Commons Sitting of 19 April 1932

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
NEW WRIT.
For the County of East Sussex (East-bourne Division), in the room of Edward Marjoribanks, Esquire, deceased.—[Captain Margesson.]

PRIVATE BUSINESS.
Private Bills (Standing Orders applicable thereto complied with),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred on the First Reading thereof, the Standing Orders which are applicable thereto, have been complied with, namely:—
London County Council (Money) Bill.
Bill to be read a Second time.
Provisional Order Bills (Standing Orders applicable thereto complied with),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred on the First Reading thereof, the Standing Orders which are applicable thereto, have been complied with, namely:—
Ministry of Health Provisional Orders (Derby and Stalybridge, Hyde, Mossley and Dukinfield Tramways and Electricity Board) Bill.
Bill to be read a Second time To-morrow.
Provisional Order Bills (No Standing Orders applicable),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred on the First Reading thereof, no Standing Orders are applicable, namely:—
Ministry of Health Provisional Orders (Lindsey and Lincoln Joint Smallpox Hospital District and Wandle Valley Joint Sewerage District) Bill.
Bill to be read a Second time tomorrow.
London County Council (General Powers) Bill,
As amended, considered; to be read the Third time.

SEA FISHERIES PROVISIONAL ORDERS (No. 2) BILL,
"to confirm certain Provisional Orders made by the Minister of Agriculture and Fisheries under the Sea Fisheries Act, 1868, for the regulation of an oyster and mussel fishery and the establishment and maintenance of a several mussel fishery in the estuary of the Wash, in the county of Norfolk," presented by Sir John Gilmour; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 62.]
ORAL ANSWERS TO QUESTIONS.
  TRADE AND COMMERCE.

    LIMITED LIABILITY COMPANIES (FAILURES).
    Mr. RHYS DAVIESasked the President of the Board of Trade the total number of limited liability companies which have been formed since the War; the number that have gone into liquidation or have otherwise ceased to function; the total amount of capital lost to shareholders through the failure of such companies; and the number of prosecutions which have been instituted in connection with any of such failures?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): The total number of limited liability companies registered in England and Scotland during the years 1919 to 1931 inclusive is 115,020. It is not possible without a very lengthy investigation to state how many of these companies have been dissolved but the number of companies of all classes irrespective of their date of registry dissolved during those years is 59,182. I regret that the remainder of the information desired is not available.
    Mr. DAVIES: Can the right hon. Gentleman give any approximate figures in reply to the part of the question which relates to the amount of capital lost?
    Mr. RUNCIMAN: The amount of capital lost to shareholders cannot be stated with any accuracy, because during liquidation it very often happens that a certain amount of capital is repaid, and there are some other factors of an uncertain character which would make the figures unascertainable.

    FRANCE (QUOTA SYSTEM).
    Mr. MITCHESONasked the President of the Board of Trade whether he proposes to make representations to the French Government on the subject of that Government's decision to establish a quota for various kinds of cotton goods?
    Mr. RUNCIMAN: As I have said in reply to previous, questions of this kind, I do not think that general representations against the restriction by quota of cotton goods or any other class of goods would serve a useful purpose, but I should, of course, be ready to consider representations if the quotas proposed were such as to involve discrimination against this country. The French Government have expressed a desire that United Kingdom exporters of cotton goods should enter into negotiations on the matter with French cotton organisations, and I understand that arrangements are being made to that end.
    Mr. HAMMERSLEY: Can my right hon. Friend say on what year the proposed quota will be based?
    Mr. RUNCIMAN: I am afraid I could not do so without notice.
    Mr. HANNONasked the President of the Board of Trade whether the French import quotas for various goods for the current quarter, published in the Board of Trade Journal of 14th April, have been the subject of negotiation between His Majesty's Government and the French Government before they became operative?
    Mr. RUNCIMAN: The quotas in question are in respect of the same goods as were subject to quota in the first quarter of the year. No discussions took place on the quotas for the second
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    quarter, so far as I am aware, but the original quotas for leather, leather goods and certain electrical apparatus, which are among the most important articles so far as United Kingdom trade is concerned, formed the subject of discussion between the trade interests in this country and those in France. His Majesty's Government are not parties to such discussions.
    Mr. HANNON: Will the right hon. Gentleman tell the House what takes place when the French Government contemplate the imposition of a quota against us? Do they make representations to us, and do negotiations take place before these quotas are imposed by the French Government, or have we to await the announcement of their decree before we know where we are?
    Mr. RUNCIMAN: The arrangement of a quota is a matter entirely within the competence of the Government which is imposing the quota; and the only ground on which we can protest is when there is discrimination against us.
    Mr. HANNON: Is the right hon. Gentleman prepared to assure these countries that retaliatory measures will be adopted if they impose quotas against us?

    GERMAN MACHINERY (EXPORT DUTY).
    Major PROCTERasked the President of the Board of Trade whether his attention has been drawn to the action of the German Government in putting an export tax on all machinery transferred from German factories for use in factories to be set up in this country; and, in view of the effect of these duties on the possible establishment of new industries in this country, will he make representations to the German Government for the removal or modification of these prohibitory taxes?
    Mr. RUNCIMAN: I am aware of the high export duty which has been placed on the exportation from Germany of used machinery of certain descriptions. This duty is applicable to German and foreign-owned machinery alike, whatever the country of destination; and, in the absence of any evidence of discrimination, does not afford grounds for representations to the German Government.
    Major PROCTER: Is the right hon. Gentleman aware that this tax amounts to £400 per ton, and that it is delaying the erection of new factories in North-East Lancashire?
    Mr. RUNCIMAN: If there are any new facts to be brought to my notice, I shall be happy to look into them.
    Sir NICHOLAS GRATTAN-DOYLE: Can the right hon. Gentleman say whether these restrictions apply to the textile industry?
    Mr. RUNCIMAN: They apply to certain forms of machinery which may be used in any industries.
    Colonel WEDGWOOD: Are we to understand that the right hon. Gentleman believes in and desires the expansion of the importation of foreign capital to this country?
    Sir PERCY HARRIS: Is this one of the results of the Abnormal Importations Act?
    Mr. RUNCIMAN: It has no connection with it whatever.

    IMPORTS (BRITISH AND FOREIGN SHIPPING).
    Mr. MITCHESONasked the President of the Board of Trade the total amount of imports which have entered British ports in foreign ships and British ships, respectively, during the period 1st April, 1931, to 31st March, 1932; the total amount of exports carried in British and foreign ships, respectively, from this country during the same period; and the comparative figures in each case for the period 1st April, 1930, to 31st March, 1931?
    Mr. RUNCIMAN: I regret that the desired information is not available.

    FILM INDUSTRY.
    Mr. MANDERasked the President of the Board of Trade whether any film studios have recently been erected in this country by American or other interests; and whether he is contemplating any legislation in connection with this matter?
    Mr. RUNCIMAN: I am not aware that any American or other foreign interests have recently erected film studios in this country, and the second part of the question therefore would not appear to arise.
    Mr. MANDER: Will the right hon. Gentleman consider the advisability of increasing the quota of British films shown in this country?
    Mr. LYONSasked the President of the Board of Trade whether, in order to encourage the further development of the British film industry, he will introduce legislation to increase the quota of British films?
    Mr. RUNCIMAN: The Government do not intend to propose an amendment of the Cinematograph Films Act, 1927, in the direction suggested by my hon. Friend.

    FOREIGN COUNTRIES (IMPORT RESTRICTIONS).
    Mr. MABANEasked the President of the Board of Trade whether there are in existence any treaty provisions intended to prevent the imposition of surtaxes on British goods entering Tunis; and whether the recently imposed 15 per cent. surtax in Tunis is discriminatory?
    Mr. RUNCIMAN: United Kingdom goods are entitled to most-favoured-nation treatment in Tunis by an exchange of Notes of 8th March, 1919, between His, Majesty's Government and the French Government. In the opinion of His Majesty's Government the surtax in question is discriminatory.
    Mr. MABANE: Will the right hon. Gentleman consider making representations in reference to this discriminatory tax?
    Mr. RUNCIMAN: We are already making representations to the French Government on the whole question of the 15 per cent. surtax, and communications are passing on the subject.
    Mr. MABANEasked the President of the Board of Trade whether there are in existence any treaty provisions to prevent the imposition of a 15 per cent. surtax on British goods entering Morocco?
    Mr. RUNCIMAN: Yes, Sir.

    BRITISH COAL (FOREIGN IMPORT RESTRICTIONS).
    Captain PETER MACDONALDasked the President of the Board of Trade if he can make any further statement as to the progress of negotiations with the Governments of Germany, Belgium, Italy, and Portugal with regard

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    to the discriminatory measures recently adopted by them against the importation of British coal?
    Mr. RUNCIMAN: His Majesty's Ambassador at Berlin has been instructed to make further strong representations to the German Government. Replies to our representations have now been received from the Belgian and Italian Governments, and are under consideration. The recent increase of 5 per cent. in the Portuguese Customs duty on coal imports is not considered to be discriminatory.
    Captain MACDONALD: Are these other countries going to be allowed to disregard commercial treaties, without any retaliatory measures being adopted by His Majesty's Government?
    Mr. RUNCIMAN: No, Sir.
    Mr. HANNON: Can the right hon. Gentleman say at what stage he proposes to tell these countries that discriminatory tariffs against us will be no longer tolerated?
    Mr. GODFREY NICHOLSONasked the President of the Board of Trade whether negotiations are proceeding with the French Government with a view to securing an increase in the quota allotted to British coal; and what is the nature of the pressure being exerted by the British Government?
    Mr. RUNCIMAN: Yes, Sir. The French Government have been pressed for an early reply to our representations regarding the method of calculation of the coal quota and the inequitable operation of the licensing system.
    Mr. NICHOLSON: Is the right hon. Gentleman hopeful that satisfactory results will eventuate from these negotiations?
    Mr. RUNCIMAN: That is a matter of opinion.
    Mr. MARTIN: Is the right hon. Gentleman keeping in touch with the owners and miners' representatives in the exporting districts in this matter?
    Mr. RUNCIMAN: Yes. We are in the closest touch with them day by day.
    Mr. HANNONasked the President of the Board of Trade if his attention has been called to the preferential treatment of Dutch coal as against British by certain municipalities and institutions in Germany; and if any representations have been made to the German Government on the subject?
    Mr. RUNCIMAN: I have seen it both affirmed and denied in the Press that certain public utility undertakings in Berlin and Hamburg are diverting their custom to Dutch coal. I am making inquiries and will let my hon. Friend know the result.
    Mr. HANNON: When can I put a question down to my right hon. Friend on this subject, with the hope of getting some definite reply?
    Mr. RUNCIMAN: Towards the end of next week.
    Mr. LAWSON: How much longer are we going to conceal from ourselves the fact that these measures against us are retaliatory?

    WEIGHTS AND MEASURES ACT (COBS AND PATENT FUELS).
    Mr. LECKIEasked the President of the Board of Trade whether he has now considered the resolution passed by the Walsall Town Council in February, requesting that Sections 20 to 29 of the Weights and Measures Act, 1889, which relate to the sale of coal, should be extended to apply to the sale of coke and patent fuels; and what action he proposes to take?
    Mr. RUNCIMAN: Legislation would be necessary to give effect to this proposal. I cannot do more at present than promise that it will be considered when an opportunity occurs for amending the Weights and Measures Acts.

    AUSTRALIAN WOOL (IMPORTS).
    Captain HUNTERasked the President of the Board of Trade if he is able to state the percentage of the total imports of wool into this country originating from Australia?
    Mr. RUNCIMAN: During the years 1929 to 1931, the proportion of the total imports of raw sheep's and lambs' wool into the United Kingdom that was consigned from Australia was 33.4 per cent. by weight and 35.5 per cent. by value,

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    while the proportion of the retained imports that was consigned from Australia was 37.2 per cent. by weight and 39.4 per cent. by value. It is believed that all but a negligible amount of this wool consigned from Australia originated in that country.

    IMPORT ADVISORY COMMITTEE (RECOMMENDATIONS).
    Mr. LOGANasked the Chancellor of the Exchequer whether he will inform the House as to the nature of the first list of recommendations which he has received from the Import Advisory Committee?
    The FINANCIAL SECRETARY to the TREASURY (Major Elliot): I must ask the hon. Member to await the statement which will be made by the Chancellor of the Exchequer this afternoon.

    MANCHURIA.
    Mr. COCKSasked the Secretary to the Overseas Trade Department whether he has any information regarding the effect on British trade of the Japanese occupation of Manchuria?
    Mr. JOHN COLVILLE (Secretary, Overseas Trade Department): Information received by my Department is to the effect that United Kingdom trade with Manchuria has not been seriously affected by the Sino-Japanese conflict in that territory. The position is, however, being closely watched.

    EXCHANGE RESTRICTIONS.
    Mr. HAMILTON KERRasked the Secretary to the Overseas Trade Department whether his attention has been called to the severe handicap which is still being placed upon industry by exchange restrictions in various foreign countries, more particularly in Hungary and Austria; and whether he will take immediate action to remove this disability?
    Mr. COLVILLE: I am sending my hon. Friend a copy of the reply on this subject which I gave yesterday to my hon. Friend the Member for Platting (Mr. Chorlton), which shows that I am in close touch with business interests on this difficult question.
    Mr. KERR: Have there been any negotiations with the collecting houses?
    Mr. COLVILLE: That is one of the subjects under consideration.

  COMPANIES ACT.
  Sir CHARLES CAYZERasked the President of the Board of Trade what steps the Solicitor to the Board of Trade proposes to take to see that the 235 companies, guilty of illegal conduct, under Section 110 of the Companies Act of 1929, as on 5th April last, are compelled to observe the law so that the public may be protected against loss?
  Mr. RUNCI MAN: Letters are sent by the Solicitor to the companies in default, and, when the circumstances are such that legal proceedings are warranted, steps are taken to prosecute for non-compliance with the requirements of the Companies Act. I would add, however, that the great majority of the companies now in default are of no public importance.

  DYESTUFFS (IMPORTATION REGULATION) ACT.
  Mr. LOUIS SMITHasked the President of the Board of Trade whether any consideration has yet been given to the question of policy that is to be adopted in connection with the Dyestuffs (Importation Regulation) Act; and, if so, what decision has been reached?
  Mr. RUNCIMAN: This Act was extended until the end of the present year by the Expiring Laws Continuance Act, 1931. The future policy will be considered in due course.

  BRITISH ARMY (CEREBRO-SPINAL FEVER).
  Mr. McENTEEasked the Financial Secretary to the War Office how many of the cases of cerebral meningitis at Windsor were among troops quartered in the modern barracks; bow many were among troops in the older quarters; and whether full sanitary provisions are made in the quarters of the guard at Windsor Castle?
  The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): There are no strictly modern barracks at Windsor, although improvements have been introduced from time to time. Since 1st January there have been nine cases of cerebro-spinal fever, five of which occurred at Victoria Barracks and four

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  at Combermere Barracks. The answer to the last part of the question is in the affirmative.
  Mr. McENTEE: Can the hon. Gentleman say whether the cause of this disease has been traced?
  Mr. COOPER: No, Sir.

  SCOTLAND

    MILK MARKETING SCHEME.
    Mr. WEDDERBURNasked the Secretary of State for Scotland if he can make any statement as to the progress of the organised milk marketing scheme for Scotland?
    The SECRETARY of STATE for SCOTLAND (Major Sir Archibald Sinclair): I would refer my hon. Friend to the reply which I gave yesterday to a question on this subject by the hon. Member for North Lanark (Mr. Anstruther-Gray).

    ALLOTMENTS (UNEMPLOYED PERSONS).
    Mr. LEONARDasked the Secretary of State for Scotland whether he is aware that the provisions of the Agricultural Land (Utilisation) Act, 1931, with regard to allotments for unemployed persons, have been nullified by the Government's failure to provide any funds for that purpose; and whether, in view of the prevailing unemployment in many parts of Scotland, provision will now be made for allotments for unemployed persons in terms of the Act?
    Sir A. SINCLAIR: I am aware that, owing to the financial stringency, it has been impossible, up to the present, to provide for any scheme of State assistance for the purpose mentioned in the question; but, as the hon. Member is no doubt aware, a voluntary scheme has been organised by the Scottish National Union of Allotment Holders and the Society of Friends, and it is hoped that the funds at their disposal will be sufficient to meet the applications by unemployed persons in Scotland for assistance in cultivating allotments during the present year.

    PROPOSED PIER, GLENELG (GRANT).
    Mr. LEONARDasked the Secretary of State for Scotland whether, in view of the representations which have been made
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    for a grant towards the construction of a pier or slip at Glenelg, Inverness-shire, and in view of the urgency of the matter for public safety in travelling and for the transport of cattle and sheep to and from markets, a grant will be made at an early date?
    Sir A. SINCLAIR: The provision of a pier or jetty at Glenelg is a matter in the first instance for the consideration of the county council of Inverness-shire. Should that body apply for a grant-in-aid, the application would receive due consideration.

    ACQUITTED PRISONER, GLASGOW (FINGER PRINTS).
    Mr. McGOVERNasked the Secretary of State for Scotland if his attention has been drawn to the case of an individual who was recently charged with a crime in Glasgow and discharged as innocent; and why his finger prints, which were taken at the time of arrest, were not destroyed, thereby saving the man from taking action in court seeking their destruction?
    Sir A. SINCLAIR: I am aware of the case to which the hon. Member refers. I understand that, in accordance with practice, the finger prints and other records were destroyed when the charge against the accused man was found not proven, and that his agent was informed to this effect some time ago.
    Mr. McGOVERN: Why is it necessary for this man to apply to the court if the finger prints have already been destroyed, and why was no assurance given in the court that such a course had been pursued?
    Sir A. SINCLAIR: I do not know whether it is necessary for him to apply or not, but the case is still sub judice.

    HOUSING.
    Mr. McGOVERNasked the Secretary of State for Scotland if his attention has been drawn to the case, which was heard at Glasgow Valuation Court on 11th April, where a house factor charged £12 10s. as a premium on a two room and kitchen house; and what action he proposes to take to protect tenants from such methods?
    The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton): I have seen a Press report of a case which I

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    assume is that referred to by the hon. Member. From the terms of the report, it seems unlikely that the house was under the Rent Restrictions Acts, in which case the landlord and tenant were free to make any agreement they pleased as regards the payment to be made for the tenancy of the house.
    Mr. McGOVERN: Do I take it that it is entirely legal now for house factors and landlords to claim premiums from working-class tenants who are looking for houses?
    Mr. SKELTON: I have nothing to add on that point, but where the Rent Restrictions Act is not concerned it is open to the landlord and tenant to agree to an extra payment in return for a lease.
    Mr. McGOVERN: Will the hon. Gentleman consider preventing such an extortion from poor tenants in a city like Glasgow?
    Mr. SKELTON: That, of course, is a large question of policy about which I cannot reply.
    Lieut.-Colonel FREMANTLE: Is there a chance of the Rent Restrictions Amending Bill, which is urgently required, being brought in?
    Mr. SKELTON: That, again, is a question of policy about which I cannot reply.
    Mr. KIRKWOOD: Has not the tenant a right under the Rent Restrictions Act to withhold the payment of rent until what he has paid in key money has been consumed?
    Mr. SKELTON: I have already explained that if it comes under the Rent Restrictions Act, a landlord who attempts to exact payment is liable to a heavy fine.
    Mr. McGOVERNasked the Secretary of State for Scotland if his attention has been drawn to the decree granted, on Friday, 8th April, 1931, against tenants by a Glasgow sheriff in a property at 55 to 69, Dalness Street, Tollcross, which has a demolition order; and if he will set aside the decree?
    Mr. SKELTON: The answer to the first part of the question is in the negative. I have, however, made inquiries and I understand that on Friday, 8th April, 1932, two tenants at Dalness Street, Toll-
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    cross, Glasgow, were sued in the Ejection Court. One case was continued till 13th May; and in the other the sheriff, after hearing parties, granted an instalment of 6s. per week and continued the case sine die. My right hon. Friend has no jurisdiction in the matter.
    Mr. McGOVERN: Is it not the case that under the Rent Restrictions Act a decree cannot be granted by a sheriff in regard to property for which a demolition or closing order has been made; that the courts have always held that, and that this case is a complete departure; and will the hon. Gentleman inquire into it?
    Mr. SKELTON: That raises another question which cannot be answered now.
    Mr. McGOVERN: May I press the hon. Gentleman for a reply. Has not a decision previously been given——
    Mr. SPEAKER: That question does not arise out of the answer.
    Mr. MAXTON: It has reference to the question on the Paper, and my hon. Friend is asking for a reply. He has repeated precisely the question on the Paper, and has asked whether as this decree of ejection has been made in regard to a, property which has been ordered for demolition, the hon. Gentleman will get the Secretary of State to set aside the decree, which has been made illegally?
    Mr. SKELTON: I have already answered that. May I explain the law with regard to a civil decree. Whether correct or not, the Secretary of State has no power to have it set aside.
    Mr. MACQUISTEN: Is not the proper course to have it decided in the courts?
    Mr. KIRKWOOD: Arising out of that reply—
    Mr. SPEAKER: Mr. Leonard.
    Mr. KIRKWOOD—
    Mr. SPEAKER: The hon. Member knows quite well that we cannot debate these questions.
    Mr. KIRKWOOD: On a point of Order. This is a serious case where people have been put out, and the law is emphatically that they must have alternative- accommodation. There is no

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    alternative accommodation here; they have simply been thrown out, and their house demolished.
    Mr. SPEAKER: Mr. Leonard.

    ROAD IMPROVEMENT, SKYE.
    Mr. LEONARDasked the Secretary of State for Scotland whether he is aware of the need for road improvement in the north of Skye; and what steps he proposes to take to ensure that this work will be proceeded with?
    Sir A. SINCLAIR: I have no information to the effect suggested in the first part of the question. As regards the second part, the maintenance and improvement of public roads is a matter for the county council as road authority.

    WRITS (REGISTRATION).
    Mr. J. S. C. REIDasked the Secretary of State for Scotland what steps, if any, are to be taken to carry out the recommendations regarding registration of writs and other matters contained in the Departmental Committee's Report of 1928?
    Sir A. SINCLAIR: Important changes in the methods of registration were proposed by the committee referred to, and it was found desirable last year to ask the committee to meet again to consider certain difficulties. After consideration of the committee's further report in which they adhered to their recommendations, I have addressed a communication to the Legal Societies with a view to ascertaining whether the recommendations of the committee are acceptable to them; and I hope that a decision will not be long delayed.

  COAL INDUSTRY.

    WORKING HOURS.
    Mr. G. NICHOLSONasked the Secretary for Mines when he anticipates that he will be able to make a statement on the policy of the Government with regard to hours of work in the mining industry and to Part I of the Coal Mines Act, 1930?
    The SECRETARY for MINES (Mr. Isaac Foot): These questions are engaging the earnest attention of the Government, and a statement will be made as soon as it is possible to do so.
    Mr. NICHOLSON: Can the hon. Gentleman be more explicit about the date?
    Mr. FOOT: The date cannot possibly be given in view of the fact that negotiations are taking place.
    Mr. McKEAG: Will the hon. Gentleman state between whom are the negotiations taking place, and in view of the desirability of avoiding even the possibility of conflict will he do what is possible to ensure that negotiations between the owners and the men are not left until the very last moment?

    BOYS (EMPLOYMENT UNDERGROUND).
    Mr. TINKERasked the Secretary for Mines if he has completed his inquiries into the position of boys working underground between the hours of 9 p.m. and 5 a.m.; and if he will bring in a Measure to place them in the same position as boys working on the surface?
    Mr. ISAAC FOOT: I am not quite clear what inquiries the hon. Member has in mind. I discussed this question with representatives of the Miners' Federation in February last, and informed them that I should be happy to consider it in detail when I had their arguments before me; but I have not yet received this information.
    Mr. TINKER: Do I take it from the reply that the hon. Gentleman is to get some further answers from the Miners' Federation?
    Mr. FOOT: I am waiting for fuller information, for which I have asked.

    OUTPUT.
    Mr. TINKERasked the Secretary for Mines if he will give the latest figures in his possession showing the output per man-shift worked with separate figures for Lancashire; and will he give corresponding figures for the years 1913 and 1923?
    Mr. ISAAC FOOT: During the year 1931, the output per man-shift worked by all workers employed above and below ground at coal mines in Great Britain was 21.61 cwts., and in Lancashire and Cheshire 17.12 cwts. I regret that corresponding figures for 1913 are not available, but in June, 1914, they were 20.32 cwts. and 15.19 cwts. respectively. In 1923 the figure for Great Britain was 17.83 cwts., but that for Lancashire and Cheshire separately is not available.

  IMPERIAL ECONOMIC CONFERENCE.
  Mr. LYONSasked the Secretary of State for Dominion Affairs whether he will issue a schedule of goods of foreign origin which have come into this country via Canada on preferential terms for the quarter ended 31st March, or the nearest convenient date; and whether the entry of such goods after a certain percentage of Canadian labour has been expended thereupon will be on the agenda for revision at the forthcoming Ottawa Conference?
  The SECRETARY of STATE for the DOMINIONS (Mr. J. H. Thomas): As regards the first part of the question, goods may be admitted to preference on importation into this country only on satisfactory proof being given that they have been consigned to this country from a part of the British Empire and (with certain exceptions) that at least 25 per cent. of the value is derived from materials grown or produced or from work done in a part of the British Empire. If, as I assume, the hon. Member means by goods of foreign origin goods manufactured in Canada from foreign material, I regret it would not be possible to give the particulars required. As regards the second part of the question, I would refer the hon. Member to the reply which I gave to the hon. and gallant Member for Keighley (Captain Watt) on 1st March.
  Mr. HANNON: Has not the attention of my right hon. Friend been called to continuous abuses of this concession through semi-manufactured articles from foreign countries being introduced into the Dominions and sent on to this country? In view of the unfair competition of those goods with the products of this country, will he bring the matter before the Ottawa Conference?
  Mr. THOMAS: I am delighted to observe that the hon. Member is alive to the difficulties which confront us. I will certainly keep the point in mind.
  Captain P. MACDONALDasked the Secretary of State for Dominion Affairs whether any appointments for business advisers to the British delegation to the Ottawa Conference have yet been made; and what bodies have been invited to put forward the names of such advisers?
  Mr. THOMAS: I am in communication with the British Committee on Empire Trade and with the Trades Union Congress on this subject, but no appointments have yet been made.
  Captain MACDONALD: Will the right hon. Gentleman say what bodies he is consulting?
  Mr. THOMAS: The British Committee on Empire Trade and the Trades Union Congress. Those are the two bodies that represent the industrial side—capital and labour.
  Mr. LAMBERTasked the Secretary of State for Dominion Affairs if agriculture is to be represented at Ottawa by other than Government nominees in a similar manner as industry will be represented there?
  Mr. THOMAS: Yes, Sir. The position was explained yesterday by my right hon. Friend the Minister of Agriculture.
  Mr. LAMBERT: Can the right hon. Gentleman say by whom the representatives will be nominated?
  Mr. THOMAS: In the main the suggestions with regard to appointments will come from the different interests concerned.
  Sir P. HARRIS: How many hundreds of representatives will there be altogether?

  NEWFOUNDLAND (DISTURBANCES).
  Mr. McENTEEasked the Secretary of State for Dominion Affairs if he will state the present position in Newfoundland; whether any assistance to maintain order was asked for by the Governor; and whether any sailors were landed?
  Mr. THOMAS: I have received this morning the following message from the Governor of Newfoundland:
  "Acts of disturbance and violence had been committed in Saint Johns and there was grave risk of disorder continuing and spreading. The strength of the constabulary force of Newfoundland was entirely inadequate to control the situation which had arisen. His Majesty's Government in Newfoundland are deeply grateful for the invaluable assistance which has been rendered by the visit of His Majesty's Ship "Dragon," which has enabled the strength

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  of the constabulary force to be increased to a number which it is hoped, with the voluntary assistance of civilians including a large number of ex-service men, will prove adequate to preserve law and order.
  No men were landed, except for shore leave, from His Majesty's Ship "Dragon," which left 17th April.
  General conditions at present are quiet."
  Mr. McENTEE: Can the right hon. Gentleman say whether it is proposed to hold any inquiry into the causes of this disorder, and, if so, whether the inquiry will be public?
  Mr. THOMAS: The hon. Member will know that if there had been similar difficulties in this country no one outside would be entitled to say what our domestic policy ought to be. Newfoundland is a Dominion, and is responsible for its own government.
  Mr. McENTEE: But can the right hon. Gentleman say whether he has any information of a proposal to hold such an inquiry on the part of Newfoundland?
  Mr. THOMAS: No, Sir, and I have not inquired.

  SOUTH WEST AFRICA.
  Mr. PARKINSONasked the Secretary of State for Dominion Affairs whether any action is being taken to include the mandated territory of South West Africa in the Union of South Africa?
  Mr. THOMAS: I am not aware of any such action. I would refer the hon. Member to the terms of Article 2 of the Mandate which, as he is no doubt aware, is exercised by His Majesty's Government in the Union of South Africa.

  DOMINIONS (DEPORTATIONS).
  Mr. LECKIEasked the Secretary of State for Dominion Affairs whether, in view of the number of men and women who are being deported from the Dominions owing to the impossibility of finding them employment, and are thus becoming a, charge on the Poor Law in this country, he will consider some scheme for stopping the further flow of deportees back to this country by giving them tem-
  1396
  porary assistance to tide them over the next two months in the country where they are located?
  Mr. THOMAS: I have carefully considered the hon. Member's suggestion, but I fear that it is not practicable to give effect to it.
  Mr. PIKE: Will the right hon. Gentleman assure the House that this question will be one for discussion at the Ottawa Conference?
  Mr. THOMAS: No. The implication in this question is that His Majesty's Government will hold themselves responsible to make contributions to migrants in distress, and I could not possibly accept such a responsibility.
  Mr. MAXTON: Are we to assume that at the Ottawa Conference there will be no discussion about the conditions of the poor people in various parts of the Empire, but that the Conference will deal only with trade interests?
  Mr. THOMAS: I assume that the object of discussing trade interests is to benefit poor people.
  Mr. MAXTON: The right hon. Gentleman knows perfectly well what I mean. Does he think that discussions in this House about trade generally are concerned with the welfare of poor people—
  HON. MEMBERS: Yes!
  Mr. SPEAKER: That question does not arise out of the answer.
  Mr. MAXTON: May I repeat my question, which is a serious one? Am I to understand that at the Ottawa Conference there will be no discussion on the general social conditions of the people in various parts of the Empire?
  Mr. THOMAS: On the contrary, I hope that the discussions will be concerned with the general conditions of the people in different parts of the Empire. The general conditions of the people in all parts of the Empire are dependent on a sound trade policy.
  Mr. MAXTON: That is the Tory way of looking at it. That is the difference between the right hon. Gentleman and myself.

  AGRICULTURE.

    MILK MARKETING SCHEME.
    Sir WALTER PRESTONasked the Minister of Agriculture whether the Government scheme for the marketing of milk arid milk products will be available before September, when the producers and distributors meet to fix prices for the following year?
    The MINISTER of AGRICULTURE (Sir John Gilmour): The Reorganisation Commission for Milk which, as announced yesterday in the House, I have now constituted, will be asked to submit a scheme without avoidable delay, but after the Commission's scheme has been considered and submitted by producers, it would not be safe to allow much less than nine months for the various preliminary stages laid down in the Act to be completed. I am afraid, therefore, that the scheme cannot be available in time to come into operation before 1933.
    Sir W. PRESTON: Is the right hon. Gentleman not aware that, if the price of milk is dependent upon the Milk Combine for another 12 months, every farmer in the West of England who has to rely on his milk trade will be bankrupt, and can nothing be done to hasten things?
    Sir J. GILMOUR: I am hoping that the outcome of the steps we are taking to deal with the milk problem will be a better organisation among the producers of milk.

  INDIA (ARCHEOLOGICAL DEPARTMENT).
  Mr. MOLSONasked the Secretary of State for India what economies have been effected by the Government of India in the archæological department; and whether he is satisfied that no irreparable harm will be done to that department by those economies?
  The SECRETARY of STATE for INDIA (Sir Samuel Hoare): I am sending my hon. Friend a copy of a Memorandum circulated to the Indian Legislative Assembly last November on this subject. I have no reason to think that the Government of India, under whose control the Department is, are unmindful of the desirability of avoiding economies which may permanently impair its usefulness.

  FACTORIES (EMPLOYES).
  Commander COCHRANEasked the Secretary of State for the Home Department if he can give for the latest convenient date the total number of factories in England and Wales and in Scotland, classified for both countries in accordance with the number of persons employed?
  The SECRETARY of STATE for the HOME DEPARTMENT (Sir Herbert Samuel): The returns made under the Workmen's Compensation Act by occupiers of factories in respect of the year 1930 have been classified into certain groups according to the number of persons employed, and I propose to circulate this information with the OFFICIAL REPORT. The figures have been tabulated for the whole country and I regret it will not be possible to give separate figures for Scotland.
  Factories covered by the returns under the Workmen's Compensation Act for the year 1930, divided into size groups according to the number of persona employed.

  Number employed.

  Number of factories.

  Percentage of Total.

  1–25

  97,463

  76·3

  26–50

  11,571

  9·1

  51–100

  8,113

  6·4

  101–250

  6,830

  5·3

  251–500

  2,421

  1·9

  501–1,000

  949

  ·7

  1,001 and upwards

  421

  ·3

  127,768

  100·0

  These figures will be published with further particulars, and any necessary explanation in the forthcoming Annual Report of the Chief Inspector of Factories for 1931.

  EXECUTIONS (DEMONSTRATIONS).
  Mr. MANDERasked the Home Secretary whether his attention has been drawn to the fact that a person formerly included by his Department on the list of approved hangmen is now travelling the country fair-grounds with a show demonstrating an actual hanging; and whether he will take steps to prevent such practices?
  Sir HERBERT SAMUEL: I have seen a report in the Press, but I regret that there is no means, as far as I am aware, of preventing such representations.
  Mr. MANDER: Will the Home Secretary make inquiries?
  Sir H. SAMUEL: I have no power to take any action.
  Mr. MACQUISTEN: Does the right hon. Gentleman not think that this exhibition may have the effect of preventing serious crime? Could he not offer this performer to Chicago after his tour here?

  UNEMPLOYMENT.

    SCOTLAND.
    Mr. DAVID ADAMSasked the Minister of Labour (1) the number of coopers unemployed in Scotland?
    (2) the number of coopers employed in connection with the production Scotch whiskey in 1914 and 1931, respectively?
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson): At 25th January, 1932, the latest date for which statistics are available, there were 1,277 wholly unemployed men on the registers of Employment Exchanges in Scotland who were applicants for work as coopers. Separate statistics of the number of coopers employed in connection with the production of Scotch whiskey are not available.

    TRANSITIONAL PAYMENTS.
    Mr. TINKERasked the Minister of Labour the number of public assistance committees his Department have communicated with in respect of their application of the means test; and will he say what has been the result?
    Mr. HUDSON: I am not clear what the hon. Member means. A great many points of detail with regard to administration have naturally arisen in all parts of the country, and I could not attempt to give any exhaustive list.
    Mr. TINKER: May I take it that there are to be no communications with those authorities which are not carrying out the instructions or wishes of the Department?
    Mr. HUDSON: We are in communication with the authorities which are not carrying out the letter and spirit of the Act.
    Mr. TINKER: Do these inquiries include any of the authorities where the percentage of dismissals or disallowances are very high?
    Mr. HUDSON: I should like notice of that question.

    SUNDAY PERFORMANCES (REGULATION) BILL.
    Mr. GURNEY BRAITHWAITEasked the Prime Minister whether His Majesty's Government intends to adopt the Sunday Performances (Regulation) Bill in order to assure its passage into Law during the present Session?
    The PRIME MINISTER (Mr. Ramsay MacDonald): I would refer my hon. Friend to the answer which I gave yesterday in reply to a question by my hon. and gallant Friend the Member for Enfield (Lieut.-Colonel Applin).

    SILVER.
    Lord SCONEasked the Chancellor of the Exchequer if he will consider arranging a conference with representatives of the principal silver-producing countries, including India., with the object of so controlling the future output that the value of silver may rise sufficiently to enable those eastern countries, whose main currency it is, again to absorb our manufactures, and thus assist the reduction of unemployment?
    Major ELLIOT: I would refer the Noble Lord to the answer given to my hon. Friend the Member for Gravesend (Mr. Albery) on the 5th April.

  GOVERNMENT DEPARTMENTS.

    LORD CHANCELLORS AND EX-LORD CHANCELLORS (SALARIES AND PENSIONS).
    Mr. PARKINSONasked the Chancellor of the Exchequer the total amount paid in salaries and pensions to Lord Chancellors and ex-Lord Chancellors during the last 20 years?
    Major ELLIOT: The total amount of salaries and pensions to Lord Chancellors and ex-Lord Chancellors of England in respect of the last 20 financial years is £466,183.

    LAW OFFICERS (FEES).
    Mr. VYVYAN ADAMSasked the Chancellor of the Exchequer the method whereby the amount of fees payable to His Majesty's Law Officers in particular cases is determined?
    Major ELLIOT: The fees payable to the Law Officers of the Crown in particular cases are determined in accordance with the Treasury Minute dated 5th July, 1895, which was laid before the House as House of Commons Paper No. 431/Session 2, of 1895. I am sending my hon. Friend an extract from this Minute.
    Mr. ADAMS: While thanking my right hon. Friend for his answer, may I ask him whether the substantial emoluments of which the English Law Officers of the Crown are still in receipt are deemed to be a measure of their Ministerial superiority over all the other Members of the Government, and their professional ascendency over the vast majority of the practising members of the Bar?
    Mr. McENTEE: Will the right hon. Gentleman publish in the OFFICIAL REPORT the extract to which he has made reference?

    TRANSFERRED OFFICERS (REPLACEMENT).
    Mr. McKEAGasked the Financial Secretary to the Treasury by what means it is proposed to replace the number of civil servants, totalling about 600, who have recently been transferred from various Government Departments to the Customs and Excise and Inland Revenue Departments?
    Major ELLIOT: I would refer the hon. Member to the answer which I gave on the 14th April to the hon. Member for Walthamstow, West (Mr. McEntee) of which I am sending him a copy.

  NATIONAL FINANCE.

    NATIONAL INCOME.
    Major NATHANasked the Chancellor of the Exchequer whether His Majesty's Government has made any estimate of the national income for the current or any recently past revenue year or any recent period, and of the distribution of such national income among the various ranges of income?
    Major ELLIOT: I regret that no official estimates are available.
    Sir ARTHUR MICHAEL SAMUEL: When shall we have a separate report of the Revenue Department which will give these figures?
    Major ELLIOT: I am afraid I could not say just now.

    INCOME TAX.
    Mr. NEIL MACLEANasked the Chancellor of the Exchequer whether he is aware that a number of people have been refused transitional benefit on the ground that the income of a son or daughter is sufficient to enable them to be maintained by those relatives; whether he is aware that when the son or daughter make a claim on their Income Tax form for an allowance, on the ground that they are maintaining their parents, the Income Tax officials refuse to allow the claim; whether this is done on instructions from the Treasury; and, if not, whether he will issue instructions for such claims to be considered and, where genuine, allowed?
    Major ELLIOT: I would refer the hon. Member to the answer given to a similar question asked by the hon. Member for Bothwell (Mrs. Shaw) on the 9th of February last.
    Mr. MACLEAN: Can the right hon. Gentleman inform the House whether he has issued any instructions relating to consideration being given by the Inland Revenue officials to the claims which have been put in?
    Major ELLIOT: The answer given on the 9th February pointed out that there were no provisions in the Income Tax Act which would enable action to be taken such as the hon. Member desires.
    Mr. MACLEAN: Is it not a hardship upon those people that they should be placed in such a contradictory situation as to be held to be wholly maintaining their parents and not be allowed to claim a rebate of Income Tax?
    Major ELLIOT: The point is that there are no such provisions under the Statute.

  LEAGUE OF NATIONS (COMMISSION).
  Mr. RHYS DAVIESasked the Secretary of State for Foreign Affairs

  1403
  whether any report has been received from the League of Nations of the travelling commission appointed some 18 months ago to inquire into the traffic in women and children in the East?
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Eden): No, Sir.

  LIBERIA.
  Mr. MANDERasked the Secretary of State for Foreign Affairs whether, in view of the fact that the Liberian authorities have now decided to reject the proposals made by the Council of the League of Nations for bringing about reforms to which His Majesty's Government attach importance, it is proposed to instruct the British representative at Monrovia to make any further representations to the Liberian Government?
  Mr. EDEN: My right hon. Friend is not aware that the Liberian Government have taken any decision so unwise as that suggested. The proper time and place for them to make their intentions known will be at the Council meeting next month.

  BRAZIL (BRITISH INVESTORS).
  Mr. POTTERasked the Secretary of State for Foreign Affairs if he will request His Majesty's Ambassador in Brazil to ascertain the reason why the authorities of the State of Rio de Janeiro have not yet terminated their default upon their obligations to British owners of their bonds?
  Mr. EDEN: As stated in the reply given to my hon. Friend the Member for the City of Chester (Sir C. Cayzer) on the 21st of March last, negotiations on this matter are in progress. My right hon. Friend does not consider that any useful purpose would be served by making the proposed inquiry at this time.

  RENT RESTRICTIONS ACT.
  Mr. LECKIEasked the Minister of Health whether, in view of the dissatisfaction which exists, he will take steps to deal with the question of the permitted increases in rent under the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, during the present Session?
  Lieut.-Colonel MAYHEWasked the Minister of Health whether he is aware that excessive rents are being charged for decontrolled and other classes of property occupied by the lower-paid workers; and if he will now consider the desirability of promoting legislation to counteract this?
  The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Ernest Brown): My right hon. Friend is afraid that he cannot add anything to the replies he has recently given as to the introduction of amending legislation.

  LOCAL AUTHORITIES (CONTRACTS).
  Mr. GLEDHILLasked the Minister of Health if he will take steps to urge upon local authorities the desirability of giving preference to British goods when placing contracts for supplies for grant-aided schemes?
  Mr. E. BROWN: Local authorities have already been urged to make use to the utmost extent practicable of goods and materials of home production and, where that is not practicable, to give preference to goods and materials of Empire origin. I will send my hon. Friend copies of the circulars in question.

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

  JURIES (EXEMPTION OF FIREMEN) BILL.
  Reported, so far as amended, from Standing Committee C.
  Leave given to the Committee to make a Special Report.
  Special Report brought up, and read;
  Report and Special Report to lie upon the Table, and to be printed.
  Minutes of the Proceedings of the Standing Committee to be printed.

  TRENT NAVIGATION BILL.
  Reported, with Amendments; Report to lie upon the Table, and to be printed.

FINANCIAL STATEMENT (1932–33).
Copy ordered, "of Statement of Revenue and Expenditure as laid before the House by Mr. Chancellor of the Exchequer when opening the Budget."—[Major Elliot.]
Copy presented accordingly; to lie upon the Table, and to be printed. [No. 63.]

ORDERS OF THE DAY.

  WAYS AND MEANS.
  Considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]

  FINANCIAL STATEMENT.
  3.30 p.m.
  The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): Among the many strange events which have characterised the financial year which has just closed, we must record the occurrence of two Budgets, a feature which I do not say is unprecedented, but for which I have not been able to find a comparable parallel in peace-time during the last 100 years. I need not now recall the events which necessitated the second or emergency Budget, but the Committee will recollect that last September my Noble Friend the Lord Privy Seal found himself face to face with a prospective deficit of no less than £74,000,000. To make good that deficiency and to balance the national account demanded the highest courage and determination on the part of the Chancellor of the Exchequer, and, at the same time, a supreme confidence in the readiness of the people to undertake whatever burdens and sacrifices might be laid upon them in order to support the national credit. My Noble Friend was fully equal to the occasion. Although, to use his own words, his task was one of the most disagreeable that had ever fallen to his lot, he produced a scheme which was universally acclaimed, both at home and abroad, as a model of severe but sound and salutary finance. By a combination of economies and new taxation, he was able to provide for a reduction of Debt of £32,500,000, and for a surplus of £1,500,000. To-day, we have the satisfaction of recording that not only have my Noble Friend's anticipations been fulfilled, but that the small surplus of £364,000 which we actually show must be taken in addition to the fact that, instead of the £23,000,000 which it was proposed to take last April from the Dollar Exchange Fund, it was only necessary to take £12,750,000. If, therefore, we add to the £364,000 the £10,250,000 which is the difference between those two figures, we see that
  1412
  we are really to-day £9,000,000 better off than my Noble Friend anticipated last year.

  FINANCIAL STATEMENT.

    REVIEW OF PAST YEAR.
    I must now proceed to show how this remarkable result, which has produced a profound impression upon instructed opinion in all parts of the world, has been brought about; and, of course, in all cases the figures I shall take in making my comparison will be those of the September Estimates, and not those of April last. Taking first the Expenditure side, hon. Members will recollect that, under the Finance (No. 2) Bill of 1931, the Fixed Debt Charge was reduced from £355,000,000 to £322,000,000. That was due mainly to the fact that the provision for the Sinking Fund and the second half-yearly payment of interest on the American Debt were excluded from the Fixed Debt Charge, in accordance with the Hoover Moratorium; and it was also due to the fact that powers were taken to borrow for the redemption of the Victory Bonds which were tendered in payment of Death Duties. The reduced charge included a sum of £32,500,000 of Sinking Fund in order to meet our contractual obligations, and the whole of this has been duly provided from revenue.
    When I come to the Supply Services, I find there one of the major factors in the happy result to which I have already alluded. Last September, the sum arrived at for Supply Services, after taking into account the increase due to the decisions which stopped the borrowing for the Unemployment Insurance Fund and the Road Fund, was £473,800,000 in round figures. That showed an increase of £34,000,000 over the sum estimated in the preceding April; but from it the National Government proposed to make economies amounting to £22,000,000, bringing the figure down to £451,800,000. But then there were Supplementary Estimates amounting to £514,000, which again raised the level, and so the final figure stood at £452,300,000. How far have the Estimates been realised? I would ask the Committee to recollect that we made a number of concessions in pay cuts, which cost us substantial sums, but, in spite of that, the economies have been more than made good, and, in addition, the reduction in the figures of unemployment came

    1413
    to our aid, so that in the end we were able to show, instead of economies of £22,000,000 savings amounting altogether to £34,500,000, the final Exchequer issues being £439,200,000. It will be seen, therefore, that the savings on the Expenditure side are responsible for more than the £9,000,000 by which we have exceeded the surplus anticipated by my Noble Friend, thus satisfactorily confounding the sceptics who believe that politicians only keep one kind of promise, namely, that they will spend more of the taxpayers' money than their predecessors did.
    Now let us glance at the Revenue side. I will refer first to the less important items—Sundry Loans and Miscellaneous Receipts. Sundry Loans show a small falling off of £1,500,000, due to the postponement of certain repayments by Colonial Governments, which have since been received and which will be brought into account in 1932. Miscellaneous Receipts show a decline of nearly £13,000,000. That is owing to the fact, to which I have already alluded, that I only paid in £12,750,000 from the Exchange Fund, and, as the total amount, including accrued interest which was in the fund, was £37,750,000, there remained, at the beginning of the present financial year, exactly £25,000,000. I shall return to the subject of this account at a later stage in my observations. The Committee will not be surprised to notice that there is a reduction in the receipts of the Post Office of £700,000, which, of course, is due to the general decline in business.
    I now pass to the Customs and Excise, which brought us in a satisfactory total of £256,052,000, showing an increase of £3,000,000 over the September estimate of £253,000,000. As no doubt hon. Members have already realised, a good part of that increase is due to measures which were not in the mind of my Noble Friend when he was framing his Estimates in September. Up to the end of March we collected from the Abnormal Importations Duties £1,165,000, from the Horticultural Products Duties £164,000, and from the 10 per cent. Revenue Tariff £760,000, making in all a little over £2,000,000 from these three classes of Import; Duties. As to the taxes which were increased by my Noble Friend, namely, those upon beer, tobacco, oils, and entertainments, all of them show an
    1414
    increase over the estimate with the exception of beer, and even beer has not done so badly as was anticipated by some enthusiasts. We expected a revenue from the increased duty of £4,500,000. Actually we have only got £3,200,000, but, after all, in these hard times £3,200,000 is not to be sneezed at, and I make my acknowledgment to those who, as they have told me, have paid more money for worse beer rather than disappoint expectations of the country. Two more duties I must mention which have proceeded in opposite directions. Spirits continued their downward path. [Interruption.] I hope my hon. Friend will keep up his spirits. They have given me over £1,000,000 less than was anticipated. On the other hand, the recent activities of sugar importers, into whose motives I do not think I need now inquire, have provided me with £1,300,000 more than I had expected. For further details of items in the Customs and Excise I may refer hon. Members to the White Paper which will be in their hands later in the afternoon.
    When I come to the Inland Revenue I find myself in face of a cheerless and unexpected deficiency in one item, namely, the Death Duties. In September my Noble Friend estimated the yield from the Death Duties for the year at £83,000,000. That was itself a drop of £7,000,000 from the sum which he had put down for this item in April. But, as a matter of fact, we only obtained £65,000,000 from Death Duties and, therefore, suffered a drop of no less than £18,000,000. Of course, the estimate in the case of this particular item must always involve a certain amount of guess work, but it is founded upon the consideration of the average of a series of years. Only this year the average has been altogether upset by the tremendous depreciation in capital values, and particularly Stock Exchange values, which was accentuated for a time by the conditions that prevailed after the suspension of the Gold Standard. It will be realised that this has damaged the revenue twice over, first of all because the total of the value on which the assessment is made has declined, and, secondly, because with the decreased valuation you bring the duties down to a lower level of charge. To those two general causes there must also be added a particular

    1415
    one, namely, the unprecedented shrinkage in the number of millionaire estates which came into charge during the year. It is very puzzling. I cannot explain the circumstance, unless the very rich have entered into some sort of patriotic conspiracy to cling to life until their estates regain their normal contributory value. I have been tempted sometimes, in looking at these figures, to repeat the exclamation which was made by a British general in the Peninsular War. When his men showed signs of hesitation in obeying an order to charge, he shouted out to them, "Come on, you rascals, do you want to live for ever?"
    To the £18,000,000 that I have lost from Death Duties I must add another £3,000,000 for the deficiency in the Stamp Duties. They have only given me £17,000,000, the lowest yield since the War. Here, again, we see the effects of the general depression in trade, which has resulted in a severe shrinkage of Stock Exchange activities and in the diminution of new issues for industrial capital. Putting these two items together, there is a loss of £21,000,000, a figure enough to wreck any Budget in ordinary times, but, as a matter of fact, this Budget has been saved by the Income Tax and Surtax payer. The Income Tax, at £287,400,000, has given me a surplus of £15,400,000, and the Surtax, at £76,700,000, is up nearly £4,000,000, and the history of this great achievement seems to me to be highly creditable to all who have been concerned in it. It was exceedingly difficult, when the second Budget was introduced in September, to say how much of the increased taxation could be gathered in during the financial year. The revised Budget came at a time of year when the ordinary work of assessment was nearing completion, and it was doubtful, to say the least of it, whether it would be possible to translate the new graduations in the tax into the assessments in time for collection on 1st January. Even suppose the assessments could be got through in time, still it remained doubtful how far the increased amount of the tax would affect the collection itself. In the end, thanks to great efforts on the part of all concerned, the Income Tax machine turned out the assessments in record time. Then the fate of the Budget de-
    1416
    pended on the willingness to pay of the taxpayer himself and everyone knows how nobly he has played his part. There was a magnificent response to the national appeal for early payment, and all alike, companies or individuals, the Surtax payers or people only with small incomes, showed that sense of duty and of citizenship for which we can always rely on the British people in times of crisis.
    The effect of this early payment went a long way beyond merely providing a surplus in the Budget. These payments were made much earlier in the last quarter of the year than usual. At one time they reached such a flood that the collectors were unable to keep pace with the inflow in getting out receipts, quite a new and strange form of the embarrassment of riches. But I am not unaware—in fact, I have full evidence of it in my own post bag—that these heroic efforts must have entailed enormous mental anxieties in many small households which had to find the ways and means of meeting this tremendous strain upon their financial resources. I hope, at any rate, that they have this consolation to-day, that not only have these advances effected a substantial saving in the cost of all Treasury Bills, but that the stimulus of their example has braced and reinvigorated the spirits of people in many other lands and has led them to look again to Great Britain with fresh confidence and hope in her capacity to lead the world in overcoming their difficulties. The Income Tax payers and the Surtax payers do indeed deserve our thanks, but I should like also to tender my thanks to all officers engaged in assessment and collection of the tax. They had a great task imposed upon them, and they carried it out successfully in accordance with the best traditions of the public service.

    NATIONAL DEBT.
    I do not think that I ought to conclude any review of the past year without some allusion to the changes which have occurred during the year in the National Debt, including the Sinking Fund of £32,500,000 and various minor receipts applicable to Debt redemption. There was, in fact, a total sum of £33,688,000 of cash applied which resulted in the cancellation of Debt to the nominal amount of £39,720,000. Against this we have to

    1417
    set the borrowing for the increased cost in the repayment of foreign credits advanced to the Treasury last summer. That shows an apparent loss of £22,711,000. As I have pointed out on one or two occasions previously, there is no real loss at the present time on account of the appreciation of the value of the gold which is held in the Issue Department of the Bank of England.
    Mr. DAVID MASON: The Bank of England is a private concern.
    Mr. CHAMBERLAIN: The hon. Gentleman does not seem to appreciate that the profits of the Issue Department belong to the Exchequer. There are further additions to the nominal amount of Debt which are due to certain operations connected with National Savings Certificates. Under the conversion offer which has been open for some time to holders of National Savings Certificates a considerable amount of accrued interest has been capitalised, while £8,400,000 was borrowed under Section 29 of the Finance Act, 1928, to meet the interest on the encashment of Savings Certificates for which no margin was available in the Fixed Debt Charge. Hon. Members need not have any concern about these transactions. They are not in any way inconsistent with the general anticipations of my right hon. Friend the Member for Epping (Mr. Churchill) when he introduced the principle of the Fixed Debt Charge in 1928. As to the result of the Savings Certificates conversion scheme, this will be open until the end of this month, and therefore it will be some time before it is finally known, but up-to-date £65,000,000 has been converted, which is a figure which we consider perfectly satisfactory. I would, however, take this opportunity of reminding the holders of certificates who have not yet converted that there are now only 11 days left to them in which to exercise their rights, and I think that in their own interests they would do well to make use of one of the special offers which are still open to them before the offer is finally closed. The only other conversion operation of the year was in connection with the 4½ per cent. Treasury Bonds which fell due on the 15th of this month. Holders were given the option of converting either into 4½ per cent. Conversion Loan or into 4
    1418
    per cent. Consols, and 95 per cent. of the Bonds have been converted.
    That closes my review of the year, which, I think, in its financial and commercial aspects, must be described as one of the gravest in our history. Trade depression, which was deep and wide at the beginning of it, has grown deeper and has extended more widely throughout the world. The curse of unemployment has lain heavily upon many struggling households where the luxuries of life have long since been discarded, and even the bare necessaries have had to be carefully measured. Cuts and reductions of income have been suffered by many people in all walks of life. Taxes have been piled upon taxes until it has no longer been possible to meet them out of revenue, and capital has had to be sacrificed to meet them. Taken as a whole, the year has been one of anxiety, difficulty, and hardship, and it is only in the last few months that some revival of trade and employment has led us to hope that at last the worst has passed. We shall all part with the year 1931 without regret, and I believe that the Committee will not be sorry that I can now pass to what are perhaps the more interesting problems of the year 1932.

    ESTIMATES FOR 1932–33.
    4.0 p.m.
    Coming to the current year I have a preliminary explanation to make. In the present Budget, I am including no receipts for Reparations and Allied War Debts, and I am including no outgoings for our own War Debt payments. In ordinary conditions those items should constitute a self-balancing chapter in our finances. The future position is dependent upon the results of the Lausanne Conference. Various alternative assumptions might have been made, but it seemed to me that the best course was to refrain at this stage from all conjectures and to treat both sides of the account as being in suspense. This procedure will entail a consequent modification of the Fixed Debt Charge, but that does not imply that any fresh decision has been taken as to our policy upon these delicate questions. On the contrary, I adopted the procedure proposed as being the best calculated not to prejudge any of the issues involved, and I am sure that I shall have the assent of the Committee in expressing the view that a discussion at the present time

    1419
    would be inopportune. The general policy of the Government was stated by me to the House on the 2nd February, and that statement continues to represent the Government's views as to the objective at which we should aim. I have similarly decided for the time being to omit any estimates of receipts for those Dominion War Debts, the service of which was suspended until the 1st July at the time of the enunciation of President Hoover's plan. Although these debts stand upon a different footing from those of Inter-Allied War Debts, the two questions are, to a certain extent, inter-connected, and I think it wiser to treat them both as in suspense. Later in the year, when we know the outcome of the deliberations which will begin next June at Lausanne, I shall submit to Parliament whatever proposals may be necessary to give effect to the measures we have agreed upon. In the meantime, however, I must point out that these assumptions deprive me of some £10,000,000 which was included in the forecast of revenue last September, when it was assumed that, after the expiration of the Hoover Moratorium, the previous position of Reparations and Debts would be restored. From the decisions I have just described, it follows that the interest on both the half-yearly payments of the American debt will be excluded from the Fixed Debt Charge, which is consequently reduced from £322,000,000 to £308,500,000. Of course, that includes the provision for Sinking Fund, which remains unchanged at £32,500,000. Northern Ireland Services amount to £6,800,000, and Miscellaneous Services to £3,500,000. The total for Consolidated Fund Services, therefore, comes to £318,800,000.

    EXPENDITURE.
    I come to the Estimates for the Supply Services, and in consideration of this question no doubt the Committee will desire to know how far savings which we expected to make last September can still be anticipated in the light of our present information. My predecessor estimated in September that, taking into account the decision to bear on the Votes the services of the Unemployment Insurance Fund and the Road Fund., instead of borrowing for them, the total required for Supply Services would be £526,000,000.
    1420
    From that the National Government pro posed to effect savings amounting to 70,000,000, leaving a, total of £456,000,000. The Estimates which have been presented to Parliament, however, amount only to £447,204,000, so that the Committee will see that the savings we now anticipate total nearly £79,000,000, instead of the £70,000,000 expected last September, and that result, I must remark, has been achieved in spite of concessions on pay cuts which amounted to £3,500,000, and also a sum of £1,250,000 unprovided for which was found to be necessary for Income Tax collection and work under the Import Duties Act.
    Of course, a large part of this extra saving is due to the fact that we anticipate continued diminution in the figures of unemployment. But there have been reductions over the other Departments of State larger than those which were forecast last autumn, and I desire here gratefully to acknowledge the assistance which I have received in this respect from my colleagues in charge of the spending Departments. Of course, the ordinary expenditure does not include the two self-balancing items. The first, the Post Office, amounts to £59,188,000, and the Roads to £22,910,000. Omitting these two figures, the total of the Supply Services is £447,204,000. I have already given the Consolidated Fund Services as £318,800,000, and, adding those together, we get a total estimated ordinary expenditure of £766,000,000 for 1932, including the Sinking Fund.

    REVENUE.
    Now I have to give my estimate of the revenue which we can expect, on the basis that taxation remains exactly as it is now. I have noticed when I go to my dentist and he says to me, "I am afraid that I am going to hurt you a little now," I always brace myself up and bear the pain with greater fortitude than when I get from him an unexpected jab. Bearing that analogy in mind, I think I ought to warn the Committee that the next quarter of an hour will not be an altogether agreeable one for them. I will again take the least important items first. I put the Exchequer yield of Motor Vehicle Duties at £5,000,000—a trifle over the receipts in 1931. I put the receipts from the Post Office at £11,7700,000, which is £500,000 less than last year's Estimate, but about £200,000 more than the actual

    1421
    receipts. I expect the yield from Crown Lands to reach £1,250,000. Sundry Loans and Miscellaneous Receipts will be considerably down, owing to the exclusion of Reparations and War Debts, and also owing to the cessation of the special transfer from the Exchange Account which appears in last year's Estimates. I put them respectively at £4,350,000 and £17,500,000. The Committee will observe that both the Exchange Account and the Rating Relief Suspense Account have disappeared entirely from the Budget picture, and the revenue this year will obtain no support from either of those sources.
    When I come to Inland Revenue, I approach graver matters. It may be recollected that last September my Noble Friend the Lord Privy Seal thought it necessary to anticipate that there would be a fall of £35,000,000 in Inland Revenue below the £437,000,000 which had been estimated for 1931; that is to say, he put the yield of Inland Revenue for this year at £402,000,000 on the basis of the then existing taxation. Additional taxation was imposed which he estimated at £57,500,000. The addition of these two makes a total anticipated revenue from Inland Revenue of £459,500,000. I have had to review that figure in the light of the actual receipts last year and of the information which has since come into my hands. I put the yield from Land Tax, Mineral Rights Duty, Excess Profits Duty and Corporation Profits Tax at £2,000,000. I think I am entitled to expect a, slow but continuous recovery in values during the current year, and accordingly, to expect a corresponding recovery in those taxes which are immediately affected by the change, namely, Stamp and Death Duties. I am Budgeting for £23,000,000 in Stamps, an increase of £6,000,000, and of £'76,000,000 from Death Duties, an increase of £11,000,000 from the exceptionally low level which those taxes reached in 1931.
    But when I come to consider Surtax and Income Tax, I have to remember that these taxes are not based upon profits and income accruing in the present year, but principally upon those of the year that has passed, that is, a year which reached a climax of depression unprecedented in our experience both for its depth and for the extent of the field which it covered. The Estimates which have been furnished to my advisers by
    1422
    certain business concerns who are good enough to give me this assistance, enable me now, I think, to form a fairly definite idea of the maximum amount of profits which can come under charge for Income Tax, and, therefore, of the maximum yield of Income Tax which may be expected, and I am sorry to say that it is quite clear, from the information which I have received, that I must anticipate a heavy fall both in Surtax and Income Tax. I cannot estimate for the year a yield of more than £66,000,000 from Surtax, nor taking into account the extra allowances for wear and tear on plant and machinery which were promised last year for 1932, for more than £260,000,000 from Income Tax. That brings us to a total for Inland Revenue of only £427,000,000, or no less than £32,500,000 below the Estimates provisionally put forward last September by my Noble Friend. I can hardly imagine a more convincing demonstration of the fact that we have approached the practical limits of the return from direct taxation. Whatever our fiscal views may have been in the past, no Government to-day could possibly afford to neglect other sources of revenue which have not been tapped to the same extent.
    Fortunately, this Government took time by the forelock, and I can now proceed to investigate what Customs and Excise can do to bridge the chasm that has been left by Inland Revenue. I will omit for the moment the new tariff duties, including those on Abnormal Imports and Horticultural Products. The older duties I estimate to bring in, Customs £140,275,000 and Excise £124,200,000, making a total of £264,475,000. That is an excess of £10,000,000 over the receipts last year, but although I am certainly hoping for an improvement in the economic conditions of the country this year, I am not basing my estimate for this extra £10,000,000 upon that improvement. It largely arises out of the fact that this year I shall get a full year's yield out of taxes which, having been imposed only last September, only gave me a half-year's yield last year. Mainly, therefore, on this account, though not entirely, I estimate on the basis always of existing taxation, increases of over £4,800,000 on beer, over £4,900,000 on oil, £1,500,000 extra on entertainments, and I have put up tobacco by 24,500,000, partly because of the full year's yield of the increased duty, but partly because there were con-

    1423
    siderable forestalments in the year before last which reduced last year's revenue. On the other hand, I feel bound to assume that the decline in the consumption of spirits will continue, and I am allowing for a drop of nearly £2,000,000 in the yield from that duty. I am also allowing for a fall of £2,300,000 in the sugar Duty, owing to the forestalment to which I made reference earlier in my speech. As to the other items, I think I may refer hon. Members to the detailed Estimates which they will find in the White Paper.

    IMPORT DUTIES.
    I would ask the Committee to consider for a moment what the position would be if I had to stop there. We have an ordinary expenditure estimated at £766,000,000, and up to the present the revenue which I have available amounts only to £731,275,000. There is a deficit there of £34,725,000. When I recollect the Debates which took place on the Import Duties Bill, not so many weeks ago, in this House, and when I think of all the scorn that was poured out from the benches opposite upon the idea that a 10 per cent. duty was necessary for revenue unless it were for the purpose of reducing the burdens upon the Income Tax payer, and then I consider this tremendous deficit of nearly £35,000,000, I cannot help thinking that the critics look rather foolish to-day. Where on earth, I wonder, could we have found this great sum if we had been debarred from the consideration of Import Duties? The sequel will show that not only were we right in making a revenue tariff the basis of our new proposals, but the actual rate which we fixed upon, the 10 per cent. rate, proves to have been as nearly adapted to our needs as could possibly have been expected from men who had no experience to guide them in exploring an unknown field.
    Let me come then to the yield that I expect to get from the new duties during the current year. On the assumption that the Abnormal Importations Duties expire on 19th May, or that they are replaced by other duties on the recommendation of the Tariff Advisory Committee, I am only expecting £250,000 from that source. On the other hand, the Horticultural Products Duties go on until next December, and I am putting
    1424
    down the yield from them at £750,000, so that between the two I get together exactly £1,000,000. The 10 per cent. Revenue Tariff is, of course, of much greater importance. The tariff has only been in operation since 1st March. It is much too soon to say with certainty what its effect is going to be upon the revenue, more especially as there was a considerable amount of forestalment before the duties came into force, and, therefore, in the earlier weeks the amount of the revenue was very much disturbed. In fact, any estimate of the revenue from this tariff must, I think, at the present time be of a highly conjectural character, but after carefully considering the whole matter I have allowed myself to expect from this source a yield during the present year of £27,000,000.
    But the general ad valorem duty does not entirely exhaust the sources open to me from the Import Duties. The Committee is aware, I think, that there is in my hands an interim report from the Tariff Advisory Committee which contains certain recommendations as to additional duties. In accordance with the Statutory directions I have consulted the appropriate Departments upon these recommendations, and I hope before the end of the week to make an Order under Section 3 of the Import Duties Act. Hon. Members would, no doubt, now like to know exactly what those recommendations are, but I am sure they will recognise that it is very undesirable to disclose any earlier than is necessary precisely what we are going to do, because the only result of that might be to enable enterprising traders to forestall our intentions. That being so, I propose to ask hon. Members to possess their souls in patience until the recommendations are published later in the week. But for the purpose of this statement I have had to make some estimate of the revenue which is likely to accrue from the Order which I shall presently be making, and, although, here again, in the absence of experience, one's estimate must be somewhat conjectural, I think I am justified in expecting a further £5,000,000 in addition to the amount which I have already estimated to receive from the general ad valorem tariff.
    Adding up the various items of Customs and Excise, I arrive at a total

    1425
    of about £297,500,000. If you add to that the figure from Inland Revenue of £427,000,000 and the revenue under other heads of £39,800,000, you get a total of £764,300,000. The position then is this:

    £

    Estimated expenditure

    …

    766,000,000

    Estimated revenue

    …

    764,300,000

    Prospective deficit

    …

    £1,700,000

    EXCHANGE EQUALISATION ACCOUNT.
    Before I deal with the matter of that prospective deficit, I want to describe to the Committee certain proposals which will appear in the Finance Bill. During recent weeks the exchange position of this country has been one of considerable difficulty. There has been a great loss of confidence abroad and that loss of confidence has led to large accumulations of liquid capital which can very easily be moved from one financial centre to another and can, therefore, materially assist the operations of speculators. The effect of the transfer of this liquid capital is to exercise a very disturbing influence upon the exchanges—particularly upon sterling exchange, which is no longer linked to gold.
    Since we were so successful in repaying the credits which were raised abroad last year and in balancing the national accounts the tide of liquid capital has been setting very strongly in towards these shores. That is flattering to our vanity, but at the same time it is sometimes a serious embarrassment to our trade, and, moreover, in so far as it does not represent a genuine and permanent improvement in the balance of trade it is apt to give rise to dangerous development. In such circumstances nobody can say with certainty that the ebb may not set in presently. Therefore, I have been driven by the force of events to this conclusion, that, if we are to avoid violent and perilous fluctuations in our currency, especially those which are due to these speculative operations, if we are to enable this country to function effectively as the main international centre of the world, then it is essential for us to hold adequate reserves of gold and foreign exchanges, in order that we may meet any sudden withdrawal of short-dated capital and check and repel these speculative movements.
    I will try to describe to the Committee the proposals which I have in mind, and I must ask for their indulgence if part of this matter appears to be somewhat technical in character. I propose to wind up the old Exchange Account and to use the assets as the nucleus of a new account to be called the Exchange Equalisation Account. I propose to ask the Committee to give me powers to borrow up to £150,000,000 for this account. The details of assets in the account will not be published, but they may take various forms, either gold, or sterling securities, or foreign exchange. That will give us a very large and extended power of purchasing exchange. The new powers, combined with the powers already possessed by the Bank, upon which, of course, the main responsibility for the management must continue to rest, will enable us to deal far more effectively than we could otherwise have done either with an unwanted inflow of capital or, if the alternative should again arise, with an outflow of capital from this country.
    4.30 p.m.
    There are certain other purposes for which this Exchange Equalisation Account can be used conveniently. First of all, there is an accounting question connected with the weekly returns of the Bank of England. Hon. Members know that there are two departments in the Bank—the Issue Department and the Banking Department. The Issue Department is liable for the note issue amounting to some £400,000,000, against which it has assets in gold and securities. The Banking Department, on the other side, is the one in which the purely banking business is carried on. The management of the Issue Department is by law entrusted to the Bank, but its profits can concern only the Exchequer, because the Exchequer is entitled to any interest earned or any profits made in the Issue Department. On the other hand, the profits of the Banking Department are for the account of the Bank. My proposals only affect the Issue 4.30 p.m. Department, and I have given this preliminary description in order to show that they do not confer upon the Bank any new privilege or any new profit. The Bank will continue to bear itself any risks which may be involved in foreign exchange operations carried on in the

    1427
    Banking Department. That arrangement is made at the Bank's own desire, and I am sure it is one which will be approved by the Committee.
    With the pound divorced from gold the accounting arrangements of the Issue Department present some difficulty. Its liabilities for the Note Issue are in sterling. Those of its assets which may consist of foreign currencies fluctuate in terms of sterling; but so far as its assets consist of gold—including any gold that may hereafter be acquired—the law requires the gold to be valued at the old par. Thus, the Issue Department cannot, with the exchange at $3.80 add £100 to its gold holding without showing an apparent loss of £28; and, in the same way, it cannot sell £100 of its gold holding without showing an apparent profit of £28, while its holdings of foreign exchange fluctuate in value every week. Our currency authorities ought to be free to hold such amounts of gold and foreign exchange in the Issue Department as may be required without being hampered by technicalities of this kind. On the other hand, we must be very careful to keep full cover against the Note Issue. I consider that in order that at all times and in all conditions the assets of the Issue Department—that is to say, the backing of our currency—should be consistently and conservatively valued, the gold in each return should be valued at the old par, and all the foreign exchange assets should be valued at the current rate of exchange irrespective of their purchase price.
    In order that the account may at all times precisely balance on this basis, my proposals provide that at any time when a valuation on this basis shows a deficiency resources to the corresponding amount shall be passed from the Exchange Equalisation Account to the Issue Department of the Bank, and that when a surplus is shown that the converse operation shall take place. I ask the Committee to observe that both of these accounts are worked for the credit of the Exchequer, for the use of the Exchequer, and for the account of the Exchequer. Therefore, it does not very much matter whether any particular asset is for the moment in one account or the other, both are for the account of the Exchequer.
    There is another point. In connection with the credits which were raised by the Bank of England last year from the Banque de France and the Federal Reserve Bank the undertaking was given at the time, and Parliament was so informed, that any loss arising from the transaction would be made good to the Bank. The Finance Bill, accordingly, will contain a provision charging £8,000,000, which is the outstanding loss on that transaction, to the Exchange Equalisation Account.
    I may be asked: Suppose that these powers are given to the Government, will that be the final end to the fluctuations in the exchange; will it mean that the exchange will be kept at a fixed point, or at any rate that it will be maintained within a fixed range of values? I am not going to give any such assurance. When you consider the economic disturbances which are still occurring in the world, and of which we probably have not even now felt the worst, it is perfectly useless to pretend that we can hold our exchange position exactly as we please independent of anything which is going on around us. On the other hand, we can say this, that those who are charged with the conduct of our currency will be much better equipped in the future with these powers to maintain that currency steady than they have been in the past; and that to that extent we should see a great improvement.
    There is another question: Will these transactions involve the Exchequer in any loss or in any considerable loss. I think the answer to that question must be that that is a very conceivable possibility. We do not know what is going to be the future of gold prices. We do not know what settlement will be reached as regards Reparations and War Debts, and other matters, which are now disturbing the world. These uncertainties rule out any possibility of our being able to return to gold immediately. We do not know when or in what circumstances we may return to gold, or at what level. If in the long run we were to return to gold in such a way that the pound stood at a higher gold value than the average level At which purchases of exchange had been made, the transactions would inevitably show a loss. This is a possibility, but it is not one which should deter us. If we are merely seeking safety from an

    1429
    accounting point of view, we can proceed as we did in the earlier period of the suspension of the Gold Standard between the years 1919 and 1925. The pound would be allowed, substantially, to take its own course, liable to fluctuations with every seasonal movement of trade or every outburst of speculation, or change of sentiment caused by developments abroad. The problems of the present time are in many ways altogether different from those which faced us immediately after the War. In my judgment, the risks entailed by the uncontrolled fluctuations of the currency today outweigh the possible loss on the transactions which I have mentioned.

    MINOR MATTERS.
    I come to one or two minor matters which will be contained in the Finance Bill. First it will provide for the extra Income Tax allowances for wear and tear of plant and machinery, to which I have already mace allusion, and which seem to have passed out of public memory in recent weeks. I am quite certain that when this comes into operation it will be of considerable benefit to industry. The next item is also one of interest to industry. It has been pointed out by their organised representatives that in a time of prolonged depression, such as that through which we have been passing, and from which I hope we are going now to emerge, traders are liable to be penalised because the allowances for wear and tear take priority over the carry forward for losses. That priority is not always unfavourable to the trader, but there are many cases in which it may deprive him of a deduction for Income Tax purposes which otherwise would have been allowed. Accordingly, I am putting in the Finance Bill a provision to ensure that every trader is given the allowances in the order most favourable to him.
    The next point concerns a change that was made in last year's Finance Act, transferring to the Board of Inland Revenue the power of appointing collectors of taxes. That step was an essential preliminary to the reorganisation of the tax collection service on modern lines. That work is in process now, and I think it has gone far enough to enable me to say that the new system is not only showing itself to be more economical and more efficient but also more con-
    1430
    venient to traders than the old. But in order that it may be completed, and completed as rapidly as possible, it is now necessary to provide reasonable terms of compensation for those members of the existing staff for whom no place can be found under the new system or whose interests will be detrimentally affected. Accordingly, I am putting a Clause in the Bill which will deal with that point.
    My last point is one which arises out of the inequitable position springing from a recent decision in the courts of law, a decision that the pensions of certain retired employés are not chargeable to Income Tax unless they are paid under contract and are legally exigible by the pensioners. I am sure that everyone will agree that all pensioners should be treated alike in this respect, whether their pensions are voluntary or contractual, and I am proposing to put that on a proper footing in the Finance Bill.
    Having disposed of these matters, I now come back to revenue. The Committee will realise, I am sure, from the position I have disclosed, that I have no opportunity of giving relief this year to the Income Tax payer. I am afraid that he will find little consolation in the reflection that the hard necessity which has enforced this decision must have afforded much mental relief to hon. and right hon. Members who were so much disturbed a little while ago as to the distribution of an imaginary surplus. The fact is that the path of financial stability is not only hard and stony but long and weary, and, although we may now begin to see the light between the trees we have still far to go before we can emerge into easier ways. But at least the path may be made less arduous by mutual aid.
    I have already spoken of the wonderful response made by the taxpayer last January, but there is one feature of the national effort on that occasion which I want to mention now with particular appreciation. A number of local authorities and certain industrial concerns were public-spirited enough to undertake themselves to pay Income Tax for their employés, and allow their employés to pay them back by instalments. Altogether there were about 100 arrangements of that kind. It generally took the form of the employer finding the whole or part of the money and then recovering it from

    1431
    the employé by deductions from the monthly payments of his remuneration. In that way not only was the tax secured to the Exchequer, but the burden of the incidence on the employé was materially eased. There is no question that the demand for the major part of the Income Tax in one lump sum does weigh very heavily upon small households where there are no considerable reserves of cash, and any system which enables the payment to be spread over several months is bound to afford relief to the taxpayer.
    Unfortunately, it is impossible, for administrative reasons, to collect Income Tax by a number of instalments, and, therefore, the only way to secure a spread-over is to arrange, through the medium of the employers, for deductions from the monthly payments. I think it would be in the public interest that schemes of this kind should form a definite and permanent feature of our tax system. I want to make an appeal to local authorities and to large industrial concerns to come into arrangements of this sort. Of course, they would be purely voluntary. They would only be made with the assent of the employer and would only extend to such of the employés as desired to take advantage of it, but there is one important difference which I would propose to make from the special and temporary arrangements that were made last year. I do not propose to ask the employer to find the money in advance. I only propose to ask him to pay over to the Revenue what he has already actually deducted from the employé. The sort of idea is that if you take the instalment payable in January, the spread-over should be extended over all the six months, from October to March. The employer would, of course, hand over to the Revenue the amount of the tax which he had collected from the employé, at dates to be arranged between the 1st January and the end of March. A similar arrangement would apply for the July instalment.

    CHANGES IN TAXATION.
    The changes of taxation which I am going to propose are not many in number or large in character, but such as they are I think they are supported by weighty considerations which merit the attention of the Committee, in addition
    1432
    to providing me with the small amount of extra revenue that I require.
    I have received many pathetic appeals to try to alleviate the hardship which was inflicted upon the beer-drinker last September. Those appeals have been based not only upon the suffering caused to those who found their favourite beverage too dear, but also upon the disastrous results which, it is said, are likely to accrue to other industries concerned and the consequent failure of revenue in this direction. I must say that I have regarded these considerations with the sort of feelings with which an angler might regard a river that is being over-fished. In my opinion, beer is over-taxed to-day. But then what industry, what individual, is not overtaxed? In the circumstances in which I find myself, the paramount consideration must be present revenue. I am advised that if that 31s. per standard barrel were remitted, it would cost me something like £10,000,000 a year—and the Committee can see that I have not got it. Very regretfully, I have come to the conclusion that I can do nothing at present for beer.
    There is another subject to which I have given a good deal of consideration in the last few weeks, and that is the position of the co-operative societies. Under the existing law the co-operative societies enjoy a privileged position, in that they pay Income Tax only under Schedules A and B, and not under Schedules C and D, and it has been calculated that under A and B they pay about £500,000 a year less than if there were no exemption and the profits were charged to Income Tax as in the case of an ordinary trading business. The ordinary trading company pays Income Tax at the full standard rate upon its undistributed income. The co-operative societies, in their privileged position, pay much less, and that has given rise to vigorous and growing protests on the part of the general trading community, who say that a gross injustice is being done to them in thus favouring their trade rivals.
    Their grievance, I think, is accentuated by the fact that the principle of mutuality, upon which the privilege is based, is not being strictly observed. I am informed that some societies grant the whole, and others a part, of the privileges of members to non-members also, and no doubt that is done for the purpose of inducing the non-member to

    1433
    come into the fold. A part, though not the greater part, of those who came to me and advocated the taxing of cooperative societies went a good deal further. They contended that the so-called "divvy," or discount on purchases, was really in the nature of a profit, and that it ought to be taxed in the case of co-operative societies just as ordinary profits are chargeable to Income Tax in the case of trading companies.
    On the other hand, I need perhaps hardly say that all these contentions are disputed, and disputed with some heat, by the co-operative societies. The Government approached this subject without prejudice either for or against the co-operators, but they do think it is highly undesirable that our system of taxation should give rise to a burning sense of injustice, whether ill or well founded, on the part of any section of the community, and therefore they would very much like to see this dispute cleared up once and for all. In 1919 the Royal Commission on Income Tax considered this matter, but, as perhaps you would have expected from the composition of that body, they found themselves unable to reach unanimous conclusions, and there was a majority report in favour of the taxation of the reserves of the co-operative societies and a minority report against it. Since then conditions have changed in many respects. The Government think that there ought to be a new review of the circumstances by a differently constituted body. They have, therefore, decided to set up a small, impartial committee to investigate the matter—
    Sir WILLIAM DAVISON: Is there any time limit?
    Mr. CHAMBERLAIN: —and they hope that the result will be a settlement of this long drawn-out controversy, which can be embodied, if necessary, in legislation in the next Budget.
    Last year my predecessor took a first step towards changing the basis of taxation on motor cycles from unladened weight to cylinder capacity of the engine. The trade organisations have pressed the adoption of the latter basis, on the ground that it would give the designer a freer hand. After consulting the Minister of Transport, I propose therefore to complete the change 'by fixing the rates of
    1434
    duty at 15s., 30s. and £3, according to whether the engine is of a capacity not exceeding 150 cubic centimetres, exceeding 150 and not exceeding 250 cubic centimetres, and exceeding 250 cubic centimetres, respectively. The effect of this scale, which will come into force as from the 1st January, 1933, will be to reduce the duty payable on some cycles, but to increase it on a comparatively small number of cycles now in use which conform to the present limit of 224 lbs. in weight, though their engine capacity exceeds 250 cubic centimetres. To these existing vehicles I think it would be unfair to apply the increased rate of duty. I propose, therefore, that any cycle registered for the first time before the 1st January next on which duty has been paid at the rate applicable to a cycle under 224 lbs. unladened weight shall in future continue to be liable to the lower rate of duty applicable to cycles with an engine capacity between 150 and 250 cubic centimetres. The loss of revenue under this change is negligible.
    I come to another matter which has been causing great anxiety to the Government, namely, the position of the sugar industry, both at home and in the Colonies. We could not possibly contemplate with equanimity the collapse of either the beet-sugar industry at home or the cane sugar industry in our Colonial territories. On the other hand, the Committee will see that in the financial position which I have revealed to them it is absolutely necessary that any assistance which is offered to the sugar industry should be limited only to what is entirely and absolutely necessary. Taking the home industry first, the present subsidy for beet sugar is 7s. 3d. a cwt., including the molasses subsidy, and that will last for another two years, till 1934. But last year the then Labour Government, recognising that the price of sugar had fallen very substantially, undertook to give a temporary special measure of assistance to the industry in the shape of an advance of ls. 3d. a cwt., to be given for one year only to those factories which were prepared to pay a certain minimum price for beets to the growers. If you add to those two forms of assistance, making 8s. 6d. a cwt. in all, the difference between the Excise Duty and the Customs Duty on sugar, namely, 3s. 6d., you get a total maximum assistance given to

    1435
    the home sugar industry last year of 12s. a cwt. As the special assistance expires this year, if nothing is done that comes down to 10s. 9d.
    The Government, however, have decided that they will give again in 1932 the same assistance as was given last year, namely, 12s.; and to replace the ls. 3d. special advance which was given by the Labour Government, I propose to lower the Excise Duty on sugar by that amount. As to whether this concession should be continued in a future year, or as to what is to happen when the present Subsidy Act expires in 1934, I am not at present in a position to express an opinion, but with a, view to receiving guidance on this and other matters, the Government have further decided to appoint a Committee to inquire into the conditions of the United Kingdom sugar industry as a whole, including production, refining, and distribution, and to ask this body to report to them before the present Subsidy Act expires.
    5.0 p.m.
    I have also, in consultation with my right hon. Friend the Secretary of State for the Colonies, considered the question of assistance to the Colonial sugar industry. This Committee is aware that sugar has declined very seriously in price in the last three years. At the end of 1929, when the West Indian Commission reported, the average price of West Indian sugar was £12 per ton c.i.f. London. The Commission recommended a guaranteed price of £15 per ton. A little later Sir Francis Watts recommended a similar or equivalent price in the case of Mauritius sugar. Neither of those recommendations was accepted by the Government of the day. Since then there has been a further precipitate fall in the price, which has now come down to £8 2s. 6d. for preferential sugar c.i.f. London. I am told that to meet this fall the planters have reduced their costs to an extent which only a few years ago would have been thought impossible; but I think there is no doubt that they are in a desperate position, and that many of them are only just carrying on in the expectation that some relief will be obtained from the Mother Country.
    I have come to the conclusion that that request for relief is justified. Accordingly I am proposing that during the next
    1436
    five years there shall be an increase of is, per cwt. in the amount of the preference on all Colonial sugar imported into the United Kingdom, the duties on foreign and Dominion sugars remaining at their present rates. In addition I propose to grant during the same period a special supplementary preference equal to a further 1s. on a limited quantity of Colonial sugar to be allocated by the Colonial Office among the several producing Colonies in proportion to their total sugar exports. The limited quantity entitled to the second shilling is fixed at 275,000 tons for 1932. Both these preferences will be liable to adjustment if during the five years the sterling wholesale price of foreign full duty sugar rises beyond 7s. 6d. per cwt. The cost of these concessions, which date from to-morrow, I estimate at £1,100,000 in the present year.
    I have one small change to propose in the Silk Duties. This relates to the provision under which articles of apparel imported by a person for his own use and not for sale may, at the option of the importer, pay a specific duty on the weight instead of an ad valorem duty on the value. This concession was made in 1926, partly because in the case of a private person the retail and not the wholesale price of the imported article generally forms a basis of assessment for ad valorem duty, and partly because of the difficulty of the Customs determining values in the case of these private importations. I am not going to discuss now whether the use made of the concession has been as strictly confined to private purposes as it was at the time intended. Sufficient to say that under the Abnormal Importations Act the apparel for private use is being treated in exactly the same way as apparel for sale, and it is anomalous to follow one method under the Silk Duties and another under the new tax. In those circumstances I propose to repeal the concession as from to-morrow, so that all importations for apparel, whether paying Silk Duties or the new tariff duties, will be treated alike, that is to say, they will pay duty on the ad valorem basis. It is impossible to say what revenue is at stake, but I am taking credit for a small extra £25,000 from this source.
    These changes leave me with a deficit of £2,800,000, and in seeking for the

    1437
    wherewithal to fill this gap I would recall to the Committee the explanation which I gave during the Debates on the Import Duties Act, as to the presence, in the free list of that Act, of tea. I said then that if the taxation of tea were to be considered it could be considered more conveniently in the Budget, where it has held a place for hundreds of years—from the epoch of Queen Elizabeth down to that of my right hon. Friend the Member for Epping (Mr. Churchill). The duty on tea has been sanctioned by a long line of Chancellors of the Exchequer belonging to all parties of the State. In 1929, when the duty was removed, it was 4d. per lb. on foreign tea, with a preference of two-thirds of a penny for tea from the Empire. The duty at that time was bringing in to the Exchequer nearly £6,000,000.
    I propose to revive the duty upon foreign tea at the old rate, but the old preference of two-thirds of a penny per lb. seems to me to be totally inadequate to the present circumstances, and I propose to increase that to 50 per cent. making the duty on Empire tea 2d. a lb. This new preference will be the same as the preference originally was in the first years after the introduction of the system of preference, and it is notable that, whilst the preference was subsequently reduced in 1922 to 1⅓ pence, and then again in 1924 to two-thirds of a penny, the proportion of Empire tea to the total consumption of the country fell, first from 90 per cent. to 84 per cent., and since the preference was abolished with the removal of the duty it has gone down to 81 per cent. I am hoping that with a 50 per cent. preference we shall see the proportion of Empire tea regain its former figure in the process of time, and that meanwhile some help may be afforded to the hard-pressed tea industries of India and Ceylon.
    But I must mention that there are at present large stocks of tea in the country, perhaps as much as six months' supply. If I am not to lose half a year's revenue, which I certainly cannot afford, I must bring those stocks into my net. I find myself, therefore, compelled to impose a Duty upon them, and that Duty, of course, will be an Excise Duty. But in order to avoid the complication of trying to dissect into their Empire and foreign constituents the stocks of tea in the
    1438
    country, I propose to make the levy at the rate of 2d. per lb. As I do not want to be called upon to make an inquisition into the affairs of every little grocer in the country, I propose also to exempt from this Excise Duty all stocks in individual ownership not exceeding 1,000 lbs. in weight. I expect to get from the Tea Duty this year £3,600,000.

    BALANCE SHEET.
    With this receipt I can strike my final balance.

    £

    The Estimated Expenditure for the year is

    766,004,000

    The Estimated Revenue, adding in the £33,000,000 from the various Import Duties and taking account of the different changes I have outlined, will be

    766,800,000

    The Budget is, therefore, balanced with a small surplus of

    796,000

    I have now finished my exposition. I think it has been generally recognised that I have had to open my first Budget in circumstances of unusual difficulty. The whole country is crying out for relief from taxation, and many people believe that that relief will carry us a long way on the road to prosperity. To the people who have been cherishing expectations of anything of the kind the announcement that no relief shall be given to them is bound to cause disappointment, and at first perhaps even resentment. In such circumstances there would be a natural temptation to seek a little popularity by gambling on the future, to take a more optimistic view of the revenue, to propose some spectacular remission of taxation in the hope that the luck would turn and that justification would be found in the general revival of trade.
    But if such a temptation has occurred to me I felt it my duty to resist it, because I believe that nothing could be more harmful to the ultimate material recovery of this country or to its present moral fibre, than that we should indulge ourselves with hopes, possibly ill-founded, certainly premature, which might tempt us to relax the efforts which have already produced a wonderful revival of public confidence. To be obliged presently to retrace steps too hastily taken now, might

    1439
    well shake that recovered confidence past repair. On the other hand the exercise of continued restraint a little longer will surely bring us in the end a greater and more certain reward.
    Everyone who has ever scaled a mountain knows how the peak which seems so close as he approaches the base, vanishes from his sight the moment he begins his ascent. Again and again, as he continues to mount, he thinks he sees the summit, only to find that there is another ridge behind. There comes a moment when he turns a corner, when he beholds at last the goal of his ambition before him, and with only a few steps more, he stands upon the final crest. So too we of this nation, though as yet prosperity is hidden from us, can feel assured that, so long as our faces are turned upwards and our hearts are strong, we are moving in the right direction. One day, perhaps almost before we know it, we shall find ourselves upon our mountain top. Hard work, strict economy, firm courage, unfailing patience—these are the qualifications that are required of us, and with them we shall not fail.

    CUSTOMS AND EXCISE.

      1. TEA.
      Resolved,
      "That—
      (a) As from the twentieth day of April nineteen hundred and thirty-two, there shall on the importation into the United Kingdom of tea be payable a duty of Customs at the following rates—
      Tea, not being an Empire product within the meaning of that expression as used in Sub-section (1) of Section eight of the Finance Act, 1919 the lb. fourpence;
      Tea, being such an Empire product as aforesaid the lb. twopence:
      (b) An excise duty at the rate of twopence the pound shall be payable on tea which was imported before the twentieth day of April, nineteen hundred and thirty-two, and is in the ownership or possession of any person who holds more than one thousand pounds thereof, but not including any such tea which is shown to the satisfaction of the Commissioners of Customs and Excise to have been intended for use by the person in whose ownership or possession it was and not to have been intended for sale or for use in the preparation of a beverage for sale:
      (c) The enactments relating to the allowance of drawback on blended tea prepared
      1440
      from teas on which customs duties have been paid shall extend to blended tea prepared from teas in respect of which either of the duties payable under this Resolution has been paid."
      Mr. LANSBURY: It is the custom, I believe, that on the occasion of the Budget the serious discussion of the Chancellor's proposals is postponed to another day and I do not intend to depart from that custom this evening. It is also customary for someone on the Opposition side, usually either an ex-Chancellor of the Exchequer or someone who has been connected with the Treasury, to offer congratulations to the Chancellor of the Exchequer on his speech. It falls to me to do so this afternoon and if the right hon. Gentleman will allow me to say so, how ever strongly I disagree with him—and no one knows better than he how often and how vigorously I disagree with him—I have never at any time had anything but a keen appreciation of his courage, his ability and his intellectual honesty in putting his case. I have never been under any delusion as to the right hon. Gentleman's policy in connection with anything on which I have disagreed with him, and this afternoon he has presented this very difficult financial statement with his usual ability.
      I think in all parts of the Committee there will be agreement that while this statement may be good in parts, and while it may be bad in parts, at least a considerable amount of ability was required to compress it into the very short time occupied by the right hon. Gentleman. There are very few men in the House of Commons who would have performed the task equally well and certainly none who would have performed it better than the right hon. Gentleman has done. Having said so I should like to congratulate the Prime Minister on having persuaded the Cabinet to follow him at least in one direction, and that is in the policy that when you come to a stiff gate you should have a committee. The proposals in this Budget call for further congratulations to the right hon. Gentleman. It is certainly a matter for congratulation to him that he has two of the late high priests of the temple of Free Trade sitting side by side with him and supporting him in the heresy put before the Committee this afternoon.

      1441
      As to what Lord Snowden thinks about it all I would like to put him before the mirror of truth and compel him to reveal his mind. I should like also to know something from him upon another subject in regard to which I can again congratulate the Chancellor of the Exchequer personally. That is the question of the Land Tax valuation. The Chancellor of the Exchequer last year prophesied that Lord Snowden's Budget would be the last Free Trade Budget and I hope that the Home Secretary glories in the fact that he is taking part now in the presentation of the first Protectionist Budget after a long number of years. The right hon. Gentleman the Chancellor also prophesied last year that a lot of things would happen before the land valuation was put into operation. To-day he has the satisfaction of knowing that he has wiped that proposal out of our financial arrangements and any hon. Member who takes the trouble to read Lord Snowden's speech on the introduction of that proposal will find that Lord Snowden then said that if only the taxation of land values were adopted we would remove one of the greatest hindrances to trade recovery. What is a poor humble person like myself to say when these giants in the business of high finance disagree and agree to differ in this fashion?
      I was much struck by the Chancellor's statement that we had reached the limit of direct taxation and I would like to ask someone who speaks to-morrow on behalf of the Government to tell us from where this other money is coming. It is not coming from heaven or out of the sea. It is coming out of the pockets of people somewhere or other. The right hon. Gentleman may say, "Oh, the foreigner pays." [HON. MEMBERS: "Hear, hear!"] That is all very well but I ask hon. Members to recall that when the import duties were being discussed hon. and right hon. Gentlemen were on their feet declaring that this industry must be exempt and that industry must be exempt, or else British industry would be ruined. If the foreigner is paying what is the difference? The thing is too absurd. It is the people who consume who will pay.
      I only wish to say this in conclusion, because my hon. Friend the Member for Limehouse (Mr. Attlee) will deal faithfully with this Budget to-morrow. The
      1442
      fundamental difference between ourselves and the Government on this question of the condition of trade in this country is that we say that a restoration of trade and industry cannot be hoped for on any sort of policy which involves economic nationalism. You cannot expect and you never will secure any advance in the condition of the world except by international co-operation. We who sit on these benches hope that when the Prime Minister goes to Geneva he will go there determined that, not merely the question of War debts and reparations will be dealt with, but that the whole question of international trade and international exchange will be dealt with also. I could not be expected to understand completely all the Chancellor's proposals for dealing with exchange, but we are quite certain that stability will never be achieved in the world until there is a stabilised currency which applies not to one country, but throughout the world. We also believe that there can be no real peace in the world until the consumption of goods matches the production of goods. We do not believe that the world is suffering from want. We believe, on the other hand, that it is suffering because mankind has not yet discovered how to distribute the abundance produced by mankind. That is the position which we shall take up in the discussion of these Budget Resolutions.
      Mr. REMER: I wish to record my keen disappointment at the fact that the Chancellor of the Exchequer has not seen fit to make any alteration in the Silk Duties. I wish to enter the strongest protest against the fact that this should be the one industry of the country to be deprived altogether of any sort of protection. I think that is a monstrous thing, and I wish to indicate to the Chancellor of the Exchequer that Amendments having been drafted, in anticipation of the absence of any mention of the silk industry in connection with these proposals, we propose to move those Amendments during the Committee stage and to fight for those Amendments by every means known to Parliamentary procedure.
      5.30 p.m.
      Sir WILLIAM DAVISON: I hope that as chairman of the Income Taxpayers Society of Great Britain I may be allowed to say a few words on their behalf with regard to the Budget which has just been

      1443
      opened by the Chancellor of the Exchequer. I need not say that we regret that he has not felt justified in reducing the standard rate of Income Tax. This great load of Income Tax cannot be borne indefinitely by taxpayers. We know the expedients by which taxpayers met that Income Tax in January of this year, by borrowing from their banks and by postponing expenditure which was needed, thereby causing further unemployment. Indeed, the Chancellor in his speech to-day said that no longer is it possible to meet this taxation out of revenue, and that capital has to be sold in order to meet it. The Chancellor's speech has shown how the annual capital levy of the Death Duties has fallen off. The springs are gradually drying up; estates are halved and quartered by Death Duties, and the incentive to thrift is being undermined in all classes of the community. The hopes of the Income Tax payers were raised by speeches from you, Sir, earlier in the year on 4th February, when you introduced your tariff proposals—
      The CHAIRMAN: I do not quite understand the hon. Gentleman's reference suggesting that the occupant of the Chair introduced these proposals.
      Sir W. DAVISON: I was saying that the hopes of the Income Tax payers of the country were raised by the remarks of the Chancellor of the Exchequer in his speech introducing his tariff proposal on 4th February, when he testified to what the Income Tax payers had already done to help the country in its emergency. He said then:
      "I do not believe you can find anywhere else in the world such an exhibition of self-sacrificing and devoted patriotism as has been shown by the British taxpayer during the last year."—[OFFICIAL REPORT, 4th February, 1932; cols. 280–1, Vol. 261.]
      Later in the same month the President of the Board of Trade said:
      "The strain placed upon those direct taxpayers has gone fax enough, and the time has come when we ought to relieve them of some of that burden. If we do not relieve them we shall undoubtedly be doing injury to the people who are dependent upon them in the industries which are now requiring more and more capital".—[OFFICIAL REPORT, 9th February, 1932; col. 696, Vol. 261]
      It is indeed a serious thing for the industries of the country that this
      1444
      war taxation should be continued in time of peace. In our opinion, there is only one remedy. The Chancellor himself has said that we have come to the extreme limits of direct taxation. The only remedy is a drastic reduction in expenditure. Only yesterday I asked the Financial Secretary to the Treasury to give me particulars of the total numbers employed in the various Government Departments in 1913 and last year, and the total amount of expenditure in each of those departments. He put me off by giving me a long list of Blue Books in which I could obtain the information. I think that it would have been better in a matter of this importance if he had given this statistical information; it would not have taken an officer of his Department long to get it out.
      In the short time available, I have been able only cursorily to look into the matter, but it seems to me that there is not a single department, as compared with 1913, which has not enormously increased its expenditure and largely increased its staff. We shall never get a proper reduction of expenditure until the various departments of State are rationed on the 1913 basis. Is it indeed an extravagant proposal that, after a great war involving the loss of capital to this country of something like £7,000,000,000, we should put our expenditure at the limit of the year immediately before the War? Mr. Bonar Law, that very wise statesman, said that if we paid our debts and did not receive payment of our expenditure from our enemies, it would mean that the standard of living in this country would be reduced for two generations. The standard of living has not been reduced; to all classes it has been improved. Hence we have this enormous amount of unemployment and the large numbers of unfortunate people who are dependent on the dole.
      It is not usual for a long speech to be made on the opening day of the Budget, but as chairman of the Income Taxpayers Society, and on behalf of Income Taxpayers throughout the country, I wanted to voice the view that the limit of direct taxation has been reached, and that the only way in which the country can be restored to prosperity is by drastic reductions in expenditure. We do not want any further Commissions or in-

      1445
      quiries. This Government of all the talents may very well go down in history as the Government of impartial inquiries into truth. We want the Chancellor himself in the months that are coming to go wholeheartedly into this question of the reduction of expenditure. It is the only way in which taxation can be reduced, prosperity restored, and employment revived.
      Question put, and agreed to.

      SUGAR.
      Resolved,
      "That on and after the twentieth day of April, nineteen hundred and thirty-two,—
      (a) there shall be payable in the case of sugar consigned from and grown, produced or manufactured in a colony or other country to which this Resolution applies, in lieu of the preferential duties of customs now payable on such sugar, the following reduced duties:—

      Article

      Rate of Duty.

      In the case of sugar accompanied by a quota certificate.

      In any other case.

      s.

      d.

      s.

      d.

      Sugar of a polarisation exceeding 99 degrees the cwt.

      3

      6·5

      4

      8·2

      Sugar of a polarisation exceeding 98 but not exceeding 99 degrees the cwt.

      2

      7·2

      3

      8·2

      Sugar of a polarisation not exceeding 76 degrees the cwt.

      1

      4·2

      1

      10·8

      Sugar of a polarisation exceeding 76 degrees and not exceeding 98 degrees

      Intermediate rates varying, in the case of sugar accompanied by a quota certificate, between 1s. 4·2d. and 2s. 7·2d. the cwt., and, in the cane of any other sugar, between 1s. 10·8d. and 3s. 8·2d. the cwt.

      In this paragraph the expression 'quota certificate' shall mean a certificate issued by the Secretary of State certifying that the sugar in question forms part of the quantity of sugar which may be imported from the colonies and other countries to which this Resolution applies at the lower rate of the reduced duties payable as aforesaid:
      (b) There shall be payable, in lieu of the duties of excise now payable on sugar, the following reduced duties:—

      s.

      d.

      Sugar of a polarisation exceeding 99 degrees the cwt.

      4

      7

      Sugar of a polarisation exceeding 98 but not exceeding 99 degrees the cwt.

      3

      7.1

      Sugar of a polarisation not exceeding 76 degrees the cwt.

      1

      10.2

      Sugar of a polarisation exceeding 76 and not exceeding 98 degrees, intermediate rates varying between 1s. 10.2d. and 3s. 7.1d. the cwt.:
      (c) There shall be payable, in the case of molasses, glucose and saccharin consigned from and grown, produced or manufactured in a colony or other country to which this Resolution applies, in lieu of the preferential duties of customs now payable on such molasses, glucose and saccharin, the following reduced duties:—
      Molasses (including all sugar and extracts from sugar which cannot be completely tested by the polariscope), if the sweetening matter contained therein—

      s.

      d.

      amounts to 70 per cent, or upwards the cwt.

      3

      0

      exceeds 50 per cent, but does not amount to 70 per cent. the cwt.

      2

      2

      does not exceed 50 percent. the cwt.

      1

      0½

      Glucose—

      Solid the cwt.

      3

      0

      Liquid the cwt.

      2

      2

      Saccharin (including substances of a like nature or use) the oz.

      1

      6½

      (d) There shall be payable in lieu of the duties of excise now payable on molasses, glucose and saccharin the following reduced duties:
      Molasses (Including all sugar and extracts from sugar which cannot be completely tested by the polariscope), if the sweetening matter contained therein—

      s

      d

      amounts to 70 per cent, or upwards the cwt.

      2

      11

      exceeds 50 per cent, but does not amount to 70 per cent. the cwt.

      2

      1½

      does not exceed 50 per cent. the cwt.

      1

      0½

      Glucose—

      Solid the cwt.

      2

      11

      Liquid the cwt.

      2

      1½

      Saccharin (including substances of a like nature or use) the oz.

      1

      6

      (e) The colonies to which this Resolution shall apply shall be all the colonies except Southern Rhodesia, and the other countries to which this Resolution shall apply shall be territories under His Majesty's protection and territories in respect of which a mandate of the League of Nations is being exercised by the Government of the United Kingdom, being territories to which section five of the Import Duties Act, 1932, for the time being applies.
      (f) In the application of this Resolution to any duty chargeable on manufactured or prepared goods under section seven of the Finance Act, 1901, the first day of July, nineteen hundred and thirty-two, shall be substituted for the twentieth day of April, nineteen hundred and thirty-two.
      And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

      SUGAR (DRAWBACKs).
      Resolved,
      "That—

      (a) on and after the twentieth day of April, nineteen hundred and thirty-two, there shall, in lieu of any drawbacks which would otherwise be allowed in respect thereof, be allowed, in the case of the following articles, that is to say—

      (i) sugar on which there has been paid a customs duty at a colonial preferential rate or an excise duty;

      (ii) sugar produced in the United Kingdom from material on which such a duty as aforesaid has been paid;

      (iii) molasses produced in the United Kingdom from material on which such a duty as aforesaid has been paid;

      drawbacks at the rates provided in the following Tables, but subject to all provisions applicable to the drawbacks which may now be allowed in the case of sugar and molasses:

      Provided that—

      (i) the reduction of the rates or amounts of any drawbacks shall not have effect in relation to any goods as respects which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty was paid at the rates in force before the twentieth day of April, nineteen hundred and thirty-two;

      (ii) the grant of a specified amount of drawback in respect of a specified weight of any article includes the grant of a proportionately less amount of drawback in respect of any less weight.

      I.—Sugar.
      Degree of polarisation and rate or amount of drawback.
      Of a polarisation exceeding 99 degrees:
      Where the rate of duty paid was 4s. 8.2d., 3s. 6.5d. or 4s. 7d. the cwt., a drawback at the same rate as the duty paid.
      Where a customs duty was paid on the higher colonial preferential scale at a rate less than 4s. 8.2d. the cwt., a drawback at the rate of 3s. 10.9d. the cwt.
      Where a customs duty was paid on the lower colonial preferential scale at a rate less than 3s. 6.5d. the cwt., a drawback at the rate of 2s. 9.2d. the cwt.
      Where an excise duty was paid at a rate less than 4s. 7d. the cwt., a drawback at the rate of 3s. 9⅔d. the cwt.
      Of a polarisation not exceeding 99 degrees:
      Where a customs duty was paid on the lower or higher colonial preferential scale, a drawback equal to the duty chargeable on sugar of the like polarisation in accord-
      1448
      ante with the scale on which duty was paid.
      Where an excise duty was paid, a drawback equal to the excise duty chargeable on sugar of the like polarisation.

      II.—Molasses.

      Nature of molasses.

      Amount of drawback.

      Where customs duty paid on higher colonial preferential
      scale.

      Where customs duty paid on lower colonial preferential
      scale.

      Where excise duty paid.

      s.

      d.

      s.

      d.

      s.

      d.

      If containing not more than 50 per cent, of sweetening matter and weighing not less than 14
      pounds to the gallon.

      0

      11

      0

      8

      0

      11

      If containing more than 50 per cent, but not more than 60 per cent, of sweetening
      matter.

      1

      4½

      1

      0

      1

      4½

      If containing more than 60 per cent, but not more than 70 per cent, of sweetening
      matter.

      1

      10½

      1

      4

      1

      10

      It containing more than 70 per cent, but not more than 80 per cent, of sweetening
      matter.

      2

      6½

      1

      9½

      2

      6

      If containing more than 80 per cent, of sweetening matter.

      2

      11

      2

      0½

      2

      10

      (b) In this Resolution—
      The expression 'customs duty at a colonial preferential rate' means a customs duty charged by any Resolution passed in the present Session on sugar or molasses consigned from and grown, produced or manufactured in a colony or other country to which that Resolution applies;
      The expression 'the lower colonial preferential scale' means the scale of the duties chargeable under the said Resolution in the case of sugar accompanied by a quota certificate;
      The expression 'the higher colonial preferential scale' means the scale of duties chargeable under the said Resolution in the case of sugar not accompanied by a quota certificate.
      And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

      SILK.
      Resolved,
      "That as from the twentieth day of April, nineteen hundred and thirty-two, a person importing for his own use and not for sale an article of apparel made wholly or partly of silk (including artificial silk) shall cease to be entitled to the option conferred by Sub-section (2) of Section five of the Finance Act, 1926, of having the article charged with duty by reference to the whole weight thereof.

      1449
      And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act. 1913."

      AMENDMENTS OF IMPORT DIMES ACT, 1932.
      Resolved,
      "That it is expedient to amend the Import Duties Act, 1932, in the following particulars, that is to say:
      (1) The Treasury may be authorised, on receiving a recommendation from the Import Duties Advisory Committee, by order under the said Act to direct that goods of all or any of the classes or descriptions specified in the recommendation shall be removed from the First Schedule to the said Act.
      (2) Provision may be made for allowing, in accordance with a scheme prepared by the Import Duties Advisory Committee and approved by the Treasury, a drawback of any duties chargeable under Part I of the said Act, in the following case and subject to the following conditions, that is to say—

      (a) Drawback may be allowed—

      (i) in the case of goods manufactured in the United Kingdom, being goods of a class or description specified in the scheme;

      (ii) in respect of such quantity of any material of a class or description so specified as is contained in the goods or is specified in the scheme as being the average quantity of material of that class or description so contained, and as respects which it is shown to the satisfaction of the Commissioners of Customs and Excise, in accordance with rules to be made by them, that duty has been paid;

      (b) the rate of drawback, which shall be fixed by reference to weight or some other measure or quantity, shall be a rate specified in the scheme, and shall not exceed an amount equivalent to the average amount of duty paid in respect of material of the kind in question;

      (c) the drawback may be allowed for any period or periods whether continuous or not or without any limit of period;

      (d) the Committee in preparing, and the Treasury in approving, the scheme must be satisfied that, having regard to all the circumstances, including the interests of any producers in the United Kingdom of materials of the kind in question, it is in the national interest that drawback should be allowed as provided by the scheme.

      (3) Provision may be made for exempting from the duties chargeable under the said Act any consignment of machinery in respect of which the following conditions are satisfied, that is to say—

      (i) that the machinery belongs to a class or description to which the Import Duties Advisory Committee have recommended that the provisions of this paragraph should apply; and

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      (ii) that the Treasury, after receiving the recommendation from the said Committee to the effect that machinery of the kind in question is not for the time being procurable in the United Kingdom, and that it is expedient to allow its importation duty free, and after consultation with the Board of Trade, have by licence authorised such importation;

      (4) Provision may be made for the variation or revocation of any Order in Council made under the said Act declaring that section five thereof (which relates to colonial preference) shall apply to a territory in respect of which a mandate of the League of Nations is being exercised by the Government of the United Kingdom."

      BICYCLES (EXCISE DUTY).
      Resolved,
      "That in lieu of the excise duties now chargeable in respect of bicycles under paragraph (1) (a) and (b) of the Second Schedule to the Finance Act, 1920, there shall on and after the first day of January, nineteen hundred and thirty-three, be charged the following duties of excise, and references in any enactment to the full amount of the duties chargeable in respect of mechanically propelled vehicles shall be construed accordingly.

      Description of vehicle.

      Rate of duty.

      £

      s.

      d.

      Bicycles:

      Where the cylinder capacity of the engine thereof—

      (a) does not exceed 150 cubic centimetres

      0

      15

      0

      (b) exceeds 150 cubic cenmetres but does not exceed 250 cubic centimetres

      1

      10

      0

      (c) exceeds 250 cubic centimetres

      3

      0

      0"

      INCOME TAX.
      Charge of Tar.
      Resolved,
      "That—

      (a) income tax for the year 1932–33 shall be charged at the standard rate of five shillings in the pound, and in the case of an individual whose total income from all sources exceeds two thousand pounds, at such higher rates in respect of the excess over two thousand pounds as Parliament may hereafter determine;

      (b) all such enactments as had effect with respect to the Income Tax charged for the year 1931–32 shall have effect with respect to the Income Tax charged for the year 1932–33.

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

      HIGHER RATES OF INCOME TAX FOR 1931–32.
      Resolved,
      "That Income Tax for the year 1931–32 in respect of the excess of the total income

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      of an individual over two thousand pounds shall be charged at rates in the pound which respectively exceed the standard rate by amounts equal to the amounts by which the rates at which Income Tax was charged in respect of the said excess for the year 1930–31 respectively exceeded the standard rate for that year.
      And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

      INCOME TAX (VOLUNTARY PENSIONS).
      Resolved,
      "That—

      (a) Where a person has ceased to bold any office or employment and any pension or annual payment is paid to him, or to his widow or child, or to any relative or dependant of his, by the person under whom he held the office, or by whom be was employed, or by the successor of the last mentioned person, then, notwithstanding that the pension or payment is paid voluntarily or is capable of being discontinued, it shall be deemed to be income for the purposes of assessment of income tax and shall be assessed and charged accordingly;

      (b) For removal of doubts it is expedient to declare that the words 'annuity' and 'pension' in the charging provision of Schedule E to the Income Act, 1918, and in Sub-section (1) of Section seventeen of the Finance Act, 1923, include respectively an annuity and a pension which is paid voluntarily or is capable of being discontinued.

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

      STAMP DUTY.
      Local Authorities Audit.
      Resolved,
      "That section sixty-one of the Finance Act, 1921, shall have effect and shall be deemed always to have had effect as if, in all cases whatsoever where by virtue of any enactment the accounts of any local authority are subject to audit by district auditors, it required the stamp duty chargeable in respect of the audit to be calculated in accordance with the scale fixed under that Section."

      AMENDMENT OF LAW.
      Resolved,
      "That it is expedient to amend the law relating to National Debt, Customs and Inland Revenue (including Excise, but not including the Law contained in the Import Duties Act, 1932, save as may be provided by any other Resolution passed in the present Session) and to make further provision in connection with Finance."—[Mr. Chamberlain.]
      Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Commander Southby.]
      Resolutions to be reported To-morrow.
      Committee also report Progress; to sit again To-morrow.
      The remaining Orders were read, and postponed.

      ADJOURNMENT.
      Resolved, "That this House do now adjourn."—[Commander Southby.]
      Adjourned accordingly at One Minute before Six o'Clock.