (Bradford, South)

    Marshall, F.

    Cocks, Frederick Seymour

    Hoffman, P. C.

    Mathers, George

    Compton, Joseph

    Hollins, A.

    Matters, L. W.

    Cove, William G.

    Hopkin, Daniel

    Messer, Fred

    Cowan, D. M.

    Horrabin, I. F.

    Middleton, G.

    Daggar, George

    Hudson, James H. (Huddersfield)

    Millar, J. D.

    Dallas, George

    Jenkins, W. (Glamorgan, Neath)

    Mills, J. E.

    Dalton, Hugh

    John, William (Rhondda, West)

    Milner, Major J.

    Day, Harry

    Johnston, Thomas

    Montague, Frederick

    Morgan, Dr. H. B.

    Romeril, H, G.

    Tillett, Ben

    Morley, Ralph

    Rosbotham, D. S. T.

    Tinker, John Joseph

    Morrison, Herbert (Hackney, South)

    Rowson, Guy

    Tout, W. J.

    Mort, D. L.

    Salter, Dr. Alfred

    Townend, A. E.

    Moses, J. J. H.

    Sanders, W. S.

    Trevelyan, Rt. Hon. Sir Charles

    Muff, G.

    Sawyer, G. F.

    Turner, B.

    Muggeridge, H. T.

    Scrymgeour, E.

    Vaughan, D. J.

    Murnin, Hugh

    Sexton, James

    Viant, S. P.

    Naylor, T. E.

    Shaw, Rt. Hon. Thomas (Preston)

    Walkden, A. G.

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

    Shepherd, Arthur Lewis

    Walker, J.

    Noel Baker, P. J.

    Sherwood, G. H.

    Wallace, H. W.

    Oliver, George Harold (Ilkeston)

    Shield, George William

    Watkins, F. C.

    Oliver, P. M. (Man., Blackley)

    Shiels, Dr. Drummond

    Watson, W. M. (Dunfermline)

    Palin, John Henry.

    Shillaker, J. F.

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

    Paling, Wilfrid

    Short, Alfred (Wednesbury)

    Wellock, Wilfred

    Palmer, E. T.

    Simmons, C. J.

    Welsh, James C. (Coatbridge)

    Perry, S. F.

    Sinkinson, George

    Westwood, Joseph

    Pethick-Lawrence, F. W.

    Smith, Ben (Bermondsey, Rotherhithe)

    Whiteley, William (Blaydon)

    Phillips, Dr. Marion

    Smith, Frank (Nuneaton)

    Wilkinson, Ellen C.

    Picton-Turbervill, Edith

    Smith, Rennie (Penistone)

    Williams, Dr. J. H. (Llanelly)

    Pole, Major D. G.

    Smith, Tom (Pontefract)

    Williams, T. (York, Don Valley)

    Potts, John S.

    Smith, W. R. (Norwich)

    Wilson, C. H. (Shelfield, Attercliffe)

    Quibell, D. J. K.

    Snell, Harry

    Wilson, J. (Oldham)

    Ramsay, T. B. Wilson

    Snowden, Rt. Hon. Philip

    Wilson, R. J. (Jarrow)

    Rathbone, Eleanor

    Snowden, Thomas (Accrington)

    Winterton, G. E. (Leicester, Loughb'gh)

    Raynes, W. R.

    Sorensen, R.

    Wright, W. (Rutherglen)

    Richards, R.

    Stamford, Thomas W.

    Young, R. S. (Islington, North)

    Richardson, Sir P. W. (Sur'y, Ch't'sy)

    Strachey, E. J. St. Loe

    Richardson, R. (Houghton-le-Spring)

    Strauss, G. R.

    TELLERS FOR THE AYES.—

    Riley, F. F. (Stockton-on-Tees)

    Sullivan, J.

    Mr. Allen Parkinson and Mr.

    Ritson, J.

    Sutton, J. E.

    Charles Edwards.

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

    Thurtle, Ernest

    NOES.

    Atkinson, C.

    Gibson, C. G. (Pudsey & Otley)

    Salmon, Major I.

    Balniel, Lord

    Graham, Fergus (Cumberland, N.)

    Samuel, Samuel (W'dsworth, Putney)

    Bird, Ernest Roy

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Sandeman, Sir N. Stewart

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

    Hanbury, C.

    Savery, S. S.

    Butler, R. A.

    Iveagh, Countess of

    Shepperson, Sir Ernest Whittome

    Carver, Major W. H.

    Leigh, Sir John (Clapham)

    Smith-Carington, Neville W.

    Cautley, Sir Henry S.

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

    Smithers, Waldron

    Christie, J. A.

    Mason, Colonel Glyn K.

    Somerville, A. A. (Windsor)

    Colfox, Major William Philip

    Morrison, W. S. (Glos., Cirencester)

    Somerville, D. G. (Willesden, East)

    Croom-Johnson, R. P.

    Nicholson, O. (Westminster)

    Train, J.

    Culverwell, C. T. (Bristol, West)

    Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)

    Wells, Sydney R.

    Dalkeith, Earl of

    Ormsby-Gore, Rt. Hon. William

    Womersley, W. J.

    Dixey, A. C.

    Peto, Sir Basil E. (Devon, Barnstaple)

    Everard, W. Lindsay

    Rawson, Sir Cooper

    TELLERS FOR THE NOES.—

    Falle, Sir Bertram G.

    Rentoul, Sir Gervais S.

    Mr. Hammersley and Captain

    Forestier-Walker, Sir L.

    Roberts, Sir Samuel (Ecciesall)

    Peake.

    CLAUSE 41.—(Temporary additions to New Sinking Fund.)
    Sir L. WORTHINGTON-EVANS: On a point of Order. I do not know whether the Chancellor of the Exchequer will make a statement with regard to the reasons for this Clause?
    Mr. P. SNOWDEN: There was a deficit of £14,500,000 on last year's balance-sheet. That sum had to be borrowed by an addition to the Floating Debt. It is no use paying off debt if at the same time you are borrowing an equal amount and adding to the debt. I am proposing in this Clause not to pay off the deficit in one year, because in the present
    1286
    financial position of the country that would be a very heavy burden, but to spread the repayment over three years—£5,000,000 this year, £5,000,000 next year and the balance of £4,500,000 in the following year. The justification for that is that if we are ever going to reduce debt we shall have to avoid borrowing to make up a deficit. When you borrow to make up a deficit you are drawing money out of the market and away from industrial purposes. When you pay off debt you pay back money into the industrial market. In the application of this particular proposal the £5,000,000 which will be appropriated for the reduction of the £14,500,000 deficit will go back into the industrial market, and will therefore be available for the extension of industry. That is the reason why I have adopted this Clause.
    Sir L. WORTHINGTON-EVANS: I beg to move, in page 34, to leave out lines 17 to 19 inclusive.
    The Amendment of which I have given notice proposes to strike out the words of the Clause which refer to the first repayment of £5,000,000 in the financial year ending 31st March, 1931. I asked the right hon. Gentleman to explain what the Clause meant, and he has given the most extraordinary explanation I have ever heard. He said that if this money were not repaid to the Sinking Fund we should be drawing money from the markets which would otherwise——
    Mr. SNOWDEN: No, but that we have been doing so.
    Sir L. WORTHINGTON-EVANS: Then that we have been drawing money from the market which would have been available otherwise for industrial purposes. The right hon. Gentleman now proposes to increase taxation by £5,000,000. Where does he think that money is coming from if it is not coming from the taxpayers who would otherwise have had it available for the markets for industrial purposes? The right hon. Gentleman does not create an extra penny of available money for industrial purposes whether he has this Clause or not. The reason which he has given is utterly fallacious. He disclaimed any desire to borrow in order to make up a deficit but that is precisely what he is doing. He is doing even worse. He is borrowing in order to find £5,000,000 for a perfectly illusory Sinking Fund. Since the Budget was introduced the Unemployment Fund has been running into debt at the rate of £500,000 a week. The right hon. Gentleman has given notice to-day that he must have additional borrowing powers and at the same moment that he is borrowing for the Unemployment Fund he pretends that he is repaying money to the Sinking Fund.
    It is an absolutely ridiculous position. It is the position which the right hon. Gentleman himself condemned in his opening statement. He condemned borrowing for the purposes of the Sinking Fund, but that is precisely what he is doing. At the same moment he is putting an extra £5,000,000 into the Sinking Fund and borrowing more for the purposes of the Unemployment Fund. All the money which he borrows for the
    1288
    Unemployment Fund, of course, comes from that very fund to which he has been referring, the fund which would otherwise be available for industrial purposes. But there is no need to do that. Since the Budget was introduced a windfall has come to the Treasury. When the Budget was introduced, the right hon. Gentleman told us about the British share of the Reparations Loan. I forget whether he told us the exact figure or not, but, at any rate it has turned out to be £10,750,000. That sum, so he tells us, is going into the new Sinking Fund in addition to the £5,000,000 proposed under this Clause. In our present circumstances, and in view of the fact that we have to borrow for the Unemployment Fund, I ask the Committee not to approve of the payment of this £5,000,000 into the Sinking Fund. That it is a desirable thing to have a Sinking Fund when you can afford it, of course goes without saying, but to overload it and to attempt to create a Sinking Fund out of what is equivalent to borrowed money is indeed a stupidity and, especially when there is an extra £10,750,000 going into that Sinking Fund, it would be proper and wise for the Chancellor of the Exchequer not to propose any further addition to it.
    Major HILLS: The Chancellor of the Exchequer has enunciated the new principle that taxation creates wealth. He has told the Committee that if he imposes taxes, he brings new money into industry. I wonder where it comes from. Is it hidden in stockings? It is a delightful theory. I quite agree with my right hon. Friend the Member for St. George's (Sir L. Worthington-Evans), and I see no sort of pretence for taxing the people of this country in order to provide this money for a sinking fund. I am aware that this is not the occasion on which to enter into a long disquisition on the principle of the repayment of debt, but certain things ought to be said, and I shall say them quite shortly. On certain occasions it is a good thing to pay off debt, and as fast as you can, but on certain occasions also it is a better thing to reduce taxation and not to pay off debt so fast. Above all, it is surely ridiculous to pretend to pay off debt and at the same time to pile up fresh debt of an equal or greater amount.
    My complaint does not end there. My right hon. Friend the late Chancellor of

    1289
    the Exchequer very wisely, in my opinion, stabilised the debt repayment at £355,000,000, a sum which was sufficient to pay the interest on the Debt and to pay off a certain amount of the capital every year. When you stabilise like that, it is important that you should keep that sum fixed, for several reasons. First of all, it is a good thing that you should not vary it, for otherwise all Chancellors of the Exchequer will do the same, but if you say that you think the sum is too small, and you tax the people to provide more, equally when there is a bigger surplus on the fund and more is going to pay off capital, it is certain that future Chancellors of the Exchequer will raid that fund.
    In those years when the interest is smaller, you may pay off rather more, and, on the other hand, when interest is high, you pay off rather less, but it is extremely important that you should not break into that stabilisation when it has once been created. I cannot see why this occasion of all occasions is chosen to increase taxation. I should have thought that if at any time it is right to make the choice in favour of reducing taxation and not paying off Debt quite so fast, this was the occasion. It seems to me a piece of foolishness to pretend to pay off Debt when really you are not, and to break into the very wise provision for Debt made by my right hon. Friend, who stabilised Debt redemption. It was done in the year 1928, and, owing to it, this country is to be entirely free from all the debt of the War in a term of years which will be within the lifetime of a good many Members sitting round me. If that comes off, it will be amost remarkable thing, for persons in this country who fought during the War will live to see us pay off every penny of the cost. There is no other country in the world which would have attempted to do it. I believe that my right hon. Friend's arithmetic was accepted by financial opinion in this country. I never heard it criticised, and now suddenly it is broken into, and of course, if it is broken into once, it will be again, and it will not stand as a permanent goal for all Chancellors of the Exchequer to aim at. I think it is a very great mistake, and the mistake has been made at a time when it is even more disastrous than it would otherwise
    1290
    have been. I suppose the Chancellor of the Exchequer will not give way. It would relieve his necessities if he did for there would be less money to raise. If my right hon. Friend goes to a Division, I shall certainly vote with him.
    Mr. CHURCHILL: I rise to give my support to the Amendment moved by the right hon. Gentleman the Member for St. George's (Sir L. Worthington-Evans) which has been reinforced by the right hon. and gallant Gentleman below the Gangway. I ask the Chancellor of the Exchequer to give his serious attention to the views expressed from this side on this question. This Debt treatment requires to be brought into proper relation with the financial and economic state of the country. You may do far more harm to your credit and reproductive energies by extra taxation than you will gain in the prestige which comes from additional redemption of Debt at this juncture. I ask myself whether, on the whole, we have not cast the emphasis since the War unduly upon a speedy amortisation of old Debts instead of giving a greater stimulus to the creation of new wealth. Of course, the Socialist party naturally applaud the most stringent methods of fortifying the rentier class. There they have their champions. For my part, I think the productive side has to be considered, especially when you are already making an immense provision which has only to be steadfastly pursued across several generations to secure, even within the lifetime of people to-day, a complete clearance of this hideous legacy of the Great War. I consider that the right hon. Gentleman, at the present juncture in our financial affairs, is making an unnecessarily large provision for the redemption of Debt, and I do not believe that I am unsupported by solid financial and political opinion in making that statement.
    If I remember aright, the quota in the fixed Debt charge appropriate to this year is over £70,000,000 on a four per cent. basis. The right hon. Gentleman can borrow money at a little over two per cent., owing, it is said, to his careful guidance of the finances, or owing, some say, to the fact that industry is almost dead, and that people will not throw money into enterprises. Whatever be the

    1291
    cause, the fact remains that he can borrow at £2 3s., or even less, in the City from week to week. When he spoke to the bankers and got on so well with them, he said that he was saving about £12,000,000 a year through much cheaper borrowing on Treasury Bills resulting from his extremely skilful reduction of the Floating Debt. If that be so, the £68,000,000 or £69,000,000, which would have been the contribution under the fixed Debt charge to the amortisation of the Debt appointed for this year, will be increased by that amount; in addition to which he has got £10,500,000, to which the right hon. Member for St. George's has drawn attention which comes to him in course of the Reparation payments. The figures for the reduction of Debt this year will be enormous, and yet this is the worst year we have gone through with our unemployment bounding up 100,000 in a fortnight. This is the year which the Government select for laying upon this country, staggering and gasping under its burden, the heaviest burden of Debt repayment. Is it good sense? Is the only thing to do to keep on repaying Debt, no matter where you have to borrow it, and to borrow with one hand and repay with another?
    I am sure that the right hon. Gentleman will be well advised to strike out this additional provision. He has had his opportunity of bringing it forward and scoring off his predecessor. My contention is that the right hon. Gentleman, by assenting to new expenditure and by muddling the final months of the collection of the revenue, caused the trouble and that there would have been no deficit if the right hon. Gentleman had not been in power. He has had his score, and he has had the advantage of showing his superior virtue. Now let him drop this nonsense, and come back to the real position in which we stand, where what we require is not to lay all the heaviest burdens of Socialistic expenditure and of financial prudery upon the nation at the same moment, but where we wish as far as possible to give encouragement to industry, and to show that their fortunes are not entirely obnoxious to the Government of the day.
    11.0 p.m.
    Five million pounds extra over and above the fixed Debt charge, over and
    1292
    above the Reparation money, over and above the great economies on Treasury Bills, is to be provided statutorially in this Measure. Where is that £5,000,000 to come from? I will tell you where it is coming from. It is coming from the additional 6d. on the reserves of companies, on the reserves of productive enterprises. Sixpence is to be taken additional to the present 4s. in order that the right hon. Gentleman shall be able to preen himself on reducing debt. Here is a definite division of principle between the two sides of the House. I wonder whether in their heart of hearts hon. Members opposite are quite such vehement supporters of this principle of rapid debt amortisation? I should have thought that what was required at present was a little encouragement for industry and employment; that they should be given a feeling that they were not, as it were, under the ban and bar of the Government of the day. I suggest to the right hon. Gentleman that he removes from the scope of the increase in the Income Tax the reserves of limited companies and industrial enterprises, and, in order that his Budget shall suffer no disadvantage, he should strike out——
    The DEPUTY-CHAIRMAN: The Amendment before the Committee is that the £5,000,000 should be excluded from this year's payment, and on that the right hon. Gentleman is not entitled to discuss the whole system of national taxation.
    Mr. CHURCHILL: Am I to understand that in arguing that this sum of £5,000,000 need not be added to our burdens I am not entitled to mention in passing the strain and stress which could be relieved——
    The DEPUTY-CHAIRMAN: I did not rule that. What I have ruled is that the right hon. Gentleman must not discuss the general system of taxation. He has made a reference to Socialist schemes and other matters which do not come under this particular Amendment. He must confine himself to the question of the money raised in the Amendment.
    Mr. CHURCHILL: Indeed, I am doing so. I am saying that this money ought not to be paid because it can be found

    1293
    only by making a further inroad upon the already depleted reserves of our industrial and productive undertakings.
    The DEPUTY-CHAIRMAN: The right hon. Gentleman was urging the Chancellor of the Exchequer to refrain from placing the extra 6d. of Income Tax on the reserves of limited companies, and I say that is not in order on this Amendment.
    Mr. CHURCHILL: Then I trust you will permit me to say that if the right hon. Gentleman were willing to accept this Amendment he would be in a position to give that great remission. I am content to leave it at that. That would be doing something which would be a great encouragement to our industries. But, seriously, I want to ask the Chancellor of the Exchequer—[Interruption.] If you want to mock, we will mock. Why should there be these taunts when, with astonishing chivalry, we are helping you to-night in a manner which, I am bound to say, has gone beyond the limits of generosity? Why should there be these mocking interruptions? Anybody is allowed to have an opinion in this House. [Interruption.] I say to the right hon. Gentleman that if he wishes to facilitate the course of this Budget he ought to try to meet the opinions which are put forward from this side of the House, even when they do not altogether represent his complete view of our financial policy. After all, he is the head of only a minority Government—[Interruption]—he is the Minister of only a minority Government, and the House has a right to be associated with them to some extent in shaping legislation. Why should every suggestion we make be brushed aside? Why should the right hon. Gentleman imagine that simply by threatening us, as he has done to-day, with the Guillotine Closure on the Budget, he will be able to carry——
    Mr. McKINLAY: Has this anything to do with the Amendment before the Committee?
    The DEPUTY-CHAIRMAN: I hope the right hon. Gentleman will confine himself to the Amendment before the Committee, and also that we shall not have these taunts across the Floor.
    Mr. CHURCHILL: I certainly claim the ordinary freedom and liberty of
    1294
    debate which has always been given to an Opposition which is almost as strong as the Government of the day. Will not the right hon. Gentleman try to make his Budget scheme more agreeable to the judgment and general feeling of the House, and not adhere to his original plan as if that was the only method by which our affairs could be well conducted? I hope very much that the Chancellor of the Exchequer will be willing to try to meet the reasonable and moderate views of the Opposition. I know it is no use asking the right hon. Gentleman for any concession which places him at a disadvantage, but in this Amendment we are asking him to relieve himself of a portion of the burden which he has thought it right to undertake. I ask the right hon. Gentleman to weigh the facts and not treat the views which we have put forward as if they are bound to be excluded from any consideration of our financial system. We claim a right to, take our share in the shaping of legislation, and if we are denied that right, and if reasonable proposals made from this side count for nothing—[Interruption]—and are snarled and yawned at by hon. Members opposite, do not let it be supposed that that will deprive us of our effectual resisting power.
    Mr. ALBERY: I gather that the case of the Chancellor of the Exchequer for the increase of the Sinking Fund is that if there has been over-spending in the past, it has generally been at the expense of the Sinking Fund. I contend that there is only one remedy for over-spending, and that is to have a more economic spending of public funds. The Chancellor of the Exchequer on the present occasion, instead of effecting economies, is increasing the load of expenditure. If the Chancellor had economised and got a surplus, then there might be some virtue in deciding to use that surplus for increasing the Sinking Fund, instead of remitting taxation. But that is not the case at the present time, and I can see no virtue whatever in the operation he proposes. On the contrary, it appears to me to be very similar to the case of a man who, imagining himself to be in bad credit, borrows a sum of money from a moneylender and puts it into his bank, in the hope that thereby he may give a semblance of credit to those who may inquire.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 235; Noes, 119.

    Division No. 391.]

    AYES.

    [11.10 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)

    Muff, G.

    Addison, Rt. Hon. Dr. Christopher

    Hall, Capt. W. P. (Portsmouth, C.)

    Murnin, Hugh

    Alexander, Rt. Hon. A. V. (Hillsbro')

    Harbord, A.

    Naylor, T. E.

    Alpass, J. H.

    Hardie, George D.

    Noel Baker, P. J.

    Ammon, Charles George

    Hartshorn, Rt. Hon. Vernon

    Oliver, George Harold (Ilkeston)

    Arnott, John

    Haycock, A. W.

    Oliver, P. M. (Man., Blackley)

    Attlee, Clement Richard

    Hayday, Arthur

    Palin, John Henry

    Ayles, Walter

    Hayes, John Henry

    Paling, Wilfrid

    Baker, John (Wolverhampton, Bilston)

    Henderson, Right Hon. A. (Burnley)

    Palmer, E. T.

    Barnes, Alfred John

    Henderson, Arthur, Junr. (Cardiff, S.)

    Perry, S. F.

    Barr, James

    Henderson, Thomas (Glasgow)

    Pethick-Lawrence, F. W.

    Batey, Joseph

    Henderson, W. W. (Middx., Enfield)

    Phillips, Dr. Marion

    Bellamy, Albert

    Harriotts, J.

    Picton-Turbervill, Edith

    Bennett, Capt. Sir E. N. (Cardiff C.)

    Hirst, G. H. (York W. R. Wentworth)

    Potts, John S.

    Bennett, William (Battersea, South)

    Hirst, W. (Bradford, South)

    Quibell, D. J. K.

    Benson, G.

    Hoffman, P. C.

    Ramsay, T. B. Wilson

    Bentham, Dr. Ethel

    Hollins, A.

    Rathbone, Eleanor

    Bevan, Aneurin (Ebbw Vale)

    Hopkin, Daniel

    Raynes, W. R.

    Birkett, W. Norman

    Hudson, James H. (Huddersfield)

    Richards, R.

    Blindell, James

    Jenkins, W. (Glamorgan, Neath)

    Richardson, R. (Houghton-le-Spring)

    Bondfield, Rt. Hon. Margaret

    John, William (Rhondda, West)

    Riley, F. F. (Stockton-on-Tees)

    Bowen, J. W.

    Johnston, Thomas

    Ritson, J.

    Bowerman Rt. Hon. Charles W.

    Jones, F. Llewellyn- (Flint)

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

    Broad, Francis Alfred

    Jones, J. J. (West Ham, Silvertown)

    Romeril, H. G.

    Bromfield, William

    Jones, Morgan (Caerphilly)

    Rosbotham, D. S. T.

    Brooke, W.

    Jones, T. I. Mardy (Pontypridd)

    Rowson, Guy

    Brothers, M.

    Jowett, Rt. Hon. F. W.

    Russell, Richard John (Eddisbury)

    Brown, C. W. E. (Notts, Mansfield)

    Jowitt, Rt. Hon. Sir W. A.

    Salter, Dr. Alfred

    Brown, Rt. Hon. J. (South Ayrshire)

    Kelly, W. T.

    Sanders, W. S.

    Buchanan, G.

    Kennedy, Thomas

    Sawyer, G. F.

    Burgess, F. G.

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

    Sexton, James

    Burgin, Dr. E. L.

    Kirkwood, D.

    Shaw, Rt. Hon. Thomas (Preston)

    Caine, Derwent Hall-

    Lansbury, Rt. Hon. George

    Shepherd, Arthur Lewis

    Cameron, A. G.

    Lathan, G.

    Sherwood, G. H.

    Cape, Thomas

    Law, Albert (Bolton)

    Shield, George William

    Carter, W. (St. Pancras, S. W.)

    Law, A. (Rosendale)

    Shiels, Dr. Drummond

    Charleton, H. C.

    Lawrence, Susan

    Shillaker, J. F.

    Chater, Daniel

    Lawrie, Hugh Hartley (Stalybridge)

    Short, Alfred (Wednesbury)

    Clarke, J. S.

    Lawson, John James

    Simmons, C. J

    Cluse, W. S.

    Lawther, W. (Barnard Castle)

    Sinkinson, George

    Cocks, Frederick Seymour

    Leach, W.

    Smith, Ben (Bermondsey, Rotherhithe)

    Colfox, Major William Philip

    Lee, Jennie (Lanark, Northern)

    Smith, Frank (Nuneaton)

    Compton, Joseph

    Lees, J.

    Smith, Rennie (Penistone)

    Daggar, George

    Lewis, T. (Southampton)

    Smith, Tom (Pontefract)

    Dallas, George

    Lindley, Fred W.

    Smith, W. R. (Norwich)

    Dalton, Hugh

    Logan, David Gilbert

    Snell, Harry

    Day, Harry

    Longbottom, A. W.

    Snowden, Rt. Hon. Philip

    Dickson, T.

    Longden, F,

    Snowden, Thomas (Accrington)

    Dudgeon, Major C. R.

    Lunn, William

    Sorensen, R.

    Dukes, C.

    Macdonald, Gordon (Ince)

    Stamford, Thomas W.

    Duncan, Charles

    MacDonald, Rt. Hon. J. R. (Seaham)

    Strachey, E. J. St. Loe

    Ede, James Chuter

    MacDonald, Malcolm (Bassetlaw)

    Strauss, G. R.

    Edge, Sir William

    McElwee, A.

    Sullivan, J.

    Edmunds, J. E.

    McEntee, V. L.

    Sutton, J. E.

    Edwards, E. (Morpeth)

    McKinlay, A.

    Taylor, R. A. (Lincoln)

    Egan, W. H.

    MacLaren, Andrew

    Thurtle, Ernest

    Elmley, Viscount

    Maclean, Nell (Glasgow, Govan)

    Tillett, Ben

    Evans, Capt. Ernest (Welsh Univer.)

    McShane, John James

    Tinker John Joseph

    Foot, Isaac

    Malone, C. L'Estrange (N'thampton)

    Tout, W. J.

    Forgan, Dr. Robert

    Mansfield, W.

    Townend, A. E.

    Freeman, Peter

    Marley, J.

    Trevelyan, Rt. Hon. Sir Charles

    Gardner, B. W. (West Ham, Upton)

    Marshall, F.

    Turner, B.

    Gardner, J. P. (Hammersmith, N.)

    Mathers, George

    Vaughan, D. J.

    Gibbins, Joseph

    Matters, L. W.

    Viant, S. P.

    Gibson, H. M. (Lancs, Mossley)

    Messer, Fred

    Walkden, A. G.

    Gill, T. H.

    Middleton, G.

    Walker, J.

    Gillett, George M.

    Millar, J. D.

    Wallace, H. W.

    Gossling, A. G.

    Mills, J. E.

    Watkins, F. C.

    Gould, F.

    Milner, Major J.

    Watson, W. M. (Dunfermline).

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

    Graham, D. M. (Lanark, Hamilton)

    Montague, Frederick

    Wellock, Wilfred

    Graham, Rt. Hon. Wm. (Edin., Cent.)

    Morgan, Dr. H. B.

    Welsh, James C. (Coatbridge)

    Grenfell, D. R. (Glamorgan)

    Morley, Ralph

    Westwood, Joseph

    Griffiths, T. (Monmouth, Pontypool)

    Morrison, Herbert (Hackney, South)

    Whiteley, William (Blaydon)

    Groves, Thomas E.

    Morrison, Robert C. (Tottenham, N.)

    Williams, Dr. J. H. (Llanelly)

    Grundy, Thomas W.

    Mort, D. L.

    Williams, T. (York, Don Valley)

    Wilson, C. H. (Sheffield, Attercliffe)

    Winterton, G. E. (Leicester, Loughb'gh)

    TELLERS FOR THE AYES.—

    Wilson, J. (Oldham)

    Wright, W. (Rutherglen)

    Mr. Charles Edwards and Mr.

    Wilson, R. J. Jarrow)

    Young, R. S. (Islington, North)

    Allen Parkinson.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Gibson, C. G. (Pudsey & Otley)

    Roberts, Sir Samuel (Ecclesall)

    Ainsworth, Lieut.-Col. Charles

    Glyn, Major R. G. C.

    Robinson, Sir T. (Lancs, Stretford)

    Albery, Irving James

    Graham, Fergus (Cumberland, N.)

    Rodd, Rt. Hon. Sir James Rennell

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

    Grattan-Doyle, Sir N.

    Ross, Major Ronald D.

    Baldwin, Rt. Hon. Stanley (Bewdley)

    Gunston, Captain D. W.

    Ruggles-Brise, Lieut.-Colonel E. A.

    Beamish, Rear-Admiral T. P. H.

    Hacking, Rt. Hon. Douglas H.

    Russell, Alexander West (Tynemouth)

    Betterton, Sir Henry B.

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Salmon, Major I.

    Birchall, Major Sir John Dearman

    Hammersley, S. S.

    Samuel, A. M. (Surrey, Farnham)

    Bird, Ernest Roy

    Hanbury, C.

    Samuel, Samuel (W'dsworth, Putney)

    Bourne, Captain Robert Croft

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

    Sandeman, Sir N. Stewart

    Bowyer, Captain Sir George E. W.

    Heneage, Lieut.-Colonel Arthur P.

    Sassoon, Rt. Hon. Sir Philip A. G. D.

    Bracken, B.

    Hennessy, Major Sir G. R. J.

    Savery, S. S.

    Braithwaite, Major A. N.

    Herbert, Sir Dennis (Hertford)

    Shepperson, Sir Ernest Whittome

    Brass, Captain Sir William

    Hills, Major Rt. Hon. John Waller

    Smith-Carington, Neville W.

    Briscoe, Richard George

    Iveagh, Countess of

    Smithers, Waldron

    Brown, Col. D. C. (N'th'l'd., Hexham)

    Jones, Sir G. W. H. (Stoke New'gton)

    Somerset, Thomas

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

    Jones, Henry Haydn (Merioneth)

    Somerville, A. A. (Windsor)

    Butler, D. A.

    Lamb, Sir J. Q.

    Somerville, D. G. (Willesden, East)

    Cayzer, Sir C. (Chester, City)

    Leighton, Major B. E. P.

    Southby, Commander A. R. J.

    Christie, J. A.

    Lewis, Oswald (Colchester)

    Spender-Clay, Colonel H.

    Churchill, Rt. Hon. Winston Spencer

    Llewellin, Major J. J.

    Stanley, Lord (Fylde)

    Cockerill, Brig.-General Sir George

    Macdonald, Sir M. (Inverness)

    Steel Maitland, Rt. Hon. Sir Arthur

    Cohen, Major J. Brunel

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

    Stuart, Hon. J. (Moray and Nairn)

    Crookshank, Cpt. H. (Lindsey, Gainsbro)

    Maitland, A. (Kent, Faversham)

    Sueter Rear-Admiral M. F.

    Croom-Johnson, R. P.

    Makins, Brigadier-General E.

    Titchfield, Major the Marquess of

    Culverwell, C. T. (Bristol, West)

    Margesson, Captain H. D.

    Train, J.

    Davies, Dr. Vernon

    Mason, Colonel Glyn K.

    Vaughan-Morgan, Sir Kenyon

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

    Meller, R. J.

    Warrender, Sir Victor

    Dixon, Captain Rt. Hon. Herbert

    Merriman, Sir F. Boyd

    Waterhouse, Captain Charles

    Duckworth, G. A. V.

    Mitchell-Thomson, Rt. Hon. Sir W.

    Wells, Sydney R.

    Edmondson, Major A. J.

    Morrison, W. S. (Glos., Cirencester)

    Williams, Charles (Devon, Torquay)

    Elliot, Major Walter E.

    Nield, Rt. Hon. Sir Herbert

    Wilson, G. H. A. (Cambridge U.)

    England, Colonel A.

    O'Neill, Sir H.

    Windsor-Clive, Lieut.-Colonel George

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

    Ormsby-Gore, Rt. Hon. William

    Winterton, Rt. Hon. Earl

    Falle, Sir Bertram G.

    Peake, Capt. Osbert

    Womersley, W. J.

    Ferguson, Sir John

    Peto, Sir Basil E. (Devon, Barnstaple)

    Wood, Rt. Hon. Sir Kingsley

    Fermoy, Lord

    Power, Sir John Cecil

    Worthington-Evans, Rt. Hon. Sir L.

    Fleiden, E. B.

    Ramsbotham, H.

    Forestier-Walker, Sir L.

    Remer, John R.

    TELLERS FOR THE NOES.—

    Fremantle, Lieut.-Colonel Francis E.

    Rentoul, Sir Gervais S.

    Sir Frederick Thomson and Sir

    Gault, Lieut.-Col. Andrew Hamilton

    Richardson, Sir P. W. (Sur'Y, Ch't'sy)

    George Penny.

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

    CLAUSE 42.—(Provision, in the case of deficit in any year for redemption in the next year of a corresponding amount of debt.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Captain BOURNE: I wish to protest against a Clause of this kind being introduced into the Finance Bill. I do not think that anybody will disagree with the idea at the back of the mind of the Chancellor of the Exchequer that a certain sum should clearly go to a reduction of Debt, but a Clause of this kind is of little value, because it is impossible for one Parliament to legislate to bind another Parliament. If I thought that this Clause would be a permanent part of our legislation and that no future Parliament would disturb it, I should have no objection to it;
    but it is open to any future Parliament and to a future Chancellor of the Exchequer, if he so wishes, to repeal this Clause in the next Finance Bill or to so word his Financial Resolutions that the Section would not operate. I think that it is purely a piece of eye-wash in order to protect the financial purity of the Chancellor of the Exchequer. It is of no real value to anybody. It is most undesirable that we should get into the habit of putting into our legislation, as has been done in many cases, Clauses which pretend to bind Parliament when in point of fact every hon. Member knows that next year there may be a repeal of the provision and that nobody is bound in anyway whatever. We are passing legislation which is of no value to anybody, and for that reason I protest against it.
    Mr. P. SNOWDEN: The hon. and gallant Member is wrong in both submissions. In the first place, that it was not

    1299
    right that we should legislate for future Parliaments——
    Captain BOURNE: I did not say that it was not right that we should legislate. I said that the legislation was not binding, which is quite different.
    Mr. SNOWDEN: It is always open to a subsequent Parliament to repeal legislation passed by a former Parliament, but the hon. and gallant Member surely is aware that it was the law and the rule up to some years ago that the surplus should be applied to the old Sinking Fund, and it was the duty of the Chancellor of the Exchequer to obtain permission from Parliament. All I am asking in the Clause is that we should revert to the old practice. If there be a deficit, it must be made good unless Parliament otherwise determines. We are not taking away the rights of future Parliaments. What we are proposing is that the Chancellor of the Exchequer should adopt the sound financial practice of making good a deficit in the next financial year. That is the whole case in a sentence.
    Sir A. STEEL-MAITLAND: Has there ever been any enactment in any Parliament at any time in our history by which the Chancellor of the Exchequer in any succeeding year was bound to make good any deficit of the preceding year? There never has been anything of the kind. My hon. Friend the Member for Oxford (Captain Bourne) is right. It is in this case merely a piece of financial pretentiousness. What the Chancellor of the Exchequer is doing is to try to make himself appear not only better than his immediate predecessor but than any other Chancellor of the Exchequer. It has always been known in the past that no one has budgeted for the purpose of having a deficit. I have been through Budgets for many years past and what has always happened has been that if there has been a surplus, as a rule it has been used to diminish the Debt, but in years of bad trade financial deficits have from time to time occurred, and on the whole history has shown that the surpluses have outweighed the deficits and the Sinking Fund has not suffered. There has been no need in the past, nor is there any need in the present, for such a pretence of financial austerity and
    1300
    virtue, which nobody else has shown before. When there has been a surplus, if it has been so used it has been in times of prosperity, when the taxation has not been such a burden on the business community; but when there has been a deficit it has nearly always been in times of bad trade, when no one wishes further to burden the business community. This Clause is entirely unnecessary, and the ordinary financial practice of the past is the best to go by.
    Sir B. PETO: I regard this as a most important Clause, embodying a principle that is far more than a question of financial purity on the part of the Chancellor of the Exchequer. I believe that it introduces a positively vicious principle. An excess of expenditure over income is normally produced by the reason that income is not coming in to the extent that the Chancellor of the Exchequer forecast in his Budget, and the cause is bad and depressed trade. In those circumstances it is not the best way of improving trade to insist that exactly the full amount of whatever deficit there may be shall be made up from the ensuing year's income. That is to pile Pelion upon Ossa, and the finances of the country will not stand it, when trade is already overburdened with taxation. It is not a question of financial purity but of financial insanity. We have had many curious contributions from the Chancellor of the Exchequer in these times of depression and in this Clause there is embodied one more proof that the Chancellor of the Exchequer does not understand the psychology of trade and industry in this country. Not from any sense of financial purity but from what I consider sheer ignorance of the psychology of the situation, he insists, at the very time when trade can least afford it, that we should depart from the old principle which says that when revenue is coming in abundantly, because of prosperous trade and industry, we should increase the amount by which the National Debt is reduced. He says: "We will reverse the process, and at the time of greatest danger to trade we will insist on exacting the full measure from trade and industry for Sinking Fund purposes, as if trade was prosperous, contrary to the interests of the country and of employment.
    Captain CROOKSHANK: In certain countries in Europe there exists a medal for virtue, which is distributed to deserving persons. That medal does not exist in this country, but the Chancellor of the Exchequer has designed it and is now pinning it upon his own breast.
    Mr. CHURCHILL: If it were not for the fact that we are anxious to accelerate progress we should have to ask the Committee to divide against this Clause, but if we do not, but merely signify our disagreement by vocal expression, I hope it will be clearly understood, and on record in the OFFICIAL REPORT that we entirely disapprove of this piece of trashy humbug.
    Question, "That the Clause stand part of the Bill," put, and agreed to.

    CLAUSE 43.—(Amendment of Part VII of National Debt Act, 1870.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. SMITHERS: I desire to ask the Chancellor of the Exchequer one or two questions on this Clause. I do not suppose there are half a dozen Members in the Committee who understand what it means. It affects a large amount of turnover in the City and I want to know what is really intended. The Clause refers to the National Debt Act of 1870, Part VII, which deals with unclaimed dividends and stocks which remain at the Bank of England and upon which no dividends have been paid for 10 years. The stock is then considered to have lapsed and becomes the property of the State. It is handed over by the Bank of England to the National Debt Commissioners. Am I right in that respect?
    Mr. P. SNOWDEN indicated assent.
    Mr. SMITHERS: This Clause refers to stocks, stock to bearer and coupon stock. I can understand the case where dividends may not have been claimed on stock which may be lying in the Bank of England, that after 10 years it becomes the property of the State, but since the War there has been an enormous creation of bearer bonds. An enormous amount of the 1914 War Loan at 3½ per cent., and of all War loans since has been issued in bearer bonds. Sub-section (2) of this Clause says:
    "For the purposes of this Section a bond shall be deemed to have been issued if it
    1302
    has been made out and paid for, notwithstanding that it has not been taken up by the person entitled thereto."
    Suppose that a man has paid for a bond and he does not take it away. How can the situation arise that bonds can be kept at the Bank of England and after 10 years become the property of the State? The Chancellor of the Exchequer would not have put this Clause in the Bill unless someone had whispered in his ear that there is a certain amount of stock lying at the Bank which might possibly, and legally, come to the Treasury. How much of unclaimed bearer bonds does the right hon. Gentleman expect to receive if this Clause is passed?
    Mr. P. SNOWDEN: The hon. Member has asked several questions, but an answer to one or two will cover the lot. He asked whether I knew how many bearer bonds there were for which the coupons had not been paid during the last 10 years. I do not know. But the hon. Member is partly answered by a remark which was made just before that observation. Since the War there has been an enormous increase in the issue of bearer bonds. The Act of 1870 does not cover bearer bonds, and the reason for this Clause is that bearer bonds shall be put in the same position as inscribed bonds; that is to say that if they have not been claimed for 10 years they can be lodged with the National Debt Commissioners. But, of course, the right of the owner to bearer bonds never lapses, if afterwards he can make out a claim. The hon. Member asked me how it could happen that bonds could have been paid for and never taken away from the Bank. I do not know how it happens, but I know that it does happen, and that there are cases where bonds have been paid for and are still in the custody of the Bank. I think that those answers meet the difficulty of the hon. Member.
    Mr. SMITHERS: Arising out of that reply, take the case of Five per cent. War Loan as an example. If the Bank of England finds that the coupons from say 1,000 bonds have not been cashed for 10 years, has the Treasury the right to take those coupons? Am I right in assuming that if at any later date the owner of the bonds finds them, say, at the bottom of a box, hidden under other papers, he can claim not only the capital of the bonds, but also the coupons?
    Mr. SNOWDEN: I would not like to give a definite reply at the moment, but I can say that what covers inscribed bonds covers bearer bonds also. I am just informed that the answer to the question is in the affirmative, and that the owner would be able to claim both the coupons and the bonds.

    CLAUSE 45.—(Bank for International Settlement to be exempt from taxation.)
    The DEPUTY-CHAIRMAN: An Amendment has been handed in by the hon. Member for Torquay (Mr. C. Williams), but it does not read intelligibly. The Amendment proposes to leave out the words "and certain other Governments" which would make the Clause read "between the Government of the German Reich, including the Government of the United Kingdom."
    Mr. CHARLES WILLIAMS: I recognise that the Amendment is wrongly worded, and I hope that, I may be allowed to put my point on the Question, "That the Clause stand part of the Bill."
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. WILLIAMS: I wish to ask, in the first place, what other Governments are included in this Clause. In the second place, it will be seen that certain funds are being relieved from any tax in respect of income or capital. Those funds may arise from investments in some form of security on which Income Tax is collected at the source. Is it possible that we may be placed in the position of having to pay back taxation which has already been collected? The third point which I wish to raise is whether the Government by this Clause are making any direct contribution. In other words, do we, as taxpayers, lose anything by giving this exemption?
    Mr. HAMMERSLEY: This Clause raises a question of great importance. I assume it would be out of order to attempt to deal with the whole situation which has arisen in connection with the
    1304
    formation of the Bank for International Settlement, and I propose to confine myself to the wording of the Clause. We are asked to agree that the Bank for International Settlement should not be liable to any taxation, present or future, in respect of any income arising from any part of the funds or investments of the Bank which results from payments made by the Government of the German Reich, under what may be called the Young Plan. The Bank is essentially a private bank. It has a capital of 500,000,000 Swiss gold francs, subscribed as to 56 per cent. by the central banks of most of the important countries—France, Belgium, Germany, Italy—and by two institutions which are not central banks representing Japan and the United States. The Bank is to perform the ordinary normal functions of banking, and, in addition is to act as trustee of, and to deal with, reparation payments.
    The question arises whether or not it is essential that the Bank should have been set up in order to deal with the question of paying the various reparation creditors.
    The DEPUTY-CHAIRMAN: That is a matter that cannot be discussed. The hon. Member must keep himself to the contents of the Clause.
    Mr. HAMMERSLEY: I bow to your Ruling and will confine myself to the Clause. Does, or does not, this particular institution make profits which may accrue to private individuals as a result of any capital amount or of any income arising from any part of the funds or investments of the Bank which results from payments made by the Government of the German Reich? Does, or does not, this International Bank make profits out of these reparation payments, and can these profits accrue to private individuals? If I could show that, in point of fact, the International Bank was in a position to invest, for example, in £10,000,000 of War loan and that that International Bank, by the passing of this Clause, would claim, and rightly obtain, repayment of Income Tax deducted at source, I think I should have proved my point that this Clause ought not to pass without careful consideration and scrutiny.
    The creditor Governments are to allow remuneration to accrue to the Bank by

    1305
    means of leaving on deposit in this Bank a sum of £6,250,000, which is to accrue to the shareholders of the institution, and I have previously said that the shareholders may be, in respect of 44 per cent., individuals. This £6,250,000 is to be without interest, and if the right hon. Gentleman the Chancellor of the Exchequer wants chapter and verse for that statement, I am prepared to give it to him. It is to be found in Command Paper No 3,484, on page 8, and there also he will find that the Bank is entitled to charge to the creditor Governments a commission of one per mille, or one-tenth per cent., on all these German reparation payments which he proposes to exclude from Income Tax.
    It is true that the annuity trust account is the only account which is covered by his proposal to free from Income Tax, but unfortunately, in my view, the annuity trust account can be used by the Bank of International Settlement, under the terms of the various Command Papers which have been published, as a means of profit to the Bank of International Settlement and to the shareholders. The annuity trust account, which is the account into which the German reparations are paid, is to be managed by the Bank, and there is a very definite safeguard in regard to the Bank, because it says that in no case are the trustees to allow any Government account to be overdrawn, but the Bank itself can use the account for several purposes, among which are all payments necessitated by the Young Plan, the payment of administrative expenses, the payment of deliveries in kind, and any other payment on account of the annuity account, so that the Bank of International Settlement is completely free from any necessity to run into debt, and at the same time it has the right to use this account to deal with and to pay all the necessary expenses, and it can use the funds of the Annuity Trust to conduct dealings in foreign exchanges.
    This is a very important matter. I will not trouble to go into all the details, but I can refer the Chancellor to the pages from which I get this information. From my reading of the position, this Annuity Account can be used by the Bank of International Settlements to deal in foreign exchanges. When it is realised that the account is to be credited every
    1306
    year with amounts varying from £85,000,000 to about £120,000,000, according to the scale of the Young Annuities, that the Bank of International Settlements is allowed to deal in foreign exchanges, and that we can assume that that would result in a profit which is to return to private individuals, I think it will be agreed that we ought to examine the proposal a little more carefully than merely to pass it by our votes without any detailed consideration.
    I have endeavoured to show that, in point of fact, the Bank of International Settlement has under its control this Annuity Account of extraordinary magnitude and is safeguarded against possible loss and that it can use the fund to make exceptional profits. Now we are proposing that these profits should be free from all Income Tax. It appears that only 56 per cent. of the shares is held by the Central Banks, and even these Central Banks are very frequently in the possession of private individuals, as, for instance, the Bank of England. We are invidiously singling out particular and specially favoured sections of the community for exemption from taxation.
    There are many other factors in the situation, but I will refer to only one of them. It is the fact that in accordance with the Young Plan, the Bank of International Settlements can increase its capital. It has only to obtain a majority of two-thirds of the other banks. On the question of profits, it has been suggested to me by an hon. Member on this side of the House that it was quite untrue to suggest that this particular bank was proposing to make profits. Let me refer to Command Paper 3484 which deals with this matter, and in which it is stated quite specifically how the net profits of the bank shall be applied. It says the net profits shall be applied in or upon the payment of a dividend of 6 per cent. per annum on the amount of the paid-up capital of the bank, this dividend to be cumulative. Further, of the residue of any such net profits, 20 per cent. is to be paid to the shareholders until a maximum further dividend of 6 per cent., which is not cumulative, is reached. So clearly the possibility may arise that the shareholders of this particular bank will obtain 12 per cent. interest on their

    1307
    money, and we are asked, in respect of an institution which has not an important British official of British nationality in connection with it—the Chancellor of the Exchequer will correct me if I am wrong——
    Mr. P. SNOWDEN: You are wrong.
    Mr. HAMMERSLEY: The right hon. Gentleman has corrected me, and perhaps he will explain the matter further. The Chairman and Vice-Chairman and the Manager of the Bank, to whom I was referring, are at all events not of British nationality. That being so, it seems to me that to ask the British House of Commons to enter into a precedent of this kind without a discussion of any character on the Floor of the House, on the question whether or not there should be an international bank, is stretching our patience too much. The Chancellor of the Exchequer will appreciate that I have put these points in no spirit of carping criticism, but in an anxiety to safeguard British industry, which is perturbed and anxious in observing these activities in respect of international finance, over which the British Parliament has no control.
    Mr. P. SNOWDEN: The hon. Gentleman has strayed a little from the Clause, or at any rate he has assumed a good many things which are not included in this Clause. The Bank of International Settlement has two features; it acts as the agent of distribution of German reparations, and it can also use what we might call super central banking business. This exemption from tax applies only to its work in connection with the distribution of German annuities. If the bank make a profit on the other part of its work, it is not exempt from taxation. Perhaps the short answer which I can give to the hon. Gentleman is that this proposal implements a part of the Hague Agreement. The Agreement, which I signed on the 20th January, and which has since been ratified, provided that the contracting parties would take any steps and measures necessary to secure that the funds and investments at the bank resulting from the payments by Germany—and only to that extent—should be free from all national and local fiscal charges.
    1308
    This Clause is simply to implement that part of The Hague Agreement. It will be an obligation upon all the other creditor powers of Germany. Therefore it is absolutely necessary that this Clause should pass. The hon. Gentleman referred to the deposit which has been made with the Bank of International settlement of a sum of 125,000,000 German Reich marks. I had a good deal to do with that, and it was a very complex and difficult matter to settle the remuneration of the Bank for its work in handling the German reparations. It was finally decided that the best way to deal with it would be to put the deposit with the Bank. The Bank would, of course, invest it and get interest on it, and that should be their remuneration. It would be quite outside all reason to charge tax upon that. The short answer is that this is part of The Hague Agreement; all the other nations are conforming to it, and we must do the same.
    12.0 m.
    Dr. BURGIN: It is somewhat fitting that the Chancellor of the Exchequer, who secured largely a personal triumph at The Hague, should submit this Clause for carrying through a part of the bargain. I welcome the Clause. Quite apart from the matters which have been discussed by the hon. and learned Gentlemen above the Gangway, there is a very important international question behind this Clause. It is a singular leap forward that we in Great Britain should say that a certain international concern, the Bank of International Settlements, shall be exempt from taxation in this country. I am speaking from memory and without having looked up the matter, but I do not think there is an exact precedent for a Clause like this. Certain loans, certain investments, are free from taxation, but that an institution, in respect of a certain portion of its income, should be free from taxation here, present or future, is, I believe, without precedent. Those of us who take the wide view in international affairs consider it is an extremely important attitude for this country to take, and we are most hopeful that every other institution of a similar character for carrying out one of the Peace Treaties may have a similar Clause in its favour. I shall hope to submit to the Chancellor of the Exchequer privately the name of another concern which

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    does somewhat similar work. [interruption.] I cannot listen to irrelevant observations. I am thinking of an international company formed in this country to carry out obligations under one of the Peace Treats.
    Mr. BRACKEN: Can the Chancellor of the Exchequer say whether all the other Governments which are represented on the board of this bank have agreed to give a similar concession in respect of the taxation in their countries.
    Mr. ALBERY: I would draw the attention of the Chancellor of the Exchequer to the phrase in the Clause
    "income arising from."
    Supposing part of the income were invested in, say, 4½ per cent. Conversion Loan, where tax is deducted from dividends at the source; would this international bank be entitled to reclaim that tax? If they are entitled to reclaim it, does not that mean, in a certain sense, that this will be a loss to us, because if anybody else had held that stock the tax would have been collected.
    Mr. P. SNOWDEN: My answer to that is that I think the Bank of International Settlements will not invest in War Loan because——
    Mr. ALBERY: I did not say War Loan. I specially avoided that, because certain War Loan dividends are paid without deduction of tax. I suggested a security where tax is deducted at the source.
    Mr. SNOWDEN: The answer is that there is no likelihood that, any of the annuities, which they hold for a comparatively short time, will be invested in that way. They must hold them in a more mobile form. But apart from that I must confess that I do not quite see the point the hon. Member is driving at, because I have already explained that this exemption from taxation applies only to the handling of the German Reparation annuities——
    Mr. ALBERY: But the Clause says, "And income arising from." These may become quite large funds, and they will have to be invested and there would be nothing unusual in this bank choosing British Government securities as an investment. If they invested in 4½ per cent. Conversion Loan, or 3½ per cent. Conversion Loan, they would find the tax
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    deducted from the dividend at the source, and it seems to me that under this Clause they would be entitled to reclaim that tax, though if anybody else held those loans we should get the tax.
    Mr. HAMMERSLEY: The Chancellor of the Exchequer suggested that the annuity account was only a temporary matter and that under the Government plan there were arrangements whereby postponed payments could be arranged. In the circumstances, something like £80,000,000 is involved. The bank has a right to invest in this country or in any other country. The Chancellor of the Exchequer has made a general reply to this discussion, but my remarks were strictly according to the Ruling of the Chair. They were precisely limited to the banking activities dealing with the annuity account. I made no reference to the activities of the bank as an overriding central bank. I addressed myself to the point as to what might happen to the fund of payments by Germany in respect of reparations. I would like it to be placed on record that the Chancellor of the Exchequer has not given a reply to the points which I put.
    Mr. C. WILLIAMS: We are now dealing with a matter of considerable importance, and I should like to put my point once more. Is it possible under this Clause that money can be invested in British securities on which Income Tax has to be paid at the source, and is it possible that there may be an actual repayment of that by the British Government? I admit that it is possible that they may not invest in those securities, but can this bank arrange for the money to be returned? I think we are entitled to have a clear and definite answer on that point.
    Mr. ALBERY: We are now discussing some very important matters, and we are dealing with some entirely new Clauses. I understand that some arrangement has been arrived at between the two Front Benches. We have been kept here quite recently until a late hour discussing matters of minor importance at great length, and I think it is improper, when we come to more important Clauses, that they should be rushed through without proper attention. The point which has just been raised is one of substance and of considerable importance,

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    and, unless the Chancellor of the Exchequer is able to give a reply to that question, I shall move to report Progress.
    Mr. C. WILLIAMS: May I have an answer to my question?
    Mr. P. SNOWDEN: In reply to the hon. Member for North Paddington (Mr. Bracken), I understand that all the countries who were signatories have already ratified. Whether they have since incorporated a similar provision in their financial arrangements I do not know. Ratification imposes on them the duty of carrying out the terms. With regard to the point put by the hon. Member for Gravesend (Mr. Albery), the position is that any profits received, or interest earned by the International Bank, as I said before, resulting from its handling of German Reparations, will be exempt from taxation, and, if this Bank of International Settlement invested in stocks from which Income Tax had been deducted, I assume it would be the net income that they received which would be free from taxation. It may be such an investment that the Bank of International Settlement has taken into consideration what the net income from the investment would be.
    Mr. CHURCHILL: This is a matter of very great importance, but we cannot carry the discussion much further tonight. There is always criticism as to whether any sort of arrangement should be come to, but we have come to one, and, in order to carry it through, I hope the Chancellor of the Exchequer is not going to go back on what he said previously. We have only a few minutes more, and, as we cannot do justice to the matter now, I trust that on the Report stage we shall be able to deal with it. Let it be recorded now that this point has emerged, a very grave and serious point, and on the Report stage of the Bill we must have it dealt with. I suggest that we really must conclude the debate now.
    Mr. P. SNOWDEN: I thank the right hon. Gentleman for expressing his view that we should wind up the debate according
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    to the understanding arrived at earlier in the evening, but I must protest against one of his remarks. I hope he is not going to attempt to make up for the saving of time we have effected to-day by prolonging the discussion on the Report stage. There is no point outstanding upon this Clause. The point raised by the hon. Member is perfectly simple. The Bank, under this Clause, would be in the position to reclaim Income Tax.
    Mr. ALBERY: The exact opposite statement was made, that the Bank would not be able to do so.
    Mr. SNOWDEN: No.
    Mr. ALBERY: Then I must carry the right hon. Gentleman further. He will be obliged to admit that within a short time, within a few years, there may be no British Government securities on which the tax is escapable. Therefore, any bank wishing to invest in British Government securities will be compelled to invest in securities where the tax is deducted at source. I therefore emphasise what the Chancellor of the Exchequer said, and I maintain the right to raise this matter on Report.

    Clauses 46 (Amendment of Section 38 of 8 & 9 Geo. 5. c. 15) and 47 (Construction, short title, application and repeal), ordered to stand part of the Bill.
    Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Mr. P. Snowden.]
    Committee report Progress; to sit again upon Monday next.
    The remaining Orders were read, and postponed.
    It being after half-past Eleven of the Clock upon Wednesday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
    Adjourned at Twenty Minutes after Twelve o'Clock.