HC Deb 26 May 1932 vol 266 cc666-94

As from the first day of January, nineteen hundred and thirty-three, the Second Schedule of the Finance Act, 1920, shall be amended by the substitution in paragraph 6 of the words: Exceeding 6-horse-power and not exceeding 12-horse power: £1 for each unit or part of a unit of horse-power in excess of 6-horse-power.

Exceeding 12-horse-power and not exceeding 20-horse-power: £12 and 10s. for each unit or part of a unit of horse-power in excess of 12-horse-power.

Exceeding 20-horse-power. £16 and 5s. for each unit or part of a unit of horse-power in excess of 20-horse-power.

for the words:

Exceeding 6-horse-power: £1 for each unit or part of a unit of horse-power." — [Captain Strickland.]

Brought up, and read the First time.

Captain STRICKLAND

I beg to move, "That the Clause be read a Second time."

9.30 p.m.

If this Clause is carried by the Committee, I believe it will be of the greatest possible benefit to the motor Trade, and will largely affect employment in that trade. There has been a continual annual rise in the number of cars in use in this country. In the year 1922, the number of cars licensed was 315,000. In the year 1931, the number had risen to over 1,076,000 cars. There was an annual increase of 29.2 per cent in the number of cars that were actually licensed annually in those years. The receipts from the Inland Revenue in that period increased by 36.1 per cent between the years 1922 and 1931. The point I want to emphasise is that, although this great increase has occurred in the number of cars licensed, and in the total revenue which has accrued to the Exchequer, the average rate obtained for cars in the country has shown a gradual decline. Had these duties been spread over the whole range of horsepower in which cars are produced, there should have been a considerable increase in the average per car, but there has been a steady fall since 1922. In that year the average duty per car was £15.5, and in 1931 it had fallen to £12.5, a decrease of no less than 19 per cent. Since 1922 there has been a gradual diminution in the horse-power of the cars produced, and a gradual fall from what may be called the average horse-power car down to the lower grades of car which are in more popular use in the country. These smaller cars are being purchased to-day in very much greater numbers than in former years, and that process is continuing.

There are certain reasons which contribute to this fact. There is, of course, the fall in purchasing power which has necessitated people buying smaller-powered cars. This demand for the small power car which is made by mass production has enabled the manufacturer to reduce the price continuously, so that there is a great demand to-day for these low-power cars to reach the limited purse. The effect has been two-fold. There has been the effect on the home market, and side by side with it we have had the effect on the export trade, due to the mass production, and by the great efficiency of our British motor trade the British small car stands preeminent for mechanical efficiency and reliability of workmanship. It has a much lower petrol consumption, which has a great effect on the revenue produced to the Exchequer. At home, we have entirely beaten out the foreign competition. In the first four months of this year imported cars numbered only 396 against a total of no less than 5,199 in the first four months of 1928. That is due to the protection given to the British motor industry, and there has been a steady growth in the employment of men in the industry. In the first four months of this year we exported 8,771 cars as compared with 5,923 in the first four months of 1928. This increase in our export trade has been mainly due to the low tax on the horse power of these smaller cars which are produced by mass production, and it has enabled us to place the cheap car on the foreign market.

This country is the most heavily taxed motor country in the world, being taxed on horse power. What has happened side by side with the increased production of the smaller cars in this country has been a great and distinct fall in the manufacture of the higher powered cars. The higher powered cars cannot be introduced for use in this country because of the extraordinarily heavy tax which is at present imposed upon them, and that means that not only are we losing in the production of the higher powered cars in this country but we are also debarred from being able to place on the foreign market the higher power cars that they require on their rougher country roads as compared with the better city roads. That is a very great detriment to the motor trade, and our Amendment is designed to meet that case. If we could by means of the Amendment lighten the tax on our higher powered cars we might enable the higher powered cars to be run in this country in sufficient numbers to make mass production a business proposition, which would enable our manufacturers to turn their attention to the export trade in this particular class of car, which is wanted in our own Dominions and in other countries abroad, from which trade the British manufacturer is entirely cut off, to his own detriment and that of the nation in consequence of our heavy motor taxation.

I appeal to the Chancellor of the Exchequer to give the most careful consideration to this point, and I do so for the reason, first and foremost, that there is an extraordinarily large market abroad for the high powered cars. If we could enter the market against the foreigner there would be something like 100,000 additional cars made in this country of the higher powered type. But it is essential that we should lower the taxation if we are to encourage that production. We are going to hold the Ottawa Conference. There will be a suggestion that this country and the motor manufacturing Dominions should have a chance in the Empire market. Now is the time when the Chancellor of the Exchequer should be able to give an assurance in the terms of this very reasonable Amendment, which would not mean a great loss of revenue to the Exchequer, or, if he is unwilling to accept the Amendment, he should undertake to appoint a technical committee on the lines of the recommendation made by the Departmental Committee on the Taxation and Regulation of Motor Vehicles, 1923, in their Third Report, when they said: In our opinion this aspect of the question should he taken into consideration by the technical committee which we recommend should be set up to consider the whole question of horse-power taxation. It may be said that the acceptance of the Amendment will mean a loss of revenue. I believe that it would mean a slight loss of revenue, but it would not run into millions of pounds. There might be a slight loss of revenue on the high powered cars for the time being, but I appeal on the ground that not only should we be employing many more men in the motor trade who to-day are un- employed, but that we should also be getting the benefit generally that comes from improved trade. Side by side with that we should be producing a car inside this country whose petrol consumption would be on a much higher scale than is the case with the smaller cars that are run so much in this country. Therefore, on balance, there might be a small drop in the revenue from the horsepower tax, but we should find that more people would be employed and that we should receive more in Petrol Duty in consequence of the greater use of the higher powered cars. Therefore, I urge upon the Government the acceptance of the Amendment. Failing their willingness to accept the Amendment I ask that they should undertake to appoint a committee of inquiry into the taxation of motor cars to take place immediately, so that when we go to Ottawa we should have a chance to say: "We in England are prepared to supply the cars you want and the type you want for your rough roads in the country districts as well as the better roads in your cities and towns."

Dr. O'DONOVAN

I support the Amendment not as a motor manufacturer, not as one interested in the manufacture or the selling of motor vehicles, but from the point of view of the encouragement of the transport industry. The lesser the tax the more people will be inclined to use motor transport and the greater encouragement will be given to trade already labouring under difficulties. Perhaps two of the greatest reasons for using the roads, apart from pleasure, are the transport of food and drink. If we do anything to maintain the high mice of food or drink we are taxing food and drink just as much as if we put a tax on at the ports or in the shops. Anything that lessens the cost of transport of food and drink is a gift and a help to the very poorest in the community. Water is transported in pipes at no expense to anyone save the ratepayers, but beer is transported either in railway trains or motor lorries. We know that the Chancellor of the Exchequer is a man extremely hard up, and therefore has to affect a hard heart, when we know that it is of a softest consistency. But we know that it is almost useless to approach him with any blandishments to attempt to reduce the present taxation upon beer, which is an article of national consumption.

The CHAIRMAN

I am afraid that the hon. Member does not realise the Amendment that is before the Committee.

Dr. O'DONOVAN

If I may explain myself more plainly, I may say that I am trying to indicate that if we do anything to cheapen the transport of an essential article of diet we are doing something to lessen its price. Anything which encourages the manufacture of cheaper motor transport is essentially a help to those who manufacture food and drink. It is a help to enable them to sell at a lower price, and I think it is legitimate to put forward that appeal to the Chancellor of the Exchequer. If he can give nothing with his big right hand, perhaps he might give a little with his left hand. It is because I see little hope of appealing to him directly on the merits of beer, that I appeal to him indirectly on the question of motor transport. There are hundreds and thousands of men who are earning a most honest income in the motor transport trade, and those who are transporting beer are a part of the community who—

The CHAIRMAN

The hon. Member's application of his argument to the Amendment certainly does make it relevant, but I must ask him to devote himself to the point of transport and not to the virtues or otherwise of the articles which he is transporting.

Dr. O'DONOVAN

I accept your instructions in the most filial spirit. I only press the point for those who are unwilling to hear, for those who are hard of hearing, and for those who are hard of heart. It would be a great encouragement to those who employ motor transport in the transport of beer and food if the Chancellor of the Exchequer would accept the Amendment, or promise to give it consideration during the year.

Sir P. HARRIS

I would like to support the plea for consideration of this matter by a committee. Every Chancellor of the Exchequer has undertaken to consider the question of the basis of the horse-power tax. I am familiar with the conditions in some of our Dominions. Up to about 12 months ago the greater part of the trade in New Zealand and Australia was held by the American producer entirely on account of the horse-power tax in this country. Where-ever they could they bought the British article, and they will always endeavour to do so, but, unfortunately, the low-power car which has been stimulated in this country by the basis of our taxation, although suited to the smooth flat roads in England with their easy gradients, is quite useless in mountainous country and on rough roads, in an undeveloped country with practically no road surface at all. Sir William Morris made a brave effort to produce a car suitable for the Colonial trade. He designed a Dominion car about 18 months ago with great success, so much so that during the last 18 months there has been a complete change-over in New Zealand and the import of British cars has overcome the American trade. That shows what can be done. But more can be done if there was a change from the horse-power tax so that mass production of cars for Dominion trade as well as for British trade might be stimulated. It would be a great thing to send a message to British manufacturers, who are feeling the general trade depression —there is not the demand in the home trade which there was a few years ago, and they have to look more and more to the world trade to keep their factories in full time—that a commission or committee is to be appointed to consider the whole question of the basis of motor car taxation.

The MINISTER of TRANSPORT (Mr. Pybus)

I have listened with great interest and complete sympathy to all the arguments which have been put forward regarding the export trade for British cars. I cannot, however, agree with the hon. Member for South-West Bethnal Green (Sir P. Harris) that the desirable end he has in view will be attained by setting up a committee to inquire into the question. It is an important and very far reaching question. The new Clause deals with a different matter. It deals with a reduction of the horse-power tax on high power cars, leaving the tax on small cars at the same amount as it is now. We have to look at this from various aspects. Hon. Members who have supported the Amendment have done so with the mistaken understanding that it would cost very little. As a matter of fact, it would cost, according to our computation, no less than £1,250,000 this year, an amount which cannot be described as small and which is a loss we are not prepared to face at the moment. We are not justified in removing or decreasing the tax on the high power luxury cars in this country and leaving the tax on cars up to 12 horse-power on its present basis. May I give one or two figures. On a 16 horsepower ear the tax would be reduced, if this Clause were passed, from £16 to £14. On a 30 horse-power car it would be reduced from £30 to £18 10s., and on a 44 horse-power car, which is the Rolls-Royce class, it would be reduced to £22.

Captain STRICKLAND

Would not the Minister sooner have a receipt of £18 10s. on a 30 horse-power car than a receipt of £12 on a 12 horse-power car?

Mr. PYBUS

The hon. and gallant Member is going on the assumption that everyone who now drives a 12 horse-power car would drive a 30 horse-power car, and as I say that is an assumption which we cannot accept. Therefore, in view of the great loss to the revenue which would result and without being in any way unsympathetic to the motor car industry I cannot accept the Amendment. Like the hon. Member for South-West Bethnal Green, I have travelled abroad a good deal, and I have been hurt to see so few British cars and so many foreign cars in our Colonies and Dominions, but at the same time I do not think that the solution of the problem for this year at any rate lies in the direction of a reduction in the revenue of £1,250,000. I will promise to consider very carefully whether an inquiry should be made as to a change in the method of assessing the taxation of motor cars which, while not damaging seriously our own revenue, might assist the export trade. Beyond that I cannot go. I trust the hon. and gallant Member will withdraw the Amendment.

Captain STRICKLAND

Do I understand that the Minister of Transport is prepared to appoint a committee of inquiry?

Mr. PYBUS

I am unable to go as far as that. I said that I would consider carefully whether an inquiry should be made.

Sir ROBERT H0RNE

I am very loth to interfere in this discussion, but I confess that the reply of the Minister seems to be somewhat obscure. The importance of this matter can scarcely be exaggerated. Everyone who has travelled knows that the sale of British cars in the younger countries of the world, where you have not the splendid roads which we have here, has been greatly impeded by the fact that manufacturers in Great Britain are compelled by the type of taxation imposed upon them to design a car with as low a power as possible, which is still able to manipulate the smooth surfaces they get on the roads generally in the British Isles. The result has been that so far as Canada and South Africa, Australia and New Zealand and India are concerned, the sale of British cars has been greatly decreased, by reason of the fact that we do not make cars of sufficient power to compete under the conditions with which cars in those countries are met.

All over the countries that I have mentioned you find American cars of high power which can take any sort of country in their stride, whereas the British car is at a hopeless disadvantage. There is no question at all that this has been achieved because the British manufacturer has been circumscribed in the type of his manufacture. Everyone knows that the cheapness of a car depends on the number of a certain model which can be produced. The British manufacturer has been accordingly compelled to manufacture a car for his home market, whereas the American manufacturer and manufacturers in other countries have had not only their own country to provide for, but all the other countries of the world have been open to them and they have been able to indulge in mass production

That is the real problem. I hope that the Minister is facing it. There may be difficulties in connection with the Exchequer. I know that the Chancellor of the Exchequer may find it difficult to forego a certain amount of revenue which he derives from this taxation. I was so bold as to do what I seldom do, that is to write a letter to the newspapers after a protracted tour of some of our Dominions two or three years ago. In that letter I set forth the very difficulties which have been described by the Mover of this new Clause. I advocated a system of taxation upon motor cars so that the British manufacturer should be as free to make the type of car which would be universally suitable as were his competitors elsewhere. I would not be indulging in the repetition of arguments which I have put before the country for some years if I were assured that the Minister realised the problem with which we are confronted. I must confess that I have no assurance of that kind in my mind after having listened to his speech. We wish for something much more definite from him. We want to understand that the problem is to be confronted with a serious desire to meet its difficulties, certainly before we come to the conference at Ottawa, in a country where this matter is very well understood.

We have been saved from absolute disaster in the Dominion markets by the extent of the preference given to us. I myself have had a little to do with certain negotiations in connection with increasing the preferences in New Zealand and Australia, for the very purpose of seeking to protect us from the disastrous effects of British taxation. I beg the Minister to assure us that he has this matter really in view, and that he intends to cope with it in a way which will enable our motor-car makers to compete in all markets of the world upon conditions which give them a competitive chance. I hope that the Minister is going to tell us a little more than he has already confided to us.

10.0 p.m.

Lord APSLEY

I was not going to ask the Minister to accept this Clause, because I knew he had no power to do so. The Financial Secretary would not allow him, and he is not here. Even if the Financial Secretary were here the Chancellor of the Exchequer would not allow him to accept the Clause. But now that the Lord President of the Council is present, I wonder whether I might be bold enough to ask him to consider this matter very carefully and to see whether it cannot be dealt with on the Report stage of the Bill. My right hon. Friend the Member for Billhead (Sir R. Horne) said that the matter should be decided before the Ottawa Conference. It is a matter of importance not only to this country but to the whole Empire.

The Minister of Transport knows full well that the horse-power tax is now obsolete. It has served its purpose very well indeed in the past. It was responsible for the fact that we drove American cars off the market in this country. At that time we had not got a reasonable tariff system which could have effected the same end in a different way. But now that we are protected by a reasonable tariff system the horse-power tax is no longer required. While the tax drove American cars off British roads, it also drove British cars off the open spaces of Australia, India, Africa, South America, and other countries.

I ask the Minister to consider the matter very carefully indeed. He said it was a question of taking the tax off the higher powered cars and leaving it on the smaller powered cars, and he quoted the case of the Rolls-Royce car. I myself have a Rolls-Royce car. It is a most excellent car and works beautifully, and I bought it for £130. It is a poor man's car, for the simple reason that there is no market for the second-hand Rolls-Royce, because to own such a car costs £50 a year. Yet the car is one of the finest productions of British engineering. It is undoubtedly because of the horsepower tax that the car is prevented from getting a market. I ask the Minister to consider very carefully whether we cannot have, on the Report stage, such a revision of the horse-power tax as is suggested in this new Clause. That would allow us to produce the car of big horse-power, and it would not affect revenue owing to the increased use of such cars.

Major BEAUMONT THOMAS

I must confess to a little disappointment with regard to the answer of the Minister of Transport. The new Clause at any rate has produced a scheme of some kind, and I think we are entitled to have from the Government a statement that if this scheme is not adopted some other scheme will be considered in the near future. Behind the McKenna Duties we have built up in this country a most important, industry, which employs directly and indirectly many hundreds of thousands of people. But it cannot expand any further. We have no competition in our home market, but our export market is closed. Because of the system of motor taxation carried on by successive Governments we have a design of motor car suitable for this country but absolutely useless for export purposes. What we want to do now is to expand our motor industry by producing a car which is suitable for the export trade. We are entitled to ask for help from the Government for this industry so that we can expand the export trade. The Minister of Transport says that this proposal would affect revenue. I believe that it would increase revenue. We want to encourage people to buy cars of higher horse-power, but that does not necessarily mean luxury cars. There are cars of higher horsepower which could not properly be described as luxury cars, but are general utility cars and it would be much easier to put cars of that type into the export market. I add my support to the suggestion that in the near future and at least before the Ottawa Conference— because this will be a most important matter at the Conference—some inquiry, not a committee, should be started with regard to this question of the horsepower tax.

Lieut.-Commander AGNEW

I ask the Minister, when he is inquiring into the system of taxation of motor cars, to consider the introduction of an entirely different form of motor taxation by means of an ad valorem duty. Such a method of taxation would apply fairly to all classes of the community and people would pay to the Exchequer according to their means. It would have another important effect. It would enable British manufacturers to produce for the home market a high-power car and yet sell it cheaply—a car of the mass production type which would be suitable also for exportation to the Dominions. I do not think that the Chancellor of the Exchequer by adopting such a method of taxation would be depriving the Exchequer of revenue. There would still be a demand for cars of the high-class and more expensive type such as the Rolls Royce. I ask the Minister to give careful consideration to the idea of an ad valorem duty.

Mr. HALES

I wish to trespass on the time of the Committee for a few moments in order to throw out a few hints which I think may be of benefit to the Ministry of Transport in the near future. For 35 years I have been connected with the motor industry. I believe I had the first motor car in Staffordshire in 1897 and from that time onwards I have been on the road in cars. Sooner or later, and the sooner the better, we have to realise that our taxation arrangements will have to be reorganised from top to bottom if we are to hold our industry together. A few months ago I was through the Dutch East Indies and there was hardly a British car to be seen from one end of Java to the other—a 600 mile trip—for the simple reason that our horse power is too small and too rapidly running engines are not suitable there, with the result that American cars have swept the board. The same remark applies to India where formerly we had not above 5 per cent of the business. Now, is it a little more, but the running of cars there is mostly in the towns, to which our small cars are suited. But in Malaya, China, Japan, Siam, in fact the whole East the same remark applies, namely, that we must make a car of bigger horse-power and make it so that the model can be adapted to the purposes of oversea trade. That is a sine qua non if we are going to hold our trade.

We are face to face with the position that the Ford works which have been inaugurated at Dagenham could make the whole output for England if they got the orders. There is now the possibility of only six or eight English manufacturers surviving the competition which has now to be faced. In Wolverhampton the Star works, one of the oldest factories in England is up for auction and the goods are being sold out—bankrupt! The same thing could apply to other well-known firms and I beg of the Minister that he will give this matter immediate attention. I make that appeal as one who knows and one who is speaking with authority. I am not an alarmist. I am an optimist but I say that we have to grapple with the position and we must not allow laissez faire to take the place of downright thorough going practical effort to save our business.

I feel that the Committee will allow me to express my opinion because I am not talking through my hat. I am dealing with a matter about which I know something. I have sold British cars all over the world, and you have to go out on a commission basis, paying your own expenses, to get your living as the result of your sales, to find out what British trade is up against. Manufacturers would ask me if I could sell their cars, and I would say, "Yes, I can sell a small quantity, but before I can sell a single car in a foreign country they will say, 'What about the spare parts?'" In those countries, if you have a broken axle perhaps thousands of miles away from anywhere, you cannot telephone and have a new one sent on by the next train. I can sell a car in Calcutta to-day, but the purchaser will insist on being able to get the parts as required. That car has to be made so as to suit local conditions, and so that the purchaser can be assured that he will be able to get anything he requires in connection with the car without having to wait for three months to have it sent out from the factory in England.

It is no use putting our heads in the sand like the ostrich and pretending that there is no danger. We are in a ridiculous position, just as we were in 1896 when the law compelled a red flag or a red light to be carried in front of every car here, and France ran away with the trade while we were pulling up our socks. The trouble is that we keep on thinking of what we are going to do to-morrow, while the foreigner does it to-day and takes our trade. I wish that I could take Members of this Committee with me on my journeys abroad, because until you get out of these islands you do not realise what we have to face in business competition. You are sitting in a fool's paradise as far as trade is concerned. We men who are out in the front trenches know what is happening, but those on the Treasury Bench only hear the rumbling of the guns. But if you cannot go out to see what is happening you should listen to those who know what is happening and can put you on the right road to prosperity, and that is why I ask you to listen to me.

Captain NORTH

I hope the Minister, when considering the method of raising revenue from the motor car industry, will not exclude an entirely new system of taxation. There are three methods by which we can obtain revenue from the motor car industry. The first is on the motor car itself, the second is on the fuel which it consumes, and the third is on the tyres on which it runs. It seems to me that much the fairest and best way of obtaining taxation from motorists is not by a horse-power tax at all, because I think that has proved to be a very ruinous taxation of the motor trade. Much the best and fairest way, I am convinced, is by weight, by the unsprung weight of the motor car. You can get a perfectly fair revenue from a taxation on weight, and at the same time you will not stop the motor manufacturer from designing a motor car which will sell, not only in this country, but in the Dominions; and, after all, that is what is wanted. I suggest to the Minister that if and when he makes an inquiry into the whole present system of motor car taxation, he should remember that probably one of the best and fairest ways of raising revenue from this source is by weight, by taxation on fuel, and by an Excise Duty on the tyres.

Mr. HERBERT WILLIAMS

It has been obvious for many years that the export trade in British motor cars has been gravely hampered by the fact that the design of motor cars has been influenced by considerations that have had nothing to do with engineering but have been solely related to taxation. By training, I am an engineer, and I am aware of the series of circumstances as a result of which we have deprived thousands of our own people of employment and of the opportunity of building up great markets, not only in foreign countries, but in other parts of the British Empire. You cannot talk to any inhabitant of any part of the British Empire, where the roads are not quite of our quality, but they will tell you that the fact that our cars have high-speed engines and relatively low acceleration compared with American vehicles is an outstanding reason why our vehicles are not bought in a great many countries. I do not suggest that the Clause now under discussion represents a complete solution of this problem, but I urge most strongly on His Majesty's Ministers that they should give some undertaking that they will examine the situation, because I believe that this Clause would not only solve the problem, but would also yield to the Exchequer a larger revenue than they are getting now.

A large number of people to-day buy low-powered cars because of the excessive taxation on the high-powered cars. The sliding scale which we suggest in this Clause would have the effect of inducing a great many people to buy high-powered cars, because as a result they would not be paying very much more in taxation—a little more—and they would get the service; and, if you consider the point of view of public safety, I believe I am accurate in suggesting that a large proportion of the accidents that take place in this country are due to the inability of people driving low-powered cars to pass the large vehicles that they find on the road to-day. The quick acceleration car is the safest vehicle to drive. I do not expect the Government to accept this Clause to-night—it would not be reasonable to accept such a complicated scheme at such short notice—but I hope they will seriously take into consideration this point, which, if dealt with adequately, will probably in the future provide employment for tens of thousands, increase the safety of our roads, and yield an increased revenue as well.

Mr. PYBUS

I have listened with very great interest to the speakers who have given their opinions on this Clause since I last spoke. I can assure my right hon. Friend the Member for Hillhead (Sir R. Horne) that both myself and the Ministry are fully aware of the difficulties in which it is said the present position of rating of horse-power taxation places the British car manufacturer regarding the export of his ears, but the Clause before the Committee is really not the Clause which has been debated at all. The right hon. Gentleman and those who followed him have put forward nothing less than a proposal that the method of taxation by horse-power rating should be abolished, and that some other system should take its place. If that be so, and if there be a good deal to be said for a reconsideration of this method of assessment of taxation, I shall be very glad to bring the matter to the attention of my right hon. Friend the Chancellor of the Exchequer, and, in consultation with him, take any steps that we may consider necessary in order that the trade and those concerned can put their views before us on this important question and give it proper consideration.

Captain STRICKLAND

I thank the Minister of Transport for the way in which he has received the suggestion. I want to emphasise the urgency of getting this matter decided before our representatives go to Ottawa. I urge that point because of the effect it will have on employment. I am sorry that with the Lord President of the Council here we have not had a definite promise of an inquiry. It will not cost the Government much to promise that there shall be a definite inquiry made into this question without prejudice, and I appeal even now to the Minister of Transport to promise us that an inquiry will be held by a technical committee that understands the matter and that this shall be taken in hand at once. It cannot affect the Exchequer, but if it is carried into effect we shall get an expert opinion which will be of the utmost value and help our representatives in Ottawa to capture this big car market which is ours for the asking.

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

Mr. CHURCHILL

I beg to move, That the Chairman do report Progress and ask leave to sit again. I venture to rise to move this Motion in order to elicit from the Government a statement of how they view the situation which has arisen this evening owing to the accidental non-discussion of the proposed new Clauses relating to the Beer Duty. [Laughter.] It is not a matter for laughter. The Government opposed these new Clauses, and I had no intention of voting against the Government, but there are enormous numbers of people, reputable and worthy people, whose trade, livelihood and interest are involved in this matter, and if by a mere accident the discussion of it was prevented, and there was, as it were, no vocal expression of the feelings that exist upon the subject, no statement of the case with all its hardships, no admonitory exposition to guide the finance for future years—if that were to take place, I venture to think that it would be deeply injurious to the Government and to the Conservative party. I know that my right hon. Friend the Leader of the-House is not a man to take small points or to take advantage of any accident of this kind. He has his duty not only as leader of the Conservative party, but as Leader of the House, to see that fair play and good and equal treatment are administered over the whole area of public business.

I have no complaint against the Government at all. They have done absolutely nothing wrong. The fault rests, undoubtedly, with those who were in charge of these important Amendments. I am stating the case quite fairly—the fault lies with them. My hon. Friend the Member for Canterbury (Sir W. Wayland) has been incessant in his attendance in the Chamber. [Interruption.] I mean it. I say he has been incessant in his attendance. [HON. MEMBERS: "Where was he? "] If hon. Gentlemen think this is a joke they are making a very great mistake. These great industries have to suffer in these hard times, but there ought to be a full statement of their case, and, even supposing a fault or error has been committed by an individual—as a matter of fact his was an absence for only two minutes out of an hour or an hour and a half when this matter was likely to come on—it is altogether unworthy of His Majesty's Government—it would be unworthy, I do not say it is— or of the House of Commons to penalise this trade and this interest in this way. They must offer us a Debate, a reasonable opportunity of discussion. [Interruption.] I do not say anything that the Government have done is unworthy; on the contrary, they have done nothing. No one is in the wrong except those who now appeal to the Government, but we are quite determined, and in my judgment it rests with the Government to offer some solution of this difficulty. [HON. MEMBERS: "Why?"] Because it will fee in the general interest that that should be done. [HON. MEMBERS: "No!"] I hear some Liberal cries of "No"—[Interruption]—well, they are all mixed up with us on these benches— but I invite the Government to offer us some consideration in this matter. In any case, it would be undesirable that this subject should be discussed so late at night as this. No one is seeking to challenge the view of the Government, they are going to have their tax, but there ought to be an opportunity for the case to be stated, and the fact that it has been missed by accident will, I am sure, not be treated by my right hon. Friend in a harsh spirit, or in the un-chivalrous spirit which some of the cries behind me have indicated.

10.30 p.m.

Mr. LANSBURY

I would like to say a few words on this subject. We who sit here have submitted, have been obliged to submit, to a series of discussions of a purely academic character in which right hon. Gentlemen and others have engaged, though knowing full well that at the end of those discussions there was to be no vote taken, that it was simply a matter of airing their particular views. Right hon. Gentlemen have walked into this House at particular moments and claimed the right to occupy the time of the Committee, to usurp the time which otherwise might have been available to ordinary private Members, putting them to the inconvenience of having to sit here hour after hour on the off chance of getting an opportunity of speaking. I think that the right hon. Gentleman is the last person who ought to speak on this occasion, and I consider it sheer audacity and effrontery on the part of the right hon. Gentleman to walk into this Chamber at this hour of the night and standing up bully the Government. A Minister has the right to speak, but the right hon. Gentleman the Member for Epping comes in and demands the right to speak. Who is he to demand that right? I will tell the right hon. Gentleman what ought to have been told him long ago, and it is that he usurps a position in this House as if he had a right to walk in, make his speech, walk out, and leave the whole place as if God Almighty had spoken. There have been statesmen in this House of high intellectual qualities, but they have never treated the House of Commons in the contemptuous manner that the right hon. Gentleman the Member for Epping has treated it, for he never listens to any other man's speech but his own.

The right hon. Gentleman comes here to-night as an injured person, but he ought to have allowed the persons interested in this matter to put their own case. I am perfectly certain he has not done their case a shred of good by his bouncing and bullying manner, and I hope the Lord President of the Council will treat him with the contempt which he deserves. I say further to the right hon. Gentleman the Member for Epping that I hope this House of Commons, and any other House of Commons that he deigns to grace with his presence, will treat him in exactly the manner he deserves, and that is listen to him when they want to, and when they do not want to listen to him, go out, and never submit to any bullying from him under any consideration.

On this question what has the right hon. Gentleman done? What does he know about it? What right has he to tell hon. Members how long people have sat in this House. The right hon. Gentleman does not know how long anybody has been here, and he does not know anything, of his own knowledge, of the proceedings of this evening at all. Therefore, the Government have no right to pay the least heed to anything he says, which is sheer impudence on his part. On this particular question no one has any right to make any complaint whatsoever. There was a Division, and any hon. Member who chose to take any interest in the proceedings of the Committee other than those in which they happen to have a particular personal interest, any Member who took that trouble would know that the next Amendment that was going to be called was quite a small one and would not have taken— [Interruption.] You do not know anything about it so hold your tongue.

Mr. CHURCHILL rose—

The CHAIRMAN

Does the right hon. Gentleman rise to a point of Order?

Mr. CHURCHILL

Yes, I rise to a point of Order, and I ask you, Mr. Chairman, whether it is in order for the Leader of the Socialist Opposition to use such an extremely offensive and provocative expression, and to tell me—addressing me in the vocative—to "Hold my tongue."

The CHAIRMAN

The right hon. Gentleman did what many Members do, and what I have often had to remind them is wrong, namely, addressing their remarks otherwise than to the Chair. But, with regard to the expression, I am bound to say that as there was a good deal of noise going on, I did not hear, although I was listening rather carefully, any particularly unparliamentary expression.

Mr. CHURCHILL

Further upon the point of Order. I am sure that the right hon. Gentleman who has just been speaking will not deny what he said in the hearing of us all. He said, "You hold your tongue." I would ask whether that expression is to come into our Parliamentary vocabulary?

The CHAIRMAN

I think that, if the right hon. Gentleman had said to me, "I should be glad if the right hon. Gentleman the Member for Epping would hold his tongue," it would have been quite in order. I think that his addressing an hon. Member not in the Chair in that way was a slip which perhaps, in the circumstances, need not be taken too much notice of. It is only an example of what I am constantly having to protest against—the habit, which is growing, of hon. and right hon. Members doing otherwise than address their remarks strictly to the Chair.

Mr. LANSBURY

I quite acknowledge that I was a little guilty, and I apologise to you, Sir Dennis; but I was led into it because of the horrible example of the right hon. Gentleman the Member for Epping (Mr. Churchill), who continually, when he addresses the House, takes occasion to say the most unpleasant things possible about my hon. Friends who sit on this side. But that is all beside the point. The point to which I now want to address myself on this Motion is that no one has any right to complain about what happened this evening— [Interruption.] May I ask you to ask the right hon. Gentleman the Member for Epping whether it is possible for him to behave himself by holding his tongue? [Interruption.] There are six names down to this Clause, and I should have thought that one of the six hon. Members might have been sufficiently interested in it to be present. It is not for me to offer the Government any advice. In a matter of this kind I myself, if I were one of the six, should have taken the ordinary course of approaching the right hon. Gentleman the Lord President of the Council, and should have been quite sure that whatever it was right to do he would have done. [Interruption.] I must ask—[Interruption.] There is, with children, a sort of habit that, when other people are speaking, they really cannot hold their tongues. The right hon. Gentleman has not grown out of his childhood, or else he is going into his second childhood. On behalf of those of my friends who, like myself, would like this matter discussed not merely in an academic matter, so that we can air our opinions and then go home, but discussed for the purpose of bringing it to a vote, I can say that we are quite certain that the right hon. Gentleman in this matter, as I think in everything else where he has to give a decision, will give a right and proper decision which will be satisfactory to the whole Committee.

Mr. BALDWIN

After the fire the whirlwind, and after the whirlwind the still small voice. I have very little to say, but I would remind my right hon. Friend that there can be no question of there being no vocal expression, because this is only the Committee stage. On the Report stage, which will take place the week after next, the new Clauses are put down first, and, therefore, if this Clause is put down first, it will be taken at about four o clock in the afternoon, which is the best hour of the day for reporting purposes. May I say a word as to the procedure to-day? Those who were present yesterday and at Question Time to-day will remember that about midnight last night the Leader of the Opposition asked me how far we proposed to go. I was very anxious last night to finish, if we could, all the Amendments and start the new Clauses to-day. I knew that that would involve sitting up late. I knew that my friends who were moving new Clauses on the subject of the Land Value Tax were very anxious to start at a reasonable hour. I thought their wishes might be met as well as the wishes of the Opposition, and I suggested that, if we broke off at a point very little in advance of where we were, it might be possible to conclude the Committee stage to-day, even if we had to sit up rather late, and I adduced the reason that it was necessary, on account of technical questions connected with the Silk Duties Clause, to get the Bill up to another place by, I think, 16th June. That was agreed to generally, and through the usual channels; we discussed this morning the rate of progress which we thought would be fair for the remaining Amendments and Clauses on the Paper. The result of that arrangement I intimated to the House to-day, and what I said about this particular Clause was that the Committee might be reasonably expected to begin the Debate on the new Clause relating to the Beer Duty not later than 9.45.

Let us go back to the beginning of the afternoon. There was considerable in- terest taken in the Amendments on the Land Values Clause, and we consumed more time than we had allowed for. I should like to say a word now in recognition of the way in which those who were most interested in the Debates tried to damp it down so that the arrangement might be fulfilled. The surprise came when the Silk Duties came up. I had expected an hour and a half for that. The Silk Duties went through with no discussion.

Sir P. HARRIS

Some discussion.

Mr. BALDWIN

Well, nothing to speak of.

Sir P. HARRIS

We were asked to cut down our discussion, and keep it as short as possible.

Mr. BALDWIN

That was the time when I left the House to seek refreshment. We were in advance of our time, a circumstance which must have been familiar to anyone who was paying any attention to what was going on. I recognised that the Clause would come on earlier than we had expected. I dined early because I did not know when I might be fetched, and I attended the Division at about half-past eight, and was told that the Clause would come on immediately. The hon. Member for York (Mr. Lumley), the Parliamentary Private Secretary to my right hon. and gallant Friend looked into the Lobby to see if he could meet any of the hon. Members who were interested in this subject, and he met the hon. Member for Leominster (Sir E. Shepperson) and advised him that the Clause would be coming up almost at once.

Sir ERNEST SHEPPERSON

I would like to say that I was not called. I had an Amendment to the new Clause of the hon. Member for Canterbury (Sir W. Wayland), but it was not going to be called, and it was not called.

Mr. BALDWIN

I was quite aware of that, but I did not wish to cumber what I was saying. The hon. Member for Leominster was the only Member seen by the hon. Member for York who was connected either directly, or indirectly, by way of moving an Amendment, with the Clause. But the odd fact is that there were nine hon. Members of this House connected with the Debate—six whose names were down for the Clause, and three whose names were down for the Amendment—not one of whom cared to take the trouble to find out how the business was proceeding. I think that my right hon. Friend must acquit the Government of blame in this matter.

Mr. CHURCHILL

I do, absolutely and fully.

Mr. BALDWIN

I am glad that my right hon. Friend recognises that fact. I come to one other question. My right hon. Friend was anxious that I should do my duty as Leader of the House. I think that that duty is perfectly simple. It is to place myself, as we all of us do, in the hands of the Chair. It is not for me to say whether it is possible by any means to Debate the subject tonight or not, and I do not propose to give any expression of opinion as to my views whether it should be possible or not, because at the moment that is the prerogative of the Chair. I shall not express any views at all. If it is possible under the direction of the Chair for this subject in any form to be Debated, the Government are perfectly ready to take the Debate. If, on the other hand, it is not possible by the direction of the Chair, then those who were responsible for this Clause must be content to move it in its place on the Report stage.

Sir WILLIAM WAYLAND

May I make an explanation? As the chief delinquent, I want to offer my deep apologies to the Committee. I certainly have been in attendance at the House since early this afternoon. I have taken part in every Division. I took part in the last Division prior to the Clause being reached. I understood that the Clause prior to mine was to be debated, and I left the House for exactly six minutes. When I returned, I was only one or two seconds too late. I certainly did listen to the Leader of the House this afternoon and heard him say that the Debate would be taken probably about 9.45. [An HON. MEMBER: "Not later than!"] I understood about 9.45. I am not blaming the Government in any shape or form whatever. I take the entire blame upon myself, and I again offer my apologies to the Committee, because nobody feels so downcast over this matter as I do myself. I only hope that there will be a chance to bring the matter forward on the Report stage, if we do not Debate it to-night. I apologise once more for any inconvenience—and I know there must have been a lot of inconvenience caused to hon. Members. I was afflicted by a concatenation of circumstances.

The CHAIRMAN

I think, after the words which fell from the Leader of the House, that perhaps it is incumbent upon me to give some expression of opinion. In matters of this kind the Chair must, of course, be guided by the wishes of the Committee as a whole, but, subject to that, it is the duty of the Chair on an occasion of this kind to give the Committee a certain amount of guidance as to what seems to be in accordance with the traditions and customs of the House. With regard to manuscript Amendments which are handed in on the Committee stage of any Bill, it has been the clearly recognised custom that the right vested in the Chair of selection or non-selection of Amendments is used much more drastically, and that the Chair cannot be expected to call manuscript Amendments unless it is quite convenient to do so from the point of view of the Amendments being easy to understand and to follow, and to realise whether they are in order or not, and also that the calling of them should not upset Parliamentary business or be generally inconvenient.

When an unfortunate state of affairs for the hon. Members concerned arises, such as that which arose to-night, I do not think that, unless there were special circumstances to be taken into consideration, hon. Members who were not present to move their Amendments when called should be allowed, as a matter of course, to get over what has happened by handing their Amendments in again as manuscript Amendments. I think also that it would be a mere way of getting round that general principle if the same hon. Members handed in similar, though not identical, Amendments, or if identical Amendments were handed in by other hon. Members; but if it is a matter which is of such interest to others than those whose names were attached to the Amendments that other hon. Members choose to hand in other Amendments, I think those ought to be treated by the Chair with considera- tion, but, subject to the view of the Committee—and on that I will say another word in a minute or two—I think the natural course would be for the Chair not to select any Amendment of that kind, unless for very special reasons, if it meant keeping the House sitting beyond the ordinary hours. There are many reasons which are too obvious, perhaps, to go into. That is my view of the position to-night. There are yet two new Clauses on the Paper to be discussed, the result of which would obviously be that the time for unopposed business in the ordinary way up to half-past eleven o'clock would have arrived before any manuscript Amendment could be discussed, and in these circumstances, except for very special reasons, I think they should not be selected by the Chair. The Chair is entirely in the hands of the House but that means—and I think it must be taken to mean—that the occupant of the Chair would not depart from what he considered to be the proper recommendation of the House, unless the feeling to the contrary were almost unanimous or, at any rate, very widespread in all quarters of the House.

Brigadier-General Sir HENRY CROFT

In view of the statement of the Leader of the House that so far as the Government are concerned every facility will be given for the discussion of this question on the Report stage, and in view of the fact that one of the complaints would be that such an important question should be Debated at this time of the night, I would urge that any hon. Members who have Amendments down should consider that it would be far wiser to have on the Report stage a Debate worthy of a subject which interests the House so greatly. It is only fair to point out that this is a very unique assembly. Members may endeavour to make calculations as to when Amendments will bo reached, but there is an entirely new situation owing to the fact that His Majesty's Opposition are quite incapable of keeping the Debate going.

The PARLIAMENTARY SECRETARY to the TREASURY (Captain Margesson)

I must point out that the Opposition in this case have met us in the fairest possible way. It is entirely through their good will that we have been able to carry out the bargain.

Sir H. CROFT

I am glad to hear what my hon. and gallant Friend has said and I accept it. [HON. MEMBERS: "Withdraw!"] I did not know—[HON. MEMBERS: "Withdraw!"] If there was an arrangement made, I certainly will withdraw any remark which has given offence, but it is legitimate to point out that we have seen Debates carried through much more quickly than has been usual. In view of the fact that the right hon. Gentleman has given an indication that this question so far as the Government are concerned will receive full consideration on the Report stage, I urge that the Debate should not be carried on to-night, because this is a question which affects the whole country—[Interruption.] I am not going to be shouted down.

The CHAIRMAN

Order!

Sir H. CROFT

On a question of this magnitude we are entitled to endeavour to impress upon our fellow Members its serious consequences. I hope the House will not make so grave a blunder as to imagine that this is not a question which is affecting people throughout the length and breadth of the land. Thousands of men have lost their employment in the last three weeks.

The CHAIRMAN

The hon. and gallant Member is debating the subject.

Sir H. CROFT

I hope that every opportunity for the case to be stated will be given on the Report stage.

11.0 p.m.

Mr. MACQUISTEN

As one of the culprits, I want to express my deep apology to the Committee for not being present. I ought to have been here, and I am not going to cover myself with a mantle of excuse. I was waiting to see the name on the board. I am sorry that I was not here. There are many people who want to hear all about this question, and it will be unfortunate for the country if we cannot have an explanation from the Chancellor of the Exchequer. But, if it is better to have it on the Report stage, let us have it then. It is very hard lines that six of us have missed the train. It may happen to anyone. I have no reflections to make against the Opposition. They are making the best of a bad job; and doing it thoroughly well; as well as can be expected. It is most regrettable, but it would be most unfortunate if it was felt in any quarter that this matter had been smothered. I was interested in the Whisky Duty. No one can say that I have no interest in the Whisky Duty, but as the Leader of the House says that we are to have a full discussion on Report I hope the Amendment will be chosen and that the discussion will be in time for the newspapers—a very important matter. I really feel genuinely ashamed of myself for not being present.

Mr. CHURCHILL

I am quite content with the fair and just manner in which the Lord President has dealt with the point which I ventured to raise. I say "ventured to raise," because if one raises a point, in accordance with the long-established procedure of this House, one apparently is subjected to a perfect cataract of semi-incoherent insults from, the so-called Leader of the so-called Oppoposition. I do not rise for the purpose of raising the heat of the assembly. If I was not in my place, let me be scolded. But, after all, we have large matters of policy to deal with, and we endeavour to fit in our duties as conveniently as we can. I am entirely satisfied with the manner in which the Lord President has dealt with the question. I gather from your Ruling, Mr. Chairman that, although it may be in order you would not be able to see any hon. Member who rose to move an Amendment on this subject during the Committee stage. Very well, let us wait for the Report stage—and for the reporters. Before I sit down I should like to make it absolutely clear to His Majesty's Government, and to the Parliamentary Secretary and others, that we have never at any moment had a shadow of a suggestion of any want of good faith on their part or on the part of the Opposition; or of any attempt to sidetrack the discussion by hustling things through. It is most important that that impression should be cleared away, because otherwise there would be undue resentment. I ask leave to withdraw the Motion to report Progress.

Mr. BUCHANAN

In common fairness, after the Committee has heard so many people who have been absent, I think that I should say a word. We have spent some considerable time already in discussing matters arising from the Clause which hon. Members expected would be discussed. The Report stage of a Bill hitherto has been considered the proper place in which to discuss matters which have not been thoroughly debated in the Committee stage. The Report stage should not be a convenience for Members who were not looking after their duty on the Committee stage. When the Report stage is reached, I hope that Members who have been present and who have refrained from speaking on matters in which they are keenly interested, will not be subject to loss of time because of the overshadowing importance of the Beer Duty or because of the occurrence to-day

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