Commons Sitting of 1 June 1933

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
PRIVATE BUSINESS.
  MINISTRY OF HEALTH PROVISIONAL ORDER (STREET) BILL;
  "to confirm a Provisional Order of the Minister of Health relating to the urban district of Street," presented by Sir Hilton Young; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 114.]
ORAL ANSWERS TO QUESTIONS.

  KING'S ROLL.
  Mr. MANDERasked the Minister of Labour how many complaints have been received during the last 12 months with reference to breaches of the King's Roll either by contractors or sub-contractors, and with what result?
  The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson): Representations are received from time to time in regard to alleged breaches of the King's Roll undertaking. Though there is no record of the number of such complaints, I am glad to say that they are comparatively few.

  UNEMPLOYMENT.

    APPLICANTS FOR VACANCIES (SELECTION).
    Captain GUESTasked the Minister of Labour whether the officials of Employment Exchanges work under any instructions as to the order in which persons on the unemployment register should be allotted work; and whether he is aware that complaints have been aroused by the practice, which appears to prevail in Plymouth, of giving preference in the provision of work to men who have only been unemployed for short periods?
    Mr. HUDSON: There are no such instructions. The ruling consideration in the submission of applicants for industrial vacancies is their suitability for the work. I am not aware that there has been any departure from this principle of selection at the Plymouth Exchange.
    Captain GUEST: May I ask the Minister if there is not an advantage to the public funds in putting people rapidly back to work, and, if that is so, is it not rather unfair upon those who have been out of work for a long time?
    Mr. HUDSON: Yes, Sir, but the important thing is that employers generally should know that only the most suitable persons are submitted by the Exchanges, and that is the ruling consideration in all these matters.
    Captain GUEST: Is it not a fact that more and more people are becoming unemployable owing to the fact that they are left out of employment for so long by the Employment Exchanges?

    BIRMINGHAM.
    Mr. SMEDLEY CROOKEasked the Minister of Labour the number of young men between the ages of 18 and 21 years who are registered as being employed in the city of Birmingham at the latest available date?
    Mr. HUDSON: It is estimated that, at July, 1932, the latest date for which figures are available, there were about 26,000 young men, aged 18 to 20, inclusive, insured under the Unemployment Insurance Acts in the area of Employment Exchanges in the county borough of Birmingham. The number of young men of that age recorded as unemployed at those Exchanges at 24th April, 1933, was, 2,618.
    Viscountess ASTOR: Have the Government a constructive plan to deal with the juvenile unemployed?

    COURT OF REFEREES (LEGAL REPRESENTATIVES).
    Mr. CROOKEasked the Minister of Labour if, in the new Unemployment Insurance Bill, he will consider the advisability of allowing applicants appearing, before the court of referees (should they so desire) to be represented or accompanied by a solicitor where the chairman' of the court is a solicitor?
    Mr. HUDSON: I would remind my hon. Friend that the unanimous view of the recent Royal Commission on Unemployment Insurance and of the Morris Committee in 1929 was against a change in the direction he suggests.

    RELIEF WORK, LANCASHIRE.
    Mr. TINKERasked the Minister of Health if he has considered the letter of protest sent from the Tyldesley Urban District Council against the proposal made by the Lancashire County Public Assistance Committee for the employment of able-bodied recipients of relief on the catchment areas of the county on relief scales of pay; and what action does he propose to take?
    The MINISTER of HEALTH (Sir Hilton Young): Yes, Sir. I am informing the council that their protest was due to a misunderstanding of the arrangement made with the South Lancashire Rivers Catchment Board. I see no reason to interfere with the arrangement made by the public assistance committee.
    Mr. TINKER: Do I take it from that reply that the Government, through the Ministry of Health, are sanctioning public work to be done at rates of pay much below the trade union rates of pay?
    Sir H. YOUNG: There is no question of rates of pay involved in this matter at all.
    Mr. KIRKWOOD: According to the question put down here we are asking able-bodied men to do work in the form of relief, and they are getting relief pay for it, and is the Minister not in a position to interfere and see that work of that nature is paid for at the standard rate of wages of the district?
    Sir H. YOUNG: There is no question of rates of pay and wages in this matter at all. It is simply a matter of payment of relief. The work is done as a condition of relief, and if it were not done by those in receipt of relief it would not be done at all.
    Mr. LANSBURY: Is it the policy of the Ministry of Health to allow public works to be carried through on a basis of relief, and does the right hon. Gentleman intend that the men shall be set to ordinary work and only receive Poor Law relief?
    Sir H. YOUNG: The right hon. Gentleman could not have observed my reply to the supplementary question. It is not ordinary work, but work which would not be undertaken on a commercial basis if it were not done as a condition of relief.
    Viscountess ASTOR: It is exactly what the Leader of the Opposition said he would do.
    Mr. LANSBURY: It is absolutely untrue, and the hon. Member knows it. I never made any such statement.
    Mr. GORDON MACDONALD: Is there no trade union rate of pay for this class of work?
    Sir H. YOUNG: I do net think that it is possible to say that any trade union rate of pay would apply to work which, if not undertaken under those conditions, would not be undertaken at all.
    Mr. TINKER: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall take the first opportunity of raising this matter on the Adjournment.

    CITY OF LONDON PAROCHIAL CHARITIES FUND.
    Major CARVERasked the hon. Member for the Bosworth Division of Leicester, as representing the Charity Commissioners, whether the City Parochial Charities Fund will give assistance out of their revenues to the work for the unemployed, organised by Toc H at All Hallows Church, in the City, where 7,500 cases have been helped?
    Mr. BLINDELL (Lord of the Treasury): I have been asked to reply. The trustees of the City Parochial Charities are the body to decide to which of the purposes authorised by the scheme under which the charities are administered the income shall be applied, and the amount of the grants to be made. The Commissioners have ascertained that the trustees have already made a grant of £5,000 to the National Council of Social Service for allocation to schemes approved by that council for the benefit of the unemployed in the more populous districts of the Metropolitan Police area The calls on the income at the disposal of the trustees are very heavy, and the

    2041
    Commissioners understand that it is unlikely that any further grant will be made for the unemployed during this year at any rate.
    Major CARVER: Is the hon. Member aware that London, the greatest city in the world, has handed over its ancient charities, which are intended for the poor, to a committee who are not disposing of them as they should; and can he recommend that funds from that committee should be allocated to this undenominational effort?
    Mr. BLIND ELL: I can only give the reply that the trustees are the body who decide these matters. I will convey my hon. Friend's statement to my hon. Friend the Member for Bosworth (Sir W. Edge).

    INSURANCE (RETIRED CIVIL SERVANTS).
    Mr. PETHERICKasked the Minister of Labour whether in the forthcoming legislation he will include provisions to bring within the scope of Unemployment Insurance all persons who, having served for a number of years as members of the Civil Service, are compelled to retire on grounds of ill-health and who are now unable to obtain the benefits of insurance?
    Mr. HUDSON: I am not sure what my hon. Friend has in mind. Perhaps he will let me have particulars of any case in which it is thought that hardship arises.

    FILMS (CENSORSHIP).
    Mr. HALL-CALNEasked the Secretary of State for the Home Department whether, in view of the number of films which have recently been exhibited in this country showing scenes which have involved cruelty to wild animals, he will consider the desirability of taking steps to obtain the necessary powers which would enable him to prevent the exhibition of such films if thought desirable?
    The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Douglas Hacking): I understand that the British Board of Film Censors make a practice of not passing any film depicting cruelty to animals and that they have rejected several films in which restraint amounting to cruelty appeared to have been used. Moreover, any cinemato-
    2042
    graph licensing authority is entitled to impose conditions on licensees enabling it to forbid the exhibition of a film offensive to public feeling. My right hon. Friend is satisfied that the existing powers of control over the exhibition of films are sufficient and I would add that misleading sensational accounts of a film are sometimes published, based on the film as it was before the censors had deleted the objectionable portions.
    Mr. DAVID GRENFELL: Have the Department any jurisdiction over the conditions under which the films are made? Films are sometimes depicted as genuine pictures when they have been taken under entirely different conditions, and there must have been a great strain upon the animals taking part?
    Mr. HACKING: Obviously, we have no control over the manufacture of films made abroad.

    LOTTERIES AND BETTING (ROYAL COMMISSION'S REPORT).
    Captain ARTHUR EVANSasked the Home Secretary if he is now in a position to say when the final report of the Royal Commission on Lotteries and Betting will be available to Members of the House?
    Mr. HACKING: It is expected that the report will be available for circulation by the end of next week.

  POLICE.

    PROPOSED COLLEGE.
    Rear-Admiral SUETERasked the Home Secretary whether, in view of the possibility that Sandhurst and Woolwich may be amalgamated so as to obtain greater co-operation between the various arms, he will consult the Secretary of State for War to see if Woolwich would be suitable for the new police college and to save expense in acquiring a new building?
    Mr. HACKING: I understand that the premises of the Royal Military Academy at Woolwich are still occupied and are not at present available for disposal, but in any event the Commissioner of Police is satisfied that they would not be suitable for the purposes of the proposed

    2043
    police college. Negotiations are now in progress for the acquisition of a suitable building.

    WOMEN POLICE.
    Mr. GODFREY NICHOLSONasked the Home Secretary the extent to which the enlistment, training, and / or organisation of women police will be affected by the proposed police legislation?
    Mr. HACKING: The proposed legislation does not affect the enlistment, training or organisation of the women police.

    SPECIAL CONSTABULARY (INSPECTOR'S RESIGNATION).
    Mr. EDWARD WILLIAMS (for Mr. ANEURIN BEVAN)asked the Home Secretary what circumstances led to the inspector of special constables for the Metropolitan area being requested to resign his position; and whether the inspector has done so?
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour): I presume that the hon. Member refers to the Chief Inspector of J. Division of the special constabulary who resigned in April last in circumstances set out in my reply to the hon. Member for East Dorset (Mr. Hall-Calne) on the 18th May.

    METROPOLITAN FORCE (RECRUITING AGE).
    Major MILLSasked the Home Secretary the average age at which men now join the Metropolitan Police Force?
    Sir J. GILMOUR: The average age of men joining the Force during this year is approximately 21 years eight months.

  EDUCATION.

    SECONDARY SCHOOLS (BUILDING COST).
    Mr. LAWSONasked the Parliamentary Secretary to the Board of Education the average cost per place for the building of secondary schools which come under the Board's administration?
    The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Ramsbotham): Since the War, building costs have shown such wide variations and have depended so largely upon particular local factors as well as upon the
    2044
    size of the school, the method of construction, and the amount of special accommodation provided, that it is not possible to give any reliable general figures.
    Mr. LAWSON: Does that apply to individual schools?
    Mr. RAMSBOTHAM: I will give the figures of individual schools if the hon. Member will put down a question.
    Mr. HICKS: Does the Minister agree that, with building costs down so low, it is time to review the situation?
    Mr. RAMSBOTHAM: I believe that building costs have decreased.
    Mr. LAWSONasked the Parliamentary Secretary to the Board of Education the cost per place for the building of the new secondary school in Sunderland?
    Mr. RAMSBOTHAM: The final statement of costs of the new premises of the Bede Collegiate Schools, Sunderland, has not yet been received, but on the basis of estimates the cost per place of the buildings will be £94. If the cost of the land, equipment and other incidental expenses are included the cost per place will be £126.
    Mr. HERBERT WILLIAMS: Can the hon. Gentleman say why it costs so much more to build a school than to build a home?

    WYGGESTON GRAMMAR SCHOOL, LEICESTER.
    Mr. PICKERINGasked the Parliamentary Secretary to the Board of Education whether he is aware of the condition of the structures in which the 1,000 boys of the Wyggeston Grammar School, Leicester, are being educated; and whether he is willing to sanction the expenditure to provide these boys with the necessary school buildings which were promised several years ago?
    Mr. RAMSBOTHAM: My Noble Friend is aware that the premises at present occupied by the boys of the Wyggeston Grammar School are to a large extent of a temporary nature, and that they were not intended to become the permanent home of the school. A large new assembly hall has been erected recently and a pressing need of the school has thus been met. My Noble Friend does not anticipate that

    2045
    it will be possible in present financial circumstances to sanction expenditure on the erection of new buildings to replace the existing premises.
    Mr. PICKERING: Is not the hon. Gentleman aware that the present structure is a discarded old Army hospital, that it is ill-ventilated, that the health of the boys is suffering considerably, that parents are refusing to send their boys there during the winter time, and that the boys were persuaded to leave a decent school in order to make room for a further school and have been "sold" in this matter.
    Mr. RAMSBOTHAM: I am informed that the premises are reasonably suitable for present use and are serving their purpose adequately.
    Mr. PICKERING: Is the hon. Gentleman satisfied that they are suitable? Would he mind going there himself?

  HOUSING.

    SLUM CLEARANCE.
    Mr. HUTCHISONasked the Minister of Health whether his Department has tendered any recent advice and, if so, of what nature to local authorities who have experienced difficulty in respect of temporarily rehousing on normal lines the population evacuated from slum clearance areas?
    Sir H. YOUNG: I would refer my hon. Friend to the reply given to a similar question put by the hon. Member for Rotherhithe (Mrs. Runge) of which I am sending him a copy.

    BUILDING MATERIALS.
    Mr. HICKSasked the Minister of Health whether, having regard to the increased activity in the erection of working-class dwellings which he expects to ensue from the passing of recent legislation, he has conferred, or will confer, with the President of the Board of Trade, with a view to having an inquiry made, by means of the existing inter-departmental committee on the supply and prices of building materials or by other appropriate means, as to the adequacy of supplies available of materials likely to be required in the near future, to the end that there may be no undue delay in
    2046
    any schemes which might provide employment for the building trade operatives now unemployed?
    Sir H. YOUNG: At present I have no reason to suppose that such a special inquiry as is suggested would be useful. I have already arranged that the Committee on Prices of Building Materials shall keep me closely informed of any changes in the conditions in the building trade.
    Mr. HICKS: Does the Minister agree that there is at the present time a shortage of materials for the work which has to be executed and that men are being discharged because materials are not available, and does he not think it desirable that the interests should be consulted in order to ensure that in future such material should be available for the building programme?
    Sir H. YOUNG: As to the shortage I will invite the hon. Member's attention to the answer I gave in the course of the last few days of which I will send him a copy. I have called the attention of the Building Materials Committee to the matter.

    NON-SUBSIDISED HOUSES.
    Mr. HALL-CALNE (for Captain PETER MACDONALD)asked the Minister of Health the number of houses which have been constructed or undertaken by municipalities without any subsidy Since the termination of the subsidy system last December?
    Sir H. YOUNG: Since 1st December, 1932, I have approved proposals for the erection without Exchequer subsidy of 1,249 houses.

    POOR LAW RELIEF.
    Mr. G. MACDONALDasked the Minister of Health the number of public assistance committees that have had their attention called by his Department to the scales of relief paid to applicants under the means test; in how many cases it has resulted in a lower scale of payments being adopted; and in how many instances has the public assistance committee refused to lower the scale?
    Sir H. YOUNG: In the course of ordinary administration there are frequent occasions, as the result of my

    2047
    Inspectors' reports or otherwise, for addressing communications to public assistance authorities which may include criticisms of scales of relief which they are applying or propose to adopt, and I could not answer specifically such a question as the hon. Member has put. If there is any particular case with which he is specially concerned I shall be glad to give him all the information available.
    Mr. LAWSON: Is the right hon. Gentleman aware that, even though he may have called the attention of public assistance committees to the scale of relief they are in certain cases enforcing starvation standards in their areas?
    Sir H. YOUNG: No, Sir.

    INSTITUTION, HAVERFORDWEST (CHILDREN).
    Mr. LOVAT-FRASERasked the Minister of Health how many children are living in the institution at Haverfordwest under the age of three and over the age of three, respectively; and how many were living there a year ago?
    Sir H. YOUNG: None, Sir, according to my latest information. A separate children's home which adjoins this institution contains 28 children, all over three years of age. A year ago there were 19 such children.

  NATIONAL FINANCE.

    AMERICAN FILMS (TAXATION).
    Mr. HALL-CALNEasked the Chancellor of the Exchequer whether, with a view to relieving the burden of Entertainments Duty on those entertainments which provide a large volume of employment and Income Tax in this country, he will investigate the possibility of obtaining revenue by levying a tax of some kind upon the large sums of money which are paid to American film companies for the rental of their films in this country?
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): The Income Tax chargeable under the provisions of the existing Income Tax law in respect of profits arising in this country from foreign films is, of course, duly assessed and paid. I do not contemplate the inclusion in the present Finance Bill of any further provisions in this matter.
    Sir JOHN WARD LAW-MILNE: Is itnot the case that the present system of taxation allows a large number of American films to come in by paying merely the duty on the estimated value, whereas the actual takings on these films show that they are very much larger than the estimated value?
    Mr. CHAMBERLAIN: I have been into this question several times, but I have not hitherto found any method of improving on the present system.

    UNITED STATES (BRITISH DEBT).
    Mr. COCKSasked the Chancellor of the Exchequer whether His Majety's Government has come to any decision regarding the payment of the next instalment of the American debt?
    Mr. CHAMBERLAIN: It would not be desirable for me to make any statement in regard to this matter at present.
    Mr. COCKS: Will the right hon. Gentleman take into consideration the fact that many American authorities would like us to cut the Gordian knot in this matter by intimating our inability to pay the next instalment?
    Mr. CHAMBERLAIN: All relevant circumstances will be taken into consideration.
    Sir PERCY HARRIS: Does the right hon. Gentleman realise that we are going into recess to-morrow for a fortnight and that he will have no opportunity of making a statement?
    Mr. CHAMBERLAIN: I am looking forward to the right to a holiday.
    Sir P. HARRIS: The right hon. Gentleman has a right to holiday, but the House of Commons has the rights of its constituents to consider, and they have a right to be informed as to the attitude of the Government on matters of vital importance of the whole world.

    INCOME TAX.
    Mr. GLEDHILLasked the Chancellor of the Exchequer the number of claims under Section I, Part II, Schedule of allowances; and what would be the ultimate loss of revenue if the allowance under this heading was increased to £50?
    Mr. CHAMBERLAIN: I assume my hon. Friend has in mind the allowance of £25 granted under Section 22, Finance

    2049
    Act, 1920, to taxpayers maintaining dependent relatives. No statistics are collected of the numbers of such allowances that are made or the total relief from tax involved in them, but it is estimated that an increase of the allowance to £50 would cost not less than £1,000,000.

  TRADE AND COMMERCE.

    IMPORT DUTIES.
    Mr. R. W. SMITHasked the Chancellor of the Exchequer if in view of the fact that there has been considerable delay by the Import Duties Advisory Committee in coming to decisions on applications made to the committee, he will consider the advisability of introducing legislation to increase the number of members of the committee and so make it possible for applications to be dealt with more expeditiously?
    Mr. CHAMBERLAIN: I would refer my hon. Friend to the answer which I gave to my hon. and gallant Friend the Member for Bournemouth on the 20th December last, of which I am sending him a copy, and to what I said on that occasion in answer to a supplementary question asked by my hon. Friend the Member for West Nottingham (Mr. Caporn).
    The following statement shows the quantity and value of cotton piece-goods imported into Iraq recorded as consigned from Japan and the United Kingdom, respectively, during the second, third and fourth quarters of 1932. Comparable figures for a later period are not yet available.

    Period, etc.

    Recorded by Quantity and Value.

    Recorded by Value only.

    Total Value.

    Quarter ended 30th June, 1932:

    1,000 yards.

    £

    £

    £

    From Japan

    1,663

    27,382

    501

    27,883

    From United Kingdom

    7,435

    102,706

    27,918

    130,624

    Quarter ended 30th September, 1932:

    From Japan

    2,779

    41,889

    291

    42,180

    From United Kingdom

    5,581

    77,114

    34,120

    111,234

    Quarter ended 31st December, 1932:

    From Japan

    3,993

    60,957

    4,110

    65,067

    From United Kingdom

    4,647

    65,128

    39,834

    104,962

    RUSSIAN CONTRACTS.
    Mr. CRAVEN-ELLISasked the President of the Board of Trade if he has full particulars concerning contracts entered into before 26th April last

    SHIPPING SUBSIDIES.
    Mr. RANKINasked the President of the Board of Trade whether, in any future negotiations for trade treaties, he will consider the advisability of including a Clause which shall provide that the co-signatory country shall henceforward limit any further subsidies to its shipping?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): The trade negotiations in which I am at present engaged have been undertaken with a view to securing increased facilities for the export of British goods, but as my hon. Friend knows shipping subsidies is one of the subjects on the draft agenda for the forthcoming World Economic Conference.

    IRAQ (COTTON IMPORTS).
    Mr. H. WILLIAMSasked the President of the Board of Trade whether he has any information as to the quantity and value of cotton piece-goods imported into Iraq from Japan for the quarter ended June, 1932, and for each subsequent quarter; and whether he can state the quantity and value of cotton piece-goods imported into Iraq from Great Britain for the same periods?
    Mr. RUNCIMAN: As the answer involves a table of figures, I will circulate it in the OFFICIAL REPORT.
    Following is the answer:
    between British importers and the Union of Socialist Soviet Republics and/or their agents for produce and manufactured goods; and will (he state the volume of such contracts and the amount of money paid on account of the same?
    Mr. RUNCIMAN: The only information in my possession relates to contracts in respect of which an application is made for a licence. As I have already stated, it would be contrary to established practice to disclose information of this character.

    COPYRIGHT.
    Mr. HALL-CALNEasked the President of the Board of Trade if when making any future trade treaties, he will alter the conditions under which we allow the United States copyright in this country on simultaneous publication in the usual way, while authors in this country seeking copyright in the United States of America are unable to obtain it unless within six months the book is set up, printed, and issued in the United States?
    Comparable quotations are not available, nor have I any information as to the prices at which kraft paper is sold in Sweden for internal consumption. The following average prices of kraft pulp of various descriptions have been compiled from information published in "The World's Paper Trade Review" —

    —

    Sweden. (f.o.b. net cash without commission).

    Great Britain. (c.i.f. prices, usual Coast ports, including agents' commission and buyers' terms).

    Kraft.

    Kraft.

    Prime Qualities (Average of range).

    Special (Average of range).

    1933.

    Shillings per ton.

    January

    …

    …

    …

    …

    144·3

    145·0

    150

    February

    …

    …

    …

    …

    141·3

    145·0

    150

    March

    …

    …

    …

    …

    140·2

    137·0

    148

    The quotations in Sweden have been converted to shillings per ton at the average rate of exchange in the months specified.

    JAPANESE COMPETITION.
    Mr. HAMMERSLEYasked the President of the Board of Trade whether he has received any reply to his suggestion of conversations between British and Japanese industrialists on the subject of competition in overseas markets; and if he can make a statement on the matter?
    Mr. RUNCIMAN: Yes, Sir, I have received a reply which is at present receiving consideration, but I am not yet in a position to make a statement.
    Mr. HAMMERSLEY: Is the right hon. Gentleman aware that no satisfactory
    Mr. RUNCIMAN: The question whether it would be possible to raise this matter in connection with negotiations for a trade agreement would depend on the nature of the agreement contemplated, but the possibility would certainly not be ovErieoked.

    KRAFT PAPER PRICES.
    Mr. R. W. SMITHasked the President of the Board of Trade the average price at which kraft paper was sold in Sweden in January, February, and March of this year and the corresponding price at which the same paper was sold in this country in the same months?
    Mr. RUNCIMAN: As the answer includes a table of figures, I will circulate it in the OFFICIAL REPORT.
    Following is the table:
    basis for these conversations can arise if particular markets are excluded, and that the only satisfactory basis is one which includes all markets? It would not be satisfactory if an arrangement was made in respect of markets in British Colonies which left Japan free to dump in the neutral markets of the world.

    FINLAND.
    Mr. HAMMERSLEYasked the President of the Board of Trade if he will insist on a reduction of the duties levied against imports from Britain by Finland as one of the terms of the proposed trade agreement with Finland?
    Mr. RUNCIMAN: I have no intention of entering into an agreement with Finland which does not provide for adequate reductions in the Finnish tariff on United Kingdom goods.
    Mr. MARTIN: Will the right hon. Gentleman see that coke producers in this country receive some consideration in this matter?

    IRISH FREE STATE (IMPORT DUTIES).
    Mr. HALESasked the Secretary of State for Dominion Affairs whether, having regard to the further raising of duties by the Irish Free State against British goods, he will make a substantial increase of duties against Irish goods of say 50 per cent., in order to bring to an end the increasing damage to both countries by the present state of affairs?
    The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): As I have said in reply to previous questions on this subject, I am not in a position to make any statement at the present time, except that the whole matter is under my constant personal consideration.

    CHICAGO EXHIBITION.
    Mr. RANKINasked the Secretary to the Overseas Trade Department how many foreign nations are represented at the Chicago International Exhibition; and what is the policy of His Majesty's Government with regard to this matter?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): I have been asked to reply. I have not yet received a report stating which foreign nations are represented at the exhibition in question, but when I receive the report for which I have asked, I will send the information to my hon. Friend. In reply to the second part of the question, I regret that in view of the high cost involved and the present necessity for rigid economy in public expenditure, it was not found possible to make arrangements for official participation by this country.

    WORLD PRICES.
    Mr. HAMMERSLEYasked the Chancellor of the Exchequer whether the Government propose to take steps to co-operate with the United States of
    2054
    America in raising world prices; and, if so, will he indicate when such measures are to be taken and what form they are likely to take?
    Mr. CHAMBERLAIN: The Government will gladly co-operate with the Government of the United States and any other Government in any measures which appear calculated to assist in raising and maintaining the level of world prices. As to the nature of such measures this obviously cannot be determined until conversations have taken place between the representatives of the Governments concerned.
    Mr. HAMMERSLEY: Is my right hon. Friend fully alive to the danger of the British Government taking up an attitude which might be construed as merely sitting on the fence in these very critical times, and will he not consider in the light of that danger the desirability of making a statement to indicate practical measures of co-operation in raising world prices?
    Mr. CHAMBERLAIN: I certainly shall have that in mind when the Conference meets.

    5½ PER CENT. LOAN, 1937.
    Mr. GURNEY BRAITHWAITEasked the Chancellor of the Exchequer whether he can make any statement as to the method of payment of the August coupon of the United Kingdom of Great Britain and Ireland 5½ per cent. Loan, 1937; and whether, having regard to the specific undertaking mentioned in the bonds to pay principal and interest in gold Coln of the United States of America of the standard weight and fineness existing on 1st February, 1917, he has obtained any assurance that future coupons will be paid either in gold or the equivalent in currency based on the last prevailing price of gold?
    Mr. CHAMBERLAIN: I do not understand from whom my hon. Friend suggests that an assurance should be obtained Since the payment of the August coupon is an obligation of His Majesty's Government. I may say, however, that this matter involves questions of the interpretation of American law, and I am not at present in a position to make any statement in regard to it.

    MEMBERS OF PARLIAMENT (TRAVELLING VOUCHERS).
    Mr. TURTONasked the Financial Secretary to the Treasury on how many occasions during the present Parliament third-class vouchers have been applied for by hon. Members?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): The information desired by my hon. Friend could only be obtained by a detailed examination of all the vouchers used during the present Parliament. The labour involved in such an examination would not, I think, be justified.
    Mr. TURTON: Will my hon. Friend consider making the same regulation with regard to Members of Parliament that applies to civil servants in the Army, Navy and Air Force and confining first-class vouchers to Members of Parliament of the rank of Parliamentary Secretary and over?
    Viscountess ASTOR: Will the hon. Member ask those hon. Members who apply for first-class vouchers to hold up their hands?

  AGRICULTURE.

    BUTTER IMPORTS (PAPER WRAPPERS).
    Mr. CRAVEN-ELLISasked the Minister of Agriculture if his attention has been drawn to the paper wrapper used for butter by many retail shops which has the words Including imported butter printed thereon; and will he consider taking steps which will necessitate information as to the country of origin and the percentage of such imported butter contained in the packet?
    Captain Sir GEORGE BOWYER: I have been asked to reply. Under the provisions of the Butter Marking Order made under the Merchandise Marks Act, 1926, the words "Including imported butter" form one of the indications to be used in marking blends or mixtures containing imported butter. These indications were recommended by the Merchandise Marks Standing Committee, after full inquiry, and I would refer my hon. Friend to the considerations set out in paragraphs 25 to 30 of the Committee's report (Cmd. 3878, 1931), which led to the adoption of these words.
    Mr. CRAVEN-ELLIS: Will the hon. Member see that the volume of imported butter is fixed at the minimum.
    Mr. LEVY: Is the hon. Member aware that the words "imported butter" do not indicate the origin, because Russian butter is not so marked; it is designated "blended butter" only, and does he not think that Russian butter should be so marked?
    Sir G. BOWYER: I think both my hon. Friends had better have a word with the Minister.

    MARKET PRICES, LINCOLNSHIRE (BROADCASTING).
    Lieut.-Colonel HENEAGEasked the Minister of Agriculture what is the present position of the negotiations with the British Broadcasting Corporation about broadcasting agricultural market prices of Louth market and other LinColnshire market towns?
    Sir G. BOWYER: The position is that the Ministry is at present reviewing the existing programme of broadcasts of agricultural market prices. Until this review is completed, the question of consulting the British Broadcasting Corporation on the subject does not arise.

    WOODHOUSE GRANGE FARM. SUTTON-ON-DERWENT.
    Major CARVERasked the Minister of Agriculture what has been the profit or loss each year resulting from the operation of Woodhouse Grange farm, Sutton-on-Derwent, by the Commissioners of Crown Lands during the past three years; whether this farm hits been offered on lease; and, if so, on what terms?
    Sir G. BOWYER: This farm containing 685 acres came into hand at 5th April, 1931. A loss of about £1,000 was incurred during the year to 5th April, 1932, but the accounts for the year to 5th April, 1933, have not yet been completed. The farm has been advertised to let on several occasions during the past two years, but no applicant has come forward who was prepared to make an acceptable offer for it. The Crown Surveyors informed one applicant that they would be prepared to recommend the Commissioners to accept a rent of £400 per annum.

  SCOTLAND.

    JUVENILE EMPLOYMENT.
    Lieut.-Colonel MOOREasked the Secretary of State for Scotland whether he will consider issuing a circular to local authorities in Scotland with regard to the issue of by-laws under the Children and Young Persons (Scotland) Act with reference to the employment of children on farms?
    The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton): On 23rd December, 1932, the Scottish Education Department issued circular No. 89, which dealt fully with the provisions of the Act so far as they relate to the employment of children, including the question of employment in light agricultural and horticultural work. My right hon. Friend does not think it necessary to issue any further circular. But I may add that nearly every education authority has been in consultation with the Department as to the form and substance of their proposed by-laws; and the Department have given and will continue TO give all information and assistance that is within their competence in this matter. I am sending a copy of the circular to my hon. and gallant Friend.

    OATMEAL (FOREIGN PRODUCTS).
    Lieut.-Colonel MOOREasked the Secretary of State for Scotland whether his attention has been called to the blending of Scottish oatmeal with inferior foreign products; and whether he will consider on this account taking steps to mend the Merchandise Marks Act to enable consumers to be protected against such practice?
    Mr. SKELTON: My right hon. Friend has received representations on this subject which he has at present under examination. I am not in a position to make any statement as to legislation.

    MARR COLLEGE.
    Mr. KIRKWOODasked the Secretary of State for Scotland what was the cost of building the Marr College, Troon; when it was completed; what has been the cost of its maintenance Since its completion; and what action he intends to take to have the college made available for secondary education in Scotland?
    Mr. SKELTON: The Department have no access to the accounts relating to the
    2058
    erection and maintenance of the Marr College but it is understood that the cost of erecting and equipping the building as about £200,000 and that the work was completed in the summer of 1930. With regard to the last part of the question, the availability of the college for secondary education depends upon the final settlement of the scheme prepared by the Endowments Commissioners. Every effort is being made to expedite this.
    Lieut.-Colonel MOORE: Is the hon. Member aware that for three years past parents of children throughout Scotland have been waiting to get their children into this college? Can he not take some definite and immediate steps to force the Educational Endowments Commission to settle this long overdue problem?
    Mr. SKELTON: I am well aware of the delay and the difficult questions which are involved. As I stated in reply to the hon. and gallant Member not long ago, we have made efforts to see whether there is any system or method by which the college could be provisioNaily opened, but this has been found to be impracticable. The delay involved in the final settlement of the scheme is due to the large sum of money involved, and, while I am making every possible effort to expedite it, I cannot say that the college will be opened before, say, next September.

    HOUSING CONDITIONS, STANDBURN.
    Mr. KIRKWOODasked the Secretary of State for Scotland if he has received a report from the inspector sent to the village of Standburn to report on the housing and sanitary conditions; and, if so, what action does the Department of Health intend to take to improve the housing accommodation there for the population?
    Mr. SKELTON: The answer to the first part of the question is in the affirmative. As regards the second part, the inspector's report has been communicated to the county council who have been asked to intimate in detail what action they propose to take to secure effective improvement in [housing conditions at Standburn.
    Mr. KIRKWOOD: If the council do not take action, what does his Department propose to do?
    Mr. SPEAKER: That seems to be a hypothetical question.

    POOR PERSONS (MEDICAL TREATMENT).
    Lieut.-Colonel MOOREasked the Secretary of State for Scotland which local authorities in Scotland have made arrangements under which their public assistance committees provide medical treatment for unemployed persons who are no longer entitled to it under the Insurance Acts; and whether he intends to advise other local authorities as to the need for considering such arrangements after the end of the current year, in view of the fact that approximately 20,000 unemployed persons in Scotland will fall out of health insurance at that date?
    Mr. SKELTON: No special arrangements are required for this purpose. All public assistance authorities in Scotland are bound to provide medical treatment for any poor person who is in need of it.

    PROSECUTION AND SENTENCE, GLASGOW.
    Mr. McGOVERNasked the Secretary of State for Scotland if he is prepared to release Miss Helen Miller, who was sentenced to six months imprisonment for concealment of pregnancy and later reduced at the Appeal Court to three months, in view of the fact that she has already been in prison for over three months and suffered mental and physical torture?
    Mr. SKELTON: After careful consideration of all the circumstances of this case my right hon. Friend regrets that he does not feel justified in advising any interference with the mitigated sentence of three months' imprisonment which was imposed by the High Court of Justiciary on the 26th May.
    Mr. McGOVERN: In view of the intense feeling there is in Glasgow in connection with this sentence on this young girl, and the fact that her mother is in a tragic state of collapse, also that the case was such that the "Daily Express" put up the money for the appeal, will he not urge further consideration of the case?
    Mr. SKELTON: I will bring the hon. Member's observations to the notice of my right hon. Friend.

    ROYAL TECHNICAL COLLEGE, GLASGOW (APPOINTMENT).
    Mr. KIRKWOODasked the Secretary of State for Scotland if he can state
    2060
    the grounds on which he acts in granting or withholding his approval of the appointment of Sir A. Huddleston as director of the Technical College, Glasgow?
    Mr. SKELTON: In accordance with the terms of the Central Institutions (Scotland) Grant Regulations, my right hon. Friend has to consider whether the qualifications of the person whose name the Governors of the Royal Technical College have submitted to the Department for their approval are such as are appropriate to the duties of the office of director of the College.

    MAGISTRATES, GLASGOW (ALLEGATIONS).
    Mr. McGOVERNasked the Lord Advocate (1) what action, if any, has been taken with regard to the complaint lodged with the police authorities in Glasgow or the procurator fiscal regarding the action of three Glasgow magistrates who were found drinking after licensed hours during a police raid on premises known as the Royal Restaurant, West Nile Street, Glasgow;
    (2) what, if any, action has been taken with regard to the complaint lodged with the police authorities in Glasgow or the procurator fiscal regarding the action of one of the magistrates of the city of Glasgow who entered a public house known as the Hole in the Wall, 117, Virginia Street, and demanded the sum of £50 to assist in securing the renewal of his licence, threatened the publican with a knife, and created a breach of the peace?
    Mr. SKELTON: No complaint has been made to the Crown Office or to the Procurator Fiscal with regard to the matters referred to in the two questions. My right hon. Friend the Lord Advocate is, however, informed that a magistrate was to-day convicted in the Stipendiary Magistrates Court on a charge of disorderly conduct in the public house known as the Hole in the Wall and was fined £5. The Lord Advocate has called for a report on the allegations contained in each question.
    Mr. McGOVERN: Is the Under-Secretary aware that after this incident took place in the Hole in the Wall the magistrate went to the appeal court and voted for the restoration of this licence? If the

    2061
    Secretary of State has no power will he seek power to take these men off the licensing bench?
    Mr. SKELTON: That is an entirely different question.
    Viscountess ASTOR: Does he not consider that if there were more qualified women magistrates this sort of thing would not happen?
    Mr. McGOVERN: In regard to the first question, can the Under-Secretary give me any information regarding the police raid which took place on the Royal Restaurant? Is he inquiring into that?
    Mr. SKELTON: I have nothing further to add to what I have said—namely, that the Lord Advocate has called for a report on each set of allegations, and until that report has been received I cannot usefully say anything.

    NIGERIA (FLOGGING).
    Mr. MAXTONasked the Secretary of State for the Colonies whether he is aware that Mr. Victor Eluaka, a native of Nigeria, was recently flogged at the open market at Buruku, in Northern Nigeria, for failing to pay his tax in time; whether this took place with the knowledge and approval of an administrative officer; and whether he will direct the governor to institute an inquiry?
    The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): The case to which the hon. Member refers has been the subject of a question in the Legislative Council of Nigeria. In reply to that question, it was expressly denied that the flogging was inflicted by the order of an administrative officer, and it was stated that the Governor had directed that further close inquiry should be made into the case. I am asking the Governor to report the result.
    Mr. MAXTON: Is it within the power of local magistrates in Nigeria to inflict flogging for the non-payment of taxes?
    Sir P. CUNLIFFE-LISTER: It is perfectly plain that no local magistrate ordered this flogging at all.
    Mr. MAXTON: May I ask the right hon. Gentleman which part of his reply indicates that no local magistrate ordered this flogging?
    Sir P. CUNLIFFE-LISTER: In my reply I said:
    "It was expressly denied that the flogging was inflicted by the order of an administrative officer."
    Mr. MAXTON: Yes, but may I ask him whether it is possible for persons holding no public position to order floggings in Nigeria on native citizens who do not pay taxes?
    Sir P. CUNLIFFE-LISTER: I am quite sure that it is not possible for any person holding no public position in the British Empire to order the flogging of anybody. The Governor dealt with the allegation that this was ordered by an administrative officer. That has been completely disproved, and he has ordered a close inquiry into the circumstances as to what happened, and when I get the Governor's report I will communicate it to the House.

    VICTORIA, AUSTRALIA (BRITISH SETTLERS).
    Mr. MAXTONasked the Secretary of State for Dominion Affairs if he has now considered the report of the Royal Commission on Migrant Land Settlement in Australia; and if he is prepared to take any steps for the relief of the distressed migrants?
    Mr. J. H. THOMAS: The report is receiving the careful consideration of the Victorian Government. I will inform the House as soon as I am notified of their decision.
    Mr. MAXTON: That is not what I am asking. Is the right hon. Gentleman aware that these men went out there not merely on the responsibility of the Victorian Government, but on the joint responsibility of the British Government, of this House, and of the Victorian Government, and I ask what steps do the Government propose to take to remedy the wrong that they have done to these people.
    Mr. THOMAS: I do not admit that the British Government have Responsibility for any wrong, but my hon. Friend is well aware that a report was submitted after investigation, and that report is now receiving the attention of the Victorian Government. I have also made representations on this matter. I do not dis-

    2063
    guise the difficulties of these unfortunate people, but I prefer not to say more at this stage, except that when the report of the Victorian Government is submitted to me I will report to the House. Then I shall be in a better position to answer questions.
    Mr. MAXTON: Do I understand that the right hon. Gentleman recognises the share of responsibility that is borne by the Government of this country?
    Mr. THOMAS: on the contrary, I was very careful to preface my remarks by saying that I do not accept the strictures about the responsibility of this Government.
    Mr. MAXTON: I wonder whether you, Mr. Speaker, have any powers to prevent Ministers side-stepping questions instead of answering them. I ask the right hon. Gentleman whether he is saying now that this House of Commons did not pass the legislation under which these men were transferred to Australia?
    Mr. THOMAS: It is not for me to deny any legislation passed by this House.
    Mr. MAXTON: Then may I ask the right hon. Gentleman—
    Mr. SPEAKER: We cannot go on like this indefinitely.
    Mr. MAXTON: On a point of Order. I have no desire to go on indefinitely. I only wish to proceed long enough to get one straight reply to my original question. May I ask the right hon. Gentleman if he is now denying the principle that he laid down so strongly on the Irish Treaty, that responsibility for agreements entered into by one Government must be taken by another?
    Mr. THOMAS: Any reference I made to the Irish question I stick to.
    Mr. MAXTON: You are away with the winners to-day.

    ROYAL AIR FORCE DISPLAY.
    Mr. MANDERasked the Under-Secretary of State for Air if he will consider the advisability of arranging at the Royal Air Force Display this year that the conditions shall be made, as far as
    2064
    practicable without endangering life, as close as may be to a state of actual warfare, and that bombs containing small quantities of tear gas shall be dropped, with a view to educating the younger generation as to what war involves to the civilian population?
    The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon): The answer is in the negative.
    Mr. MANDER: Does my right hon. Friend not think it desirable to demonstrate that war is not all joy-riding, and that it might be a good thing to give the public a whiff of the real thing?
    Sir P. SASSOON: The Royal Air Force Display is the culmination of the Royal Air Force annual training. It does not involve the use of gas in any form whatever.

    NAVAL AND MILITARY PENSIONS AND GRANTS.
    Colonel CLIFTON BROWNasked the Minister of Pensions the total number of claims to pension of all classes which have been admitted, and the proportion of these which have been so admitted, respectively, by the Ministry on its own investigation or on appeal by the Pensions Appeal Tribunal?
    The MINISTER of PENSIONS (Major Tryon): The total number of claims from officers and men, widows and dependants, which have been admitted is, up to 31st March last, 1,970,000. Of these, 97.6 per cent. were admitted by the Ministry on its own decision, and 2.4 per cent. were so admitted on appeal by the Pensions Appeal Tribunal.

    POST OFFICE (ADVISORY COUNCIL).
    Mr. RANKINasked the Postmaster-General if he can state how many meetings have been held by the reconstituted Post Office Advisory Council; what have been the principal matters referred to it for advice; and what have been the changes, if any, which have resulted from such advice?
    The ASSISTANT POSTMASTER-GENERAL (Sir Ernest Bennett): Two meetings of the whole council have been held and one meeting of a sub-committee of the council. As regards the latter

    2065
    part of the question, I would refer my hon. Friend to the reply given to the hon. Member for Romford (Mr. Hutchison) on 6th March.

    COAL INDUSTRY (GAS DETECTORS).
    Major HILLSasked the Secretary for Mines whether he has come to any decision as to the necessity of supplying coal mines with automatic gas detectors?
    Dr. BURGIN: I have been asked to reply. My hon. Friend the Secretary for Mines, has now received all the reports on the recent pit trials of the Ringrose automatic detector, and he is having a limited number of copies printed in one volume for distribution to the interested parties, so as to give them an opportunity of considering the bEarlng of the results on the general question of gas detection.
    Mr. PIKE: Will that be available to Members of the House?
    Dr. BURGIN: I will convey the suggestion to my hon. Friend the Secretary for Mines.
    Mr. TINKER: When does the hon. Gentleman expect the final report to be issued?
    Dr. BURGIN: I will ask the Secretary for Mines.

    TERRITORIAL ARMY.
    Mr. ATTLEEasked the Financial Secretary to the War Office for what reason the Territorial associations have been asked their opinion on the desirability of altering the conditions of service of Territorials so as to make them liable to general service; what has been the nature of the replies received and whether the Government intend to introduce legislation on this subject?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): The motives for consulting the county associations were those that I outlined to the House on the 9th March last. The associations have decided practically unanimously to accept the proposals with regard to general service. No special legislation has been contemplated other than that which would be necessary in the event of grave emergency. Details will be published in due course for the information of all concerned.

  INDIA.

    IMPORT DUTIES (MOTOK CYCLE PARTS).
    Mr. HALESasked the Secretary of State for India whether he is aware that the Customs authorities at the Indian ports are insisting on a duty of 37½ per cent. on motor cycle parts instead of only 30 per cent. on such parts; and will he issue instructions to the effect that an allowance of 7½ per cent. should be made, to be retrospective from when the new duties were arranged?
    The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): I have no information, but will inquire.
    Mr. HALES: Is the hon. Gentleman not aware of the very serious dislocation and tension between the dealers and Customs in all the ports throughout India, where goods have been lying for six months, and it is impossible to land them because of misunderstanding of the Ottawa Agreements, and will he send out representations so as to get the deadlock removed?
    Mr. BUTLER: I will inquire into the matter.

    WORKMEN'S COMPENSATION.
    Mr. THORNEasked the Secretary of State for India whether there is any workmen's compensation legislation in force in India: whether the 12 men who were seriously burnt at the sugar factory, Walterganje, have received any compensation for their injuries; and whether the relatives of the five deceased workmen received compensation?
    Mr. BUTLER: The Indian Workmen's Compensation Act, which was recently amended on the recommendation of the Whitley Commission, provides for the payment of compensation in such cases to workmen who are disabled, whether temporarily or permanently, and to the dependents of those who lose their lives. Adequate arrangements are in force for settling questions arising under the Act. I do not normally receive reports of the compensation granted in individual cases and do not expect to receive a report in the present instance.

    JAPANESE FACTORIES.
    Vice-Admiral CAMPBELLasked the Secretary of State for India whether

    2067
    he has received any communication from the Government of India about the efforts of Japanese industrialists to establish mills and factories in India; and whether he will give the House the information he has on this matter?
    Mr. BUTLER: I have no information except what has appeared in the Press. I will ask for a report.

    GERMANY (POLISH JEWS).
    Mr. MANDERasked the Secretary of State for Foreign Affairs if he will state the action taken by the League of Nations Council at its recent meeting with reference to a petition complaining of the ill-treatment of Polish Jews in German Upper Silesia, and the attitude adopted by the British Government?
    The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): As the answer is long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
    Mr. JANNER: In view of the practical admission that has been made by the Germans of this ill-treatment, would not the right hon. Gentleman consider raising this question under the Polish-German Convention through some other channel?
    Sir J. SIMON: My hon. Friend had better see the full answer.
    Following is the answer:
    A petition was presented to the League of Nations by Mr. Franz Bernheim, recently residing in German Upper Silesia, protesting against certain legislation and administrative acts as being incompatible with the rights secured by the German-Polish Convention of 1922 to all German nationals in that area without distinction of race, language or religion. This petition was considered on the 30th of May by the Council of the League in conjunction with the report submitted by the delegate of the Irish Free State, who acts as Rapporteur for Minority questions.
    Mr. Lester, after recalling a declaration already made to the Council by the German delegate to the effect that the decrees mentioned in the petition were in no way intended to conflict with Ger-
    2068
    many's international obligations, recommended that the German Government should re-instate persons who, because they belonged to the minority, had lost their employment or found themselves unable to practise their trade or profession, and that the petitioner's own personal case should be submitted to the local procedure for which the Convention provides. The German delegate refused to accept Mr. Lester's report on the ground that the petitioner was not persoNaily qualified to present, his petition nor to raise the general issue involved.
    Mr. Lester proposed to refer these two points to a committee of three jurists, and this proposal was approved (the German delegate abstaining) by the Council, which agreed that both signatories to the Geneva Convention might submit their observations to the committee of jurists and that the latter should present their report to the Council, if possible, in the course of a few days. The delegate of the United Kingdom supported Mr. Lester's proposal, adding that his silence in regard to some of the statements made by the German delegate must not be taken as implying agreement.

    CHINA AND JAPAN (ARMISTICE).
    Mr. THORNEasked the Secretary of State for Foreign Affairs whether he intends issuing a White Paper in connection with the recent armistice between Japan and China?
    Sir J. SIMON: I am glad to be able to inform the House that an armistice was signed at Tangku at 11 a.m. yesterday, by Chinese and Japanese representatives. At present I am without details of its terms, and there is no further information that I can give to the House.
    Mr. THORNE: Will the right hon. Gentleman be in a position when the House reassembles to have a White Paper printed giving all the details of this and of the indemnity which I understand is demanded from Japan because they have "pinched" a lot of territory from China?
    Sir J. SIMON: I think we really must see first what the information is.
    Mr. MANDER: Is it not a fact that there has never been a war, and how can there be an armistice?

    EUROPEAN POWERS (DRAFT PACT).
    Mr. THORNEasked the Secretary of State for Foreign Affairs whether the Four Power Pact document, showing details of the proposed agreement, will be printed as a White Paper?
    Sir J. SIMON: Yes, Sir.
    Mr. COCKS: Will the White Paper also contain the terms of the Pact as origiNaily proposed, so that we can compare the two versions?
    Sir J. SIMON: The exact form of the document is not quite decided, but I do not think it would be desirable to do that. It will contain a document which will explain the story quite clearly.
    Mr. THORNE: Will this information bring the question up-to-date, because there appears to have been some alteration made in Rome the other day?
    Sir J. SIMON: The White Paper will contain what is quite up-to-date.

    SOCIAL SERVICES (WAGES).
    Mr. CRAVEN-ELLISasked the Minister of Labour what is the wage value of the social services expressed in terms of real wages?
    Mr. HUDSON: Particulars of expenditure on some of the principal forms of public social service will be found in a Return presented to Parliament in November last (Cmd. 4197). I regret that I am unable to evaluate these services in terms of real wages.

    BERWICK MARKET, LONDON.
    Mr. DORANasked the Home Secretary if he is prepared to issue instructions to the police prohibiting street vending and transactions taking place in the thoroughfare known as Berwick Market, either immediately or upon the expiration of the licences at present held by the vendors?
    Sir J. GILMOUR: The stalls in that portion of Berwick Street which is known as Berwick Market are subject to bylaws made by the Westminster City Council, and the information before me does not suggest that there is a case for prohibition.

    ANIMALS (EXPERIMENTS).
    Mr. GROVESasked the Home Secretary the number of certificates granted in 1839, 1922, 1927 and 1931, respectively, for conducting experiments upon animals; how many inspectors are engaged to watch such experiments; and the total number of experiments so attended in these years?
    Sir J. GILMOUR: Figures of the number of certificates allowed to come into operation in the course of a given year are not available, and such figures would provide no definite indication of the number of experiments carried out in the year. As for the number of experiments attended by Inspectors, no information is available for 1899, but the figures for the years 1922, 1927 and 1931 are 401, 33, and 128. These figures provide no measure of the amount of inspection, Since it may be a matter of accident whether a number of brief experiments such as inoculations are performed during an Inspector's visit. Many experiments, such as feeding experiments or experiments involving inoculations or the administration of drugs, extend over several weeks, and an Inspector in the course of his visits sees thousands of animals which are undergoing such experiments. There are two Inspectors appointed to visit registered places for the purpose of securing compliance with the provisions of the Cruelty to Animals Act.

    FISH HILL, WORCESTERSHIRE.
    Mr. DORANasked the Minister of Health if he is aware that it is proposed to erect dwelling houses on the beauty spot known as Fish Hill, Broadway, Worcestershire; and if he will take steps to secure this site for the country by means of a regional planning scheme or otherwise?
    Sir H. YOUNG: My attention has not previously been drawn to this matter. I understand that the Worcestershire County Council are taking steps to secure the promotion of regional planning schemes throughout the county, and I will communicate with them.

    BRITISH TRUST FOR ORNITHOLOGY.
    Lord SCONEasked the President of the Board of Trade if he is aware

    2071
    that the refusal of his Department to the British Trust for Ornithology of registration as a company under the Companies Act, 1929, is endangering the establishment and development of the trust; if he will state the reasons for this refusal; and if, in view of the importance of the trust, he is prepared to reconsider the previous decision?
    Mr. RUNCIMAN: The British Trust for Ornithology has not been refused registration under the Companies Act. The Board of Trade have, however, in accordance with their general policy refused to issue a licence to the proposed company under Section 18 of the Act. The grounds for this refusal have been communicated to the Trust, and if my noble Friend has information bEarlng on the application which the Board of Trade have not already had before them the application will certainly be considered again.

    DISARMAMENT CONFERENCE.
    Mr. LANSBURY(by Private Notice) asked the Secretary of State for Foreign Affairs whether he has any statement to make concerning the position at the Disarmament Conference, and whether it is a fact that the Conference proposes to adjourn until the 27th of June?
    Sir J. SIMON: A meeting of the General Commission, I am informed, was held this morning when it was decided that the Bureau should be charged with the work of preparing the text of the Draft Convention for what is called at Geneva the second reading. The President was charged with the conduct of the negotiations to facilitate this work. It was decided that when the General Commission have completed the first reading they should adjourn until 3rd July. The technical committees will continue their work. When the General Commission has completed the first reading of the United Kingdom Draft Convention, a proposal will be made by the President to take that Draft as the basis for the Convention to be negotiated.
    Mr. LANSBURY: I beg to give notice that on the first Supply Day after the Whitsuntide Recess we shall call attention to the inordinate delay in connection with the Disarmament Conference.

BUSINESS OF THE HOUSE.
Mr. LANSBURY: Will the Lord President of the Council kindly state what the business will be after the holidays?
The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): Tuesday, 13th June: Supply, Committee, Seventh Allotted Day, Foreign Office Vote.
Wednesday, 14th June: Second Reading, Unemployment Insurance (Expiring Enactments) Bill, and Committee stage of the necessary Money Resolution.
Thursday, 15th June: Second Reading, Government of India (Amendment) Bill from another place; further consideration of the Private Legislation Procedure (Scotland) Bill; Second Reading, Church of Scotland (Property and Endowments) Amendment Bill, and Report and Third Reading of Pharmacy and Poisons Bill. The two last-mentioned Bills come down from another place.
The business for Friday will be announced later. On any day, if there is time, other Orders will be taken.
Mr. MAXTON: Are we to assume that the Second Reading Debate on the Unemployment Insurance (Expiring Enactments) Bill will be concluded in one day? Is that all the time to be allowed for the Second Reading of a Bill on Unemployment Insurance?
Mr. BALDWIN: It is a Bill of only one Clause, and I think the time will be sufficient.
Mr. MAXTON: I think there are two.
Ordered,
"That the Proceedings on the Finance Bill have precedence this day of the Business of Supply."[Mr. Baldwin.]

BILLS PRESENTED.

  LOCAL GOVERNMENT AND OTHER OFFICERS' SUPERANNUATION (TEMPORARY PROVISIONS) BILL,
  "to make provision for certain deductions from remuneration to be disregarded in the computation of contributions, pensions, and gratuities under enactments relating to the superannuation of persons employed, or paid, by local authorities and other public bodies; to give retrospective effect to such provision; and for purposes connected with the matters aforesaid," presented by Sir Hilton

  2073
  Young; supported by Sir Godfrey Collins, Mr. Skelton, and Mr. Shakespeare; to be read a Second time upon Tuesday, I3th June, and to be printed. [Bill 115.]

  SEA-FISHING INDUSTRY BILL,
  "to provide for regulating the catching, landing, and sale of sea-fish; for the constitution of a Sea-fish Commission; and for purposes connected with the matters aforesaid," presented by Major Elliot; supported by Sir John Gilmour, Sir Godfrey Collins, Mr. Runciman, and Sir Bolton Eyres Monsell; to be read a Second time upon Tuesday, 13th June, and to be printed. [Bill 116.]

  STANDING ORDERS.
  Resolution reported from the Select Committee;
  "That in the case of the Knutsford Light and Water [Lords,] Petition for Bill, the Standing Orders ought to be dispensed with: That the parties be permitted to proceed with their Bill."
  Resolution agreed to.

SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE B.
  Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Member from Standing Committee B: Mr. Mabane; and had appointed in substitution: Mr. Alan Todd.
  Report to lie upon the Table.

ORDERS OF THE DAY.

  FINANCE BILL.
  Further considered in Committee. (Progress 31st May.)
  [Sir DENNIS HERBERT in the Chair.]

  FINANCE BILL.

    NEW CLAUSE.—(Repeal of tea duty.)
    (1) The Customs Duty chargeable on tea shall cease to be charged.

    (2) Thi6 Section shall be deemed to have had effect as from the twenty-fifth day of April, nineteen hundred and thirty-three.— [Mr. D. Grenfell.]

    Brought up, and read the First time.
    3.41 p.m.
    Mr. DAVID GRENFELL: I beg to move, "That the Clause be read a Second time."
    We hope that we shall get the overwhelming assent of Members of this Committee to this Clause. This concession, which we hope to obtain, would be distributable over the largest possible number of citizens of this country. Tea, which was at one time regarded as a luxury and a subject of feminine indulgence, is now the most popular of all drinks and an article of daily consumption among all classes of our people. I think it is true to say that we are the greatest tea-drinking nation in the world, and in quality, I think, our tea stands supreme as compared with the tea served in all other countries. A very great trade has been built up in this beverage, and we move this new Clause confident that that trade will be maintained, that there is no danger of interference with the consumption or sale of this very popular commodity. Unlike beer, there is no danger that the law of diminishing returns will affect this taxable commodity, but we are not having regard to the financial value of this concession.
    We believe that this wholesome and mildly stimulating drink should be still further encouraged, because it plays a very prominent part in the daily dietary of our people. The old-time ideas that tea was detrimental to health have now been almost completely discredited, and no one now believes that moderate indulgence in the use of tea is at all detrimental or a sign of unmanliness or
    2082
    effeminacy in the consumer. There are those who believe that tea is indeed a highly essential drink in these days of changed habits, when the currents of life run so swiftly. It is urged by those who have studied physiology and diet that all of us require on occasion a little stimulative element of some kind, and I am sure that the tea-drinker holds a very prominent place in this House because of the mild and non-injurious stimulation which his cup of tea gives him in the course of the day.
    It is said that tea is a proper subject for taxation because it comes in part from the Empire and in part from foreign countries, and some think the tax should be maintained because it gives an opportunity for Imperial preference, but no less ardent an Imperialist than the right hon. Member for Epping (Mr. Churchill) did what we are asking should be done to-day. He took off this tax in 1926, and from then till 1931 the right hon. Member for Epping, followed by that rabid temperance reformer, Lord Snowden, maintained free imports of tea into this country, despite the temptation to raid all possible sources of revenue. The Noble Lord, it is true, became a backslider in the cause of temperance and free imports under the pressure of economy in 1931, but for the years 1928 to 1931 there was no taxation of tea, and no Chancellor of the Exchequer in ordinary times would have dreamed of restoring this duty.
    The tax now stands at 4d. per lb. on foreign-grown tea and 2d. on tea produced within the Empire. There is, therefore, a preference of 2d. per lb. on Empire-grown tea. We were told on one occasion how many cups of tea were made from one pound of tea and now difficult it would be to apportion the value of this concession to the purchaser of the individual cup of tea who visited a tea-shop and bought a cup of tea. Those who argue in that way ignore the fact that the great bulk of the tea that is drunk in this country is made at home by the head of the family, the lady of the house, who makes it for her family and does not count the cups of tea that are consumed. The argument that you cannot give this concession to the individual person who pays a visit to the teashop is not worthy of attention. We are not asking for this concession in the interests of those people, but because we

    2083
    believe that the concession is due to the great bulk of people, who must in consequence benefit from the removal of the duty and a reduction in the price of tea by 4d. per lb. in the case of foreign tea and 2d. in the case of tea produced in the Empire. The Chancellor of the Exchquer has pleased a minority of people by his reduction of 1d. a pint on the duty on beer, but he will please and earn the gratitude of the overwhelming Majority of the people of this country if he will balance that by a concession of 4d. per lb. on foreign tea and 2d. on Empire tea.
    3.50 p.m.
    Mr. BANFIELD: I beg to support the Motion. During these Debates all kinds of interests come to the House and ask for some relief in some form or another. In this new Clause we are asking for some relief for a very important section of the community, namely, the wives who pay the Tea Duty. It is the one duty which is a direct tax upon the home purse, and in asking for this concession we are not asking for a very great thing. I feel sure that had it not been for the crisis and the economy proposals we should not have had this duty replaced on tea. The Government have now an opporunity to restore the position as it was previous to 1931, and to give some relief, however small, to the home. The purchase of tea is made by the housewife, and, as consideration has been given to the men by a reduction in the Beer Duty, it is only fair that the women who have to pay the Tea Duty should have a look in also.
    3.52 p.m.
    Mr. TINKER: On the question of the Beer Duty there was a difference of opinion on this side of the Committee, but on this question we are unanimous. I think that that unanimity ought to impress the Chancellor. Tea is the national beverage, and we should like it to have the position that it occupied when there was no duty at all upon it. This duty is indirect taxation, and we are opposed to that form of taxation. We believe in the principle of the direct taxation of people so that they know exactly what they have to pay. It is time the House of Commons set about removing all indirect taxes, and we could not do better than to start by removing the Tea Duty, because every one uses tea more or less.
    2084
    It may be injurious to use too much, but it is used in every household. We may be met by the Financial Secretary saying that our finances cannot stand this remission. We have managed to find money for other remissions, however, and I hope that there will be no riding off on those lines, but that the Financial Secretary will meet us on the straight issue whether tea ought to be taxed or not.
    3.54 p.m.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): I must thank the three hon. Members for the brevity with which they have initiated our long discussions this afternoon. They have stated the case very concisely, and, if everybody will do that, we shall be able to get through our business by midnight. They have not imposed a very heavy task upon me. I do not in the least dispute the virtues of the beverage, nor its popularity. We may all agree about that. I do not know, however, why the hon. Member for Leigh (Mr. Tinker) should seek to deprive me of what is, after all, a very valid argument, namely, that this remission would ultimately cost over £4,000,000. I would point out that other new Clauses which hon. Members opposite have on the Order Paper would cost £25,000,000, and, while they may have made some suggestion for additional revenue in the course of our discussions, no proposal that they have made would provide us with the means to satisfy all their demands. Therefore, I must point out to the Committee that it would cost over £4,000,000 to remit this duty. Is it a hardship? Let us look at the simple facts. When there was no duty on tea in 1929–30, the retail price was 2s. 0¾d. per lb. To-day, with the 2d. duty, it is 1s. 9¼d. Therefore, I do not think it can seriously be contended that the existence of this duty has made tea less accessible to the households of the country. I hope that in raising these two practical arguments I have said enough to satisfy the three hon. Gentlemen who have spoken.
    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes, 39; Noes, 233.

    Division No. 219.]

    AYES.

    [3.59 p.m.

    Attlee, Clement Richard

    Hirst, George Henry

    Nathan, Major H. L.

    Banfield, John William

    Janner, Barnett

    Owen, Major Goronwy

    Batey, Joseph

    John, William

    Parkinson, John Allen

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

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

    Price, Gabriel

    Cape, Thomas

    Jones, Morgan (Caerphilly)

    Salter, Dr. Alfred

    Cocks, Frederick Seymour

    Kirkwood, David

    Smith, Tom (Normanton)

    Cripps, Sir Stafford

    Lansbury, Rt. Hon. George

    Thorne, William James

    Edwards, Charles

    Lawson, John James

    Tinker, John Joseph

    Foot, Isaac (Cornwall, Bodmin)

    Logan, David Gilbert

    Williams, David (Swansea, East)

    Grenfell, David Rees (Glamorgan)

    McEntee, Valentine L.

    Williams, Edward John (Ogmors)

    Groves, Thomas E.

    McGovern, John

    Williams, Thomas (York, Don Valley)

    Grundy, Thomas W.

    Mainwaring, William Henry

    Hall, George H. (Merthyr Tydvil)

    Mander, Geoffrey le M.

    TELLERS FOR THE AYES.—

    Hicks, Ernest George

    Maxton, James

    Mr. D. Graham and Mr. G. Macdonald.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Denville, Alfred

    Lloyd, Geoffrey

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Despencer-Roberteon, Major J. A. F.

    Lovat-Fraser, James Alexander

    Agnew, Lieut. Com. P. G.

    Dickie, John P.

    Mabane, William

    Albery, Irving James

    Doran, Edward

    Mac Andrew, Lieut.-Col. C. G. (Partick)

    Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)

    Drewe, Cedric

    McEwen, Captain J. H. F.

    Anstruther-Gray, W. J.

    Dugdale, Captain Thomas Lionel

    McKie, John Hamilton

    Applin, Lieut.-Col. Reginald V. K.

    Duncan, James A. L. (Kensington, N.)

    McLean, Major Sir Alan

    Astor, Viscountess (Plymouth, Sutton)

    Edmondson, Major A. J.

    McLean, Dr. W. H. (Tradeston)

    Baldwin, Rt. Hon. Stanley

    Ellis, Sir R. Geoffrey

    Maitland, Adam

    Balfour, Capt. Harold (I. of Thanet)

    Elmley, Viscount

    Makins, Brigadler-General Ernest

    Banks, Sir Reginald Mitchell

    Emrys-Evans, P. V.

    Mallalieu, Edward Lancelot

    Barclay-Harvey, C. M.

    Erskine, Lord (Weston-super-Mare)

    Manningham-Buller, Lt.-Col. Sir M.

    Barrie, Sir Charles Coupar

    Erskine-Boist, Capt. C. C. (Blackpool)

    Margesson, Capt. Rt. Hon. H. D. R.

    Beaumont, M. W. (Bucks., Aylesbury)

    Evans, Capt. Arthur (Cardiff, S.)

    Marsden, Commander Arthur

    Beaumont, Hon. R. E. B. (Portsm'th, C.)

    Falle Sir Bertram G.

    Martin, Thomas B.

    Belt, Sir Alfred L.

    Fielden, Edward Brockiehurst

    Mayhew, Lieut.-Colonel John

    Benn, Sir Arthur Shirley

    Foot, Dingle (Dundee)

    Mills, Sir Frederick (Leyton, E.)

    Bennett, Capt. Sir Ernest Nathaniel

    Fox, Sir Gifford

    Mills, Major J. D. (New Forest)

    Betterton, Rt. Hon. Sir Henry B.

    Galbraith, James Francis Wallace

    Milne, Charles

    Birchall, Major Sir John Dearman

    Ganzoni, Sir John

    Mitchell, Sir W. Lane (Streatham)

    Blinded, James

    Gillett, Sir George Masterman

    Molson, A. Hugh Elsdale

    Bossom, A. C.

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

    Moreing, Adrian C.

    Boulton, W. W.

    Gledhill, Gilbert

    Morris-Jones, Dr. J. H. (Denbigh)

    Bower, Lieut.-Com. Robert Tatton

    Glyn, Major Raiph G. C.

    Morrison, William Shepherd

    Bowyer, Capt. Sir George E. W.

    Goodman, Colonel Albert W.

    Murray-Phillpson, Hylton Raiph

    Boyce, H. Lesile

    Grattan-Doyie, Sir Nicholas

    Natlon, Brigadler-General J. J. H

    Braithwaite, J. G. (Hillsborough)

    Gretton, Colonel Rt. Hon. John

    Newton, Sir Douglas George C.

    Briscoe, Capt. Richard George

    Grimston, R. V.

    Nicholson, Godfrey (Morpeth)

    Broadbent, Colonel John

    Guest, Capt. Rt. Hon. F. E.

    Nicholson, Rt. Hn. W. G. (Petersf'ld)

    Brockiebank, C. E. R.

    Gunston, Captain D. W.

    North, Edward T.

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

    Hacking, Rt. Hon. Douglas H.

    Oman, Sir Charles William C.

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

    Hales, Harold K.

    O'Neill, Rt. Hon. Sir Hugh

    Browne, Captain A. C.

    Hamilton, Sir R. W. (Orkney & Zetl'nd)

    Ormiston, Thomas

    Buchan-Hepburn, P. G. T.

    Hammersley, Samuel S.

    Pearson, William G.

    Burghley, Lord

    Hanbury, Cecil

    Peat, Charles U.

    Burgin, Dr. Edward Lesile

    Hanley, Dennis A.

    Petherick, M.

    Burnett, John George

    Hartington, Marquess of

    Peto, Geoffrey K. (W'verh'pt'n, Bliston)

    Campbell, Edward Taswell (Bromley)

    Hartland, George A.

    Pike, Cecil F.

    Campbell-Johnston, Malcolm

    Harvey, George (Lambeth, Kenn'gt'n)

    Potter, John

    Carver, Major William H.

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

    Power, Sir John Cecil

    Cautley, Sir Henry S.

    Haslam, Henry (Horncastle)

    Pownail, Sir Assheton

    Cayzer, Sir Charles (Chester, Clty)

    Headlam, Lieut.-Col. Cuthbert M.

    Procter, Major Henry Adam

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

    Heneage, Lieut.-Colonel Arthur P,

    Pybus, Perey John

    Cazalst, Thelma (Islington, E.)

    Hepworth, Joseph

    Raikes, Henry v. A. M.

    Cazalet, Capt. V. A. (Chippenham)

    Herbert, Capt. S. (Abbey Division)

    Ramsay, Alexander (W. Bromwich)

    Cecil, Rt. Hon. Lord Hugh

    Hills, Major Rt. Hon. John Walter

    Ramsay, Capt. A. H. M. (Midlothian)

    Chamberlain, Rt.Hon. SirJ.A.(Birm.,W)

    Hore-Belisha, Lesile

    Ramsden, Sir Eugene

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Hornby, Frank

    Rea, Walter Russell

    Chapman, Sir Samuel (Edinburgh, S.)

    Howitt, Dr. Alfred B.

    Reed, Arthur C. (Exeter)

    Clarke, Frank

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

    Reid, David D. (County Down)

    Clarry, Reginald George

    Hume, Sir George Hopwood

    Ropner, Colonel L.

    Cobb, Sir Cyril

    Hurd, Sir Percy

    Runciman, Rt. Hon. Walter

    Cochrane, Commander Hon. A. D.

    Jamisson, Douglas

    Rungs, Norah Cecil

    Conant, R. J. E.

    Jones, Lewis (Swansea, West)

    Russell, Alexander West (Tynemouth)

    Cook, Thomas A.

    Ker, J. Campbell

    Rutherford, John (Edmonton)

    Cooke, Douglas

    Kerr, Hamilton W.

    Salmon, Sir Isidore

    Cooper, A. Duff

    Kimball, Lawrence

    Salt, Edward W.

    Courthope, Colonel Sir George L.

    Knox, Sir Alfred

    Samuel, Sir Arthur Michael (F'nham)

    Craven-Ellis, William

    Lamb, Sir Joseph Quinton

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

    Crooke, J. Smedley

    Law, Richard K. (Hull, S. W.)

    Sandeman, Sir A. N. Stewart

    Crookshank, Capt. H. C. (Gainsb'ro)

    Leighton, Major B. E. P.

    Sanderson, Sir Frank Barnard

    Dalkeith, Earl of

    Levy, Thomas

    Scone, Lord

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

    Liddall, Walter S.

    Shakespeare, Geoffrey H.

    Davison, Sir William Henry

    Lindsay, Noel Ker

    Shaw, Helen B. (Lanark, Bothwell)

    Denman, Hon. R. D.

    Lister, Rt. Hon. Sir Philip Cunliffe-

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

    2086

    2087

    Smith-Carington, Neville W.

    Summersby, Charles H.

    Wedderburn, Henry James Serymgol

    Smithers, Waldron

    Tate, Mavis Constance

    Wells, Sydney Richard

    Somerville, Annesley A. (Windsor)

    Templeton, William P.

    Weymouth, Viscount

    Soper, Richard

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

    White, Henry Graham

    Southby, Commander Archibald R. J.

    Thomson, Sir Frederick Charles

    Whiteside, Borras Noel H.

    Spene, William Patrick

    Thorp, Linton Theodora

    Williams, Herbert G. (Croydon, S.)

    Stanley, Hon. O. F. G. (Westmorland)

    Todd, A. L. S. (Kingswinford)

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

    Steel-Maitland, Rt. Hon. Sir Arthur

    Tryon, Rt. Hon. George Clement

    Windsor-Clive, Lieut.-Colonel George

    Stevenson, James

    Turton, Robert Hugh

    Wood, Rt. Hon. Sir H. Kingsley

    Stones, James

    Wallace, John (DunferMilne)

    Wood, Sir Murdoch McKenzie (Banff)

    Strauss, Edward A.

    Ward, Lt.-Col. Sir A. L. (Hull)

    Strickland, Captain W. F.

    Ward, Sarah Adelaide (Cannock)

    TELLERS FOR THE NOES.—

    Sueter, Rear-Admiral Murray F.

    Wardlaw-Milne, Sir John S.

    Sir George Penny and Mr.

    Sugden, Sir Wilfrid Hart

    Waterhouse, Captain Charles

    Womersley.

    NEW CLAUSE.—(Exchange Equalisation Account.)
    Section twenty-four of the Finance Act, 1932 (which provides for the establishment of the Exchange Equalisation Account), shall have effect as though for Sub-section (7) thereof the following Sub-section were substituted: —
    (7) The Account shall in every year until it is wound up be examined by the Comptroller and Auditor-General, and he shall report thereon to the Commons, House of Parliament.—[Mr. Morgan Jones.]
    Brought up, and read the First time.
    4.5 p.m.
    Mr. MORGAN JONES: I beg to move, "That the Clause be read a Second time.
    Perhaps I might recall to the House the position in relation to this account as it now stands. The Committee will remember that last year when this Equalisation Account was set up there appeared in Sub-section (7) of Section 24, an instruction to the Comptroller and Auditor-General in respect of his responsibility for certifying the Exchange Equalisation Account, and perhaps I ought to make it quite clear what I understand is the responsibility of the Comptroller and Auditor-General under that Sub-section. Under the law as it now stands, it seems to me that all that he is called upon to do is to examine the account and, at the end of the year, to certify that, in his judgment, the account has been conducted in accordance with the terms of the law setting up the account. We had last year and we have had this year attempts to raise the question as to whether that provision in last year's Act is a sufficient guarantee in respect of the control of this fund.
    In the previous discussion upon the fund, the Chancellor of the Exchequer, I regret to say, did not feel able to meet the suggestion made by hon. Members in all parts of the House, and I would like to repeat that this is not a party point
    2088
    at all. It is an entirely non-party point, although it is a House of Commons point pure and simple. On previous occasions when this subject has been raised with the Chancellor of the Exchequer, he has, I think, taken two points. One was that there was no object in having a full examination of the account so many months after the closing of the year's account—there was no special merit in it. That was one of his points, but it was not the first that he put. The first was that he hesitated to have the account examined by the Public Accounts Committee, lest by having such a close and minute examination of the account, an unfortunate disclosure might take place which might be inimical to the public interest. I would like to give the quotation on that particular point first of all. He was replying to some question I had put. He said, on 4th May:
    "What is the sort of questions that they"—
    That is, the Public Accounts Committee—
    "might address to him? They have been clearly suggested by the hon. Member for Caerphilly. He would want to ask, 'What has been done with this sum of money? In what form has it been held from time to time? What were your resources on such-and-such a date? What did you do when certain circumstances arose? How did you act, and what was the result of your action?' These would be reasonable questions to ask and answer if they could be safely answered to the Public Accounts Committee, or even to Members of the House, without giving the same answers to the whole world; but, as I pointed out earlier, that is really the difficulty in which we are."—[OFFICIAL (REPORT, 4th May, 1933; col. 1093, Vol. 277.]
    May I take that point first of all? The Chancellor of the Exchequer will know that in practice the Public Accounts Committee does not embark upon examination of the accounts of a given year until, at the earliest, the January of the following year. In practice the Committee does not actually arrive at the examination of

    2089
    the Treasury witness, or of the Comptroller and Auditor-General until, say, late in May, or the beginning of June. As a matter of fact, this year we have completed the examination of the Treasury witness this very week. That is to say, the examination of the Treasury witness, or the Comptroller and Auditor-General does not take place until some 15 months after the end of the financial year. On the question of privacy, the right hon. Gentleman will know that, in the very nature of things, those of us who are members of the Public Accounts Committee are presented year after year with accounts which it is desirable, in the public interest, not to make public. Quite a number of private accounts are presented to us, and, so far as my short experience of the Committee goes—and I dare say it covers the whole history of the existence of the Committee—I have never heard of the disclosure of any single figure presented within the privacy of that Committee room.
    Not only that, but this also is true. Take this Account. I dare say the Chancellor of the Exchequer will attach to this Account a very special degree of privacy, but let me remind him that this would not be the first time for the Public Accounts Committee to be confronted with highly confidential documents, and that even during the late War accounts of a highly confidential character (had to be presented to the Public Accounts Committee in relation to Navy, Army, and Air expenditure. I think the right hon. Gentleman will concede to me this proposition, that in time of war expenditure of that sort must necessarily be of a highly confidential character, and yet, though those accounts were of that character, they were, in point of fact, presented to the Public Accounts Committee during those years. The then Public Accounts Committee agreed that there should be no publicity in extenso, but that for the time being certain limitations should take place. In case I should be regarded as exaggerating the position, I would like to read a passage from their second report in 1916 in relation to this question of limitation of information:
    "Your Committee agree to the limitation of information now made public on the undertaking, as twice specifically given to them, that nothing should he withheld from the Comptroller and Auditor-General and that the full accounts will be published at
    2090
    the earliest moment that can be done without detriment to the public interest."
    But even with that limitation upon publicity the Auditor-General, as I understand it, even then did present to the Committee a full statement so far as they requested that it should be made. I think I have shown that there is a safe precedent and an adequate precedent for the proposition I am putting to the Chancellor. From the House of Commons point of view it is not enough to certify merely that the Account has been conducted according to law. The Public Accounts Committee, which is the accounts committee of this House, should be, in 1933–34, just as fully informed of the state of this Account as the Public Accounts Committee were informed in 1916 of expenditure in relation to equally confidential matters, that is, the Services expenditure at that time.
    I am sure the Chancellor did not mean to make any reflection, nor, in fact, did he, upon the reliability of members of the committee. He was rather apprehensive, perhaps, of the mere effect of the presentation of accounts at all, but I have shown him that there is a precedent for the presentation of accounts of a highly confidential character in a previous year. There is also this fact, that now, year after year, we get presented to us documents conveying information of a confidential character which we all of us, as members of that Committee, have to safeguard very carefully, and do safeguard to the utmost of our ability. The second point put by the Chancellor of the Exchequer was a different one, and I wonder on which leg he proposes to stand. Having put the point about fEarlng possible publicity, he put a second point, which will be found in column 1502 of the OFFICIAL REPORT, of the 9th May, when he was answering my hon. and gallant Friend the Member for Gainsborough (Captain Crookshank):
    "Let me point this out to the House of Commons. I think one hon. Member asked what would be the use to the speculators of knowing nine months afterwards what had been done. What use would it be to the House nine months afterwards? How would the House have control? The only information, the hon. Member now says, that is wanted is whether on a particular date a profit or loss has been incurred."—[OFFICIAL REPORT, 9th May, 1933; col. 1502, Vol. 277.]
    I submit respectfully that that is a poor House of Commons' point to take, be-

    2091
    cause the whole work of the Public Accounts Committee is an examination of accounts long Since closed. As I stated at the beginning of my speech, we have only just concluded this week an examination of witnesses bEarlng testimony to accounts which were closed 15 months ago. The House of Commons, in its wisdom long ago, set up a Public Accounts Committee, not in order to stop expenditure when it is being actually expended but in order that control shall be exercised by the House, and the knowledge that that survey is going to be made by the Public Accounts Committee acts as a bar upon the activities of the various Departments. I submit that we are not yet convInced that the case we have made is not adequate for as complete a review of this account as is made of other confidential accounts, and, indeed, of other accounts generally.
    I need not argue the general case again, because I must not consume time, but I must add this last observation. I dare say that those in charge of this account will do their very best in accordance with the traditions of our public service, indeed, that is taken for granted at once; but the times in which we live are times of some difficulty financially, and in spite of the very best efforts difficulties may supervene with consequences of a very serious character to this account. When a sum of £350,000,000 is involved it is not asking too much that the Public Accounts Committee, 15 months later if you like, but at any rate at some time, should be able to cross-examine the responsible officer of this House with a view to inquiring what is the state of this account and whether it has, in point of fact, been properly used in accordance with the decisions of Parliament. I hope I have succeeded, and I trust very much from the point of view of the House of Commons alone, in showing that there is an adequate case for what we ask, Since I am not convInced that there is the need for that large measure of reticence which the Chancellor of the Exchequer seeks to preserve in relation to this account.
    4.23 p.m.
    Mr. ALBERY: Members on this side who feel very keenly about this question of Parliamentary control over the Ex-
    2092
    change Equalisation Account are principally concerned that a fund of such importance should not be allowed to go entirely outside the control of the House of Commons. I do not propose to say much on that subject, however, because I do not believe that we have any real issue or difference of opinion with the Chancellor of the Exchequer on that point. Only last year he expressed his willingness to make an attempt to find some means by which our request could be complied with, and again this year he has said that if some means can be found by which adequate information can be given to the Public Accounts Committee or some other body without doing any harm to the actual functions of the, account he would be quite willing to consider such a proposal, and even endeavour to seek for such means. I am therefore going to leave that point, and come to what appear to be the real difficulties of the situation. One can readily understand that those who have been charged with the extremely delicate task of operating the account may very likely have made it one of their conditions that they should be given the greatest possible liberty and suffer the least interference. That is very easy to understand, and I think in such circumstances Members of the House of Commons would be willing to give the greatest amount of liberty of action, provided the principle is maintained that the House does, in fact, retain adequate control of the moneys voted by Parliament.
    The last point I wish to touch upon is probably a matter of opinion, and I rather gather that the Chancellor of the Exchequer has other views on it than my own. I have never held the view that complete secrecy can be of any real advantage in transactions of this kind. I quite realise that the operations of the account could not be carried on from day to day without absolute secrecy. The account could not be carried on if its operations were made known within a short period of their having occurred, but apart from that I have always held the view that the real objects of this account, which are, apparently, to bring about a greater degree of stability, and to inspire confidence, are better achieved by some degree of publicity than they would be by complete secrecy. To illustrate the point of view I have in mind, I would take hon. Members back to the

    2093
    time when we left the Gold Standard. Through the publication of the Bank of England gold statement, everyone was well aware of our gold position. We had seen the decline in gold.
    Eventually we saw that extremely serious departure of gold which brought us into a period of crisis, and on top of that we were made aware of those very large debts which we had to incur in America and in France. All that was made known, and in my view it was largely because it was known, and because in some sense it was a gradual process, that no panic occurred in this country. I believe, on the other hand, that if there had been no such thing as the Bank of England gold statement, and that if we had woke up one morning and been told, without previous information, that we had no more gold left and were off the Gold Standard, nothing could have prevented a panic in this country. I admit that that is a matter of opinion, that some people will agree with me and that others have every reason to take an opposite view, and I put it forward only for what it is worth. FiNaily, in view of what the Chancellor of the Exchequer has said, I very much hope that in consultation with his advisers he has been able to devise some means which will secure adequate control over this account, and that he will be able to make some proposal which will meet our difficulties in this matter.
    4.24 p.m.
    Captain CROOKSHANK: I do not want to go over the ground which I trod last year and this year on this subject, but I entirely endorse what has fallen from the hon. Member for Caerphilly (Mr. M. Jones) that this is not a political matter or a political issue in any shape or form. With regard to what has been said about the Public Accounts Committee some of us, I do not say resent, perhaps, but are a little sorry, that there are people—I do not think they include the Chancellor of the Exchequer, but it may be some of his advisers—who are not quite sure that we can be trusted with information. The hon. Member has put several questions on that subject. I think that the Public Accounts Committee are perfectly trustworthy Members of the House, and that if they are told anything in confidence that confidence will not be betrayed. We have
    2094
    had ample evidence in the past, and we may reasonably hope that our successors will be just as public-spirited in a matter of that kind as we hope we are ourselves and as our predecessors have shown themselves to be.
    Parliament showed anxiety when the fund was set up last year as to arrangements that it might be possible to make with regard to the examination of the fund. This year, Parliament has been a little more anxious because of—certainly to me—the unexpected and vast increase in the amount of the fund. Many hon. Members have thought that what might have been a good arrangement a year ago, when, compared with this year, the fund was a small one, set up as was then hoped, for a short time, was not necessarily the arrangement that is required to-day. I am certain, from the expressions of opinion that have been heard in all quarters of the Committee during these Debates, that the Chancellor must have a very good idea what it is we hope he may do. We hope that some means may be found of bringing the fund under the control of Parliament. There is no Amendment on the Paper in the name of the Chancellor, but there is yet a further stage of consideration, if he should wish to deal with the matter in the way that we suggest.
    A case has been made out for some attempt to bring this matter under the better control of Parliament, and that is all that we are asking. We feel, as guardians of the public purse, and I think quite rightly, that there is an element of financial and other danger in setting up a fund, however laudable the purpose, over which Parliament has not sufficient control. On the Third Reading of the Bill I said that if the Chancellor could not give us an assurance that he would reconsider the matter between then and the passage of the Finance Bill, I might reluctantly have to vote against the Measure. He at once said that he would give the matter his personal attention, and therefore I supported him, in the hope and full confidence that the result of his deliberations might bring some satisfactory solution. I hope that that may be the case, but of course, if no means have been found, I am afraid that I shall be thrown back upon my original position that I do not think that Parliament should be satisfied with the

    2095
    fund under the present arrangements, and that some scheme should be formulated by which we can obtain further control.
    4.34 p.m.
    Mr. DAVID MASON: I support the adoption of the Clause which was so admirably moved by the hon. Member for Caerphilly (Mr. M. Jones). I have an Amendment on the Paper which I believe I am right in stating will only see the light if this Clause is read the Second time. It is based upon a Clause which was put upon the Paper by two of my hon. Friends in practically the same wording, and which was so well worded that I could not improve upon it. The hon. Member who moved the Clause which we are now discussing will agree with me that without the valuation there would not be very much of a report, and that the valuation is needed to give the hon. Gentleman what he desires. He would say that if he were given authority to cross-question the Treasury he would arrive at what we all desire, a valuation between bullion and sterling. After his last speech, the Chancellor of the Exchequer may possibly be able to meet us, in some form or another.
    I have not much to add to what has been said, except that I am sure that it is the general opinion that the right hon. Gentleman, who has never shown himself averse to responding to a general request from all parts of the House, should give Us what we, as representatives of the taxpayers ought to request, some definite report and some valuation. The right hon. Gentleman says that the Fund is secret. A very excellent speech was made by the hon. Member for Putney (Mr. S. Samuel), who pointed out that we knew pretty well what is going on now with regard to bullion, and we know that the floating Debt has been increased to £900,000,000, just a little under £1,000,000,000 because of the additional £200,000,000 which was voted the other day. Many of us are capable of finding out what is going on. The right hon. Gentleman will say, "Why then press for a report?" The answer is that our efforts are merely guesswork, whereas an official statement from the Treasury and from the right hon. Gentleman would be of immense value, and would add to his
    2096
    popularity. It would also meet the wishes of the House.
    4.38 p.m.
    Sir GEORGE GILLETT: My views are entirely opposite those which have already been expressed. I am willing to support any reform which the Chancellor feels able to concede, but it is almost impossible for him to give any information which would be of use to anybody, and in all probability the information would do more harm than good. The hon. Member for East Edinburgh (Mr. D. Mason) is far better left guessing. I should never trouble to give him the information, because I think that that is the best state in which people should be left in regard to this Fund. The hon. Member who moved the Clause was not alive to the facts of the case which is now under consideration. He cited certain information given during the time of war, in regard to the purchase of munitions and articles of warfare, but that is entirely different from the information which is presented to the Public Accounts Committee. The hon. and gallant Member for Gainsborough (Captain Crookshank) more truly represented the position when he said that this information might be exceedingly valuable for a member of the Public Accounts Committee, and not alone for-a member of the Public Accounts Committee, but for a number of other people who attend that committee. I am not suggesting that for anyone connected with that committee to know would necessarily be giving away important information, but I can see that some Members might be placed in a very difficult position.
    As an illustration of the difficulty of giving information, I might take a purely imaginary case. Suppose that this fund had been in existence for one or two years, and, at the Public Accounts Committee shortly before America went off the Gold Standard, the accounts presented dealing with the fund for the past year had shown, as I understand, the hon. Member for East Edinburgh thinks it should show, how it had been invested. If those accounts had shown large holdings in dollars, what would have been the position of the Public Accounts Committee in the future after America had gone off gold? It would be known that, nine or ten months before, the Exchange Account

    2097
    had had a very large holding of dollars. What would happen to that committee? Would you say to the committee: "Are you still holding those dollars to-day," or would you not? If the Accounts Committee ask nothing, all they know is that, 10 months before, the fund had those dollars. The general temptation would be to ask whether those dollars had been sold, and whether gold had been purchased with them. At once you get to the point that the Public Accounts Committee have not satisfied themselves, and would be compelled to ask questions dealing with the position of the fund, in order to have their minds set at rest. When they look at the kind of information which is being asked for, hon. Gentlemen will see that although it might be information as to the position many months ago, yet in view of the difficult position of the fund, the Public Accounts Committee might be placed also in a difficult position when they got that information.
    The hon. Gentleman who moved the Clause gave an illustration of what he considered was secret information being given to that committee. I can give an illustration of information which is never divulged to the committee—information as to the Secret Service Fund. I do not think that particulars are given to the committee as to how the Secret Service Fund is spent, and members of the committee do not ask anything about it. That is an illustration that you can have a fund about which you know perfectly well that information will not be given to the Public Accounts Committee. Even if the Chancellor gave to that committee the information that is suggested, hon. Members would find ultimately that it would be impossible for the right hon. Gentleman to give any information which would be of any value to the Public Accounts Committee without the Treasury being placed in a most difficult position, and without arousing a series of questions of every kind which could not be answered. The whole question would be left in a most unsatisfactory position.
    Mr. ALBERY: Does it not occur to the hon. Gentleman that the Comptroller and Auditor-General would only have the information up to the date of his audit and would be unable to answer about transactions afterwards.
    Sir G. GILLETT: I see that. I was pointing out that the Public Accounts Committee would then be left with information as to what happened some time ago in regard to dollars owned by the fund, and without the knowledge whether the dollars were still held by the fund. As the hon. Member knows, the usual procedure, as the Comptroller and Auditor-General cannot answer questions, is for his representatives to do so. The Treasury would be answerable. You do not ask questions of the Comptroller and Auditor-General; you ask the representative of the Department, and the person who has to be asked is the representative of the Treasury, who must know exactly what the position is, although he may refuse to answer.
    4.45 p.m.
    Sir JOHN WARDLAW-MILNE: The truth of the statement made by the hon. Member for Caerphilly (Mr. Morgan Jones), in moving this Clause, that this is not a party matter, is shown by the fact that I find myself in complete agreement with the objects which he seeks to attain, but yet quite unable to support the Clause as it stands. My reasons are partly but not entirely those which have been given by the hon. Member for Fins-bury (Sir G. Gillett). I think it would be possible, when a period of some months had elapsed after the end of the year, for the Public Accounts Committee to get information as to what had happened in the previous financial period covered by this account, but whether that information would be of much practical value is another matter. I entirely agree, however, as to the undesirability of the situation in which the House of Commons finds itself at the present time, when there is this very large amount of money entirely outside its control, and that is the reason why I am in entire agreement with the objects which hon. Members who are supporting the Clause have in view. At the same time, I am faced with the fact that, as far as I can see, if you have a fund of this kind it is quite impossible to give the House of Commons that information it desires to have, because the fund could not, as I imagine, be properly administered if the information were given.
    Therefore, as I see it, it merely comes to this, that the House of Commons has to put up with a position in which, be-

    2099
    cause of the exceptional circumstances of the times, it has entrusted to certain people a very large sum of money which is outside its control altogether. I do not think there is any alternative, and I think we have to face that position. That it is not a desirable position I entirely agree. I would go further, and say that, if this were a case in which, for a period of years, the use of such a fund was likely to continue, I think the Chancellor of the Exchequer would have to consider very seriously whether it would not be necessary in some way or other—whether by means of some special committee or in some other way—to take the House of Commons to some extent into his confidence. He, I presume, like the rest of us however, hopes that this is only a comparatively temporary measure, the necessity for which in the ordinary course of things will pass away at an early date; and I think the House of Commons must face the fact that for this temporary period it will entirely lose control of the administration of this huge sum of money.
    Another reason which makes me more hopeful that this period may be a temporary one is that we are within a few days of the inauguration of the World Economic Conference, and it is perfectly clear, surely, to everyone, that if that conference does not deal with the stability of currencies first and foremost, before it even begins to consider any other questions, it is doomed to failure at the start. There is no other question in the same category of importance as that of the stabilisation of world currencies, and, indeed, all our tariff agreements and other trade arrangements will go by the board, because they will be quite inoperative, unless currencies are stabilised as between the nations. That being the case, I can only hope, and I live, perhaps over-optimistically, in that hope, that this conference, of which we have heard so much and which has been postponed so often, is going to succeed in dealing with first principles and first things first of all. If that be the case, there will be no necessity, within a very short time, for the use of this Equalisation Fund, at any rate, to anything like the same extent as it is necessary to-day, and for that reason also I think that the House of Commons must, as I have said, put up the fact
    2100
    that we are, and must be in the nature of things, without any control over the fund for this temporary period.
    I would like to say one further thing. If there is anything that gives us confidence in continuing this admittedly unsatisfactory arrangement, it is that the Equalisation Fund has been so extraordinarily well administered in the past. I think that the House of Commons owes a debt of gratitude to the right hon. Gentleman the Chancellor of the Exchequer and his advisers for the way in which the fund has been administered— so far as we know—I add those words advisedly; and, in case I should be misunderstood, I would repeat what I have said before, that, without the information which only the Chancellor of the Exchequer and his advisers have, and which the rest of us are not in possession of, we are faced with the possibility that the so-called appreciated value of gold may not be forthcoming when it comes to a final settling up. It would be out of order to go into these matters now, and I would only say that, so far as we know it, the administration has been extraordinarily successful, and at any rate the traders of this country owe a debt of gratitude to the Government for the fact that the fluctuations in exchange have been kept within reasonable limits in recent months. For the reason that I do not believe that any statement 10 months or thereabouts after a financial year has closed can be of any real value, I could not myself support the Clause, although, as I have said, I have great sympathy with the desire of the House of Commons to know more about these matters from time to time.
    4.52 p.m.
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I am disposed to agree with my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) that we may hope that the necessity for the existence of this Exchange Equalisation Account will only be of a temporary character. At the same time, I would not say, if any agreement is come to at the outset of the World Economic Conference as to means for retaining relative stability in the case of various currencies, that that is associated in my mind with the immediate disappearance of the Exchange Equalisation Account. Indeed, it might well be

    2101
    that an account of this kind would be one of the factors which would enable us to carry through such an arrangement if it were found possible. That, perhaps, is somewhat of a digression.
    The hon. Member for Caerphilly (Mr. M. Jones), who is Chairman of the Public Accounts Committee, said very truly that this is not a party matter, but rather a House of Commons question; and I think he is entitled to make that claim, because the views which he expressed have been echoed in various other quarters of the Committee, and, as the Committee are aware, I have always been sympathetic towards that point of view. I have always realised the difficulties, to which my hon. Friend the Member for Kidderminster has referred, of the position of the House of Commons in being asked to entrust the management and administration of a vast sum of money, consisting of hundreds of millions of pounds, to a body the composition of which is not known to it, and without any knowledge at all of how the administration is being carried on. I have felt, myself, that there could be no justification for such a state of things were it not that it would appear that the disclosure of such information as the House of Commons would certainly, in other circumstances, have the right to ask for, would make it impossible to operate the fund at all for the purpose for which it has been established. That, as I have said before, and as I say again, is the only reason and the only difficulty that prevents me from accepting to the full the claims which have been made by the hon. Member for Caerphilly.
    He has put this Clause down, and has argued that what he is asking—namely, that the Auditor-General should not only examine the account and report whether it has been conducted in accordance with the statute, but should, further, make a general report to the Public Accounts Committee—could be done without danger to the public interest. Of course, if the Clause were carried in the form in which it now stands, it would be obvious that the Auditor-General must take it as a direction to communicate to the Public Accounts Committee the whole state of the fund at the date on which he was reporting—what the assets were, what the conduct of the fund had been, and so on—and would have to answer questions as to the state of the
    2102
    fund at any particular time, and the reasons which had been given for any particular action.
    Mr. MORGAN JONES: When the right hon. Gentleman speaks of the date at which the Auditor-General was reporting, he will, of course, remember that in fact the Auditor-General only reports to the Public Accounts Committee some 12 or 15 months after the end of the year.
    Mr. CHAMBERLAIN: By the date at which he was reporting I did not mean the date at which he appeared before the Public Accounts Committee, but the date of the closing of the Account—the 31st March, or whatever it might be. Let me say at once that I am not suggesting any kind of reflection upon the sense of responsibility of members of the Public Accounts Committee, but I put to myself this question: What is the purpose of the Public Accounts Committee? Is it not to enable the House of Commons to exercise control over public expenditure? I will assume that in this case the Public Accounts Committee, after receiving the report of the Auditor-General, fully approve of everything that has been done. In that case there would be no reason why the information which has been given to them should go any further than themselves. But, surely, T. must take into account the possibility that they would be critical of something that had been done. They might consider that some error had been made in the administration of the Account. In that case, surely, they would desire to be able to report to the House of Commons that they did criticise, that they did not approve, that they recommended certain alterations. And when you come to that point, I do not see how they are going to make a case to the House of Commons, or how my Department is to defend itself against any such criticism, unless some of this material which has been supplied to them is also imparted to the House of Commons, whose proceedings, of course, are public. I am sure that the hon. Member will see the difficulty in which I am.
    Mr. MORGAN JONES: Do I understand the right hon. Gentleman's argument to be that, in the event of the Account having been, in the view of the Committee, properly conducted, all would

    2103
    be well, but that if there should be in the view of the Public Accounts Committee something that deserved, shall I say, censure, or objection, the (Public Accounts Committee is to allow it to go on without any observation at all?
    Mr. CHAMBERLAIN: Certainly not. It is not what the Auditor-General says that I am concerned about. I am assuming that the Auditor-General does certify in any case that the Account has been conducted in acordance with the Statute. But, obviously, the Public Accounts Committee might say that, although it had been conducted in accordance with the Statute, they did not approve of the way in which it had been conducted. It may be that I am over-cautious in this matter, but I would ask the Committee to observe that we are here dealing with matters of which we have very little experience up to the present, and yet which are matters of vital importance, as we believe, to the country; and if in this matter we make a mistake and go a little bit too far, we may utterly destroy the usefuiness of the fund, and may find that we have done away with the possibility of using it for the purpose for which we set it up. I venture to say to the Committee that it is better, at any rate in the first instance, to be a little too cautious than a little too rash in this matter, because the dangers of being over-cautious are not nearly so great as those of going too far in the opposite direction.
    Having said that, I say again that I am extremely anxious to find some way of meeting the point that has been raised by the hon. Member for Caerphilly, and supported by my hon. Friends in various parts of the Committee. I have given quite a lot of time to trying to find whether one could not give to the Public Accounts Committee sufficient information to enable them to form their own judgment of the working of the account, without at the same time disclosing the actual state of the account at a known date.
    I want to emphasise this point. The dangerous thing is to make known the state of the account at a given date. That would let it be known to those who have an interest in the working of the account for their own purposes and they
    2104
    could connect up the two things, the given date and the state of the account at that date, and by looking back at the transactions that took place at that time they could get information which would be useful to them in guessing at the future operations of the fund. There must always, in the working of a fund of this kind, be times when the resources of the fund may be fully expended. Those will be the weak times, because we are dealing here not only with speculation but with seasonal changes, which come at known periods of the year, and, therefore, we want to guard against giving the public information which enables them to say, "At such a date this was the state of the account." Perhaps it is possible to avoid that particular danger while giving the Public Accounts Committee the sort of information which they very properly desire to have and which I am anxious that they should have if it can be done without public danger. I have devised this proposal which I will communicate to the Committee and, if it is acceptable, I shall be very glad to carry it out. This is the proposal. There will be prepared a figure for each month showing the value of the holding in the account on the last day of that month of foreign devisen and gold, in which alone the account can deal. From these figures will be compiled what I may call a monthly average figure comprising the period from the setting up of the account in July last year to the end of the financial year in March, 1933. This figure, after it has been agreed with the Comptroller and Auditor-General, will be available to the Public Accounts Committee and will be given to them by the Treasury Accounting Officer when he comes before them in the ordinary course of business for examination of the Appropriation Accounts for 1932–3. That is going a good way. It is giving rather more than my advisers would like me to give, but I hope the Committee will accept it as an earnest at any rate of my strong desire to meet their wishes on the point.
    My hon. Friend the Member for Gainsborough (Captain Crookshank) remarked that there was no Amendment in my name upon the Paper. While I am ready to give this undertaking to the Committee in respect of this year, I do not wish to put it in the form of a statutory provision at the present time. I must regard

    2105
    this as to some extent experimental. I should like to see how it works. If it works all right during the course of the present year, I shall then be quite ready to consider next year, if the Exchange Equalisation Account is still continued, whether it might not be embodied in a more permanent provision, but for the present I would ask the Committee to be content with the undertaking I have given and to let it be considered as a trial which will be permanent or otherwise according as experience guides us.
    Mr. SM1THERS: Will the right hon. Gentleman tell us what the monthly figure will consist of? Will it be a valuation of the contents of the fund at that date?
    Mr. CHAMBERLAIN: There will be first of all taken out a figure of the holding in the account of foreign devisen and gold on the last day of each month. That will give, in a full year, 12 monthly figures. The average of those figures will be taken as what I call the monthly average and that will be the figure.
    5.5 p.m.
    Mr. MORGAN JONES: One has only heard the statement across the Table, and it is difficult to form a judgment as to the exact significance of it. I am very much obliged to the right hon. Gentleman for having attempted to meet our point. I am quite sure it is well intentioned and we accept it in that sense for the present. I am quite willing to withdraw my Motion so that we can have time to examine the statement as it appears in the OFFICIAL REPORT to-morrow, and, if it appears to us satisfactory, that is the end of the matter, but we should like to return to it on Report if it is unsatisfactory.
    Mr. CHAMBERLAIN: I think that is very reasonable.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Deductions in respect of relative or other person taking charge of widower's or widow's children or acting as housekeeper or in respect of widowed mother, etc.)
    Sections nineteen and twenty of the Finance Act, 1920, and Sections twenty-one and twenty-two of the Finance Act, 1924, as amended by any subsequent enactment, shall have effect as if for the words "fifty pounds" there were substituted the words "sixty pounds."—[Mr. Logan.']
    Brought up, and read the First time.
    Mr. LOGAN: I beg to move, "That the Clause be read a Second time."
    5.6 p.m.
    Mr. CHARLES BROWN: I suppose all Members are familiar, perhaps from personal experience, with the type of case to which we seek to give some relief in this new Clause. This allowance was first granted in the Finance Act, 1920, and the amount was £45. By the Finance Act of 1924 it was increased to £60. In the crisis Budget of August, 1931, it was reduced to £50. We propose to restore it to the figure of £60 which obtained between 1924 and 1931. The Chancellor of the Exchequer has told the Committee on more than one occasion that confidence is largely restored in the country through the policy that has been pursued during his term of office, and it would be taken as a sign of his own confidence in the policy that he is pursuing if he granted this concession. If he has no fear for the future, I cannot doubt that he will grant it. If he does, it will be practically the only concession that he has made in the course of these Debates.
    5.8 p.m.
    Mr. HORE-BELISHA: The hon. Member has correctly narrated the history of this allowance. It was based on the recommendation of the Royal Commission on Income Tax in 1920, upon the cost of living which was then 230 per cent. above pre-War, whereas it is now only 136 per cent. Therefore, the allowances on that basis are higher than the Royal Commission recommended. The general reduction of allowances in 1931 was part of a scheme. The hon. Member wishes to restore one part of the scheme and not the other. The cost of this proposal would be £100,000 and, if all the allowances were restored, it would be £25,000,000 and the Budget would obviously be unbalanced. The Clause cannot be accepted as it stands, because it would have the illogical result that a widower with a housekeeper would receive an aggregate allowance of £160—£100 personal allowance and £60 housekeeper allowance—whereas a married couple would receive only £150. So that a man with a housekeeper would be considerably better off than a married man living with his wife. On those grounds I ask the Committee to reject the Clause.
    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes, 34; Noes, 257.

    Division No. 220.]

    AYES.

    [5.12 p.m.

    Attlee, Clement Richard

    Hirst, George Henry

    Price, Gabriel

    Banfield, John William

    John, William

    Rathbone, Eleanor

    Batey, Joseph

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

    Smith, Tom (Normanton)

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

    Jones, Morgan (Caerphilly)

    Thorne, William James

    Cape. Thomas

    Kirkwood, David

    Tinker, John Joseph

    Cocks, Frederick Seymour

    Lansbury, Rt. Hon. George

    Wedgwood, Rt. Hon. Josiah

    Cripps, Sir Stafford

    Logan, David Gilbert

    Williams, David (Swansea, East)

    Daggar, George

    McEntee, Valentine L.

    Williams, Thomas (York, Don Valley)

    Edwards, Charles

    McGovern, John

    Grenfell, David Rees (Glamorgan)

    Mainwaring, William Henry

    TELLERS FOR THE AYES.—

    Groves, Thomas E.

    Maxton, James

    Mr. D. Graham and Mr. G. Macdonald.

    Grundy, Thomas W.

    Owen. Major Goronwy

    Hicks, Ernest George

    Parkinson, John Allen

    NOES.

    Acland-Troyte, Lieut.-Colonel

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

    Hunter, Capt. M. J. (Brigg)

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Davison. Sir William Henry

    Hurd, Sir Percy

    Albery, Irving James

    Denman, Hon. R. D.

    Inskip, Rt. Hon. Sir Thomas W. H.

    Allen, Lt.-Col. J.Sandeman (B'k'nh'd)

    Denville, Alfred

    Jamisson, Douglas

    Anstruther-Gray, W. J.

    Despencer-Robertson, Major J. A. F.

    Jones, Lewis (Swansea, West)

    Applin, Lieut.-Col. Reginald V. K.

    Dickie, John p.

    Ker, J. Campbell

    Astor, Viscountess (Plymouth, Sutton)

    Donner, P. W.

    Kerr, Hamilton W.

    Baillie, Sir Adrian W. M.

    Doran, Edward

    Kimball, Lawrence

    Baldwin, Rt. Hon. Stanley

    Dower, Captain A. V. G.

    Knox, Sir Alfred

    Balfour, Capt. Harold (I. of Thanet)

    Drewe, Cedric

    Lamb, Sir Joseph Quinton

    Banks, Sir Reginald Mitchell

    Duckworth, George A. V.

    Law, Sir Alfred

    Barclay-Harvey, C. M.

    Dugdale, Captain Thomas Lionel

    Law, Richard K. (Hull, S. W.)

    Barrie, Sir Charles Coupar

    Duncan, James A.L.(Kensington, N.)

    Leckie, J. A.

    Beaumont, M. W. (Bucks., Aylesbury)

    Edmondson, Major A. J.

    Lees-Jones, John

    Beaumont, Hn. R. E. B. (Portsm'th, C.)

    Ellis, Sir R. Geoffrey

    Leighton, Major B. E. P.

    Belt, Sir Alfred L.

    Elliston, Captain George Sampson

    Levy, Thomas

    Benn, Sir Arthur Shirley

    Elmley, Viscount

    Liddall, Walter S.

    Betterton, Rt. Hon. Sir Henry B.

    Emmott, Charles E. G. C.

    Lindsay, Noel Ker

    Birchall, Major Sir John Dearman

    Emrys-Evans, P. V.

    Lister, Rt. Hon. Sir Philip Cunliffe-

    Bird, Ernest Roy (Yorks., Skipton)

    Entwistle, Cyril Fullard

    Lloyd, Geoffrey

    Bird Sir Robert B. (Wolverh'pton W.)

    Erskine, Lord (Weston-super-Mare)

    Lockwood, John C. (Hackney, C.)

    Blindell, James

    Erskine-Boist, Capt. C. C. (Bik'pool)

    Lovat-Fraser, James Alexander

    Boulton, W. W.

    Evans, Capt. Arthur (Cardiff, S.)

    Mabane, William

    Bower, Lieut.-Com. Robert Tatton

    Evans, David Owen (Cardigan)

    MacAndrew, Lt.-Col C. G. (Partick)

    Boyce, H. Lesile

    Everard, W. Lindsay

    McEwen, Captain J. H. F.

    Braithwaite, J. G. (Hillsborough)

    Falle, Sir Bertram G.

    McKie, John Hamilton

    Briscoe, Capt. Richard George

    Fielden, Edward Brocklehurst

    McLean, Major Sir Alan

    Broadbent, Colonel John

    Foot, Dingle (Dundee)

    McLean, Dr. W. H. (Tradeston)

    Brocklebank, C. E. R.

    Foot, Isaac (Cornwall, Bodmin)

    Macquisten, Frederick Alexander

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

    Fox, Sir Gifford

    Maitland, Adam

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

    Galbraith, James Francis Wallace

    Makins, Brigadler-General Ernest

    Browne, Captain A. C.

    Ganzoni, Sir John

    Mallalieu, Edward Lancelot

    Buchan-Hepburn, P. G. T.

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

    Mander, Geoffrey le M.

    Burghley, Lord

    Gledhill, Gilbert

    Manningham-Buller. Lt.-Col. Sir M.

    Burnett, John George

    Gluckstein, Louts Halle

    Margesson, Capt. Rt. Hon. H. D. R.

    Campbell, Edward Taswell (Bromley)

    Goff, Sir Park

    Marsden, Commander Arthur

    Campbell-Johnston, Malcolm

    Goodman, Colonel Albert W.

    Martin, Thomas B.

    Carver, Major William H.

    Gower, Sir Robert

    Mason, David M. (Edinburgh, E.)

    Cautley, Sir Henry S.

    Grattan-Doyle, Sir Nicholas

    Mayhew, Lieut.-Colonel John

    Cayzer, Sir Charles (Chester, Clty)

    Gretton. Colonel Rt. Hon. John

    Merriman, Sir F. Boyd

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

    Grimston, R. V.

    Mills, Sir Frederick (Leyton, E.)

    Cazalet, Thelma (Islington, E.)

    Guest, Capt. Rt. Hon. F. E.

    Mills, Major J. D. (New Forest)

    Cazalet, Capt. V. A. (Chippenham)

    Gunston, Captain D. W.

    Milne, Charles

    Cecil, Rt. Hon. Lord Hugh

    Hales, Harold K.

    Mitchell, Sir W. Lane (Streatham)

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

    Hamilton, Sir R. W.(Orkney & Zetl'nd)

    Molson, A. Hugh Elsdale

    Chamberlain, Rt. Hon. N.(Edgbaston)

    Hammersley, Samuel S.

    Moreing, Adrian C.

    Clarry, Reginald George

    Hanbury, Cecil

    Morris, John Patrick (Salford, N.)

    Cobb, Sir Cyril

    Hanley, Dennis A.

    Morris-Jones, Dr. J. H. (Denbigh)

    Cochrane, Commander Hon. A. D.

    Hartland, George A.

    Morrison, William Shepherd

    Colfox, Major William Philip

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

    Murray-Phillpson, Hylton Raiph

    Conant, R. J. E.

    Haslam, Henry (Horncastle)

    Natlon, Brigadler-General J. J. H.

    Cook. Thomas A.

    Headlam, Lieut.-Col. Cuthbsrt M.

    Nicholson, Godfrey (Morpeth)

    Cooke, Douglas

    Heneage, Lieut.-Colonel Arthur P.

    Nicholson, Rt. Hn. W. G. (Petersf'ld)

    Cooper, A. Duff

    Hepworth, Joseph

    North, Edward T.

    Courthope, Colonel Sir George L.

    Herbert. Capt. S. (Abbey Division)

    Nunn, William

    Craven-Ellis. William

    Hills. Major Rt. Hon. John Waller

    O'Neill, Rt. Hon. Sir Hugh

    Crooke, J. Smedley

    Holdsworth, Herbert

    Ormiston, Thomas

    Crookshank, Gapt. H. C. (Gainsb'ro)

    Hore-Belisha, Lesile

    Pearson, William G.

    Croom-Johnson, R. P.

    Hornby, Frank

    Peat, Charles U.

    Curry, A. C.

    Howitt, Dr. Alfred B.

    penny, Sir George

    Dalkeith. Earl of

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

    Petherick, M.

    Davidson, Rt. Hon. J. C. C.

    Hume. Sir George Hopwood

    Peto, Sir Basil E. (Devon, Barnstaple)

    Peto, Geoffrey K. (W'verh'pt'n, Bliston)

    Scone, Lord

    Thorp, Linton Theodore

    Pickering, Ernest H.

    Shakespeare, Geoffrey H.

    Todd, A. L. S. (Kingswinford)

    Pickford, Hon. Mary Ada

    Shaw, Helen B. (Lanark, Bothwell)

    Touche, Gordon Cosmo

    Pike, Cecil F.

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

    Tryon, Rt. Hon. George Clement

    Potter, John

    Smith-Carington, Neville W.

    Vaughan-Morgan, Sir Kenyon

    PowNail, Sir Assheton

    Smithers, Waldron

    Wallace, John (DunferMilne)

    Ramsay, Alexander (W. Bromwich)

    Somerville, Annesley A. (Windsor)

    Ward, Sarah Adelaide (Cannock)

    Ramsay, Capt. A. H. M. (Mldlcthlan)

    Soper, Richard

    Wardlaw-Milne, Sir John S.

    Ramsden, Sir Eugene

    Southby, Commander Archibald R. J.

    Waterhouse, Captain Charles

    Rankin, Robert

    Spears, Brigadler-General Edward L.

    Wayland, Sir William A

    Ratcliffe, Arthur

    Spens, William Patrick

    Wedderburn, Henry James Scrymgeour.

    Rea, Walter Russell

    Stanley, Hon. O. F. G. (Westmorland)

    Wells, Sydney Richard

    Reid, Capt. A, Cunningham

    Steel-Maitland, Rt. Hon. Sir Arthur

    Weymouth, Viscount

    Rentoul, Sir Gervals S.

    Stevenson, James

    White, Henry Graham

    Roberts, Aled (Wrexham)

    Stewart, J. H. (Fife, E.)

    Whiteside, Borras Noel H.

    Ropner, Colonel L.

    Stones, James

    Williams, Herbert G. (Croydon, S.)

    Rosbotham, Sir Samuel

    Strauss, Edward A.

    Wills, Wilfrid D.

    Runge, Norah Cecil

    Strickland, Captain W. F.

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

    Russell, Alexander West (Tynemouth)

    Sueter, Rear-Admiral Murray F.

    Womersley, Walter James

    Rutherford, John (Edmonton)

    Sugden, Sir Wilfrid Hart

    Wood, Rt. Hon. Sir H. Kingsley

    Salmon, Sir Isidore

    Summersby, Charles H.

    Wood, Sir Murdoch McKenzie (Banff)

    Salt, Edward w.

    Tate, Mavis Constance

    Samuel, Sir Arthur Michael (F'nham)

    Templeton, William P.

    TELLERS FOR THE NOES.—

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

    Thomas, James p L. (Hereford)

    Captain Sir George Bowyer and

    Sandeman, Sir A. N. Stewart

    Thomson, Sir Frederick Charles

    Lieut.-Colonel Sir A. Lambert Ward.

    NEW CLAUSE.—(Seduction of Death Duties.)
    The scale set out in the Schedule (Scale of Rates of Estate Duty) to this Act shall in the case of persons dying after the commencement of this Act be substituted for the scale set out in the Second Schedule to the Finance Act, 1930, and the schedule of rates of estate duty.—[Captain Cazalet.]
    Brought up, and read the First time.
    5.20 p.m.
    Captain CAZALET: I beg to move, "That the Clause be read a Second time."
    It is no new or unexpected incident on the Committee stage of the Finance Bill that the Chancellor of the Exchequer should be asked to reduce the incidence of the Death Duties. We know that it is equally not new or unexpected that we shall not get much satisfaction from the Chancellor of the Exchequer on this point.
    Mr. ALBERY: Can you tell us for our guidance, Sir Dennis, whether any of the following new Clauses upon this subject are likely to be called.
    The CHAIRMAN: No, I am afraid that I cannot make any announcement or statement whether any particular new Clause will or will not be called. Hon. Members can sometimes by enquiries of their own form an opinion as to what is likely to happen. On general principles it is not likely that more than one new Clause to a similar effect will be called.
    Captain CAZALET: There is one thing about the tax and the request which we are making to the Chancellor of the Ex-
    2110
    chequer to review it sympathetically which is different from requests in regard to any other form of tax, namely, that the bulk of the hon. Members who are supporting the proposed Clause have already had to suffer the full brunt of Death Duties, and they themselves will never benefit by one penny from the reduction of this particular form of taxation. That should be, if not a justification of the case we are making, at any rate a justification of the Sincerity of the motive which prompts us to put it forward. The Estate or Death Duties are a burden which have to be experienced to be fully appreciated. I know full well that the observation of the ordinary individual on any complaint which is made by an individual who has to pay Death Duties is: "You are very lucky to get anything at all." I appreciate that point of view, but we are not particularly stressing, or concerning ourselves with, the case of the individual beneficiaries. We wish to emphasise the point that, although certain individuals may suffer in the amounts they receive, it is not often realised that there are a very large number of other individuals who are not beneficiaries in any way under a particular will, but who are most directly affected by the incidence of the duties and by the height of the actual taxation. It is in their interests in particular that we are moving the Clause this afternoon. I do not think that it is always recognised how far the wealth of the so-called rich individual, particularly the rich individual who lives in the countryside, is already allocated to dependants, employés and charities, all of whom suffer through no fault of their

    2111
    own by the incidence of the tax which comes unexpectedly at any moment and with such great force.
    The question was fully argued and discussed by a committee in 1927. Various opinions were expressed to that committee on the whole issue of Estate Duties. One witness described these taxes as having every defect which a tax could possess; others took a less strong view, but all were unanimous that already the tax was dangerously high for the effectiveness of the revenue it was intended to produce. What has happened Since? The rates are higher, and the value of all property and estates has obviously decreased Since 1927. There is another point which is not often recognised. Ever Since 1929 Death Duties have had to be paid on a falling market. It is impossible to get probate for a will sometimes for weeks and sometimes for months, and it may be for years if there are any complications, with the result that ever Since 1929 there has always been an additional 10, 20, or even 30 per cent. to be paid by the individuals, in addition to the high rate exacted by the duties themselves because of the very considerable fall in the value of all stocks and shares, and, indeed, of practically all property during the last five or six years.
    The question may well be asked: Why have the returns kept up so well? I think that the answer is that the Chancellor of the Exchequer is still reaping the first crop from these duties, and that it will not be until the present generation, or until another 10 years has gone by, when the duties will have been in operation at a high level for some 30 years, that the full results of the height and extent of the duties will be observed in the diminishing returns which the Exchequer will receive. The report deals fully with the question of whether this is taxing Capttal and applying it to revenue, and I accept their opinion, that it is only a Capttal tax as regards the individual, and from the point of view of the State it is no more a Capttal tax than is high Income Tax or Surtax.
    My hon. and gallant Friend who is supporting me in this Clause will deal, in particular, with the effect of Estate Duties upon agricultural estates, but there are
    2112
    one or two observations of a general nature which I wish to make with regard to the effect these duties have on the countryside. In no other country in the world has there been pursued such a deliberate policy of bleeding the countryside white. In Germany, Czechoslovakia and Denmark, countries where there have been Radical and even Socialistic Governments, and where high taxation rules, they have always made prosion that adequate working Capttal should be left to support and to carry on agriculture in the countryside. In Italy to-day, although death duties are fairly high, arrangements are made so that large estates can be preserved, because they believe, as we believe, that the large estates perform a useful function and are an asset to the country as a whole. I appreciate the fact that during the past 10 years Conservative Governments, who presumably hold the same views as we hold on this matter, have been in office with Majorities, and have done nothing to ease the situation. The only step which has been taken is that Death Duties have been increased by a Chancellor of the Exchequer of a Conservative Government. This is one of the very few things for which we cannot entirely blame the Socialist party.
    I think it is generally agreed that everyone desires to see to-day a better balance restored between town and country. We all desire to get more people back again to the countryside, which is a better, healthier and happier life for the individual, and I am certain that the agricultural policy pursued by that most invigorating personality the present Minister of Agriculture will do a great deal to restore agriculture to a prosperous basis. But England is rather different from other countries in this respect. The countryside in England has always been supported by the importation of artificial wealth from outside. It has never alone depended upon agriculture for its prosperity. The amenities of the countryside, whether they are health, sporting or social amenities, have always attracted to the countryside a proportion of wealth which never came solely from agriculture. There is one illustration of that truth in the fact that never were working people better housed and at cheaper rents than in the cottages on agricultural estates in England. During

    2113
    the past 40 or 50 years or even further back during the last century hardly an agricultural cottage in England has been built for economic purposes.
    What has been the result of this penal taxation! It has driven Capttal out of agriculture on the countryside. The landowner has either been forced to sell his property, in which case the tenant farmer has been encouraged to buy it, and thereby his working Capttal has gone in buying his farm and has not been available for carrying on his business, or the individual landowner has struggled to continue and he has been deprived of the life-blood of his business by the exactions of this taxation. It is, in other words, impounding the workman's tools as regards agriculture. I do not think you can treat the business of agriculture like any other ordinary industrial or manufacturing concern. What advantage is it to destroy the economy of the countryside? To whose benefit is it to have an estate broken up, to have the house empty, paying no local rates, and to have the farms to let? Each estate which is a going concern is a national asset, but each estate which is broken up is a wasting asset. Quite apart from the psychological or the sentimental view of these matters, and I think there is a great deal to be said for that in the form of society in which we live to-day, these duties have meant disaster to many unemployed in the very districts where we least wish to see unemployment. I hope that the Chancellor of the Exchequer, if not this year at some time in the future, will be able to make some concession in regard to Death Duties on agricultural estates. Either let him lower the rates or let him alter the system of Valuation. If possible, I should like to see agricultural land treated as regards Death Duties in the same way that it is treated in regard to rates, namely, to be free of them altogether.
    I should like to make one point in regard to the incidence of Death Duties on personal estate, namely, stocks and shares and other individual possessions. There a case can be made for sympathetic inquiry. I dare say hon. Members are not aware that there has been practically no change made in the incidence of, or in the manner in which Death Duties are levied on personal estate Since the Death Duties were origiNaily
    2114
    instituted by Sir William Harcourt in 1903, when the maximum rate was 8 per cent. May I give an instance which if the Chancellor of the Exchequer could review it, sympathetically would entail no very great burden on the Treasury but would do something to bring about a measure of justice? Death Duties become payable on an estate from the date of death. Although the executors of the estate may actually have the money in the bank with which to pay the duties, they cannot get hold of the money and they cannot pay the duties and they cannot avoid paying the interest because they cannot get probate. They cannot get probate for several weeks if not for months. All that time the Treasury is charging interest, which was formerly 4 per cent. and is now 3 per cent. The same latitude ought to be allowed in regard to personal estate as in regard to Death Duties on agricultural land. In the latter case a year is allowed before the debt charge is made and before any interest is charged by the Government on the amount owing. I suggest that on personal estate three months' grace should be allowed, because if there are no complications in that time one ought to be able to get probate and find out what exact sum is required to be paid. That would give three months in which to find the money.
    The second point is in regard to the valuation of personal estate. To-day, stocks and shares are valued at their price on the day of the death of the individual concerned. I contend that that price is not a bona fide price.
    The CHAIRMAN: I think the hon. and gallant Member is straying beyond the terms of the new Clause. There are other new Clauses on the Order Paper dealing with the point to which he is now referring.
    Captain CAZALET: I thought that this Clause raised the whole question of Death Duties and that my arguments were pertinent.
    The CHAIRMAN: If we were to allow a discussion on the whole subject on the particular new Clauses referred to, we should be here all next week.
    Captain CAZALET: I appreciate your point. My point relates to the question of the amount charged on certain stocks and shares. In our new Clause we

    2115
    suggest that a lower rate should be charged, and I was putting forward arguments why I think a lower rate should be charged.
    The CHAIRMAN: If the hon. And gallant Member does that, I am afraid that I shall be obliged to shut out entirely the new Clause dealing specifically with valuation of stocks and shares.
    Captain CAZALET: I hardly know how to proceed. If I can raise my point on the other new Clauses, I presume that other hon. Members will also be allowed to raise their particular points.
    Mr. ALBERY: If the new Clause happens to be called, there would be nothing to prevent the hon. and gallant Member from raising his point on it.
    Captain CAZALET: But we cannot tell which Clauses are going to be called.
    The CHAIRMAN: The hon. and gallant Member cannot tell now, but he may be quite certain that if he discusses a future new Clause on this Clause that future new Amendment is not likely to be selected.
    Captain CAZALET: I hope you will excuse me. I could not possibly tell whether you were going to call a subsequent new Clause on which I could raise my point; therefore I have endeavoured to raise it where I thought it was in Order. I do not wish to stand in the way of the hon. Member opposite raising his particular point, and I shall be very glad to support him.
    Mr. HASLAM: Seeing that this new Clause asks that there should be a reduction in Death Duties and Estate Duties on agricultural properties, should the hon. and gallant Member not be entitled to argue that there is an unfairness as between the duties on agricultural property and other property?
    The CHAIRMAN: The hon. Member is mistaken. The new Clause with which we are dealing does not refer specially to agricultural property; it does not mention it.
    Captain CAZALET: I will not labour the point further. I should like to give an example of something that occurred on an estate that I know. The estate happened to possess what are euphemistically known as certain gold Russian bonds. Those bonds have had no value whatso-
    2116
    ever for the last 15 years, but because there was one quotation one morning on the Stock Exchange the Treasury have charged several hundred pounds on these absolutely worthless bonds. As you say, these matters can be discussed later on and other suggestions can be made, and I have no desire to elaborate them now. I only wish to say that the present arrangements seem to us to admit of a gamble both in the amount that the Treasury may receive in certain cases and in the amount that the individual may have to pay. There is one further point which I hope will be raised on a later Amendment. We do not expect much from the Chancellor of the Exchequer this year. High taxation is bad and it is difficult to draw invidious distinctions between one form of bad taxation and another.
    Some taxes are only oppressive, but these Death Duties are, I believe, oppressive and destructive. I realise that no reduction can be expected this year and I do not ask the Chancellor of the Exchequer to appoint a full-blooded Royal Commission to inquire into the full incidence of Death Duties, but I ask for his sympathetic consideration of the suggestions I have made and that other hon. Members will I hope be allowed to make later on. Perhaps next year we may be bolder in our hopes that he will meet us sympathetically in regard to our demands. I am certain that if he will take certain steps which we suggest he will remove injustice and do something to restore prosperity to agriculture and the countryside and he will create new assets instead of destroying old ones from which he and other Chancellors of the Exchequer will be able to replenish their revenue in time to come.
    5.45 p.m.
    Brigadier-General CLIFTON BROWN: I desire to say a few words on this Clause and to emphasise the great harm that is being done to agriculture by Death Duties. Some few months ago the Chancellor of the Exchequer was good enough to receive a deputation representing the agricultural owners of the country, not only those in England but those in Scotland as well; but it was rather an unfortunate time, because on that very morning he informed us that he had received a message from the President of the United States of America

    2117
    asking that a sum of £15,000,000 or £20,000,000 should be paid at once. Nevertheless, he listened to our representations, and Since then he has had time to consider the case which was put before him. In addition to the case put forward by the representatives of agricultural owners, other representative bodies like the Auctioneers and Estate Agents and the Law Society, and similar professional bodies, who have to deal with these matters day after day, have sent in a memorandum expressing strongly their view as to the great damage which Death Duties are doing to estates in the country and to the agricultural industry in the countryside. They all agree as to the disastrous effects of these duties on agricultural land. Successive Chancellors of the Exchequer Since the right hon. Member for Epping (Mr. Churchill) have realised the position and Death Duties have not been increased on agricultural land, but they are at such a high figure that the Capttal which should go to the improvement of farms and estates, to the building of cottages for the agricultural labourer, and for the construction of water supply, is not available.
    During the last 10 years a sum of about £27,000,000 in Capttal has been withdrawn from agriculture by Death Duties, most of which would have gone into the development of the industry, and when you remember that during the last three or four years agriculture has been going through a period of depression more terrible than ever known, you will realise how necessary it is to restore the life-blood of the industry instead of taking it away in Death Duties. It should also be remembered that under the present system of landlord and tenant Capttal has been obtained upon very favourable terms. Agriculture enjoys the cheapest rate of interest in regard to Capttal of any industry. As a rule it is able to borrow Capttal at about 2½ or 2 per cent., and there is no other industry in the country which is able to draw upon such cheap money. What happens when estates are broken up? It would not matter so much in other industries, but in agriculture it is others who have to suffer when the landowner has to go. The farmer has to buy his farm, and to do so must borrow money. He has done so in hundreds of cases rather than go
    2118
    away from the place where he and his predecessors have been for generations. Instead of being able to borrow money at 2½ per cent. as under former conditions, he has had to pay 5 per cent. and 6 per cent. That does not permit him to have sufficient working Capttal to develop his farm, and the farm thus goes from bad to worse. The fate of the agricultural worker is even worse. He not only feels the effect of the disturbance, he has to go because the estate is split up, but he has to find fresh fields, another occupation, or he goes into some old cottage in the village while his children drift into the town. The effect of this upon agriculture is most serious, because you cannot get fresh Capttal into the industry as you can in the case of other industries, and that is why the Death Duties have such a disastrous effect on the industry as a whole.
    The Ministry of Agriculture issued a report in connection with the agricultural credit scheme. It was examined by interests connected with agriculture who stated that the effect of these Death Duties was such that they looked upon them as one of the greatest evils that existed, and that the credit scheme would not be such a success as it might otherwise be. I do not want to weary the Committee with details, but I am sure the Chancellor of the Exchequer will realise that this is becoming more acute as the years go by. I want to support my hon. and gallant Friend in pressing on the Government to institute a thorough inquiry into the whole incidence of these duties, especially in their relation to agricultural land and their effect on unemployment in the countryside. I know that any such inquiry will make the Government realise the tremendous damage that is being done to all agricultural interests. They mean not only a loss of revenue on undeveloped estates, but a loss on account of Capttal in the agricultural industry, and a loss of unemployment insurance. The sooner we have an inquiry to ascertain whether these Death Duties are not doing far more damage than good, even at a time when we must get money from somewhere, the better; and I hope that the Government will institute such an inquiry.
    5.54 p.m.
    Mr. MANDER: I am surprised at the audacity of the hon. and gallant Member

    2119
    in bringing forward a proposal of this kind in present circumstances. It may be true that there are cases of real hardship in connection with the payment of Death Duties, but what are these hardships compared with those of millions who have nothing at all. To bring forward a proposal of this kind, within 18 months of the appeal to the country for equality of sacrifice, when there have been cuts all round, seems to me to be a perfect mockery of the situation which then arose. How can you, at a time when the dole cut of 10 per cent. is still on, when the means test administration is what it is, possibly justify a proposal which in the case of a man who leaves £2,000,000 gives him another £330,000?That would be the effect of this proposal. Really it is beyond all understanding how such a proposal can be seriously put forward in the name of equality of sacrifice.
    Brigadier-General BROWN: The hon. Member is quite right, it is beyond some understanding. But he is bringing up something quite different. He does not understand tie point.
    Mr. MANDER: The point is that the new Clause substitutes one scale of duties for the existing scale, and I suppose it is meant to be carried. If it is carried, then the effect, beyond question, is that a man who leaves £2,000,000 will, under this new Clause, be left with £330,000 odd more than he would have under the present scale.
    Captain DOWER: He would be dead.
    Mr. MANDER: He himself would not have the enjoyment of this money, but his successors would be helped. I do not see how an Amendment of this kind can be justified, and I am sure that the Chancellor of the Exchequer will not consider it for one moment. If there is any proposal to reduce taxation, I hope that Death Duties will be one of the last to receive consideration. They are fair, and just. What is more just than that a man who has had the full enjoyment of his wealth throughout his life should be asked to make some contribution—and a substantial contribution—to the State, or that those who follow him, who have made no contribution to this wealth, should be asked to make some contribution to the State, and who will be for-
    2120
    tunate indeed, at a time when millions have nothing, to receive the large sums which will still be coming to them?
    5.58 p.m.
    Mr. SCRYMGEOUR-WEDDERBURN: Surely the hon. Member for East Wolverhampton (Mr. Mander) is aware that the purpose of reducing this taxation is not in order to lighten the incidence upon the individual, but to lighten the burden on the employment of those whom he professes to represent. The effect of the proposed new Clause would be a general reduction in the scale of duties on all classes of property, but it has been put down partly in the hope that the Chancellor of the Exchequer may take this opportunity to indicate whether it is not possible to consider some discriminatory modifications in the incidence of this tax with the object of lightening its burden, at no great cost to the Treasury, in those places where it weighs most injuriously on industry and employment. It is not in order to discuss in detail any such proposal, but the industry which I have particularly in mind, and the industry upon which, as everybody knows, the burden of these Death Duties falls with the most peculiar unfairness and the most devastating ill-effects, is the industry of agriculture. If a man dies holding £100,000 in Government stock, it may not be a difficult matter for his executors to dispose of 20 per cent. of his property and no irreparable damage will be done; and, in the case of certain classes of real property which may be readily saleable, it could not be said that the owner was being more harshly treated than the general body of taxpayers, but in the case of an agricultural estate, whose assessed Capttal value may be out of all proportion to the net annual income, whose good management may be destroyed by subdivision, which may not be saleable at all, or which may be legally debarred from sale by an entail, it is unquestionable that the colossal burden of these taxes on property of this sort has deterred the employment of Capttal on the land, and has hindered the modernisation and improvement of British agriculture to an extent that is simply disastrous.
    The Chancellor of the Exchequer was good enough to receive a deputation on this subject, and I will not, therefore, trouble him with a repetition of the arguments to which he has already listened. It was on a day when, because of remote

    2121
    causes, he was not likely to be in so accommodating a mood as otherwise; and even now I have some misgivings when I reflect that another critical date is uncomfortably close. But I hope the Chancellor of the Exchequer may be able to tell us that he will consider whether something can be done, not with the object of giving any special favour to any one industry, but simply in the interests of economic good sense.
    6.0 p.m.
    Mr. ATTLEE: The speeches to which we have just listened have raised a very interesting dilemma. It is quite clear from what was said by the last speaker that there is no wish that property in a particular form should get off more lightly than other property when it comes to Death Duties, because the hon. Member believes in equality of sacrifice and the duty of citizens to support the State. On the other hand we gather that the present incidence of the Death Duties has an injurious effect on agricultural economy, which we understand is being, or is about to be, restored by the activities of the Ministry of Agriculture. If hon. Members will give the matter a little further consideration, they will see that a restoration of agriculture is incompatible with the present system of Death Duties, in which, as they say, all Capttal is drained away from the Countryside. 80 it is quite clear that what hon. Members should be doing is, not approaching the Chancellor of the Exchequer for some particular relief, but going to the Minister of Agriculture and the Prime Minister, whom they will find quite receptive of these ideas, and going "all out" for the nationalisation of the land as a means of avoiding these difficulties.
    6.1 p.m.
    Mr. CHAMBERLAIN: The hon. Member for Wolverhampton, East (Mr. Mander) expressed some surprise at what he called the audacity of my hon. and gallant Friend in making this proposal. I think the hon. Member for Wolverhampton East should be the last man in this House to express surprise at audacity, for no one brings forward more reckless proposals than the hon. Member himself. As I understood my hon. and gallant Friend, he did not bring forward this proposal with any idea that it was likely to meet with acceptance from the Chancellor of the Exchequer, and that
    2122
    his object was rather to put before the Committee and the public the views which he holds upon the injurious effect, as he thinks, of the present level of Death Duties. The Clause makes no distinction between Death Duties on different kinds of property, but I understand that my hon. and gallant Friend and my hon. Friend who spoke last desired particularly to call attention to the effect upon agriculture. They will not think it discourteous of me if I do not express any views on the subject, because, as they fully realise, it would be quite impossible in the present year to carry out any such proposals as these. The loss to the revenue would be very considerable, and it is obvious that I am not in a position to afford the money, even if it were possible to give relief in the direction indicated.
    There may be something to be said for the view that in the case of agriculture in particular the present level of Death Duties has the effect not only of breaking up estates hut of bringing about changes in the social structure and the general state of affairs in the country. But agricultural estates have already received some relief from the Treasury in respect of Death Duties; at any rate they have not been subject to the same basis as other forms of property, and that has involved an expense of some £600,000 a year. If it were possible to-give relief, and if the Government of the day thought it desirable to give relief, i that could be done very simply by a percentage reduction in the Capttal value of agricultural estates. I do not propose to express any opinion as to whether or not it is desirable to do that, because I know that anything I might say would be liable to be brought up in evidence against me on some future occasion. Let me say, however, that if it were desired to do anything it would be quite a simple matter to do it. It would not require the setting up of any further committee. All the facts are known. All you have I to decide is, first, is it. desirable to give I relief by way of reduction of Death I Duties upon agricultural land; and, secondly, how much are you prepared to give? When you have answered those two questions it is quite easy to do it by a reduction in Capttal value. I hope that my hon. Friends will be satisfied, after having ventilated this question and reminded us that it is still a live one.
    6.6 p.m.
    Mr. SMITHERS: I would like to refer to the speech of the hon. Member for Wolverhampton East (Mr. Mander). I do not want to be impolite, but a more miserable speech I have not listened to for a long time. The hon. Member talked about equality of sacrifice and about the poorest of the poor. The whole object in relieving the burden of Death Duties in this way would be to take some of the weight off the backs of people, especially in the country, who have to pay these heavy Duties. That would be an enormous relief and would lead to the abolition of the dole to a large extent, because the money so available would be actively used in creating employment.
    Mr. MANDER: Does the hon. Member hold that this step should be taken before the restoration of the cut in the dole?
    Mr. SMITHERS: Yes, I think it should be taken. It would immediately do away with some of the dole, and would create employment. I want this Amendment to be passed together with another Amendment which asks that the amount collected in Death Duties should be definitely allocated to the redemption of debt. The latter Amendment, I fear, may not be called. The claim that we want to stake is this: Although a rich country in time of difficulty may be able to live for a time on its Capttal, that cannot go on indefinitely. We want to be able to say that we persistently made this claim that the taking of Death Duties and using them for the purpose of current expenditure is taking money out of the Capttal of the country. That cannot go on for ever. We want to stake that claim strongly this year, in the hope that when better times come we shall cease, to some extent, to live on our Capttal and get back to a sounder basis of national finance.
    6.9 p.m.
    Captain CAZALET: In view, not so much of what the Chancellor of the Exchequer has said, because he really did not say anything, but because of what I believe his attitude to be on this matter, and what we hope it will be next year, I beg to ask leave to withdraw the Motion.
    Motion, and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Substitution of actual for estimated value of securities for Death Duties.)
    Where the Commissioners of Inland Revenue are satisfied that securities or properties which have been valued for probate have been sold to a bona fide purchaser for value on a fair market basis within 12 months of the granting of probate or of letters of administration, as the case may be, or are at the expiration of that period unsaleable, and the amount so realised in the case of a sale is less than the probate valuation of the securities or properties sold, then in any such case the amount so realised for such securities or properties sold shall be substituted for the probate valuation thereof for estate duty purposes, and such unsaleable securities or properties as aforesaid shall be deemed to have no value for estate duty purposes.
    Provided always that the provisions of this Section shall not apply unless within three months of the granting of probate or of letters of administration, the legal personal representatives of the deceased person shall have notified the Commissioners of Inland Revenue of their intention to realise such securities or properties.—[Mr. Albery.]
    Brought up, and read the First time.
    6.10 pan.
    Mr. ALBERY: I beg to move, "That the Clause be read a Second time."
    By this Clause it is not sought in any way to bring about any reduction in the burden of Death Duties. When Death Duties were first imposed, as has been said, the percentage of the levy was comparatively small, and in the case of many estates securities were readily negotiable and could generally be found and realised to provide the amount which was demanded by the State. In recent years the levy has been very largely increased, and the result is that the method of levying the duties to-day frequently means that the percentage value which is paid in Death Duties is very much larger than the percentage which is laid down in the Schedule. It will be realised that it takes a certain amount of time to get probate, and that executors or trustees cannot deal with securities until probate has been obtained. There have been several notorious cases within the last few years in which, when it has been possible to liquidate securities for the payment of Death Duties, the value which has been obtained for those securities has been materially less than the value put upon them for probate purposes in valuing the estate. It is solely to remedy that injustice that this new Clause is being moved.

    2125
    It is true, and it may be said by the Chancellor of the Exchequer, that there is no provision in the new Clause for cases in which securities realise a higher value than they had at the date of death. That is true, and the only reason why that has not been done is that that if it were provided for the new Clause would be out of Order. But that is a matter which can easily be attended to by the Chancellor of the Exchequer, if he should see fit to accept the general sense of this new Clause and endeavour to remove what is certainly a very big grievance and in many cases has resulted in real hardship. When the Death Duties were small the injustice was small, but with the very heavy taxation which it has recently been necessary to impose in this country, the injustice has become greater and the incidence of the duties is a much greater burden. In the past the citizens of this country have stood out above all others in their readiness to meet the payment of taxation. There is nothing so calculated to harm the willingness of people to meet their obligations as a sense of injustice.
    6.15 p.m.
    Mr. HORE-BELISHA: I understand the proposal in the new Clause to be that within three months of the granting of probate the executors are to give notice to the Inland Revenue that, in respect of some selection of securities, instead of paying on the normal value, they will pay upon the market value if they are realised at any time within 12 months, and that, if within that twelve months, the securities turn out to be unsaleable, then no Estate Duty is to be payable to the Exchequer at all.
    Mr. ALBERY: If particular securities were found to be unsaleable their value would be returned as nil in the estate.
    Mr. HORE-BELISHA: That is exactly what I have said. If the securities are unsaleable no duty will be payable upon them at all. Under the proposition of my hon. Friend, instead of the value being taken as at the date of death, the option could be exercised to sell the securities on the open market, and, if they cannot be sold on the open market, and are therefore unsaleable, no duty will be paid at all.
    Mr. ALBERY: On them.
    Mr. HORE-BELISHA: On those particular securities. I do not think there is any difference between us as to the meaning of the proposal. But the Committee will observe that the option is one-sided. The executor can decide in respect of any particular security that it is going to fall in value and he can say: "As regards that security I shall pay Estate Duty on the value to which I think it will descend in the course of the next 12 months." Obviously, that would be unfair and would vitiate one of the cardinal principles of taxation, namely, that a taxation Statute must be definite and must tell the tax-gatherer the point of time at which he is to make his imposition. Estate Duty is leviable upon an estate as it is at death. I can understand what has prompted my hon. Friend's proposal. He has observed in the past few years a tendency for securities to decline; executors have consequently been paying upon higher values than those subsequently realised, and that has created a sense of grievance. But that tendency has now changed. Take the case of a man who died just before the last Conversion Loan. He derived very great benefit. [Laughter.] I was not referring to the treasure which he had laid up in heaven. His estate derived great benefit, and, as the whole tendency of prices today is to rise, estates will benefit to that extent. While I realise that that is not much consolation to those who are dead, or their executors, or to those who have benefited under their wills, it may be of some consolation to those who are now living. As I say, I appreciate what has prompted my hon. Friend in making this proposal, but he will realise that the Treasury could not enter into gambles of this nature and allow executors to exercise a one-sided option, because it would always tell in favour of the executor and never in favour of the Exchequer.
    Mr. ALBERY: I endeavoured to make-it clear that our proposal was not one-sided, but I am in a difficulty because I was precluded by the Rules of Order from putting down a new Clause providing that the Treasury would get the benefit when the securities rose in value. It is not, however, beyond the power of the hon. Gentleman to do that, and I do not think he ought to use that point as an argument against the New Clause.
    Mr. HORE-BELISHA: My hon. Friend will not misunderstand me if I repeat that the option is one-sided, because it is only the executor who is to have the option and in no circumstances, whether the securities rise or fall, is the Exchequer to have an option. I do not think that my hon. Friend, even if he had not been prevented by the Rules of Order, would have changed his proposition in that regard. There is no option to the Exchequer at all.
    6.21 p.m.
    Captain CAZALET: I appreciate the point raised by the Financial Secretary, but I think that there is a case for some such proposal as that contained in the New Clause. A valuation of property taken on a specific date may be highly unreliable. This New Clause has been put down for the purpose of raising that point and of asking whether it is not possible to review the method of valuation of certain properties. As my hon. Friend has explained, he is precluded by the Rules of Order from putting down the Clause in the form in which he would have wished to put it. If he had put it down in the form in which he wished to put it, there would be as much opportunity for the Treasury to benefit by an increase in value as there is for the individual to benefit by a lower value of the security and consequently a lower duty. I suppose it is only natural that the Treasury should arrange these things on the basis that heads they win and tails the individuals lose. In no case can the Treasury lose, but at present the duty is assessed on the value on a particular day, which may be a wholly unreliable value.
    I suggest that the value of stocks and shares, for instance, should not be taken on a particular day but should be averaged over, say, the preceding three months. That method would give a fairer value which in some cases might work out to the benefit of the individual and in some cases to the benefit of the Treasury. We wish to eliminate the element of gambling which exists to-day. In the case of personal property such as a book, a manuscript, a picture, or a horse, one may arrange to have the most careful valuation possible and pay large fees to valuers whom the Government can trust and the Government may accept their valuation. But if within 12
    2128
    months you sell that object at anything in excess of that valuation to which the Government have agreed, the Government claim duty on the excess value. The Financial Secretary said that the option would be all in favour of the individual, but in the case of personal articles the option always works in the interests of the Government. Therefore, there is something to be said if not for the merits of this Clause as drawn, at least for the principle which it seeks to establish, that the element of gambling should be eliminated from the valuation of estates for this purpose. If this proposal were carried out the individual would at any rate know where he was and would be able to make his arrangements accordingly. He would know if it would be necessary for him to close down to any extent or to dismiss certain employés and in the long run the Treasury would not suffer.
    6.25.p.m.
    Major COLFOX: There is no great difficulty in this matter. The hon. and gallant Member for Chippenham (Captain Cazalet) has pointed out that, in regard to certain items in estates passing at death, the principle is already in operation that if they are sold at something higher than the valuation the State gets the benefit. Surely it would be easy to indicate that any item in an estate which is sold within 12 months, or whatever period may be fixed, should be taken for the purposes of Estate Duty, not at its valuation but at the actual price which it realised. That would be a fair way of dealing with the matter. Possibly the Clause as drafted, does not carry out that intention, but the Government draftsman should have no difficulty in drafting a Clause which would carry out that intention.
    6.26.p.m.
    Mr. DAVID MASON: I wonder if the Chancellor of the Exchequer, who seems to be in a rather complaisant mood, will not give some further consideration to this proposal. I think it worth considering whether some period such as has been suggested, say a period of six months, should not be allowed for this purpose. The option would be applicable both to the beneficiaries of the estate and to the Treasury. I agree with the hon. and gallant Member for Chippenham (Captain Cazalet) that to take the value arbi-

    2129
    trarily as on the date of death often works out to the serious loss of those concerned when they come to realise the securities and is most unfair to many estates. Perhaps the right hon. Gentleman before the Report stage will consider whether there is not some way of meeting this grievance and allowing a limited time in connection with these valuations which would get over the difficulties suggested this afternoon by hon. Members, and enable us to achieve what we all desire, namely, a fair valuation of these estates.
    6.27.p.m.
    Mr. SPENS: This new Clause deals with a practical difficulty of every-day occurrence. When a man dies, and his executors get probate, there and then they have to make some sort of valuation of his estate and pay money on taking out probate. In nine eases out of ten they have to go to the bank and borrow the money. The next step is that the assets are valued at the market price on the day of death, if there is a market value. If there is no market value, then such value is put upon them as is fixed by the commissioners and there are all sorts of inquiries for that purpose. An executorship generally takes anything from three months to three years. It requires that time and often longer to wind up an estate. For the purpose of winding-up the estate, those assets which have been valued either on the market price as at the date of death, or on the valuation of the commissioners have to be sold. In some cases they realise more than the valuation but during the last two or three years in nearly every case they have realised much less than the valuation. The result is that the persons who have to pay these duties have to bear a sum which is out of all proportion to what the estate ultimately works out at for them.
    What we are trying to do in this new Clause, though the Rules of Order make it difficult, is to modify the provision that for Estate Duty purposes, the market value on the date of death or the value fixed on that date by the Commissioners should be the final and conclusive valuation. We ask the Chancellor of the Exchequer to consider whether it would not be much fairer to the taxpayer that what is ultimately realised from the estate for the purpose of paying duty
    2130
    should be on the basis of the adjustment of these values. It would be an enormous benefit to taxpayers who have suffered severely during the last two years by the fact that, ultimately, when the executorship has come to an end they have had to realise securities at vastly reduced prices, for the purpose of paying on values fixed perhaps a year or two years previously, values which never could be realised.
    6.30 p.m.
    Mr. CHAMBERLAIN: The hardship that is complained of here is due to the fact that values have fallen rapidly in the last five or six years, and that fact has operated very much against the estate of the property owner. It is not out of place to give this warning, that if you are going to readjust affairs so that some different system obtains, you may find that you have readjusted them at the very moment when things were going to turn in favour of the taxpayer, but that by your readjustment they will turn to the benefit of the Exchequer. That being so, I am not at all indisposed to consider the matter further, but I think it must be obvious that the Clause, as drafted, could not possibly be accepted, because, while I fully recognise that hon. Members have been under some disadvantage, in that they could not put down, owing to the Rules of Order, exactly what they desired to do, even so, I think their proposition must turn upon the value received by the sale of certain securities. Who will choose which securities are to be sold? I do not think there is any proposition that the Treasury should have the right to say which securities should be sold, and, therefore, even if you put in this provision, that if the value goes up, the Treasury will benefit, whereas if the value goes down, the owner will benefit, to give the option as to which securities are to be sold to the executors would mean naturally that they would choose those which are likely to benefit them and would not choose those which benefit the Exchequer. Therefore, the Clause could not be accepted as it stands.
    My hon. and gallant Friend says, "Oh-let us take a valuation on the average price of the three months before death." Is he sure that that will eliminate the risk to the executors? Is it not quite

    2131
    possible that values may have been level for three months before the death and may then go down, or that they may have been particularly high during the three months before death and then go down? At any rate, that does not seem to get rid of the chance of loss, but it is an entirely different proposal from that which appears on the Paper. I would suggest that my hon. Friends should reconsider this position, first of all, among themselves, and that then, between now and Report, they should talk to me and bring me the results of their reconsidered reflections, and if I can find anything more practical and more fair all round than the present proposal, I should be prepared to consider it.
    6.34 p.m.
    Mr. SMITHERS: The Chancellor of the Exchequer has made the very generous offer, with his usual courtesy, that we should make certain proposals to him as to how the valuation of securities in an estate could be more fairly carried out. We are in a very great difficulty. He and his advisers, the Board of Inland Revenue, have much more information at their disposal than we can have. On the big principle, I am certain that the Government do not want to take advantage of the trustees who have to pay these duties, but, at the same time, the taxpayers do not want to take an unfair advantage of the Treasury. It seems very unfair that an estate with a large amount of shares should have those shares valued at some chance quotation for perhaps 10 or 15 shares on the day that the owner dies.
    I would ask the Chancellor of the Exchequer if we may come and see him, if he will think the matter over with his advisors, and if he can suggest some fair way—I emphasise the word"fair"—by which a large amount of shares will not be valued at an inordinately high price because of some chance quotation. We want to arrive at some fair means of valuation by which the State shall get its full share and by which the trustees shall not have to pay Estate Duties greater than the value of the whole estate put together, which is, of course, an extreme case, but which has happened. I hope the right hon. Gentleman will enlarge his offer and not only let us come and see him and try to arrive at some fair means of valuation, but will also, if
    2132
    he can, initiate and suggest some means by which this fairer valuation can be obtained.
    Mr. ALBERY: I wish to thank the Chancellor of the Exchequer, and beg to ask leave to withdraw the Clause.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Reduction of Entertainments Duty.)
    As from the first day of August, nineteen hundred and thirty-three, Entertainments Duty within the meaning of the Finance (New Duties) Act, 1916, shall in Great Britain be charged at the rate set out in the Schedule (Rate of Entertainments Duty) to this Act, and not at the rate set out in the Second Schedule to the Finance (No. 2) Act, 1931.—[Sir J. Wardlaw-Milne.]
    Brought up, and read the First time.
    6.37 p.m.
    Sir J. WARDLAW-MILNE: I beg to move, "That the Clause be read a Second time."
    We have spent the greater part of the afternoon in the consideration of questions involving large sums of money, such as the Equalisation Fund Account, Death Duties, and so on, and I now desire to ask the attention of the Committee to a smaller matter in money, but one which, I think they will agree, is of almost more immediate importance to a very large number of people in this country. The present rates of duty in connection with the entrance into cinemas, and particularly in connection with the cheaper seats therein, are a very real hardship to a large section of the population. If hon. Members will turn to page 1194 of the Order Paper, they will find there the Schedule referred to in my Clause, and they will see that my proposals reduce the rates of duty at present imposed on all cinema seats under 1s. 3d. by exactly half, while leaving the duty upon all seats over 1s. 3d. as they are at present. It is not particularly material to me whether the Chancellor of the Exchequer accepts the proposal in this form or in a modified form. There are other Amendments on the Paper which have not been called, but which will no doubt be referred to, proposing to abolish the tax altogether on seats of 6d. and lower, and that is another form of giving relief to the poorer section of the people who go to the cinema. PersoNaily, and perhaps naturally, I prefer my own solution, as it

    2133
    grades the tax and makes everybody pay something, however small—only a halfpenny on the lowest priced seats—and it would have the effect of relieving those who at present feel this hardship, while at the same time I do not believe it would add in any way to the difficulty of collecting the tax.
    It will be within the recollection of some hon. Members that the tax on the cheapest seats, of 6d. and under, was re-imposed by Mr. Snowden, as he then was, in 1931, and there have been various representations made to him and to subsequent Chancellors of the Exchequer as to the necessity for doing away with this burdensome tax on the very cheap seats. In looking into this matter, I was very struck by some figures that were given by the hon. Member for Don Valley (Mr. T. Williams) in 1931, when he was speaking about the effect of the tax on the sixpenny seats in the cinema in the northern parts of this country. He said that between May, 1931, and May, 1932, there had been a falling off of no less than 44 per cent. in the receipts. I believe that is the case elsewhere also.
    It is impossible to get any figures which are absolutely authentic as to the effect of the duty on the smaller priced seats. The Chancellor of the Exchequer is in the same difficulty, and can only make a rough estimate, but I would like to give some figures which appear, at any rate, to show that in reality the Exchequer has not benefited to any great extent by the imposition of this tax on the cheapest seats. It can only be got at in a roundabout way, and I do not give the figures as definitely accurate or final, but they are the best that I can find, because the Treasury, I am told, are not in a position to give us the exact figures. The whole of the Entertainments Duty brought in, in 1930, £6,952,000, and in 1931, £7,868,000. That increase was immediately after the tax on the sixpenny seats was reimposed. It would at first sight appear that that large increase had something to do with that particular tax, but I would point out that actually it had very little to do with it, because the increase in the previous year, over that of the one preceding it, in the total amount of revenue derived from the tax was no less than £700,000, and in this period of comparison the tax on 6d. seats was not in opera-
    2134
    tion. Assuming, therefore, that the increase in the tax in the previous year was at all regular, that it was anything like £700,000 or even half of that, it is clear that the revenue did not derive any large benefit from the imposition of the duty on the cheapest seats, as the increase in the total revenue was only £900,000.
    I do not stress the point of the un-desirability of collecting the money in this way, because representations have been made to the Chancellor of the Exchequer, and probably to his predecessors, on that point, and the right hon. Gentleman, I think, himself said not long ago that he was prepared to consider, when he had an opportunity, the question of a percentage tax on the total takings of the cinema instead of on the present basis. I have not got the reference to that suggestion beside me, and it may be that nothing has been done about it, but whether this is desirable or not at the moment, the point that I wish to make is that this tax on the cheapest seats in the cinema is undoubtedly a very heavy burden on the poorest classes of the community. The whole of the Entertainments Duty yields only £7,000,000. Assuming for the sake of argument that the whole cinema tax yields £3,000,000 or £4,000,000 out of this, you have the position that the Chancellor of the Exchequer is asked by my proposal to reduce the tax by one-half only on seats sold at less than Is. 3d. If he accepted my proposal in its entirety, that is, to halve the tax on all seats sold up to Is. 3d., I do not believe that the total amount involved would be more than a very few hundred thousand pounds, even if it amounted to as much as that.
    If, again, he chose to accept only one portion of it and eliminated the duty on all seats under 6d., probably the loss of revenue would be smaller still. There is no doubt that the cinema industry feels the imposition of this duty very seriously. Illustrations have been given to me of cases in which cinemas are paying away in taxation far more than the profits that they are earning and indeed paying large sums to the revenue while making losses; and although I do not want to enter into details of particular cases here I do not think that there is

    2135
    any doubt that throughout the cinema industry there has been a strong and increasing demand for relief on the cheaper seats. That is supported by almost all classes of people throughout the country. I suggest that the Chancellor might make this concession without any great sacrifice to the revenue. It would be popular in a time when popularity is hard to get, especially from the Treasury point of view. It is a concession that will be supported, I feel sure, in many quarters of the Committee.
    6.47 p.m.
    Mr. T. WILLIAMS: I should like to supplement the observations of the hon. Member for Kidderminster (Sir J. Ward-law-Milne). The Chancellor will recall that when I moved an Amendment on this subject last year, I brought before him figures relating to the attendances at a large number of cinemas in exclusively working-class areas. They were produced by the same chartered accountant who was responsible for the Income Tax returns for these various small places, so that there was no doubt about their accuracy. Amazing though it may seem, in some of these isolated or exclusively working-class places, with populations of from 7,000 to 10,000, the attendances were actually reduced by from 44 per cent. to 50 per cent. taking the comparable periods of six months before and six months after the imposition of the duty on seats down to 1d. I can quote the districts with all the figures if that be necessary, but I am sure that the Chancellor has sufficient information at his disposal to satisfy him that the statement which was made 12 months ago and the statements made by the hon. Member for Kidderminster are correct. Before the duty was imposed on the cheaper seats many of these small cinemas between October and April made a slight profit, but during the following six summer months they actually made losses, and they required the profits of the winter months to tide them over the whole of the 12 months. On the whole therefore the profit was very small indeed. As a result of this duty on the cheaper seats, the winter profit vanished. Therefore, instead of having profits to tide them over the 12 months, they have been actually working in many places for the Treasury and not for themselves.
    2136
    That is likely to have a tendency which, I am sure, the Chancellor will consider undesirable. Instead of people who attend the cinemas being privileged to view the best films, they have had to be fobbed off, through circumstances over which the manager has no control, with second-rate films which are not educational, elevating or even restful. I wish the Chancellor of the Exchequer could get rid of the West End complex, for the kind of films that are seen in the West End are totally different from those seen in many working-class districts. Financially, this concession would not be a great strain on the Treasury. I should have preferred the Chancellor to accept our Amendment to do away with the duty on the lower priced seats. Our suggestion was that no seat of a less price than 6d. should pay any duty. If the cinema-goer cannot afford to pay for a seat in excess of 6d., he ought not to be taxed on that very modest fee. In my division cinemas have seats as low as 3d.; the 1d. duty makes it 4d., and that addition very often makes all the difference to the person who wants to go to the cinema, and also to the cinema proprietor. If the Chancellor can see his way to make some concession—and it would be a very small concession—to the poor cinema proprietors, it would be welcomed in all parts of industrial Great Britain. Because of the burden that people are carrying in their daily lives, the small miserable wages and the sordid conditions in many districts, he ought to concede this very small request, and at least let it be understood that he has a desire to help those who are unable to help themselves.
    6.52 p.m.
    Captain DOWER: The effect of the duty in my own constituency has been very deleterious, not upon the more luxurious kind of entertainment, but upon the smaller entertainments in the industrial areas which cater almost entirely to working-class people and provide seats between 21d. and 6d. An increase of 1d. may not seem a very serious matter, but I can assure the Chancellor that it means all the difference between whether or not these people can go to the cinema and take their families once a week. The effect of the duty has been that the attendances have declined, profits have disappeared, and, in many cases, which

    2137
    I know in my own area, it is all that cinema proprietors can do to keep their doors open. I should like to give my right hon. Friend three instances in that particular district. If you compare the net takings for the 12 months before the duty was put on with the 12 months after, the following results are seen. In the first instance the takings were £18,000, and after the duty £12,000; in the second instance the takings were £14,000, and after the duty £10,000; in the third instance the takings were £7,000, and after the tax £5,000. I can give the names of those particular places to my right hon. Friend, and I assure him that they are not exceptions but the rule.
    I should like to hear my right hon. Friend reply to the criticism of the unfairness of the incidence of the duty. The duty on the 3d. seats, which is a very favourite seat in my constituency, is 1d., which is 33⅓ per cent. The duty on the luxury seats of 3s. 6d. or 5s. 9d. varies between 16 per cent. and 20 per cent. That is a vast difference. I feel convInced that when Lord Snowden imposed these duties he did not realise the disastrous effects that they would have on this particular type of entertainment. It is not a question of putting money into the pockets of the cinema proprietors, because they have promised to pass on to the public any benefits that they receive. For these and the other reasons which were so admirably put by my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne), I hope that the Chancellor will see his way to inquire into the unfair incidence of the duty.
    6.55 p.m.
    Sir ROBERT HORNE: In intervening in a Debate such as this on a proposal for a reduction of a duty which would mean a diminution of revenue, I naturally start with a, strong prejudice in favour of the Chancellor of the Exchequer. But I confess that, in looking at the project which is before us, it seems to me that there is a great deal to be said for some remission in this duty. I imagine, although I have no figures before me which would corroborate or confirm my view, that the proposal in this proposed new Clause would cost a great deal more money than my hon. Friend who moved it suggested. My impression is that when the Chan-
    2138
    cellor comes to reply he will not accept the kind of figure which was given by the Mover of the Clause.
    Sir J. WARDLAW-MILNE: I made it clear that I had no official figures, but as the total revenue is only £7,000,000, including all the theatres, the amount I gave cannot be far wrong.
    Sir R. HORNE: I do not reproach my hon. Friend for not having the necessary information. I was making the statement I did only for the purpose of explaining why I am in favour of something smaller being done. I am rather inclined to the suggestion which was made from the Front Opposition Bench, that all taxation upon cinema seats under 6d. should be remitted. That, I imagine, would not mean anything like the sum that would be involved in the proposed new Clause. The reason I say that there is a very strong case for a remission of this duty is not merely because of its effect on a large portion of our population, but because I think that in the interests of the Exchequer itself this remission is worth making at the present time. I have had before me, for example, the figures of a typical cinema in a working-class area where the people who are catered for are the simplest and those who are least well off in life, and who live in an area where there exists great depression. It is a well-doing and well-managed house, but the figures for 1932–33 reveal the fact that while the loss in the year was £82 10s., the amount paid in taxation was £1,421 13s. 11d. Of course, it is a false analogy, but I present it to show the Committee what the incidence of such a tax means. In any business firm they would have to make a profit of £4,000 before they paid a tax of £1,421, yet this particular cinema made a loss of £62 on the year's working instead of a profit.
    That I believe to be a position of things which cannot go on, and I am informed, I think on very reliable authority, that there is a large number of these cinema houses catering for people in working-class districts which will have to shut down. It cannot benefit the Exchequer if these places should be closed. I venture to suggest to the Chancellor of the Exchequer that by keeping on this heavy taxation he may decrease the actual yield to the Ex-

    2139
    chequer and that is a result which he cannot look upon with equanimity. In the case of the Beer Duty, he found that the yield was reduced by the height of the tax, and I believe that something like the same action as was taken in the case of beer will have to be taken in the case of these little cinema houses which are situated for the most part in working-class districts. I accordingly present my argument on purely Exchequer grounds, and I venture to hope that the Chancellor of the Exchequer will find it possible to remit taxation on all seats that cost less than 6d.
    I would be false to my own point of view if I did not say something more before I sat down. I have referred to cinema performances as the most common diversion of the people. Even when times are bad, people require some kind of diversion. In times when people are worse off, and when heavy depression is hanging over the whole of these industrial districts, it is still more worth while to give people this simple diversion at very low cost. It is quite possible that the effect of such entertainments is to save the State much money which might have to be spent in more perturbed circumstances. I accordingly would venture to renew my request that the Chancellor of the Exchequer should meet in some shape or form the design of the Clause presented to the Committee.
    7.1 p.m.
    Mr. McENTEE: I would prefer to see this tax in the form in which it is in the proposed Schedule to which I have attached my name. I believe that would be the best means of meeting the needs of the cinema industry, and of those who attend cinemas. At the same time, it would give a greater possibility of an actual increase in the revenue the Chancellor of the Exchequer would get. I remember the Chancellor of the Exchequer's speech on the Beer Duty. He gave as one of the reasons for the reduction of the Beer Duty that he was satisfied that, as a consequence of the higher duty, he was getting diminishing returns. I venture to put it to the right hon. Gentleman that he is probably now getting diminishing returns as a result of the tax we are discussing now. I do not want to quote figures, although I have had many given to me as a result of
    2140
    my inquiries from those who own cinemas, particularly in the poorer areas. The Chancellor of the Exchequer has, no doubt, the knowledge that a large number of these cinemas have been compelled to close down. I have an assurance that in fact there is a great number of cinemas at the present time in these poorer districts—as has been stated by the right hon. Gentleman who has just spoken—which are in such a position that they will be compelled to close down because they are actually losing money. It is only through the hope that some remission will be given to them, as a consequence of this Debate, that they have kept going until they see what the Chancellor's decision is.
    Like many of my hon. Friends in the House, I represent a very poor district. The people in that poor district are more heavily taxed for amusement than others are. There is no justice behind that. Consequently, I would ask the Chancellor of the Exchequer to consider the remission of the tax, and to give to these people some little hope of cheaper amusement. PersoNaily, I feel certain that an actual increase in attendances would result, and the takings of the cinemas would give to the Chancellor possibly more than he has got now. As a result of the increase of attendances he would get more Income Tax, as there would be an increase of profit to the owners of the cinemas. There has already been a considerable number of people put out of work, as a number of cinemas have already been closed. To my personal knowledge there is a great number of people to-day who are in fear of being discharged any day in the week. I think it is almost a certainty that if some remission is not given to the cinemas many of them will be compelled to close down.
    Taking all these considerations together, I think it would probably be proved, if figures were available, that the Chancellor of the Exchequer would gain as a consequence of a reduction in the duty such as that which has been asked for in the proposed Clause, or in one of the many other Amendments on the Paper which deal with the reductions of the tax. I think it is probable that, if a free vote of the Committee were taken, there is scarcely, an, hon. Member, or an hon. Lady, who would not vote for a reduction in the taxation on these lower-priced

    2141
    seats. I am not asking the right hon. Gentleman for that free vote, but I am using it as an argument, and I hope he will be able to make some concession.
    7.7 p.m.
    Mr. CURRY: The plea put forward is for the total remission of the tax upon the lower-priced seats of the cinemas. I am not concerned with the general range of these duties. I have had brought to my notice figures of the industry in my own constituency which show that they are in a parlous condition—losing attendances and turnover because of the incidence of the tax upon the lower-priced seats. But that is not the point of view I want to press upon the Chancellor of the Exchequer, serious although it is. I want to press the view, so ably expressed by the right hon. Gentleman the Member for Hillhead (Sir R. Horne), on behalf of the persons who desire to attend these cinemas and to occupy these cheap seats. After all, if a person can only afford 6d. or less than 6d., which is very often the case in my division, or if they can only afford 3d. to see a picture, it is unfair that the State should take a toll upon that small amount which they require in order to get reasonable relaxation.
    We must consider the times in which we live. Times are difficult. Depression is great, and employment is uncertain. The only relaxation these people can get from their worries and anxieties is an occasional attendance at the cinema. The least we can do in these days, when the incomes of all people have been reduced, is to accede to this request and remit the tax upon the lower priced seats. I would appeal to the Chancellor of the Exchequer to look very carefully at the case, because the argument has great force. If he does so, he may ever be brought to see that this tax is now subject to the law of diminishing returns. We have, I think, a complete argument for the remission of this tax, or any tax: First, the contraction and the destruction of trade and business; secondly, hardship of incidence on he taxpayer; and, thirdly, diminishing returns to the Exchequer. If these three things are proved, as I think they are in this case, then the case for remission is unanswerable.
    7.10 p.m.
    Mr. CHAMBERLAIN: A large number of hon. Members apparently desire to
    2142
    speak, but something tells me that they all wish to say the same thing If we were to decide this question solely on the ground of whether this would be a popular move, I think the hon. Member opposite, who desires to have a free vote, would be quite right. A great many Members who have not my responsibilities wish it. I got up early in the discussion to say that I cannot see my way to accept this Clause, or any of the other Amendments.
    Mr. KIRKWOOD: Can you not go half roads?
    Mr. CHAMBERLAIN: I cannot go half roads. If I were to do anything at all, I should be inclined to do something more drastic than these particular Amendments. Let me for a moment put to hon. Members one or two considerations on the other side. First of all, I am told that the law of diminishing returns is coming into operation in the case of this tax, and that that is a reason why I should now reduce the tax in the hope that I might get a larger income from it, this year or next year. Surely hon. Members have forgotten that exactly the same thing has been said of Income Tax, Surtax and Death Duties. I do not say whether it may be true or not.
    Mr. C. BROWN: Has the right hon. Gentleman forgotten that he said it about the Beer Duty?
    Mr. CHAMBERLAIN: What I am saying is that I will not argue that it is not true that a reduction would bring in more money. That is a matter on which one may have verying opinions according to the particular tax which is under consideration. I do want, however, to point out that the difference between the Entertainments Duty and the Beer Duty, to which the hon. Member has referred, is one of magnitude. In the case of the Beer Duty I was considering what is a main source of income—a duty which brought in nearly £75,000,000. In the case of the Entertainments Duty the whole of the tax yielded under £10,000,000. There is not the same case for immediate urgency of alteration in the case of a tax which is only bringing in, as a whole, a comparatively small sum as there is in the case of the larger one of the Beer Duty.
    Two grounds have been put forward as to why this tax should be reduced.

    2143
    The first ground is that it is very hard on poor people that they should be deprived of amusement which has become almost a necessity for them, by reason of increase in price. Secondly, it is argued that it is ruining the small cinema proprietor because he cannot increase his prices to the public, and has to bear the whole charge. Both these grounds cannot be valid. Either the price has been increased or it has not. If the price has been increased, the public is paying. If the cinema proprietors are bEarlng the charge, then it cannot be borne by the public. It may be that in a good many cases cinema proprietors have felt they could not pass on this charge, and have had to maintain the old prices and recoup themselves by some rearrangement of seats. But let us remember for what purpose this duty was imposed on the tickets for the cheaper seats. It was part of the emergency Budget of 1931, and we must all recognise that that Budget, which was concerned with a number of ways of reducing expenditure or increasing taxation, was a complete project, a whole, for dealing with a serious state in the national finances. If we are going to break into that Budget anywhere at once you raise the question whether you ought not to break into it in some other direction.
    Mr. MANDER: What about beer?
    Mr. CHAMBERLAIN: The hon. Member means that I have broken into it?
    Mr. MANDER: Yes.
    Mr. CHAMBERLAIN: I agree, but there was a special reason for that which I have explained to the Committee, and could a reason comparable to that in weight be adduced in the case of any other of the projects which were included in the emergency Budget of 1931, I should certainly be prepared to justify a further breach of it; but I say that the case for an alteration in this particular instance is not comparable with the Beer Duty, and that being so I do not think it is possible for me either on the ground of hardship, or that the revenue is diminishing, or any other grounds which have been put forward—grounds which may be quite good in themselves—to accept this proposal to break into an arrangement which was based upon the understanding that every sec-
    2144
    tion of the community must make its contribution to the national emergency. That was the specific reason given by Lord Snowden for putting the tax on the cheaper seats, and that being so I regret—I regret it very much—that in present circumstances I cannot see my way to upset the whole project embodied in that Budget. I quite realise how pleased hon. Members would have been if I could have said that I would agree to this new Clause, and they could have taken home the good news that the cheaper seats were to be free from tax, but I am afraid that I must ask them to support me in this refusal.
    Mr. T. WILLIAMS: Can the right hon. Gentleman give the Committee any idea of what it would cost the Treasury if he were to remit all tax upon seats not in excess of 6d.?
    Mr. CHAMBERLAIN: It has been explained on various occasions that it is impossible to give an accurate estimate, that one can make only a sort of guess, and the best guess I can make is that it would cost something over £2,000,000.
    7.19 p.m.
    Mr. PRICE: I am sure the Committee will agree that we are very much disappointed with the reply from the Chancellor. He has told us that this duty was put on the low-priced seats to deal with the emergency for which the emergency Budget of 1931 was brought in, and that if that Budget is to be dealt with it must be as a whole. He then admits that he himself has broken into it in one direction, but he fails to realise that the Budget of 1931, which he assumed spread the burden fairly over the backs of the community as a whole, did not really do so. The Budget of 1931 put a tremendous burden, more than their share, on the poorest people of the nation. Our appeal is for the people who occupy the lowest-priced seats in cinemas. All of us in the industrial districts, without having that special interest in cinemas which the directors of them have, have noted the falling off among those who occupy the lower-priced seats. With the other sacrifices they had to make under the Budget of 1931 they cannot now afford to attend cinemas.
    Last winter thousands of people who used to attend cinemas when things were

    2145
    better—unemployed, men on short time and men with low wages—could not go to these entertainments, which to my mind do more good than harm. It is very disappointing that the Chancellor of the Exchequer, with a balance of £19,500,000, should say that it is not possible when we appeal to him to use that balance in alleviating the lot of the poorest people. I am not satisfied that this concession could not be made, and I am perfectly certain that it is a concession which would be very much appreciated by poor people. To rob them of this modest form of entertainment is to take away from millions of poor people the only entertainment they have in the winter months. The Chancellor has made the reply which some of us expected, because the Budget—not only the 1931 Budget, but this present one—has been framed so as not to give any concessions to the poor people but to put further burdens on their backs. Therefore, it appears that the best thing we can do is to let the poorer people whom we represent understand that they are not likely to get any concessions at all until the National Government are turned out and a Government with more sympathy put in.
    7.23 p.m.
    Major COLFOX: If I may say so, the speech of the Chancellor of the Exchequer did not sound entirely convincing to me. The statement has been made more than once that if this tax were reduced it would increase the revenue from the tax. The Chancellor said he was not going to address himself to that point, but it seems to me that that really is the one point which arises. I am not moved at all by those who say that this tax should be reduced because it falls heavily upon poor people. After all, this is not like the Income Tax or Death Duties, it is not a compulsory tax. No one need pay it who does not wish to do so, and therefore the argument that it must be reduced because it falls so heavily upon poor people leaves me quite cold. It does not fall heavily upon anyone who does not wish it to fall heavily upon him. But if I am told, and it is proved, that a reduction in this tax would increase the revenue, that is a consideration which would influence me very considerably. We want to get from this tax as much revenue as is possible, in order to help
    2146
    the national finances and the social services, and therefore if by reducing the tax—I say "if," because I have no figures to prove whether it would or would not—we could increase its yield, I think we certainly ought to do so, even though that would break into the structure of the 1931 Budget.
    The Chancellor said that that Budget was framed in order to make sure that all sections of the community bore their share in providing revenue. No doubt that is so, but if, in fact, the high level of this tax has reduced its yield, I submit that this particular section of the community, the cinema-going section, is not really bEarlng its fair share of the tax and that it might be made to do so if the tax were reduced. Naturally a private Member has not got access to figures which can either prove or disprove the statements which have been made, and I for one am certainly not going to state, or to believe, without proof, that a reduction of this tax would, in fact, increase its yield. The Chancellor of the Exchequer and his advisers may be in possession of figures which will prove or disprove that point, and to my mind the whole argument should rest on that consideration and on no other. I believe the statement which has been made several times in the course of the Debate is a false one, I think it would be very unwise to reduce this tax, as I believe that by reducing it we should further reduce the yield from it.
    7.28 p.m.
    Mr. TOM SMITH: I should not have intervened but for the speech of the hon. and gallant Member for West Dorset (Major Colfox). He said he did not make any suggestion with regard to this tax because, in his opinion, it did not fall hardly upon the poorest of the community. He said, further, there was no need for anybody to pay the tax who did not want to. That applies to more things than to cinemas. No one need pay any Beer Duty, no one need pay any Tobacco Duty, or pay motor car licences or dog licences. There are a hundred and one things which people need not have or do if they feel so disposed. The logic of his argument would be that if everybody ceased to buy or to do things there would be a considerable decrease in revenue. As a matter of fact, this Entertainment Duty does fall very heavily indeed on the

    2147
    poorest in the community. The Chancellor sought to justify the duty on the ground that in 1931 Mr. Snowden wanted to make the sacrifices equal. People suffered cuts in salaries, the allowances to the unemployed were cut by 10 per cent. and this additional Entertainment Duty was put on. Of course, if Members believe that a working man or working woman has no right to entertainment one can understand their being indifferent to this appeal. I hope the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) will press this Clause to a Division. Members of Parliament have three loyalties to bear in mind. They have a loyalty to the constituency, a loyalty to the party, and a loyalty to their own consciences, and, if I may say so, a loyalty to the promises they made to the cinema people and to the electors as to what they would do if returned. We hear much about independent thought and independent action among Members and supporters of the Government and I hope they will to-night quit themselves like men and go into the Lobby and vote for this proposed new Clause. If they do so their action will be applauded, not merely by the cinema people but by many of those whom they represent in this House. When they get back to their constituencies they will at least be able to say that they have carried out one of the promises that they made when they were appealing to the electors for support.
    7.30 p.m.
    Mr. PIKE: I would like to put one point before the Chancellor of the Exchequer, in the hope that, prior to next year's Budget, he will have changed his mind on this question. He tried to show a parallel between the Entertainments Duty and the diminishing power of the people to pay it, and the position of the Income Tax, Surtax and other taxes, that are generally paid throughout the country. I respectfully suggest that the position is entirely different from that. One pays Income Tax and Surtax when one earns, but, as the right hon. Gentleman the Member for Hillhead (Sir R. Home) pointed out, one pays Entertainment Duty without earning. That condition of affairs cannot continue. On the Second Reading of the Finance Bill I produced figures to show conclusively that the number of people attending the cinemas in the cheaper seats was slowly
    2148
    but surely diminishing, although the return of Entertainments Duty was increasing. There can only be one result, as was produced by the excessive beer duty, that has ultimately meant further taxation upon the people for at least one year, to the extent of £14,000,000, until the position irons itself out.
    It is unfair to suggest reductions continuously to the Chancellor without submitting to him some means whereby he can find the money to compensate him for what he would lose temporarily by remitting the taxation. I therefore submit that vast money is earned as the result of showing in this country films produced in America, and that cinema proprietors pay rent for the films to a total of about £30,000,000 per year. This money is going out of the country. A tax of 8 per cent. or 10 per cent. upon that money would provide far more than the Chancellor can ever lose by the remission of taxation sought by the proposed new Clause. I hope that before the next Budget the Chancellor will give consideration to that point.
    In my own division more than 30,000 men and women are unemployed. Prior to the introduction of the Entertainments Duty, proprietors of the cinemas entertained them at various times in the year at half price. The moment this duty was introduced, it became financially impossible for the proprietors of the cinemas to continue that humane and desirable concession to the unemployed. It was a concession very pleasing to those who were able to enjoy it, and the imposition of the duty has denied the right to a large number of people in my part of the country to enjoy the little pleasure that they occasioNaily got. I hope that the Chancellor of the Exchequer will look into these points, and that he will do what he can next year to give us what we are asking for.
    7.34 p.m.
    Mr. KIRKWOOD: The Chancellor of the Exchequer has made the fullest reply that I have yet heard from him, either on the Finance Bill or any other. He rejected the appeal that has been made by hon. Members not only on these benches but on his own benches, and by no less a personage than an ex-Chancellor of the Exchequer, who is bound to be acquainted with all the difficulties that might arise from a situation such as the

    2149
    present. The Chancellor of the Exchequer said that it was impossible for him to give any remission now. The duty is one that is imposed on all seats, and we desire the duty to be entirely eliminated from the sixpenny seats downwards. The Chancellor of the Exchequer said that Lord Snowden in 1931 had imposed this duty in an emergency Budget, and that that emergency Budget was part of a scheme of things with which the present Chancellor could not interfere without damaging all the arrangements that were then made. My contention is that that reply is the greatest lot of nonsense that has ever been put across that Table.
    Circumstances have entirely changed, and the Chancellor of the Exchequer has changed his Budget, Since 1931. Since then we have gone off the Gold Standard. That was supposed to be the end of all Budgets. We were to start a new era. The Budget for which the present Chancellor is responsible is not an emergency Budget. He has a surplus. Surely we are justified in coming to him, seeing that he has a surplus of about £19,000,000. He has had the hardihood to give £14,000,000 of that surplus to the brewers. [An HON. MEMBER: "Shame !"] Of course it is a shame. It is a shame and a disgrace. He is supported to-day by men who are comfortable, who do not know what it is to be up against it, and who do not know what a penny really means. We appeal to the Financial Secretary to the Treasury to bear these things in mind and to convey them to the Chancellor.
    We realise quite well that the Chancellor has given certain concessions to some sections of the community. He has given £14,000,000 to the brewers. He knew that nearly 400 Members of this House were pledged to the concession for which we are now appealing. That pledge was given to the cinema operators of this country. The reason why the individuals who own cinemas are not standing to their guns is that they are not as solid as the brewers, who are behind one another. Why is that? I would have every man and woman of good will listen to what I am now going to state: The cinema operators are not like the brewers, because there are certain cinemas that pay well and whose owners are not interested in the duty. The cinemas in the main streets of Glasgow, such, as in
    2150
    Sauchiehall Street, are all right, but the cinemas in the working-class districts and in the West of Scotland and elsewhere, where poverty is rampant, are not doing well.
    In Britain, this duty hits heaviest the poorest cinema operators. Those who own the poorest cinemas are up against it. This House, as usual, rides off by putting the burden on to the poor. That is what the Chancellor of the Exchequer has done here. All that we are asking is that he should abolish the duty up to the sixpenny seats. It is becoming more and more recognised that the cinema is the cheapest form of entertainment available to the people. It has become an important element in the social life of the people. It is no longer a luxury, but, in the drab and dreary circumstances of life in the depressed areas, it is the only means of bringing a little colour into the lives of the people.
    I have before me the names of some of the cinemas in my own district. Other hon. Members may have similar information. The right hon. Gentleman the Member for Hillhead (Sir B. Home) has been approached. He has gone into the working-class sections of Hillhead, and has seen the terrible situation that is arising. Let me give three outstanding examples of these cinemas. First, the Lorne Cinema decreased its takings by £l,874, while there was an increase in Entertainments Duty of £926. In the Elder Cinema, there has been a decrease in takings of £1,183 and an increase in Entertainments Duty of £1,660. At the Lyceum—[HON. MEMBERS: "Oh !"]— This is the last. I must give this information to the Committee. I can go on for an hour. You must remember that in working-class districts this is one of the vital items, and that we have discussed it under an hour. It is the case of the poor that is being stated, and because it is the case of the poor you find rich individuals like the hon. Member for South Kensington (Sir W. Davison) interrupting. The Lyceum decreased its takings by £2,724, and the increase of the duty was £336.
    I do not want to talk unnecessarily, but I want to do what I possibly can to bring before the Committee what is really meant by depriving the poor folk of the opportunity of going into a cinema. It only costs them, in the cheapest places,

    2151
    3d. or 4d., and in some places it is 2½d. I would like the Committee to remember that, as a result of the impoverishment that is taking place, the poorer cinema operators have not been able to spend the necessary money to keep these cinemas in a proper condition. Many of them require cleaning and overhauling, but the proprietors cannot afford to spend the money. I emphasise this point because, particularly in the winter nights, these poor people are not only entertained in the cinemas, but they can go there and spend three hours in comfort, in heat, when they have no means of heating at home—no coal and no fire. They can go to the cinema and have a fine, comfortable seat for three or four hours for those few coppers, and another penny will make all the difference as to whether or not they get that little bit of entertainment in life.
    An hon. Member opposite—I forget where he comes from—made the coldest statement that I have ever heard made in the House. He said that they did not need to go. Of course they do not need to go. He does not need to take his food, but he requires it. He will not want to die, but, die he will. It is good that there is such a thing as a grave. I want the Financial Secretary to use his influence and try to convey to the Chancellor of the Exchequer the sentiments that have been expressed in this House, and the feeling that there is in the House, because I am perfectly satisfied that, if I could take hon. Members, even those who are most against me in the House, into these cinemas in working-class districts, they would not hesitate for a moment, but would even defy their Whips and go into the Lobby just as we are going to do, because we are going to see that the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) divides the House, or, if he does not, we will.
    7.48 p.m.
    Mr. ORMISTON: I speak with considerable knowledge of the cinematograph trade, as I happen to be the honorary treasurer of the National Association of Cinematograph Exhibitors, and this afternoon I was exceedingly disappointed when the Chancellor of the Exchequer informed us that he could not see his way to remove the tax on the cheaper seats in cinemas. He told us that it would cost
    2152
    him approximately £2,000,000 to remit the tax on the seats up to 6d., but he ovErieoked the amount of Income Tax that he has lost through the imposition of the additional tax on the cheap seats. When Mr. Philip Snowden, in 1924, remitted the tax on seats up to 6d., it gave a tremendous impetus to the attendance at cinemas, and the figures grew at a very large rate; but Since, in the emergency Budget of 1931, Mr. Snowden reimposed the tax on seats up to 6d., there has been a considerable diminution in the attendance at cinemas. On behalf of the trade, we issued a referendum to oar members, and we have ascertained, by comparison of figures prior to and after the increase of tax, that the amount of admission money paid at the cinemas has decreased by no less than £4,000,000; and the Chancellor has lost Income Tax on that £4,000,000, because we have not been able to reduce our expenses to an extent corresponding with the reduction in our receipts. Therefore, the net loss to the Chancellor would be something under £1,000,000.
    Hon. Members must not think that the cinema is the entertainment that they see in the West End of London. In many of the smaller towns and villages of this country the cinema is the only entertainment that the people have. It is the cheapest entertainment that has ever come before the public, and the least harmful; in fact, in many ways it is the most beneficial form of entertainment that the people have ever had. Therefore, I would appeal to the Financial Secretary to impress upon the Chancellor that, if he reduced the tax on seats up to 6d., he would be doing good, not only to the trade—the trade may or may not be deserving of his sympathy—but to the large Majority of the working people of this country. I again express the hope that he will be able to give this matter his further and sympathetic consideration.
    7.52 p.m.
    Mr. LOGAN: Having made definite promises in regard to this great industry, I feel that I owe it to those who want this form of entertainment in the neighbourhood from which I come to endeavour, in the House of Commons, to get some improvement in the conditions, so that, out of the little money that they have, they may be able to get, if they

    2153
    want it, a little entertainment to relieve their drab existence and break the monotony of their lives. A tax of 1d. on a seat costing 3d., is a tax of 33⅓ per cent., and I would ask any reasonable Member of the House whether a tax of that kind is fair and reasonable? I am not obsessed by the Chancellor of the Exchequer, and am not going to make any apology for wanting to know why he is absent when this Bill is being discussed. It may be said that he has been here. So have I, and I am not the Chancellor of the Exchequer. I have been waiting here to put these points to him.
    I want to put some points in addition to those which have been already presented. It has been stated that this tax brings in a certain amount of revenue, but even a Chancellor of the Exchequer cannot put taxes upon the people if the people are not anxious that those taxes should be put on. There are other ways of getting revenue, and I do not think that oppression of the poor by taxation of this kind ought to be supported in a British House of Commons. Why are Members here? Have they not made promises, and are they not here to carry out their promises? It is no use the Chancellor of the Exchequer saying that "No" is his answer to most of the Members in the House. Even Chancellors of the Exchequer have to be taught that the voice of Members of the House of Commons has to be heard in regard to the constituencies from which they come. I have listened to concessions being made in various directions, and have not grumbled because, I felt that better times were coming; indeed, it is time; that is going to solve the riddle, not the National Government.
    Let me put to the Committee an aspect of the matter that has not been dealt with. I may say that I have no interest whatever in cinemas, except that I know that the people in the district from which I come go to the cinemas in their drab hours. I am speaking now of the smaller cinema. I maintain that, if those people think they can afford to spend the money, they have a right to the entertainment, and they know best whether they can afford to spend the money or not. If they spend it, I maintain that the British House of Commons has no right to tax them excessively simply and
    2154
    solely in order to bring in a small revenue. There are many of these small cinemas which, if this tax continues, will not be able to carry on, and I know that many men who are working in them are likely to lose their jobs. It will be small consolation to me to know that they will have to go before public assistance committees because these small cinemas cannot be carried on.
    Again, will it be said that the proprietors of the great cinemas in our large cities are anxious to protect these smaller ones? No; they do not want the poor, and they do not cater for them as regards entertainment. Certainly, these poor people are not catered for in the big places which have been built at a cost of, perhaps, £80,000, or £120,000, or, in some cases, nearly £200,000, and, if it is not to be possible to provide this form of entertainment at small cost for the masses of the industrial workers of the country, it will simply mean giving a monopoly to the great multiple cinema owners. I have had occasion to know how these people work in the case of some of the big cinemas. In one case, when the licensing bench, on which I sat, insisted that the organ was not to be brought in, and that the violins and so on in the orchestra were not to be dispensed with, they came to an agreement to keep an orchestra of 24 musicians. Immediately, however, they established their huge cinema, and got a monopoly in the centre of the city, they discharged 14 members of the orchestra, who have been walking about the streets Since, some of them playing outside public houses.
    That is a kind of thing that I do not want to see continued. I do not want to see a great monopoly given; I want to see the people able to get a reasonable form of entertainment, and I say that this step of the Chancellor's is in the direction of giving a monopoly to these large syndicates, most of them not British, so that the money of bur people is being spent in a wrong direction in these cases. I know the poverty of the people in many of these areas, and the poverty of the cinema proprietors who are trying to keep a roof over their heads, while providing this cheap form of entertainment; and I trust that Members of the House, no matter what the hon. Member for Kidderminster (Sir

    2155
    J. Wardlaw-Milne) meant when he brought forward this proposal, will not agree to it being withdrawn. [Interruption.] I believe that your proper place to-night is in that Lobby. If you have regard to your pledges to the people you represent, Chancellor or no Chancellor, you will vote for the Clause. It is time there was some independence of opinion in the House. Supporters of the National Government should have a conscience sometimes and not be part of a machine. They know that frequently when they go into the Lobby they give a vote that they do not wish to give.
    Mr. LINDSAY: Am I not right in thinking it is one of the Standing Orders of the Labour party that a Member should not vote against the party?
    Mr. LOGAN: I have sometimes voted as I was inclined to vote, and I trust that on an occasion such as this you will show that you have a conscience just as I have. There is not a Member present who, if he were allowed a free vote, would not vote for a reduction of this duty. It is ridiculous that 4d. or 3d. should carry a tax of 1d. Those who can afford to pay 2s. or 7s. 6d. for a seat can well afford a little additional tax. It is quite possible for the Chancellor, with the staff at his disposal, to make an adjustment which would be fair and equitable. This is most unfair and I ask the Committee not to agree. Let us put it to the test of a Division and not withdraw the Amendment.
    8.3 p.m.
    Sir WILFRID SUGDEN: I wish to adduce three arguments in support of this Clause which have not so far been mentioned. The first is the question of health. We once had a respected colleague here named Sir Watson Cheyne, who was a very great authority on medical matters, especially on eyesight, and he told us more than once that the exhibition of cinematograph films, unless perfected in respect of their use and material, would have results on the eyesight not of this generation, maybe, but of the two following generations. Even if the Chancellor feels that this £8,000,000 or £10,000,000 is vital, he ought to sacrifice some of it for the sake of the children who will follow us. Cinema
    2156
    proprietors, because of the stringent times and smaller attendance of patrons, have to use films which have been in continuous use, because they get them cheaper, and scratched or varnished films have a detrimental effect on the eyesight. Then there is the question of educational films. Some of us have been called puritanical, especially in the matter of Sunday opening of cinemas, but I do not apologise for my views. Those who wish to present useful educational films will be handicapped by this high taxation on the lower-priced seats. I wish the representative of the Board of Education were here to hear what we have to say. To my mind, there is an opportunity in the matter of general and technical education which has never yet been taken advantage of. In these times, when children are growing into manhood and womanhood without being able to obtain work, if they could get technical instruction in cinemas, at the very lowest price entrance, which would give them knowledge of new trades and make them more efficient, the money would be well spent. Then there is the moral argument. Some of us who are Sabbatarians hold the view that such films as the "Mystery of the Blood Stained Putty Knife" are not helpful to morals. But the argument of the cinema owner is that he sometimes cannot make his cinema pay with the heavy Entertainments Duty and he must open on Sunday. If we are going to cut right across the moral views of a certain class of the community, that again must rest on the shoulders of the Chancellor himself.
    The CHAIRMAN: I think the connection between Sabbath observance and the Entertainments Duty is rather filmy.
    Sir W. SUGDEN: I am content for my colleagues to form their own conclusion. I ask the Chancellor of the Exchequer to note the arguments that I have adduced which warrant us in voting against the Government if they are not prepared to alter the rates of duty.
    8.11 p.m.
    Mr. LECKIE: I should like to join in the appeal that has been made to the Chancellor. I know something about the conditions in Walsall. I have been waited upon by the managers of various cinemas there and I have had irrefutable evidence of the great damage that has

    2157
    been done to the takings in the cinemas owing to the increased tax. I feel that nothing would be more popular than some concession in this matter, and I do not believe it would mean a reduction in the revenue. I believe a reduction would inevitably increase the yield of the tax. It is the tax, and not the depression, that is responsible for the great reduction in attendance in working-class constituencies. It is sometimes said that the unemployed spend their money in the cinema. If they feel that they can afford 2d. or 4d. for an afternoon or evening's entertainment, they are doing very well for themselves. They get warmth and brightness, and they are taken out of themselves. I do not think that argument holds water. I hope that the Chancellor, if he cannot accept the Amendment, will do something to meet the demands that undoubtedly exist in all working-class constituencies.
    8.13 p.m.
    Mr. J. JONES: We have a number of cinemas in my constituency in the dock area where men are never certain of a day's work. They have to muster every morning and every afternoon on the off-chance of getting a few hours employment. When the call is over, thousands of them have to trudge back to houses where there is not enough to provide the ordinary necessities of life. They are glad to get the cheapest kind of entertainment they can to kill the hours before they have to muster again for the call on. I do not appeal to anyone's sentiments, because I believe, "Blessed he is who expecteth nothing, for he shall not be disappointed." Some of us on these benches believe that taxation should be completely revolutionised and that men and women should not be taxed on the things that they use, but on what they have. This system of taxation is the reverse. The lightest tax is put upon the people who are best able to pay and the heaviest tax upon those least able to pay. The percentage between the two forms of taxation works out to the disadvantage of the poorest section of the community. It does not merely touch the man who pays for admission to the cinema, but helps to diminish employment. In my constituency, men who used to work as cleaners and who were employed in looking after the establishments have been discharged, and women have been taken
    2158
    on in their places because their labour is cheaper. We are indirectly adding to unemployment by this kind of taxation. The Chancellor of the Exchequer is only interested in the amount of money which he can get from the taxpayer in order to meet the charges upon the State. At the same time, I would remind him that it is no good taxing the people if the consequence of the taxation is to increase the poverty of the people he is taxing.
    I am not vindictive in these matters. We discussed the question of relief for landlords only a few hours ago, and all the poor landlords in the House were shedding crocodile tears over their miseries. We who live in London know how hard they have been hit. We have seen the empty houses in the West End, and we have also seen the luxury flats in the West End which have been built to supersede the houses where they used to keep a lot of servants. I know that I am possibly infringing the rules of debate and I am looking forward to the possibility of being pulled up, but we believe that in the Entertainments Duty the Government are doing their best to make things more difficult for those least able to stand the strain. Take a wet day at the docks when men looking for employ-men are turned away after the one o'clock call. The cinemas have just opened. Those men have to pay a 1d. tax upon a 2d. seat. Two pence is as much as they can afford to pay. They find that the 3d. seat has become a 4d. one. Though 4d. is not much to some people, some of the men who have to walk to the docks have only 4d. in their pockets to last them the day until they get home at night. To those men 4d. is a lot of money. It may be very nice to talk about the figures in the books, but I want the Committee to realise the figures in the street—the people who have to find the money. If they cannot afford to have reasonable entertainment, what are they to do? If they cannot pay the price of admission into these entertainment places, what are they to do? They will become disgruntled, disappointed and quarrelsome. What you gain on the swings financially you lose on the roundabouts socially. We support the Clause, which does not ask for as much as we should like, though I expect that it is more than we shall get, as usual. We shall vote for the Clause, because it is a step in the right direction,

    2159
    and we believe that it would help the people most deserving of help in existing circumstances.
    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes, 57; Noes, 192.

    Division No. 221.]

    AYES.

    [8.19 p.m.

    Attlee, Clement Richard

    Grundy, Thomas W.

    Nathan, Major H. L.

    Banfield, John William

    Guest, Capt. Rt. Hon. F. E.

    Ormiton, Thomas

    Batey, Joseph

    Hepworth, Joseph

    Owen, Major Goronwy

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

    Hirst, George Henry

    Parkinson, John Allen

    Cape, Thomas

    Holdsworth, Herbert

    Pickering, Ernest H.

    Cocks, Frederick Seymour

    Janner, Barnett

    Potter, John

    Cove, William G.

    John, William

    Price, Gabriel

    Cripps, Sir Stafford

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

    Procter, Major Henry Adam

    Curry, A. C.

    Jones, Morgan (Caerphilly)

    Salter, Dr. Alfred

    Daggar, George

    Kirkwood, David

    Smith, Tom (Normanton)

    Denville, Alfred

    Lansbury, Rt. Hon. George

    Sugden, Sir vilfrid Hart

    Dickie, John P.

    Lawson, John James

    Thorne, William James

    Dobble, William

    Leckie, J. A.

    Tinker, John Joseph

    Edwards, Charles

    Little, Graham-, Sir Ernest

    Wallace, John (DunferMilne)

    Foot, Dingle (Dundee)

    Logan, David Gilbert

    White, Henry Graham

    Foot, Isaac (Cornwall, Bodmin)

    Lovat-Fraser, James Alexander

    Williams, David (Swansea, East)

    George, Major G. Lloyd (Pembroke)

    Macdonald. Gordon (Ince)

    Williams, Thomas (York, Don Valley)

    George, Megan A. Lloyd (Anglesea)

    McEntee, Valentine L.

    Grenfell, David Rees (Glamorgan)

    McGovern, John

    TELLERS FOR THE AYES.—

    Gritten, W. G. Howard

    Mainwaring, William Henry

    Mr. Groves and Mr, D. Graham.

    NOES.

    Acland-Troyte, Lieut-Colonel

    Emmott, Charles E. G. C.

    Mabane, William

    Adams, Samuel Vyvyan T. (Leeds,W.)

    Emrys-Evans, P. V.

    MacAndrew, Lieut.-Col. C. G.(Partick)

    Agnew, Lieut.-Com. P. G.

    Erskine, Lord (Weston-super-Mare)

    MacDonald, Malcolm (Bassetlaw)

    Allen, Lt.-Col. J.Sandeman (B'k'nh'd)

    Erskine-Boist, Capt. C. C. (Blackpool)

    McEwen, Captain J. H. F.

    Applin, Lieut.-Col. Reginald V. K,

    Essenhigh, -Reginald Clare

    MeKle, John Hamilton

    Aske. Sir Robert William

    Evans, David Owen (Cardigan)

    McLean, Major Sir Alan

    Baillie, Sir Adrian W. M.

    Everard, W. Lindsay

    McLean, Dr. W. H. (Tradeston)

    Balfour, Capt. Harold (I. of Thanet)

    Fielden, Edward Brocklehurst

    Macquisten, Frederick Alexander

    Banks, Sir Reginald Mitchell

    Fox, Sir Gilford

    Mallalieu, Edward Lancelot

    Barclay-Harvey, C. M.

    Ganzoni, Sir John

    Margesson, Capt. Rt. Hon. H. D. R.

    Barrie, Sir Charles Coupar

    Gillett, Sir George Masterman

    Mayhew, Lieut.-Colonel John

    Birchall, Major Sir John Dearman

    Gledhill, Gilbert

    Meller, Richard James

    Blaker, Sir Reginald

    Gluckstein, Louis Halle

    Merriman, Sir F. Boyd

    Boothby, Robert John Graham

    Goff, Sir Park

    Mills, Major J. D. (New Forest)

    Boulton, W. W.

    Goodman, Colonel Albert W.

    Mitchell, Sir W. Lane (Streatham)

    Bowyer, Capt. Sir George E. W.

    Gower, Sir Robert

    Molson, A. Hugh Elsdale

    Boyce, H. Lesile

    Graham, Sir F. Fergus (C'mb'rl'd, N.)

    Monsell, Rt. Hon. Sir B. Eyres

    Braithwaite, J. G. (Hillsborough)

    Grattan-Doyle, Sir Nicholas

    Moreing, Adrian C.

    Broadbent, Colonel John

    Graves, Marjorie

    Natlon, Brigadler-General J. J. H.

    Brocklebank, C. E. R.

    Grenfell, E. C. (City of London)

    Nicholson, Godfrey (Morpeth)

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

    Grimston, R. V.

    North, Edward T.

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

    Guinness, Thomas L. E. B.

    O'Connor, Terence James

    Buchan-Hepburn, P. G. T.

    Gunston, Captain D. W.

    Oman, Sir Charles William C.

    Burgin, Dr. Edward Lesile

    Hacking, Rt. Hon. Douglas H

    O'Neill, Rt. Hon. Sir Hugh

    Campbell, Edward Taswell (Bromley)

    Hamilton, Sir R. W.(Orkney & Zetl'nd)

    Ormsby-Gore, Rt. Hon. William G. A.

    Caporn, Arthur Cecil

    Hanbury, Cecil

    Penny, Sir George

    Cautley, Sir Henry S.

    Hanley, Dennis A.

    Peto, Geoffrey K. (W'verh'pt'n.Bliston)

    Cayzer, Ma|. Sir H. R. (Prtsmth., S.)

    Hartland, George A.

    Raikes, Henry V. A. M.

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Harvey, George (Lambeth,Kenn'gt'n)

    Ramsbotham, Herwald

    Chapman, Col.R. (Houghton-le-Spring)

    Haslam, Henry (Horncastle)

    Rankin, Robert

    Clarry, Reginald George

    Headlam, Lieut.-Col. Cuthbert M.

    Ratcliffe, Arthur

    Cobb, Sir Cyril

    Heilgers, Captain F. F. A.

    Ray, Sir William

    Cochrane, Commander Hon. A. D.

    Hore-Belisha, Lesile

    Remer, John R.

    Colfox, Major William Philip

    Hornby, Frank

    Rhys, Hon. Charles Arthur U.

    Colville, Lieut.-Colonel J.

    Howard, Tom Forrest

    Robinson, John Roland

    Conant, R. J. E.

    Howitt, Dr. Alfred B.

    Ropner, Colonel L.

    Cook, Thomas A.

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

    Rosbotham, Sir Samuel

    Courthope, Colonel Sir George L.

    Hudson, Robert Spear (Southport)

    Runge, Norah Cecil

    Crookshank. Capt. H. C. (Gainsb'ro)

    Hume, Sir George Hopwood

    Russell, Alexander West (Tynamouth)

    Cross, R. H.

    Hunter, Capt. M. J. (Brigg)

    Rutherford, John (Edmonton)

    Dalkeith, Earl of

    Hutchison, W. D. (Essex, Romf'd)

    Salt, Edward W.

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

    Jamisson, Douglas

    Samuel, Sir Arthur Michael (F'nham)

    Davison, Sir William Henry

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

    Samuel, Samuel (W'dsworth, Putney)

    Denman, Hon. R. D.

    Jones, Lewis (Swansea, West)

    Sandeman, Sir A. N. Stewart

    Donner, P. W.

    Ker, J. Campbell

    Sanderson, Sir Frank Barnard

    Doran, Edward

    Kimball, Lawrence

    Scone, Lord

    Drewe, Cedric

    Lamb, Sir Joseph Quinton

    Shakespeare, Geoffrey H.

    Duckworth, George A. V,

    Law, Sir Alfred

    Shaw, Helen B. (Lanark, Bothwell)

    Duncan, James A. L. (Kensington, N.)

    Law, Richard K. (Hull, S.W.)

    Shaw, Captain William T. (Forfar)

    Edmondson, Major A. J.

    Levy, Thomas

    Skelton, Archibald Noel

    Elliston, Captain George Sampson

    Liddall. Walter s.

    Smiles, Lieut.-Col. Sir Walter D.

    Elmley, Viscount

    Lindsay, Noel Ker

    Smith, Bracewell (Dulwich)

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

    Strickland, Captain W. F.

    Weymouth, Viscount

    SmithCarington, Neville W.

    Tate, Mavis Constance

    Whiteside, Borras Noel H.

    Smithers, Waldron

    Thomson, Sir Frederick Charles

    Williams, Herbert G. (Croydon, S.)

    Somervell, Donald Bradley

    Todd, Capt. A. J. K. (B'wick-on-T.)

    Wills, Wilfrid O.

    Somerville, Annelley A. (Windsor)

    Touche, Gordon Cosmo

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

    Soper, Richard

    Tryon, Rt, Hon. George Clement

    Windsor-Clive, Lieut-Colonel George

    Southby, Commander Archibald R. J.

    Wallace, Captain D. E. (Hornsey)

    Winterton, Rt. Hon. Earl

    Spender-Clay, Rt. Hon. Herbert H.

    Ward, Lt.-Col. Sir A. L. (Hull)

    Wise, Alfred R.

    Spent, William Patrick

    Ward, Irene Mary Bewick (Wallsend)

    Wolmer, Rt. Hon. Viscount

    Stanley, Hon. 0. F. G. (Westmorland)

    Ward, Sarah Adelaide (Cannock)

    Wood, Sir Murdoch McKenzie (Banff)

    Steel-Maitland, Rt. Hon. Sir Arthur

    Wayland, Sir William A.

    Stewart, J. H. (Fife, E.)

    Wedderburn, Henry James Scrymgeour-

    TELLERS FOR THE NOES.-

    Strauss, Edward A.

    Wells, Sydney Richard

    Mr. Blindell and Mr. Womersley.

    NEW CLAUSE.—(Exemption from import duty of certain trophies.)
    The First Schedule of the Import Duties Act, 1932, shall be amended by the insertion at the end thereof the words, "Trophies, including cups and medals, when imported by or on behalf of a person domiciled in the United Kingdom where such trophies have been awarded to the owner for acts of bravery or for distinction in art, science, sports, athletics, or for eminent public services."—[Mrs. Tate.']
    Brought up, and read the First time.
    8.25 p.m.
    Mrs. TATE: I beg to move, "That the Clause be read a Second time."
    This Clause is designed solely to ensure that trophies, including cups and medals, imported under the circumstances described in the Clause, shall be allowed into the country free from taxation. There is no justification for the taxation of these trophies on the ground of revenue, because when one is considering the revenue of the country the small sum derived by the taxation of such trophies is negligible. No one welcomes more whole-heartedly than I do the change in our fiscal policy where it is designed to protect our home industries, but the taxation of these trophies has no justification on those grounds. On the psychological basis I think all of us will agree that the taxation of these trophies is very undesirable. They never represent the value of the actual achievement for which they were awarded; they are only mementos of initiative, courage and endeavour, and as such I think everyone will agree that it is very undesirable that those to whom they have been awarded should in any way be penalised.
    The present Foreign Secretary once said that it was difficult to define an elephant, but that you know one when you saw one. The Financial Secretary to the Treasury, in answer to a question which I put to him on 11th April of this year, told me that:
    2162
    "From the Customs point of view a trophy is what it is made of, and it is very difficult to discover an alternative definition."—[OFFICIAL REPORT, 11th April, 1933; col. 2356, Vol. 276.]
    With respect, I submit that it may be very difficult for a back bench Member such as myself to find an alternative definition, but no one who has seen the Chancellor of the Exchequer guide as through two very difficult Budgets would agree that can possibly be beyond his ingenuity to find some alternative definition. It is very desirable that some definition should be found. In January of the present year the mate and four men of the "Ford Castle" were awarded gold and silver watches for the extreme gallantry they showed in rescuing members of the crew of the burning liner "Atlantique." The French nation gave those watches as awards for those men's bravery, but on entering this country the watches were seized. Owing, however, to the discretion of a Customs official they were put under seal and were fiNaily allowed into this country free of duty. I am sure that the Financial Secretary will agree that it is undesirable either from the public point of view or from the point of view of the Customs officials that such matters should be left to the discretion of individual men. I would also remind the Committee that British subjects who go abroad and win athletic and sporting cups, often render a very great service to British industry by advertising British engines, etc., ail over the world, and we do not wish to penalise them by taxing their trophies. Although the wording of my Clause may not be acceptable—it may be too wide—it ought not to be impossible for the National Government to find some words to cover the intention of my Clause.
    8.31 p.m.
    Mr. HORE-BELISHA: The hon. Lady has said that one knows an elephant when one sees one. One also knows a good cause when one hears of it. It was very hard for me in the answer to the ques-

    2163
    tion which she has quoted to take the line that I did, namely, that it was not possible under the existing law to exempt trophies, and that it was very difficult to obtain any definition. Those difficulties, in fact, remain, but my hon. Friend has confidence in the ingenuity of my right hon. Friend the Chancellor of the Exchequer, and I rise for the purpose of saying that my right hon. Friend is determined to find some form of words. We fear that the words of this Clause may be too narrow, not "too wide." My instructions are that they are not wide enough. There are a number of things that come in under the McKenna Duties and the Key Industries Act which she would completely exclude. If we must deal with the matter we must deal with it in a thorough-going manner. If the hon. Lady will talk with the Chancellor of the Exchequer between now and the Report stage, or with myself, if she considers that suggestion a proper and reasonable one, we will see what we can do to meet her desires.
    8.33 p.m.
    Viscount WOLMER: As a supporter of the Clause I should like to thank the Financial Secretary for the concession and the pledge he has given, and I should like to congratulate my hon. Friend, and I feel sure that she will now withdraw the Amendment, confident that the pledge will be honoured.
    Mrs. TATE: I am most grateful for the consideration which the Financial Secretary and the Chancellor of the Exchequer has shown to me, and in view of the suggestion that I might discuss the matter with him and have it considered before the Report stage, I beg leave to withdraw the Amendment.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Exemption of stage plays, etc., from Entertainments Duty.)
    Entertainments Duty within the meaning of the Finance (New Duties) Act, 1916, shall not, as on and after the first day of October, nineteen hundred and thirty-three, be charged or levied on payment for admission to any entertainment the performers in which are persoNaily present and performing, and which consists mainly of one or more of the following matters, that is to say:

    (a) a dramatic performance;

    2164

    (b) a musical concert, whether vocal or instrumental or both vocal and instrumental;

    (c) a number of variety items or turns such as are ordinarily given in a music hall.—[Mr. Denville.]

    Brought up, and read the First time.
    8.35 p.m.
    Mr. DENVILLE: I beg to move, "That the Clause be read a Second time."
    After the speech which we have just heard from the Financial Secretary, showing that he is now in a more generous mood, I have the greater confidence in proposing the Second Reading of this new Clause. I am putting forward this proposal for two reasons. First, I do not wish to see the National Government do such an injury to the theatre of William Shakespeare that it will be referred to in future as the Government which put the theatre out of existence. In the second place, I have been prompted to move this new Clause because although the meeting which we had two or three months ago in a room upstairs failed to impress hon. Members yet soon after that when I suggested this new Clause, within 24 hours over 50 hon. Members desired to back the proposal, and Since then at least 200 or 220 hon. Members have expressed their desire to be allowed to help in setting the theatre on its feet. If we had suggested three months ago that the Entertainments Duty was the cause of all the trouble in the theatre, we should have been laughed at, but to-day I think I can show that it is crushing our national theatre out of existence.
    When it was first introduced this Entertainments Duty was brought forward purely as a War measure. The House was rather dubious about accepting it, indeed, so dubious that the Chancellor of the Exchequer at that time gave a definite pledge that when the War was over the duty would be removed. The War has been over for a long time and the Government have failed to keep that pledge. At the moment the National Government is standing still and allowing the first and foremost entertainment of the British people to disappear altogether. They are failing to see the large number of actors and actresses, musicians, carpenters, electricians, scene painters, canvas movers, and wardrobe mistresses, who are thrown out of work. The duty as it is now imposed applies equally to the theatre and to the cinema.

    2165
    The same duty is placed on a building which employs a large number of persons as on a building in which the entire company is brought in every Monday in a little round tin can and taken away on the Saturday in a little round tin can. There should be a difference made between the theatre and the cinema, the same difference that is made in France, where the theatre is placed in a privileged position and does not pay any Entertainment Duty whatever until it reaches a certain point. We are entitled to the same form of exemption that is given in Holland where places of entertainment in which 95 per cent. of the human element obtains are exempt.
    When the boom was on there was no difficulty about the theatre and cinema carrying on side by side; there was no difficulty about prices. For a time they both did well, but when normality came the theatre with its higher prices and, I say it with shame, with its less comfort, could not compete with the cinema with its lower prices and its greater comfort because it had to pay 50 or 60 more employés every week. It could not expect to carry on in competition with the cinema. I am now speaking from a provincial complex, not from a London complex. The London complex is a different thing altogether. In London we have the great grievance of higher prices and short performances, but I am speaking of the country as a whole, and when a theatre manager has to compete with the talkies he says that the easiest way is that as the cinema has no orchestra he will have no orchestra, and away go 10, or 15 or 18 musicians. In the provInces we have always been noted for the number in our orchestras, they are generally larger than the orchestras in London, but putting in a gramophone in the theatres has made no difference, except that those people who like music and do not like gramophones stay away from the theatre.
    The next thing to cut down were the large shows which people had been in the habit of seeing in the provInces, and to put on instead little chamber plays. They saved a considerable amount of stage money. The scenery is set on the stage on the Monday and all that is required is for a man to pull up the curtain and lower it again. In regard to these chamber plays a native of Stockport said
    2166
    that they were not worth going to see because they only put on furniture which anyone could see in a shop and then folks came on and started talking but did not do much else. But that is what theatre managers have been forced to do. They have been forced to bring in the gramophone and to put on the small play. They have also been forced to put on certain plays which have done no good to the theatre or to the managers; certain plays of a questionable nature which are inspired by America, and which would not have been put on but for the competition of the cinemas because we in the theatrical profession love our profession and do not want to see it degraded.
    But what the Chancellor of the Exchequer wants to know is how, if he takes the duty off the theatres, he is going to get his money. Every point that I am about to put has been submitted to the Chancellor of the Exchequer, so that there can be no question of his being taken by surprise, and if he has anything good in his mind to tell me he will have it ready. When the theatres found themselves in this peculiar position they were forced to go in for economy. Taking the average of the middle-class towns in the ProvInces, a No. 2 theatre pays £300 a week. When a touring company visits such a theatre the manager has to hand over £150 a week to the company. Out of the remaining £150 he has to pay anything from £50 to £60 to the workers. He found that he could provide his entertainment for something like 33⅓ per cent. of the gross receipts, instead of 50 per cent., and that if he only played to £100 a week gross, that is one-third of what he had to play to with an acting company, his share was 66| per cent., and he was not only paying his way but making a small profit.
    Can anyone wonder, then, that to-day we have to get up in this House and plead for the theatre? The theatre has never had a chance, and it never will have a chance under the present taxation. Ireland saw the mistake and France saw the mistake, but this country has not seen it so far. Let me give some particulars as to the number of workers who have been thrown out of employment within the last few years. In this matter the railways are the best barometer, and their figures have been dropping year by year. This year alone they have dropped

    2167
    33⅓ per cent. Owing to the persistence of the Entertainments Duty 160 theatres have gone out of existence. I have the list here. This Whitsuntide will see the end of another 21 theatres. These are only going out for the summer for decorations. The number of persons being thrown out of work in those 21 theatres is 1,425. They will go on the dole.
    We have asked for information from the Government and others as to the number of workers in the theatrical or the living entertainment industry. Roughly the Government records show that 8,000 are out of work, but that total refers only to those on the dole and does not refer to those who are on public assistance committee relief. Hundreds and hundreds of performers are too proud to accept public assistance committee relief, or they cannot get the dole. There are hundreds and hundreds of actors playing on village greens, in schools, in portable theatres, in barns and public houses and clubs, in order to get a living. The official figures do not take into account a very famous leading lady whose name was a household word a few years ago. She was picked up out of the gutter in a Welsh city during the early part of this year, and was starving. The official figures do not take into account a well-known musician of world-wide fame who was charged with begging at Bow Street the other day. The magistrate and the police took pity on the poor beggar and let him go. The official figures do not include the large number of suicides among theatrical people in the last few years.
    We are not asking the Government for a subsidy. Taking off a tax is not giving a subsidy. We are not asking for preferential treatment. We are simply saying that in the case of the theatre the Government will save money by taking off the Entertainments Duty. The number of actors and performers thrown out of work, as certified by the associations to which they are attached, is 5,000, unemployed stage staffs are nearly 10,000 and musicians just over 10,000. Roughly that is 25,000 people. Then there are the scenic artists and the great number of landladies in the towns of the country who depend on the visits of performers to keep them alive. These people are on the dole. It is true that a large number
    2168
    of musicians have got other employment, and naturally they do not want to give it up in order to go back for an odd week or two to a theatre or music hall. So they stick to their work. If permanent jobs were secured for them in the theatres again there would be employment for others in the jobs that they leave. Our figures show that there are over 20,000 people directly out of work in the theatres because of the Entertainments Duty.
    Mr. HALES: Do we understand that the theatres closed for decorations are permanently closed?
    Mr. DENVILLE: No. I have here particulars of the last four theatres to close. They are at Southampton, Bournemouth, Swansea and Westcliffe. In one year they paid £10,000 in Entertainments Duty, and lost £11,250. In Swansea, Southampton, Bournemouth and Westcliffe there are 108 theatrical people on the dole or getting public assistance. That is the point at which we are getting. If the payment of £180 per week is kept up, the people who are out of work will receive more money out of public assistance and in other ways than the Entertainments Duty will realise. Taking 300 theatres as compared with 4,531 cinema;;, the theatres are one-fifteenth of the whole and if they were exempted the Government would only lose the one-fifteenth part of the £9,000,000. But they would gain more than that by putting workers into work again. If I were asking for something which I thought the Government could not give, I should not be able to plead justification for my cause as I am doing. But I think, gentlemen—
    HON, MEMBERS: Order!
    Mr. McGOVERN: You must not address them as gentlemen.
    Mr. DENVILLE: I am sorry, Sir Dennis, if I am wrong in addressing Members of the Committee as gentlemen. What I was about to say is that it seems a terrible thing that the land of Shakespeare should allow its theatre to die. We have been prominent as the greatest acting country in the world from the earliest days—the French have been next, the Italians next, and the Americans nowhere.
    Sir BERTRAM FALLE: Whom do you mean by the "Americans"? The people of the United States?
    Mr. DENVILLE: I say it seems a terrible thing that we should allow to die that theatre, created by a humble little player who was a member of the company of a former Lord Derby. That Lord Derby was a pilgrim and made voyages all round the world. From his pilgrimages he brought back stories of other lands. He told them to his hack playwright, who sat down and wrote plays upon them—all those beautiful plays of which we are so proud. Those are the plays which are being kept alive to-day in adverse circumstances in theatres like the Old Vic and Sadler's Wells owing to the generosity of actors and of other people who take an interest in them. Our great national writer, the greatest writer the world has ever known, is more highly respected in foreign countries than in his own. But it seems a tragedy that any Government whether it calls itself a National Government or a Socialist Government, should stand by and see our national theatre decline without stretching forth a hand to save it. It would be much better indeed for the Government to give the theatre its death-blow, but I should be sorry to hear of a Chamberlain being its executioner. In the words of poor old Shylock:
    "Nay, take my life and all, pardon not that;
    You take my house, when you do take the prop:
    That doth sustain my house: you take my life,
    When you do take the means whereby I live."
    You are taking from the actor the means by which he lives. There is one point which I know the Financial Secretary is bubbling over with anxiety to bring forward, but I am going to anticipate him. I am going to cut the ground from underneath his feet. He will say, if the tax is taken off will it improve attendances at theatres? I am not advertising any theatres or any companies here. I do not believe in it, but I have here certain playbills, and I find that in one or two small towns the managers have tried the experiment of paying the tax themselves and thus getting down to the cinema level of prices. They have done so, and they have been able to compete with the
    2170
    cinemas, and, what is more, they have been able to beat them.
    That has been done in one or two towns close to your own doors. I do not know that I ought to mention them because that would be advertising, and this is not a place for advertising people's wares. But not 40 miles from London there are theatres competing with and beating the cinema on its own ground. But at what a price. At the price of the blood and bones of ladies and gentlemen who have learned their profession and who have to live on bread and butter to keep the flag flying. The theatre is being starved. One of these playbills is that of a theatre in which the top price is 3s., the cinema top price being 2s. 6d. Take off the tax, and they can come down at once to the cinema price. In another case if the Government took off the three penny tax on the 1s. 6d. seats and the management took off three pence, back would come the shilling seat, and they could compete with the cinemas.
    That is why we say that the tax is more than we can stand at present. If we had not so many people to keep we should be able to pay the Entertainments Duty just as the cinemas do. We should kick against it no doubt, and we should ask for a reduction in the case of the lower-priced seats. But the Government cannot get away from the fact that at present we are keeping people, men and women, living, breathing people, off the streets or rather we are doing our best to keep them off the streets, while under the social system they are being driven on to the streets. I ask the Chancellor of the Exchequer to give favourable consideration to the plea that he should do something for the poor actor and actress.
    As chairman of a section of the theatrical profession, I can assure the Committee that if this tax were taken off, within three months 100 theatres would be ready to open. I can give the name of a theatre which was under construction—the foundation and the frontage were complete, but work on it was stopped four years ago. The moment the tax was taken off, work on that theatre would be resumed and it could be opened by Christmas. There is another point which is perhaps more important than all the other arguments I have

    2171
    advanced. Whatever is done for the theatre, if anything, there ought to be a definition of a place of entertainment. It should be defined as a place in which there is an orchestra of not less than so many members, in which there are not less than a certain number of stage hands, and in which there is a company not less than so many strong. A theatre is no good without a proper orchestra and a proper staff and certainly not without a proper company. This is the first time I have occupied so long in addressing hon. Members, and I think I have now completed my little contribution to this Debate. I am not fond of this kind of speaking—I like the footlights in front of me—but I hope that this honourable assembly will consider favourably the plea which I have put forward.
    I hope the Financial Secretary to the Treasury will be prepared to say, "There is something here that we cannot get at, but if you will let it drop for the moment, we will go into the figures and see if the Government cannot do something for you." Something must be done. If you want to save the theatre, you must do it not to-morrow, but to-day. The theatre is going quickly. There will not be a No. 2 theatre in the provInces by Christmas time if something is not done; there will not be half-a-dozen No. 3 theatres, and there will not be more than eight or 10 No. I theatres. If the Government allow the theatre to disappear, future historians will say of the Government what the Government deserve, and if that is recorded in heaven, all the tears of all the angels will never be able to blot the record out.
    9.6 p.m.
    Mr. LOVAT-FRASER: I should like to second the appeal that has been made by the hon. Member for Central Newcastle-on-Tyne (Mr. Denville), who speaks with a very real and practical knowledge of his subject, while I speak simply as an ordinary citizen. It seems to me that the question that we have to ask ourselves is, "Are we prepared to lose the theatre as an institution?" Almost daily we hear of theatres being closed, and we know that in the theatrical profession there is destitution and poverty of the most distressing kind. Those who know tell us that if things are permitted to go on as they are going on
    2172
    now, the theatre in this country will soon be an institution of the past. Are we prepared to face that eventuality? The Committee knows what we owe to the theatre. The Committee knows what a part the drama has played in human life. The whole history of our race, from the Greek times, as the hon. Member said, right down to the present day, is displayed in the drama. May I recall the description of playing given by Hamlet?
    "The purpose of playing …is, to hold, as twere, the mirror up to nature; to show virtue her own feature, scorn her own image, and the very age and body of the time, his form and pressure."
    The drama is a great institution. The greatest Englishman of all, the man with the biggest brain that our race has produced, was a play-actor. I remember reading a story of King Louis XIV of France, who asked the poet Boileau who was the greatest man in his dominions. The poet Boileau replied, "Molière." The King was angry and displeased to think that in his kingdom, full of such distinguished men, the greatest of them all was Molière.
    One of the great features of modern times has been the growth of mechanisation. Man is being replaced by the machine, and the theatre is suffering from rivals based on mechanisation. I appeal to this Committee to prevent the complete disappearance of the theatre before mechanisation. May I read a short extract from a letter that appeared in the "Times" the other day, which is, I think, of real practical interest to this Committee? It is a letter by Mr. E. P. P. Rowe, in which he shows the effect of the Entertainments Duty on the theatre, and he write about the "Old Vic" and Sadler's Wells. I am very familiar with the "Old Vic," but Sadler's Wells I have not yet visited. Speaking of those two theatres, he says:
    "The main purpose of these charity foundations is to provide the best drama (especially Shakespeare) and opera at prices which even very poor people can afford. The result of the last two seasons has been a loss, subsequently met by charitable gifts, almost exactly equivalent to the punishing sum exacted for Entertainment Duty. Quite clearly the effect of this duty would be to tax such work out of existence if the loss it inflicts were not met, with effort and difficulty, through appeals to charity."
    There is a very practical instance of the effect of this tax on the theatres, and I

    2173
    ask the Chancellor of the Exchequer to respond to the appeal so earnestly made on their behalf.
    9.11.p.m.
    Mr. GODFREY WILSON: I rise to support this new Clause, and I appeal to the Chancellor of the Exchequer to give way on financial grounds. I believe that the Entertainments Duty is killing the theatre, and it is throwing a large number of people out of employment. I believe that the receipts from the tax will diminish, and from every point of view, so far as the money side of the question is concerned, it seems to me that it would be a proper thing for the Chancellor of the Exchequer to give way upon this point. I have in my hand a letter which I received yesterday from some people who understand this question thoroughly, in which they state:
    "The position of theatres, especially in the provInces, is becoming so desperate that unless some relief is afforded them they will have to give up their competition with cinemas and close altogether."
    I am not going to weary the Committee by speaking any longer, but I think the Chancellor of the Exchequer should give way on this point, because I believe that it would pay the country and save money in the long run.
    9.12.p.m.
    Mr. LOGAN: I have great pleasure in supporting the appeal which has been placed before the Chancellor of the Exchequer, and I do so as one who knows the subject and who has been an actor and is therefore well fitted to deal with this question. I remember in my early days in the green room of a theatre taking a humble position in a well-known theatre in this country, and right from those days up to now, in one way or another, I have been associated with the theatrical profession. I have known men and women of talent, women gifted in elocution, great tragedians on the boards of our theatres, which are the only true and proper schools of the English language, and the loss to this country, if the true stage were to disappear, would be incalculable. The British public have many forms of entertainment, but when one looks back at the early days and remembers the great actors and actresses who have graced the stage, one realises what the loss would be if they had never
    2174
    been—your Terrys, your Irvings, your Forbes-Robertsons, and so on.
    When I think of how poorly paid the people of the theatre are to-day, and when I see this art so depressed, I feel that it is high time to make an appeal to the Chancellor of the Exchequer. Many of the houses to which the old stock companies used to come are now disappEarlng. If we could give a revival to the theatres we could ease the lot of many of these unfortunate people. One of the tragedies of life is to see the disappearance of orchestras, and the tin music of the cinemas giving place to the instrumentalists who used to grace the theatres. Some of the finest instrumentalists are now on the streets seeking relief. I have come across some of the best of them down and out, and this week I have been told by at least a dozen of the leading players of this country that they are on the poverty line. It is a disgrace to the dramatic art of this nation that so many men should be disappEarlng from the stage and that a helping hand should not be offered to them in a time of dire distress. When theatrical companies go and theatres close we shall have lost everything that is great and glorious from the point of view of the uplift of our people. The stage has had a great influence for good, and it would be of great benefit to the country if the Chancellor could give this help.
    I will give one or two instances from Birmingham on the material side of this question. The Chancellor, I think, will have some knowledge of that great city. The Grand Theatre in Birmingham has a staff of 40 and an orchestra of 10, and it is about to close. The Theatre Royal in Birmingham with a staff of 70 and an orchestra of 14, is about to close. The Empire Theatre, with a staff of 46 and an orchestra of 11, is also about to close. I have the figures of one particular theatre, the name of which I will not mention. They show that the total gross receipts, less tax, amounted to £5,969. After all expenses had been paid, the loss was £2,628. [An Hon. MEMBER: "Which theatre is that."] It is the Palace Theatre, Manchester. While they suffered a loss of £2,628, they paid in taxes £1,196 17s. 8d. Owing to that financial loss it will have to close its doors. If these losses continue, there will not only be losses in rent, but losses in rateable value to the cities in which the

    2175
    theatres are situated. Thousands of actors are being thrown out of work, and the loss from the point of view of public assistance and relief is great. I do not know any more deserving class in this country that ought to be assisted than the theatrical profession, which has done so much for charity and in the day of extremity needs so much help.
    9.19 p.m.
    Lieut.-Colonel JOHN SANDEMAN ALLEN: I do not think that any Member could have listened unmoved to the appeal that was made by the hon. Member for Central Newcastle (Mr. Denville), but we must not let our feelings run away with us. We must come down to earth. I have no doubt that the Chancellor of the Exchequer will be able to repeat the arguments which he made against the reduction of the cinema Entertainments Duty, for the same arguments apply to the theatres as to the cinemas. The country must meet its liabilities. That is the whole reason for taxation, and there are two ways of improving things. One is to improve trade and the other is to reduce our liabilities. If we get an improvement of trade, we shall get more from taxation, and then we shall be able to consider a reduction of taxation. Incidentally, I would like to mention to my right hon. Friend that the best stimulus he could give to trade and to the theatres would be a reduction of Income Tax. Why should we give preference to theatres or to any other particular interest? All proposals for the reduction of taxation are popular. We in this House, however, are not here to be popular, but to govern the country. We are inclined to forget that at times by seeking cheap popularity. I hope that my right hon. Friend will bear in mind the need for reduced expenditure. The country will be most grateful to him if that can be brought about. The theatres would get far more benefit from a general increase of trade which would follow either a reduction of Income Tax or a reduction of expenditure.
    9.21 p.m.
    Mr. HORE-BELISHA: The Committee has listened to a moving description of the plight in which it is alleged the theatres have fallen. My hon. Friend who moved this proposed new Clause to exempt from Entertainments Duty
    2176
    theatrical and variety performances and concerts, told us that this duty was responsible for 20,000 unemployed, for a number of suicides, and for other evils and distresses which I need not rehearse again. But surely it is going rather far to put the burden of all this complaint upon the Entertainments Duty. There are still theatres which are thriving. Some of those theatres which have made losses would, according to the hon. Gentleman's own figures, have made Josses in any event. No manipulation of the Entertainments Duty could compel people to see bad plays, and it is still possible, I am glad to say, to find in London and the provInces most successful performances still running. I am not in the least trying to minimise the incidence of the tax upon any section of entertainment, but I think that I can carry the Committee with me when I say that it is not right or just to attribute to the Entertainments Duty the decline of British drama, upon the assumption that it has declined. My hon. Friend said that unless we accepted this new Clause and did it now, the theatre would be dead. I do not think that it is as bad as all that.
    Mr. DENVILLE: I wish the hon. Gentleman would be good enough to keep to the point which I tried to make. It is that if we could get the tax off, we should be able to bring down our prices comparable to the cinemas and employ more people.
    Mr. HORE-BELISHA: I was trying to deal with one of the various points which my hon. Friend made, but I cannot deal with them all simultaneously. I will now pass to the point he mentioned. He complains that the same tax is put upon the admission to theatres as to the admission to cinemas, and he says that because the theatre employs more people than the cinema the theatre should have a remission of the duty. But circuses also pay the tax, and they employ many more people than the theatre. After all, the tax is only upon the price of admission. What my hon. Friend asks is that the theatre should be subsidised at the expense of the cinema by taking off the tax from the theatres and leaving it on the cinemas. It may be that the cinema has taken much of the public from the theatre, but that is hardly the fault of the Entertainments Duty. Bather it is

    2177
    attributable to the changed tastes of the people. But whatever the merits of my hon. Friend's case may be, I am sure he would not think it proper for us, who have just rejected a Clause bringing relief to the cheaper seats in the cinemas, to lay ourselves open to the charge that we were now giving an advantage to the occupants of the stalls in a theatre. I do not think he could defend an argument at this stage whereby we should accept this Clause although we have rejected the other, but I do commiserate most Sincerely with him and with the theatrical profession generally, which, like every other section of the community, is suffering from the depression. The arguments that my hon. Friend used could be employed with equal validity not only against this tax but against almost every other tax. It only remains for me to say that the cost of accepting his Clause would be £2,000,000.
    9.27 p.m.
    Mr. HUTCHISON: The Financial Secretary to the Treasury obviously does not understand in what way the theatrical profession would benefit from a reduction of the tax. He says that there are many successful performances both in London and in the ProvInces. I quite agree that in the West End of London there are many successful theatres at present. They are successful because there is still a large public who will pay 38s. for a stall at the opera. At the same time there are many people throughout the country who cannot pay 38s. for a stall at the opera or 12s. 6d. for a stall in the theatre. However, having saved up for several weeks, they come up to London to witness a performance in the West End where they can see a first-class company in a new play. They are not the public that the theatrical profession wish to get. I am convInced that if the Chancellor would say that the Entertainments Duty, as regards performances given by living persons, was not to be levied on prices up to 5s., that would offer an enormous benefit to the theatrical profession. By that I mean circus performers, variety artists, and all the people connected with giving entertainment to the public.
    It is the touring company theatre that has been killed recently by the competition of the cinema, by this little extra
    2178
    on the tax and by the many difficulties with which it has to contend. First of all, the Majority of theatres throughout the country are old buildings, built for the most part in the 'nineties, out-of-date and with seating accommodation which is extremely uncomfortable. At the outside they can give only two performances a day, whereas the cinema can start at noon and go on till midnight. Theatre artists cannot do that because it is a great strain to talk before the public. At the end of an election the Majority of hon. Members are very tired indeed, and if they have any voice left they are extremely lucky. How can you expect the artist to give of his best all day long in competition with the cinema? That the touring theatre has been affected there is not the slightest doubt. The hon. Member for Newcastle Central (Mr. Denville) stated that the railway was a good barometer of the success or otherwise of the theatrical profession. It is a very good barometer indeed, and if hon. Members remember Crewe Station a few years ago, when the theatre was in a thriving state, they will recall the numbers of theatrical companies that used to cross through Crewe Station on a Sunday. If they go there now they will be lucky indeed if they see half a dozen. There is the argument as to where the money is to come from. I suggest that there was the Ray Report and the 1922 Committee Report, neither of which seems to have been acted upon.
    In my opinion, the theatre has a more educative value than the cinema. We will admit that there are certain films which have been shown recently which have a distinct educative value, but the theatre has a tremendous educative value. We have already heard the name of William Shakespeare quoted several times this evening. If the Chancellor would talk to the First Commissioner of Works he would realise that the First Commissioner is helping the theatre by allowing open-air performances to take place in Regent's Park. Regent's Park is the same as the West End as regards the number of people who will go to the theatre. You have a much richer and larger population to draw upon. It is an altogether different story from that of the touring theatre, which is in dire distress. If this tax could be reduced only up to the 5s. seats, it would confer a great

    2179
    benefit and would put many people into employment who need employment badly.
    9.32 p.m.
    Mr. McENTEE: I want to say a word in regard to a section of the entertainment industry to which no reference has been made, and that is the music hall. The music hall is in many respects entirely different from the theatre. Probably some people would not admit it had the same educative value, but it has something that the theatre has not, certainly in the London area. It has a clientele quite different from those who go to the theatre and that clientele is, generally speaking, one of very much poorer circumstances. The appeal I desire to make has already been made by the last speaker. It is that if the Chancellor cannot see his way—apparently he cannot—to grant all that is asked for in the Clause which is now before us, he should give at least some consideration to an industry which we have been told is actually being killed by the imposition of this tax.
    I have a letter—I do not propose to read it—from a music hall in my area and they tell me the number of people who are employed there. I know from my own conversations with the people who are responsible for the management of that music hall that they are losing considerable sums of money at present and, like many other such places, they are awaiting the decision of this House as to whether they shall be able to remain open or not. Having seen the figures presented to me, my own view is that probably they will close as a consequence of the vote that will no doubt be given in favour of the decision to which the Chancellor has come. I am concerned mainly with the actual number of persons thrown out of work. We need not accept 20,000, which is the figure that has been quoted; we can put at least 25 per cent. on to that. I think it would be safe to say that at least another 5,000 will be thrown out of work as a consequence of the decision that will be given here to-night. The figure of £2,000,000 which has been quoted as the loss which would be incurred by the Exchequer if this concession were granted is one on which no reliance whatever can be placed. It is hardly fair without considering anything else just to say that if
    2180
    we remit this tax £2,000,000 will be lost to the Treasury, because it is undoubtedly true that a considerable number of men and women would be put into work.
    Mr. DENVILLE: The actual amount which would be lost to the Exchequer is just over £500,000.
    Mr. McENTEE: I was taking the figure given by the Financial Secretary. I think it is grossly exaggerated; if he looked into the figures which could be legitimately placed on the other side of the balance-sheet he would find that sum would be very considerably reduced. In the case of the reduction of the Beer Duty the Chancellor quoted the law of diminishing returns, and by that argument it would be easy to prove that there would be no loss whatever in this case. Further, is no consideration to be given to the health of the people who will be thrown out of work as a consequence of this tax? Is no consideration to be given to the fact that large amounts of Capttal will be lost by people who have invested their money in this industry? Again, it would be interesting to hear what the Chancellor would propose to do with the theatres and music halls which have been closed up already, buildings which are totally unsuitable for any purpose except that for which they were erected, and the further number which will undoubtedly be closed as a consequence of his action to-day. I have listened to many statements here concerning various industries which will suffer as a consequence of this Budget, and I think it would be safe to say no hon. Member can ever remember a Budget which has produced so many reports of serious effects upon different industries as this Budget. I do not, however, accept all the statements made about the dire effects which will result from the imposition of some of the taxes which have been under consideration.
    I am speaking as one who has not the slightest interest in theatres in any way. I do not think I have visited theatres more than three times in the last 10 years, and I have no association with the profession or with the interests which manage theatres, but I have been induced to put forward this plea by audited figures which have been put before me showing that theatres must close down if this tax is to be continued in its present incidence and at the present rate. I hope the Chancellor will again go into

    2181
    the matter, and that he will at any rate induce his Financial Secretary to be more fair when he makes statements in regard to losses to the Exchequer than he has been to-day. It is grossly unfair to say simply that £2,000,000 will be lost to the Exchequer when he knows perfectly well that other figures, which ought to be placed on the other side of the balance-sheet, would reduce that loss very considerably, if not wiping it out altogether. I hope the Chancellor will not allow theatres and music halls to be practically wiped out. I am quite independent in this matter, having no interest except to see the preservation of the theatre primarily and of the music hall secondarily, as well as other forms of entertainment. I appeal to him to give more consideration to the pleas submitted to him to-night than would appear to have been given judging by the very meagre and not very accurate statement made by the Financial Secretary.
    The DEPUTY-CHAIRMAN (Captain Bourne): I really think the Committee are ready to come to a decision.
    Question, "That the Clause be read a Second time," put, and negatived.

    NEW CLAUSE.—(Additional deduction in case of machinery and plant.)
    Section eighteen of the Finance Act, 1932 (.which provides for additional deductions in respect of wear and tear of any machinery or plant during any year of assessment) shall have effect as if the words "one-fifth" were substituted for the words"one-tenth."— [Mr. Dingle Foot.]
    Brought up, and read the First time.
    9.41 p.m.
    Mr. DINGLE FOOT: I beg to move, "That the Clause be read the Second time."
    I raise this subject of wear and tear allowances because I think it is one which has commanded increasing attention from manufacturers and industrialists during the past year. On the 9th March the Chancellor received a deputation from the Association of British Chambers of Commerce, who put their views on this subject very strongly before him. I would remind him of what was said on that occasion by the Chairman of the Finance and Taxation Committee, Mr. Lakin-Smith:
    "The association is being continually urged by chambers of commerce throughout the country to urge upon you the insufficiency of the existing allowances for
    2182
    wear and tear, and the urgent need for some relief upon that portion of profits earned which is not distributed but put to reserve and is required for the development and extension of a business."
    I think it is relevant to compare the allowances made in this country with those made elsewhere. The Committee may have seen a letter on this subject which appeared in the "Times" newspaper of 31st March. It was a letter from a Mr. G. Bonar, one of the leading manufacturers in my constituency. He had been at considerable pains to get into touch with manufacturers in other European countries who were in the same line of business as himself, and to obtain a comparison between the depreciation allowances made in this country and those granted in European countries.
    The Committee are aware that in this country, up to last year, the rate of depreciation generally allowed was in the neighbourhood of 7½ per cent., and that last year it was increased to 8¼ per cent. upon the declining value of the plant or machinery. In France, Belgium and Italy they allow 10 per cent. per annum, not on the declining but on the original value. In Germany they allow 20 per cent. in the first year and 8 per cent. on the declining value thereafter. I think I am right in saying that the scrap value of machinery is in the neighbourhood of 3 per cent., and therefore at the present rate, and in the view, at any rate, of the Inland Revenue authorities, it takes 41½ years in this country before machinery is reduced to scrap, whereas in France, Belgium and Italy they can write off not the amount less scrap value but write off the whole cost of the machinery in 10 years. I suggest to the Committee that this is a very striking contrast, and it must be apparent that British manufacturers are placed under a very serious handicap.
    The Chancellor may reply that, on the other hand, generous provision is made for obsolescence allowance. That is true, but so do other countries. The obsolescence allowance only becomes effective if expenditure is actually incurred in replacing plant, but if there are no renewals it follows that there are no allowances. Very often it is the case that there are disputes between manufacturers and the Inland Revenue as to whether a new machine is, in fact, a replacement of an old machine. If a manu-

    2183
    facturer sells his plant and does not replace it by other plant or another machine, he gets no allowance whatsoever.
    I ask the Committee to compare that situation with the one that prevails in Australia, where a manufacturer obtains full allowances in respect of any loss sustained by him if he sells machinery, whether he replaces it by other machinery or not. This is a subject of some importance to industrialists, and I would like to put two points very briefly to the right hon. Gentleman. It would be of great interest to many people if he could give us his view of the suggestion that was made to him on 9th March, at the interview to which I have already referred. The suggestion, which was reported in the "Financial Times" the following day, reads:
    "I suggest that in the Finance Bill, 1933, there should he a Section to the effect that in respect of the assessable profits of any business, whether owned by private or public limited companies or privately owned, assessed under Schedule D for the assessment year 1933–34 and each subsequent assessment year, any portion of such assessable profits not exceeding one-sixth, which shall, during the two assessment years following the year of assessment, be expended upon a Capttal extension in plant or buildings for the sole use of the business, shall be allowed as a deduction from the assessable profits of the year of assessment in which the amount is expended."
    So far as I am aware, that is an entirely new suggestion. I should like to have the Chancellor's view, if he has formed one, upon it.
    If the right hon. Gentleman can give us no concession this year in respect of depreciation, there is a matter that he might consider in the next 12 months, before he produces his next Budget, and that is an alteration in our system of dealing with wasting assets, upon which, at the present time, no allowance is made. We make no allowance for the depreciation of buildings in this country, whereas in Germany an allowance is made of from 2 per cent. to 5 per cent., and in France and Belgium of 5 per cent. of the original value. They can write off the cost of a building in 20 years, whereas the Board of Inland Revenue in this country assume that a building lasts for ever. This is a matter of very considerable importance to the industrialists
    2184
    of this country. The system which we have, even with the concession that was made last year and for which we are grateful, is not equitable in its demands upon industry, and it has not kept pace with the march of invention. If the Chancellor of the Exchequer cannot meet us now, I hope that in the future he will be able to see his way to bring the allowances made to British industry into line with the allowances made to the industry of continental competitors.
    9.50 p.m.
    Mr. HERBERT WILLIAMS: I beg to support the proposed new Clause, and I hope that the Chancellor will be able to give some consideration to it. It is identical in form, although differing slightly in detail, to the one which stands in my name. There is no subject on which manufacturers feel a greater sense of grievance than that of depreciation. In theory, a manufacturer can, in the long run, get all the depreciation allowances to which he is entitled. Under, I think it is, the Act of 1918—I forget for a moment—an industry can approach the Board of Inland Revenue in order to have settled the proper rate of depreciation. When I was connected in an official capacity with a certain industry I remember going to Somerset House with a deputation. Ultimately we came to a settlement that was not too bad, but even the settlement at which we arrived left us feeling that the industry was not getting an adequate allowance for depreciation.
    I believe that, broadly speaking, it is true to say that every manufacturing company has two statements of profit and loss, one that is communicated to shareholders and one which is ultimately communicated to the Board of Inland Revenue. The profits that the company themselves regard as having been made, are always something less than what the Inland Revenue believe that they have made. It has never been the case that the allowances for depreciation are adequate. I know that, when plant has been written down to a certain point, and is disposed of, because it has become obsolete, and replaced by other plant, there may be allowances; there may be, there should be and, legally, there are allowances for obsolescence to which, theoretically manufacturers are entitled. When I discuss it with manufacturers,

    2185
    they say: "yes, it sounds all right, but it does not work out satisfactorily in practice."
    When the Income Tax was raised from 4s. to 5s. in the £ in September, 1931, the then Chancellor of the Exchequer, in order that the taxation imposed upon the development funds of limited companies—funds which are not distributed in profits—should not be overwhelmingly large, agreed that the depreciation allowance should be increased by 10 per cent. I am told by many of those who are engaged in industry that they do not regard that concession as adequate. Accordingly, some of my hon. Friends and myself put down an Amendment to increase the allowance from one-tenth to one-sixth. The hon. Member for Dundee (Mr. D. Foot), with a similar Amendment, proposes to go a little further and make it one-fifth. It is a little difficult to discover what sum is involved. Probably it is not dissimilar from that which was involved in the proposed change in Entertainments Duty which the Chancellor of the Exchequer has rejected. I shall not be in the least surprised if he explains that, on financial grounds, he cannot do what we ask this year.
    I hope that the Chancellor will consider a complete overhaul of the principle upon which depreciation allowances are granted. There ought to be far greater freedom. I want to see manufacturers replacing their plant with much greater freedom than at present. The Income Tax restrictions are a definite check upon enterprise in this country. I want to see plant thrown out with the greatest rapidity, not because it is incapable of performing its function, but because it can be replaced by plant which can do the job more cheaply. In spite of the opinion that the world is producing too many goods, I am convInced that the world is producing far too few goods, because everybody that I know is much too hard up, and that is the real test. I hold the view that the increased efficiency of industrial operations is the sole basis whereby you may raise the standard of living, and everything that stands in the way of that, whether it be a system of taxation or anything else, calls for modernisation. I Sincerely hope that, if not in this Budget, the Chancellor of the Exchequer will be able to overhaul entirely the sytem of depredation allowances in this country.
    9.55 p.m.
    Brigadier-General SPEARS: I beg to support the proposed new Clause. I represent a large industrial city, where the living of thousands of people depends upon machinery and the effectiveness of machinery. The better the machines, and the more up to date they are, the more orders will be secured for the factories in which they are installed. I have had representations from practically all the managers of the big factories in my constituency—and there are many of them— begging the Chancellor of the Exchequer to consider giving some relief in this connection.
    The desire of the Government is, as we know, to help industry where and how they can, and no greater relief could be given to industry than by relieving taxation, and relief from this kind of taxation would bring the remedy to the sore spot in a way that nothing else could. There is a reason which might, perhaps, lead the Chancellor to consider this proposal a little more favourably now than he would have a few months ago. The tendency to-day is to lower tariffs, that is to say, to lower the barriers of protection of our industries, and, surely if that is so, everything ought to be done to enable our industries to compete on a more equal footing with their rivals abroad. The relief which is asked for would give a direct encouragement to those manufacturers who are most ready and willing to replace their machines, and are most ready to scrap machinery which happens to be out of date. As has been said, the normal rate deductible from Income Tax assessments for wear and tear of machinery is 7½ per cent. That rate was fixed a long time ago—
    Mr. DINGLE FOOT: 8¼ percent.
    Brigadier-General SPEARS: It is 8¼ now, but it was 7½. That rate was fixed when machinery lasted longer, when competition was far less keen than it is to-day, and when the necessity for replacement was far less urgent than it is now. To-day machinery becomes obsolete much more quickly than it did a few years ago, and certainly it is the opinion of all the manufacturers in may constituency, who have to meet competition in the world markets, that the relief granted last year, although they were very grateful for it, is found in practice not to work out as sufficient. It is true that when

    2187
    machinery is scrapped, in the year in which it is scrapped relief is granted up to the value of the machine that has been scrapped, but, from the point of view of the factories, it would be fairer, and far more satisfactory, if the annual rate of relief bore a closer relation to the life of the machine than it does at present. Let me quote an example to show how things work out to-day. I will take the hypothetical case of a machine valued at £10,000, whose life is estimated at 10 years. In the ninth year, the manufacturer will still be paying on an assessment of over £4,600, although in the following year he will have to scrap the machine. I hope that the Chancellor of the Exchequer will give what relief he can, and I am certain that whatever relief is granted will bear fruit in the very near future.
    10 p.m.
    Mr. CHAMBERLAIN: With the object of the Mover of this Clause and those who have supported him, as I understand it, I have very great sympathy. In other days, when I occupied a position of greater freedom and less responsibility than I do now, I frequently urged upon the Chancellor of the Exchequer of the day that he should do something, in his treatment of the reserves of manufacturing companies, to encourage manufacturers to devote more of their surplus profits to the replacement of their machinery by more up-to-date plant, which would enable them to produce their articles at a lower cost. I remember that in those days successive Chancellors always expressed sympathy, but always were unable to do anything to carry out what I desired. My feelings are just the same now as they were then. I agree with those who have said that there is a tendency to distribute in dividends money which would be much more wisely spent, in many cases, upon putting in new machinery—not because the old machinery is worn out, not because it does not do its work efficiently, but because there is some new machine available which will produce the same article either better or at a lower cost. Certainly, therefore, I sympathise with those who want to encourage manufacturers to do that. But, really, I do not think that the wear-
    2188
    and-tear allowance is the proper way of dealing with this matter.
    I am not at all sure that the Committee will have appreciated what the position is about the wear-and-tear allowances, although I do not say that those who have spoken have not fairly and accurately stated the position. There is a good deal in the way in which it is emphasised. For instance, I think the hon. Member who moved the Clause said that the rates of allowances given in this country would mean, taken alone, that it would take 41 years for machinery to be written down to scrap value; but, of course, that is not the way in which the matter is dealt with, because, as the hon. Member knows, and, indeed, as he said, it is necessary to take into consideration, not merely the wear-and-tear allowance, but also the renewals allowance. In fact, a machine does not wear itself out for 41 years, because it is replaced at some time or other during its life, and, when it is replaced, the manufacturer is allowed to write off so much of the value of the old machine as has not already been given to him by way of allowances in previous years. I do not suppose that anyone suggests that you should write off more than 100 per cent. of the value of the machine you are going to replace. What happened when my predecessor gave this additional 10 per cent. was that he, too, had been asked to do something to free from taxation the reserves of companies which were to be used for this purpose. He, too, expressed sympathy, but there were very great practical difficulties in the way. He said he had not been able to devise any scheme which seemed to him satisfactory, but, in view of the additional burden that was being placed on industry by the increased Income Tax, he gave them, as a sort of compensation, this extra 10 per cent. on the amount of the allowance. But that 10 per cent. simply meant that there was an anticipation of the allowance which would otherwise have been made in later years—it simply piled up a little sooner in the life of the machine the allowances which were bound to be made in any case.
    The manufacturers say that is not enough, and, if I gave them a fifth instead of a tenth, they would still say it was not enough, I do not think it is possible to do what the manufacturers

    2189
    want under a wear-and-tear allowance. It would not really show itself in any immediate profitable business. It would mean that manufacturers would be encouraged from time to time to put in machines rather earlier than they would otherwise have done and the effect of it, therefore, would not be very rapid. But, if there were nothing else to say against the proposal, I am really precluded from entertaining it now because of the cost. My hon. Friend the Member for Croydon South (Mr. H. Williams) is quite right. This addition would cost about £2,000,000 to £2,500,000. I am not in a position to say when the Chancellor of the Exchequer will have funds at his disposal which will enable him to deal adequately and satisfactorily with this question. All I can say is that I sympathise with and approve the object of those who put this proposal forward and, if and when I can see any opportunity of furthering that object, I shall certainly be glad to give it consideration.
    10.7 p.m.
    Sir ARTHUR STEEL-MAITLAND: Those of us who have this proposal at heart, of course, realise the difficulties at the moment, and I doubt if any of us expected that my right hon. Friend would be able to meet us this evening and to do what we want. It is also clear that we cannot get all that is wanted under the wear and tear allowance. It is really obsolescence of a different kind, the need for replacing existing machinery, good in itself, by machinery of a new kind, for which we want an allowance. We are glad to know, as indeed we knew ourselves, that the Chancellor realises the absolute and paramount importance of giving every conceivable inducement to manufacturers to keep their plant up to the highest standard, or to bring it up to the highest standard if it is not there already, but we realise that it is impossible to do it at the moment. Of course, in the future, when it is not so impossible, we may be faced by a Chancellor saying it is a very complicated business and the practical administrative difficulties in the way of working it out are very great.
    I would suggest to my right hon. Friend that now, at a time when he cannot actually do it, he might, at any rate, get the officials of his Department who deal With it and representatives of industry to
    2190
    go into the question and try in anticipation to find a solution of the difficulties so that, when happier days come and it is possible to afford the money needed for a reform of this kind, a practical measure may be forthcoming. In those days, when it is possible, I do not think the Chancellor of the Exchequer will in the end lose great revenue, because of the great economies that will be made through the allowances that the then Chancellor may be able to give. It will also mean that the businesses will be earning a higher rate of profit, which will make the Income Tax more productive in another way.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Reduced duty on un-stripped unmanufactured tobacco.)
    The duty of customs on unmanufactured tobacco when imported unstripped shall be reduced as from the first day of June, nineteen hundred and thirty-three as follows:
    In the case of tobacco grown in and consigned from Empire countries by two-pence halfpenny per pound. In all other cases by one penny halfpenny per pound. —[Mr. II. Williams.']
    Brought up, and read the First time.
    10.10 p.m.
    Mr. H. WILLIAMS: I beg to move, "That the Clause be read a Second time."
    This Clause deals in particular with tobacco, but it is one of five, all emphasising in one way or another the same principle. When, in February last year, the Financial Resolutions were introduced on which the Import Duties Bill was subsequently based, they provided that protection should be applied in respect of commodities which were not liable to duties under other enactments. In other words, we excluded from their purview all those commodities from which great revenue was obtained for many years. We also excluded from the purview of that Act those commodities that were already protected under the McKenna Duties or other temporary or permanent protective enactments. I do not complain, because, obviously, it was an enormous task suddenly to convert a Free Trade country to a Protectionist country and the method chosen, through the circumstances of the case, left certain gaps' in our protective system. There are a number of commodities which are

    2191
    dutiable for purely revenue purposes. They bear a duty of Excise and a duty, at the same rate, of Customs. They produce a substantial amount of revenue but there is no protection.
    Last year, when the Finance Bill was going through, my friends and I raised this question of principle in connection with one or two commodities, one of which was matches, and we are grateful to the Chancellor that in this Budget he has taken matches away from the field where they were liable to heavy duties but where the production in this country was not protected. It is also the case that some of these commodities do not enjoy the degree of Imperial Preference that they might have enjoyed had they not already been dutiable when we adopted our Protective system. This is a convenient Clause on which to raise the issue, because tobacco already enjoys a substantial measure of Imperial Preference, and in no sense is any process of manufacture in this country protected. It is a very remarkable thing that that industry has done so amazingly well despite the fact that it enjoys no protection.
    This Clause, if it had been proposed by the Chancellor, would have taken a different form, because he enjoys a privilege denied to those who do not sit on the Front Bench, that he can propose to increase a duty, whereas the rest of us can only propose reductions in duty. I am satisfied that the proper way to approach this problem would be by a small increase in the duty on stripped tobacco. This duty on stripped tobacco must be one of great interest to him persoNaily because in 1904, when the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) was Chancellor of the Exchequer, in what was more or less a Free Trade Government, though a Conservative one, he gave us the first piece of industrial protection that we had had for 44 years. He differentiated between tobacco which had undergone the preliminary process of stripping and that which was un-stripped, and the results were very remarkable. Whereas, prior to the duty, the bulk of the tobacco was coming in stripped, after the duty was imposed the bulk of it came in unstripped and a substantial amount of employment was pro-
    2192
    vided. Two years later Mr. Asquith, because he was a Free Trader, abolished the little preference of 2½d. a lb. The new Clause which I am proposing would restore that protection. Fortunately, the industry does not need it so much to-day as it did then. But a good deal of stripped tobacco is coming into the country, and there is no need at all for one pound's weight of stripped tobacco to come into this country, as that operation can be performed in this country. In our proposal we differentiate between stripped tobacco from the Empire and that from foreign countries, so that we give a small measure of increased preference. I do not think that the Chancellor of the Exchequer will accept my proposal, because he will say chat it will cost him so much revenue. If he will only put down a new Clause on Report whereby we get the preference—
    The DEPUTY-CHAIRMAN: I would remind the hon. Member that not even the Chancellor can do that.
    Mr. WILLIAMS: I know that under the Rules of Procedure he would have to go back to Committee of Ways and Means, and I cannot expect, under the present pressure of business, that that would happen. We are on the most important part of the Finance Bill proceedings. The most important part is not the ratifying of what the Chancellor of the Exchequer said he was going to do on Budget day. That is more or less settled. The really important part of the Finance Bill discussions is the giving of the Chancellor of the Exchequer broad hints as to what he can do next year. The main purpose of the new Clause is not that we expect to get anything from him to-night. He has distributed all the money that he has available. We are trying to indicate the reforms which he ought to bring about. Apart from the merits of the proposal, I urge upon the Chancellor of the Exchequer the advisability of considering whether it will not be possible in next year's Finance Bill, or perhaps sooner, to amend the Import Duties Act in the same way as, in the Finance Bill, he has amended it in respect of silk, so that every industry shall have the opportunity of going to the Import Duties Advisory Committee even though their duties were not origiNaily imposed under the Import Duties Act.

    2193
    There are certain cases where the circumstances of revenue outweigh anything else. He has always—
    Mr. LAWSON: On a point of Order. Is it within the rules of order for an hon. Member to discuss next year's Budget?
    The DEPUTY-CHAIRMAN: I do not think that there is any disorder in suggesting that some step might be considered between now and next year. In fact, it is frequently done. Most of the new Clauses have been aimed at the next Budget.
    Mr. WILLIAMS: I am grateful to you, Captain Bourne, for not ruling me out of order. I get ruled out of order at times, but for once I am right. I hope that the Chancellor of the Exchequer will consider widening the whole sphere. If he says, "I cannot risk allowing the Import Duties Advisory Committee to examine the position in respect of commodities which yield an enormous revenue in respect of quantities of goods like tobacco, in the broad sense, or spirits or beers which are imported," I would remind him that, after all, no recommendation of the Import Duties Advisory Committee comes into operation unless it is approved by him and by the appropriate Department. Not only that, there is not the slightest reason why a Government Department, where necessary, should not tender evidence to the Import Duties Advisory Committee.
    The DEPUTY-CHAIRMAN: I think that the hon. Member is now labouring these things rather too far. It might be advisable to have a private conversation with the Chancellor of the Exchequer in these matters.
    Mr. WILLIAMS: I shall be very glad to accept your kindly suggestion. I think I have said enough which is in order to indicate what is in my mind, and when the World Economic Conference is over I hope that the Chancellor of the Exchequer will give me an opportunity of further elaborating the point.
    10.19 p.m.
    Mr. CHAMBERLAIN: My hon. Friend knows that at any time when I have the leisure I shall be happy to have a discus-
    2194
    sion with him upon any point he wants to raise. I would warn him that we have not yet so perfected our fiscal revenue system as to enable me to contemplate letting go of a number of duties which are responsible at the present time for a considerable part of our revenue. On the other hand, I fully recognise that industries would have some grievance by reason of the fact that if they contribute a particularly large share of revenue they were thereby debarred from obtaining any preference in the home market. My hon. Friend has been good enough to express his approval of the action which I have taken in respect of matches. I think I may say to him on the broad question that, while I am not prepared to hand over the question of what should be done with these particular industries to the Import Duties Advisory Committee, for the reasons that I have stated, I am keeping in mind the whole time the general aspect of the protection of industries, where protection is required.
    As to the particular instance that he has mentioned, that of tobacco, I have considered it and, as he pointed out, the situation in regard to the manufacture of tobacco in this country is very different from what it was at the time when one of my predecessors introduced the differential duty. As a matter of fact the imports of stripped tobacco are to-day only half of what they were after the differential duty had been imposed, and less than one-third of what they were before the differentiation was introduced. Stripped tobacco to-day is less than 25 per cent. of the total clearances of tobacco. Out of that 26 per cent. over one-fourth comes from the Empire, and when we talk about transferring the whole of the stripping to this country, we have to consider whether we might thereby throw out of employment in the Empire a certain number of people who are now occupied in the manufacture of tobacco. These are considerations which have been in my mind. I hope that the general position I have outlined will be regarded as satisfactory.
    Mr. WILLIAMS: After that satisfactory explanation from the right hon. Gentleman, I beg to ask leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Amendment of ss. (l), (2), (3) of s. 95 of the Spirits Act, 1880.)
    In Sub-section (1) of Section ninety-five of the Spirits Act, 1880, leave out all the words from "paid" to the end of the Subsection.
    In Sub-section (2) of Section ninety-five leave out the words "for exportation or for ships' stores, but not for home consumption."
    In Sub-section (3) of Section ninety-five, leave out the words "either for exportation or for ship's stores, but not for home consumption."
    Leave out Sub-section (4) of Section ninety-five.—[Mr. H. Williams.]
    Brought up, and read the First time.
    11.23.p.m.
    Mr. H. WILLIAMS: I beg to move, "That the Clause be read a Second time."
    I hope the Chancellor of the Exchequer? will be able to give a definite concession in respect of this Amendment. It is protective in character. It happens to be the case that certain liqueurs of a kind that we import from abroad are made in this country. If they are made in this country, under the provisions of the Spirits Act, 1880, they may not be stored in bond for home consumption, but if similar liqueurs are imported from abroad they may be stored in bond. As a result the importer is placed in a more favourable position than the home producer, and I am merely asking that the home producer of liqueurs of a kind made in this country should not be placed in a disadvantageous position financially as compared with the importer of foreign liqueurs. [An HON MEMBER: "What are the home-made liqueurs"] Cherry brandy is one of them. It is made in substantial quantities in this country, and having regard to the circumstances I see no reason why the British manufacture of cherry brandy should be in a worse position than the importer of foreign liqueur. The Amendment involves an Amendment of the Spirits Act of 1880, and I hope that the Chancellor of the Exchequer will see his way to adopt it.
    10.24.p.m.
    Mr. CHAMBERLAIN: It is a little difficult in reading the Clause on the Order Paper to understand what it means, but after the very lucid speech of my hon. Friend I can see there is a good deal in it. I am not prepared to accept the Clause as it stands without further
    2196
    examination, but I am quite ready to consider it sympathetically, and if my hon. Friend will give me the pleasure of his company between now and the Report Stage we will see what we can do in framing something to meet what he desires.
    Mr. WILLIAMS: I very hopefully beg leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Provision for companies on reconstruction or amalgamation.)
    If the Commissioners of Inland Revenue have been satisfied, in connection with a scheme for the reconstruction of any company or companies, or the amalgamation of any companies that the conditions of Section fifty-five of the Finance Act, 1927, as amended by Section thirty-one of the Finance Act, 1928, have been complied with the company referred to in such Sections as "the transferee company" shall, notwithstanding the provisions of Sub-section (2) of Section thirty-two of the Finance Act, 1926, be entitled on giving notice in writing to the surveyor within twelve months after the end of the year of assessment in which such reconstruction or amalgamation toot place to such reliefs in respect of losses carried forward and to such allowances for deductions of wear and tear of machinery and plant to which, but for the reconstruction or amalgamation, the company, referred to as "the existing company" in Section fifty-five of the Finance Act, 1927, amended as aforesaid, would otherwise have been entitled.—[Mr. Peat.]
    Brought up, and read the First time.
    10.25 p.m.
    Mr. PEAT: I beg to move, "That the Clause be read a Second time."
    This proposal raises a point of principle as well as of justice. We are to-day living in. an era of reconstruction. Business men are being pressed to reconstruct wherever possible and the process of reconstruction has been encouraged by various Acts of Parliament right up to the Companies Act of 1929. Unfortunately, in 1926 an Act was passed which restricted to a certain extent the facilities which a company gets on reconstruction. The reason why we are moving this new Clause is this. At the present moment, if a company wants to reconstruct itself, and to transfer its undertaking to another company, it loses the opportunity of carrying forward losses which may be due to it under the Inland Revenue Acts. What we are asking for is the principle involved in

    2197
    Section 55 of the Finance Act of 1927, which allowed a company which reconstructed itself to be absolved from the payment of Stamp Duty on the new Capttal issued. The conditions under which this relief can be given are as follows:
    "(1) that either the undertaking of one company, called the existing company, shall be acquired by another company, or not less than 90 per cent. of its share Capttal should be acquired by the new company, called the transferee company, and;
    (2) that the consideration for the acquisition by the transferee company of the undertaking or shares in the existing company shall consist, as to not less than 90 per cent. thereof of shares in the transferee company to the shareholders in the existing company."
    Those are the, conditions under which a company was allowed absolution from Stamp Duty on a new Capttal issue. Let me call attention to the report of the Company Law Amendment Committee, which says:
    "The existing law as to Stamp Duties imposes a heavy burden in cases of reconstruction. We are not sure whether our recommendations on this subject fall strictly within the scope of our reference, but we may point out that, in our opinion, at any rate where the shareholders in the old and the new company are substantially the same, there can be no justification for charging ad valorem duty on so much of the Capttal of the new company as represents Capttal of the old company on which duty has already been paid. The effect is in substance a double taxation, which places a heavy and, in our opinion, an unjustifiable burden on industry and seriously interferes with the beneficial process of reconstruction. With regard to ad valorem duty on the new transfer of the old company's property to the new company, we think that there should be a statutory provision that this duty should not be exacted where the shareholders are substantially the same."
    We make our request to the Chancellor of the Exchequer for a reconsideration of the provision that where a company reconstructs and hands over its business to a new company in which the identity of the shareholders is the same, the company so reconstructed should be allowed to carry forward wear and tear allowance which has not been charged in the profit and loss account, and losses. In present circumstances many companies who are anxious to take advantage of the great and beneficial results of reconstruction are prohibited from doing so by reason of the fact that they may not be in a position to carry forward losses
    2198
    which are strictly due to them, under the present arrangement of taxation in this country.
    I feel that we can say to the Chancellor of the Exchequer in answer to the criticism that he may make—that the shareholders of the reconstructed company to-day may change their identity to-morrow—that shareholders in companies that reconstruct are looking forward to improvement in their conditions, and that they are not the people who want to change their identity as soon as reconstruction takes place; they are bona fide proprietors of companies who will try to take advantage of a process of law which enables them to reconstruct themselves and to enter upon a new lease of life. If there was any difficulty on the point the supporters of this new Clause would be prepared to accept from the Chancellor of the Exchequer some restriction of the period during which a change of shareholding could take place.
    The principle of this new Clause has already been accepted in so far as the Finance Act of 1926 is concerned. That Act laid down that where a partnership or sole trader transferred business to a company the losses could be carried forward by the company which was formed to take over the business. If you are to say to a man, who is in partnership, "If you transfer your business to a limited company you will be allowed to carry forward your losses," you should be able to say the same to a company which is transferring its business to a fresh company. In both cases the same principle should apply. I am speaking briefly, and I am not able to give the full explanation that I would have liked to have given of the proposal, and I will only add that I think this new Clause is merely common justice. Where reconstruction is demanded, either by commercial circumstances or, as is very often the case, by the Inland Revenue themselves who are trying to get arrears of taxation and are threatening proceedings and recommend reconstruction—in cases where reconstruction is in fact carried out, and where the identity of the shareholder or proprietor remains the same, the reconstructed company should be in a position to take advantage of the lasses of the company which existed in the first place.
    10.35.p.m.
    Sir A. STEELE AITLAND: I support the new Clause. The hon. Member for Darlington (Mr. Peat) has stated the case for it briefly, but so clearly and admirably that there can be no doubt as to the advantages of the course which he suggests. I am not going to repeat what he said, further than to point out that this would be another step in helping forward the policy of enabling industry to modernise itself and attain the utmost efficiency. I did not think the proposal would cost the Chancellor of the Exchequer much, and, if he could carry it out, now, it would be an encouragement to industry. On the other hand, if he cannot do it now, I hope he will take it into account and that by the time it is possible to do some of these things, there will be ready to the hand of a future Chancellor of the Exchequer a charter which will in all these respects give greater freedom from the burdens which at present rest on industry.
    10.36.p.m.
    Mr. CHAMBERLAIN: This is a rather technical matter and unless hon. Members have followed it very closely it may be difficult for them to grasp exactly what is proposed. In the first place, let me say that I cannot accept the proposal. I am afraid it would cost the Revenue a good deal of money, but it is not on that account that I must ask the Committee not to accept it. It is on the ground that the proposal itself seems to be wrong in principle, and I will try to explain what I mean. The proposal is that where a reconstruction or amalgamation of companies takes place under certain conditions the amalgamated or reconstructed company shall have the option to carry into its own business certain set-offs to which the old company would have been entitled if it had continued in existence. These are set-offs in respect of losses, wear and tear allowances and so forth. The Committee will see that this is an option given to the new company which, of course, it will only exercise in its own favour.
    My hon. Friend said that the new company would be the same as the old because under the conditions the shareholders would be the same to the extent of 90 per cent., but that is not quite the effect of the conditions of which he
    2200
    speaks, because the main condition on which he relies is, not that the shareholders shall be 90 per cent. identical, but that the consideration of the transfer shall, to the extent of not less than 90 per cent. be the issue of shares in the transferee company to the other company. That is a very different thing. Suppose, for example, that a very large concern, a great combine, buys up a small company which has practically only what is called a "nuisance value" in that it is hampering to some extent the business of the larger concern. The condition is that 90 per cent. of the price which the large company pays for the small one shall be shares in the large company. That does not mean that 90 per cent. of the shareholders of the large concern are the same as the shareholders of the small company. My hon. Friend will see that it is not the same thing.
    What is the principle which this proposal disregards? It is a principle with which hon. Members opposite are now familiar, namely, that a company has a legal entity. That legal entity is, of course, of considerable value to the company. For example, take the case of set-offs. Suppose a company has made a loss in a certain year, we know that that loss can be carried forward, and in the course of six succeeding years may be set against profits. It does not follow that the shareholders are always the same. The shareholders may change; they may even change completely during those six years, but, because the company has a separate legal entity, the company is able to get the benefit of its set-off. That entity is to be disregarded under this proposal, and the one-sided arrangement is to be made that a company which is to be assessed upon its profits as a new entity is to disregard the new entity when it comes to exercising this option which may be favourable to itself. That seems to me to be a principle which we cannot accept. I would point out one further objection. If the company which is going to be bought out is able to bring with it the option to take over these setoffs or losses, that option will be used as an addition to the price to be paid for the company. In that case the benefit of the proposal is not going to improve the industry, but merely going into the pockets of one particular section of share-

    2201
    holders who have already perhaps only a "nuisance value."
    Mr. PEAT: I should like to withdraw this Clause, because I feel that the Chancellor of the Exchequer will probably give me an opportunity of discussing the matter with him later.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Amendment of s. 33 of Income Tax Act, 1918.)
    (1) Where a company whose business consists mainly in the making of investments, and the principal part of whose income is derived there from, has failed to obtain repayment of tax under the provisions of Section thirty-three of the Income Tax Act, 1918, in respect of part or the whole of the sums disbursed as expenses of management (including commissions) in any year ending subsequent to the fifth day of April, nineteen hundred and thirty, other than by virtue of Sub-sections (1, b), (2) or (3) of the said section, it shall be entitled to carry forward the amount of such expenses of management (including commissions) in respect of which it has so failed to obtain repayment of tax, and for the purpose of repayment of tax under the said section to have the amount so carried forward treated as expenses of management disbursed for any of the six years next following the year for which they were actually disbursed but subject to the next following paragraph.
    (2) Any relief under this section shall be given as far as possible in the first subsequent repayment made for any year within the said six following years after relief has been given in respect of expenses of management for that year but before relief has been given in respect of expenses of management carried forward in virtue of this section for any subsequent year or years and so far as it cannot be so given in the next subsequent repayment and so on.—[Mr. Boothby.]
    Brought up, and read the First time.
    10.42 p.m.
    Mr. BOOTHBY: I beg to move, "That the Clause be read a Second time."
    Relief from Income Tax in respect of management expenses was first allowed to investment trust companies under Section 14 of the Finance Act of 1915, and it was repeated in Section 33 of the Income Tax Act of 1918. There is a proviso to the effect that relief shall not be given so as to make the tax paid by the company less than the tax which would have been paid if the profits had been charged in accordance with the rules applicable to case I. of Schedule D, and on the face of it that is a perfectly
    2202
    fair proviso, but in practice, during the last few years, the Inland Revenue have taken the company's gross income of the preceding year and then deducted its management expenses of that preceding year, and then calculated Income Tax on the difference between the two. They then say that the amount of tax which can be repaid cannot be more than the excess of the tax actually borne by the company in the year of claim over the tax on this purely notional assessment based on the figures of the previous year. What arises I If the gross income of the previous year exceeds that for the year of claim, the amount of management expenses in respect of which repayment can be obtained will be reduced or entirely wiped out, according to the measure of such excess. Therefore, the investment trust companies are now faced by this extraordinary anomaly: If their income is steady or rising, they get full relief on their management expenses, but if, on the other hands, their income falls, the relief in respect of management expenses is certainly reduced and may be completely wiped out.
    My new Clause seeks to give an invest-menn trust company the right to carry forward for six years the amount of any expenses of management in respect of which it has failed, by reason of the official interpretation of proviso (a), to obtain repayment of tax under the provisions of Section 33 of the Income Tax Act, 1918. I ask that it shall be made retrospective until 1930–1 for the reason that that was the year when investment trust companies, like so many other companies in this country, began to be severely hit, but I do not necessarily press this particular aspect of it. It would not involve the reopening of any past claims for repayment of tax on management expenses. It would merely require the amounts disallowed on past claims to be considered when and if profits arise in future.
    That is as briefly as I can put the case which I have to present to the Committee, but I would like to add this. If the Chancellor of the Exchequer were to accept, either in the present form or in a modified form, the new Clause which I am moving, it would not, as far as I can see, involve the revenue in any im-

    2203
    mediate loss at all. I doubt if it would involve the revenue in any loss for the next two or three years. Perhaps it may never involve the revenue in any loss if, when the trust companies make a profit sufficient to enable them to make retrospective claims in respect of management expenses, their revenue has increased to an extent sufficient for them to increase the revenue by way of Income Tax which goes to the Exchequer— sufficient, I should have thought, to cover the particular remission which will be involved by the passage of this or a similar Clause.
    As the Committee well knows, the investment trust companies have been going through a particularly bad time during the last three or four years owing to the colossal depression in securities all over the world. The shareholders of theses investment companies, which are a distinctive, and, I venture to suggest, a distinguished part of the commercial apparatus of this country, are to a large extent people of very moderate means, people on the whole who cannot afford to invest in individual securities for themselves, but who place their money in the care of people who are in their opinion competent to invest it. By that means they are able to spread a comparatively small amount of money for the purposes of investment over a wide field. The fall in commodity prices and in the price of securities have been so great that the investment trust companies have been in some ways hit harder than any comparable type of commercial or financial company in this country. Therefore, a very large number of shareholders of moderate means have been hit hard and are likely to be hit for some time to come, because I cannot see that there is much chance of these investment trust companies being able to pay a substantial dividend—in some cases no dividend at all—on their ordinary stock for several years.
    I do not want to press this new Clause in its exact form, but I beg the Chancellor to give the question his serious consideration, not in the light of a favour in any way, but because I am genuinely convInced that it is a matter of equity that these investment trust companies should be allowed—and I believe it was always the intention of the Legislature that they should be allowed—to take
    2204
    their management expenses into consideration when they come to be assessed for Income Tax. I earnestly and urgently ask the Chancellor of the Exchequer if he cannot see his way either to accept the proposed Clause as it stands, or to agree after discussion to place in the Finance Bill for this year a Clause which will give effect to the proposals which are embodied in it.
    10.50 p.m.
    Mr. CHAMBERLAIN: I have listened very attentively to my hon. Friend in his account of the proposal he has been making, and I must say that I think he has certainly made out a prima facie case for considering that proviso to which he refers, which probably does act with some hardship and perhaps injustice in certain cases. He has said that he does not insist on the exact form in which his proposal is couched, and I think I should certainly have to take exception to any proposal to make the Clause retrospective, because I think that would land me, if not immediately, in the long run, perhaps, in considerable expense. If he is prepared to drop that part of his Clause which makes it retrospective, I shall be very glad to consider it between now and the Report stage, and see whether it is not possible to recast it in such a form that I can remedy what, I think, is, perhaps, an injustice.
    Mr. BOOTHBY: In view of the Chancellor's reply, I beg to ask leave to withdraw the Clause.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Herb beer.)
    For the purposes of Section twelve of the Finance Act, 1932 (22 and 23 Geo. V., c. 25), the name "herb beer" shall not in itself be taken to be calculated to indicate that the substance so described is, or is a substitute for, or bears any resemblance to, ale, beer, porter, or stout, or any description of ale, beer, porter, or stout.—[Mr. O'Connor.']
    Brought up, and read the First time.
    10.52 p.m.
    Mr. O'CONNOR: I beg to move, "That the Clause be read a Second time."
    The names standing in support of the new Clause which I have the honour to move indicate, at any rate that this is a non-controversial matter as far as party politics are concerned. It relates to a humble and, I believe, innocuous

    2205
    beverage. Let me explain why this becomes necessary. At an extremely late hour last year—I think it was after eleven o'clock—my right hon. and gallant Friend the Member for Burton (Colonel Gretton) having taken advantage, as he was perfectly entitled to do, of a somewhat thin House, moved an Amendment which had been on the Order Paper only a very short time, the effect of which was to prohibit anybody from selling any substance by description or by any name which was calculated to indicate that it was a substitute for, or bore any resemblance to, beer. At that particular moment somebody appears to have been sufficiently awake in the House to secure the exemption of ginger beer, though that was an obvious case of a name which did bear a resemblance to beer.
    Nobody was sufficiently alert to know that there was, and is, a very well-established old herbal concoction in this country made, I am informed, largely of dandelions and nettles which, to those people who have an appetite for such luxuries, is known as herb beer. It is drunk in large and perhaps dangerous quantities by cyclists, touring clubs, hikers, and all those people who peregrinate through the countryside. That accounts for some of the names in support of this Clause. That is the situation. Herb beer is a very well-known drink in the Midlands. I am assured, though I have no personal experience in the matter, that it is perfectly innocuous and non-intoxicating. For upwards of 50 years a firm in my constituency, named Newball and Mason, have been manufacturing this delicious beverage. They manufacture it and place it in small cartons which are sent to the cottagers and villagers in various romantic districts in the Midlands, and there these cartons of herbs, which are accurately described in every respect, are made up by the villagers and sold to thirsty cyclists as herbal beer.
    It will be observed that the Section which it is sought to amend by this proposed new Clause prohibits the description of anything by any name which is calculated to indicate that it is a substitute for or bears any resemblance to beer, and in pursuance of that Clause it was necessary for the Customs and Excise to issue a circular last year warning all and sundry that the descrip-
    2206
    tion "herb beer" on a packet was not a permissible description within the law. I think there is no doubt that their interpretation of the Act was perfectly accurate. An hon. Member asks me what they call "herb beer" now. Actually, the absurdity of this provision was so patent that I think the Customs and Excise have wisely and prudently acted with, perhaps, not due vigilance in the matter, and have allowed these parcels to go forth to all and sundry; but the fact remains that although the manufacturer has assured purchasers, that his advertisements conform to the law, or at any rate that there will be no prosecution, the small cottager who makes up the preparation into this delicious beverage is afraid to do so. In consequence, the manufacturers have had a very large number of complaints, their sales have decreased enormously, and employment has been limited in that industry; and yet nobody is a penny the better for the whole transaction.
    I think nobody in his senses would imagine that the description "herb beer" is likely to deceive anybody, that anyone who is seeking for a foaming flagon is likely to be misled in an unguarded moment into drinking a flagon of herb beer. I had hoped that it would be possible to secure the co-operation of even the trade interests in this modest new Clause, and my right hon. and gallant Friend the Member for Burton certainly does not see his way to oppose it. I had even hoped that I might have recruited him in the gallant band which is moving this new Clause, but I have not been quite so successful as that. I move the Clause in the interests of common sense and in the interest of a trade which is suffering, though it was never intended it should suffer, and which is not a competitor in any way either with the beer trade or with the Revenue. This Clause is entirely limited in its effect. The words chosen are identical with the words which were used for the exemption of ginger beer from the original Clause. In my submission this amending Clause cannot do harm to anybody, and I trust the Chancellor will see his way to accept it.
    10.59 p.m.
    Mr. ENTWISTLE: I heartily support the proposed new Clause. The right hon. and gallant Member for Burton (Colonel

    2207
    Gretton), probably at a late hour, secured the passage of a Clause preventing any substitute to be sold as beer which would be calculated to deceive the public. As the hon. and learned Member for Central Nottingham (Mr. O'Connor) has said, some enthusiast was probably awake at that hour and secured exemption for ginger beer. The hon. and learned Member, in the interest of his constituents, is seeking to extend that exemption to herb beer. The necessity of this proposed new Clause arises principally from ginger beer being expressly excluded from the operation of the original Clause. By ginger beer not coming within the penalties prescribed by the Clause, it might be held that those words could be construed in an ejusdem generis manner, and that herb beer would not come within the exemption, because it was not mentioned with ginger beer.
    It is obvious that there are other substances in the same category as herb beer and ginger beer which would suffer, merely because the hon. Gentleman's interests have been devoted solely to herb beer. The hon. Member will note that even if the Clause were passed there are similar beverages, equally stimulating and innocuous, such as hop ale and dandelion stout, presumably made from similar materials to that which the hon. Member has mentioned, that would not obtain the exemption that ginger beer now has, and which herb beer would have? I appeal to the hon. Member to add such substances as hop ale and dandelion stout, because the arguments that he used applied to them. If the Chancellor of the Exchequer accepts this Clause I hope that he will say that he will include all those substances which come within the principal remarks of the hon. Member, and then the legislation in this instance will cover all the cases which the new Clause desires to protect.
    11.2 p.m.
    Mr. WELLS: I oppose the proposed new Clause. Last year a Clause was put into the Finance Act to protect the revenue in respect of non-alcoholic substances being sold as beer. I do not think that the revenue will be injured very much by herb beer, nor do I think that this Clause is necessary. Herb beer is a table water; it may be a herb table water which is called a herb beer.
    2208
    For many years it paid the Table Water Duty, and it was only when the Table Water Duty was done away with that herb beer paid no duty at all. I think that we are wasting the time of the Committee, because the Clause is entirely unnecessary, and I hope that the Chancellor will not accept it.
    11.3 p.m.
    Sir WILLIAM WAYLAND: I also oppose the proposed new Clause. Before last year, there were a number of drinks masquerading in the names of beers and ales. They did not contain a single ounce of honest hops or a grain of good English, or even foreign, barley. They were meant obviously to deceive. In that category were herb beers. [HON. MEMBERS: "Oh!"] I repeat that they were made to deceive those who would like a glass or a bottle of good beer, but did not dare to buy it because they were teetotallers. It is the kind of fraud which was perpetrated upon the public for years. There are hundreds of kinds of herb beer. There is the so-called herb beer which is a teetotal herb beer, and there are herb beers which contain considerably more alcohol than ordinary, or even strong, ale. What we seek is to let the public know what they are buying. The name "beer" has always been associated with a liquor made from malt and hops and not from dandelions and other herbs found in the countryside. For these reasons, we want the public to know exactly what they are buying, and not to be defrauded by a label into buying something which, instead of giving them a warm feeling when it goes down into their stomachs, will, on the contrary, probably give them a pain which will keep them awake all night.
    11.6 p.m.
    Mr. CHAMBERLAIN: Last year I was asked to agree to the passing of Section 12 of the Finance Act, 1932, on the ground that certain substances were, not mistaken for beer, but advertised as substitutes for beer, and had a general resemblance to beer, and it was alleged that the revenue might suffer considerably by the increasing consumption of these substances. I did not, myself, think that the damage which the revenue was suffering was quite as much as was suggested by some of the advocates of the Clause, but, at the same time, I

    2209
    thought they had some justification for complaint that substances were being put forward as substitutes, and, accordingly, the Clause was passed. It is true that it excluded certain substances, such as ginger beer and ginger ale, which had already a considerable reputation, and which, certainly, nobody would confuse with the genuine article, beer. With regard to herb beer, my hon. and learned Friend says that it is not a substitute for beer, and has nothing to do with beer, but is made from entirely different substances. At the same time, I noticed that there were roars of laughter when it was described as table water. I have not, myself, any acquaintance with herb beer, but I am informed that it looks like beer, and tastes more or less like beer; and it is obvious that you cannot deal with herb beer without considering other substances, as was mentioned by my hon. Friend the Member for Bolton (Mr. Entwistle), which also have names suggesting their affinity with beer, or with ale or stout. If you are going to multiply these instances, obviously you render the whole Clause ridiculous, and it would be far better to repeal the Sub-section than to put in a Clause of this kind. In the circumstances, I would suggest that my hon. and learned Friend should not press the Clause now, but that, between now and Report, he should see other Members of the House who are interested in this matter, and ascertain if they can come to some agreement as to either the Clause, or, perhaps, the repeal, of the Sub-section in question.
    Mr. O'CONNOR: In view of my right hon. Friend's remarks, I beg to ask leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.
    First Schedule (Duties and drawbacks on beer,) Second Schedule (Provisions to be substituted for Scale 2 of First Schedule to the Finance (1909–10) Act, 1910), Third Schedule (Bates of customs duties on matches,) Fourth Schedule (Reduced rate of duty chargeable on certain musical instruments, clocks, etc.,) Fifth Schedule (Provisions for determining for purposes of preferences under 22 4s 23 Geo. 5. cc 8 and 53 whether goods are grown, produced or manufactured in part of the British Empire,) and Sixth
    2210
    Schedule (Provisions as to re-importation and re-exportation of certain goods,) agreed to.

  SEVENTH SCHEDULE.—(Amended rates of duty in the case of certain mechanically-propelled vehicles.)
  11.9 p.m.
  Mr. CLARRY: I beg to move, in page 32, line 14, after the word "than" to insert the words "coal, gas or."
  I presume that it may be for the convenience of the Committee if I deal with the various Amendments to the Seventh Schedule which stand in my name. With reference to compressed gas for motor vehicles this, as I think my right hon. Friend will appreciate, is only just emerging from its experimental stages. There has been a great deal of exaggeration, which is not warranted either on the work that has been done up to date or on what may be effected in the immediate future. Certainly there are a number of points that deserve notice. Compressed gas for the use of motor cars is cleaner and it is 100 per cent. British fuel from coal. But it has been found by experience that the costs are so heavy that there is not much prospect of any development in compressed-gas driven vehicles except under highly favourable conditions. We are asking that compressed coal gas should be put in the same class as petrol vehicles, and we ask for new concessions dealing with the assessment of the unladen weight, which has a material bEarlng on the amount of licence duty chargeable. On the assumption that there is an increased licence to be paid for compressed-gas driven vehicles of approximately £20, if we could assume an average vehicle with average mileage consumption, this would be approximately equivalent to 3d. a gallon on petrol, which completely rules it out for the time being. It may be argued that the petrol duty is partly a contribution to the upkeep of the roads and compressed gas does not bear any proportion of this, but gas undertakings pay a very large amount of rates per annum and are generally amongst the largest ratepayers in their particular areas. They are, therefore, contributing very largely to the upkeep of roads. The two concessions that are asked for are practically negligible from the income point of view, but would be of inestimable value in developing re-

  2211
  search work in connection with a matter that is very closely concerned with British fuel for driving motor cars.
  11.12 p.m.
  Mr. PIKE: I support everything that has been submitted by my hon. Friend, but, as the matter covers a very wide field, and one that affects a considerable interest in gas-driven vehicles, I should also like to call attention to the position of some road vehicles and the duties which are set out on the top of page 38, and which appear to be practically the same as those that appear in the lower half of the page as applicable to petrol-driven engines. These duties, it would be seen, are in fact, as far as the steam-driven road vehicle is concerned, much more burdensome, because the unladen weight is necessarily so much greater than in the case of the petrol-driven vehicle, in addition to which the maximum over-all weight of 19 tons allowed for the heaviest class of steam vehicle acts very prejudicially against it. I would ask the Committee to consider the position of the heavy steam vehicle in respect of the alleged damage done by them to the roads as against the damage done by the lighter petrol-driven vehicle. I would also ask the Minister to consider that in no way can these allegations be sustained. In fact, the actual reverse is the position.
  The effect upon the road surface of the six and eight-wheeled vehicle, especially in these days, Since the fitting of pneumatic tyres and the restriction of the speeds, is so much lighter than the more speedier petrol vehicle and much less damaging to the surface. If one looks at the various views put forward by many committees and boards which have had the matter under review, one finds that the petrol-driven vehicle does not enjoy by any means the same longevity in respect of its tyres as is enjoyed by the steam vehicle. In view of the great development which has taken place in the steam vehicle and the methods which are adopted to avoid the emission of obnoxious steam and fumes, and the great claim this type of vehicle has upon the attention of the Minister in respect of the various Amendments upon the Paper, I have great pleasure in supporting the Amendment.
  11.18.p.m.
  Mr. MOLSON: The Amendment covers exactly the same point as the Amendment which I have put down a little later on the Order Paper, and therefore I should like to say a few words in support of it. My sole purpose is to try and encourage the consumption of home-produced fuel on the road, and I do not see why in this Schedule one should find that the steam-driven vehicles are taxed at a lower rate than the coal-gas vehicles. At the present time there are many firms which are experimenting with coal gas and great hopes are held out for considerable development of coal-gas vehicles and for the transport to be carried on the roads to be propelled by gas rather than by imported oil, so that I hope that the Government will be prepared to give sympathetic consideration to the Amendment.
  11.19.p.m.
  Mr. H. WILLIAMS: We are dealing with a matter of great complexity, without, perhaps, all the information that might be possessed. The Government have presented to us a series of very complicated Schedules, and they have no doubt taken great trouble in drawing up those Schedules. Whether they represent the best solution, I do not know, and I very much doubt whether the Government know. They are based, presumably, upon the assumption that a vehicle ought to be taxed in proportion to the damage it does to the roads. But there is the further consideration that to some extent we should try and protect the production of certain British fuels against certain foreign fuels, and my main concern for the Amendments on the Order Paper, to about a, dozen of which my name is attached, is that we ought to do everything possible to protect British industry. I am an unrepentant Protectionist. Whenever I get the chance to protect British industry I want to do it, and I think the various Amendments on the Order Paper would have the effect of protecting the production of gas which, incidentally, means the production of coal. Therefore, I support it.
  I hope the Chancellor of the Exchequer —I do not suppose he is going to accept any of the Amendments to-night—will have an exhaustive investigation, in consultation with the industries affected, as to the merits of these Schedules. Budgets are

  2213
  produced in secret and the Chancellor of the Exchequer always tells us that he cannot anticipate his Budget statement, although that is perfectly sound in regard to a great many proposals in the Budget, it is a thoroughly bad principle in regard to a great many other proposals, and I look forward to the time when some Chancellor of the Exchequer will anticipate his Budget proposals in part. So that people can discuss in advance what he proposes to do. That is impossible when he is proposing to vary Customs duties or Excise duties, but there is no reason why that old fashioned and bad principle should be continued in respect of every case. Here are a series of proposals. They may be good or bad, I do not know, but there has been no detailed explanation of them and I do not suppose that the Minister at this time of night will give us a very exhaustive explanation of them, but I hope he will examine the proposals in the Amendments to which many of us have put our names. We desire to protect fuel made in this country as against imported fuel.
  11.22 p.m.
  The MINISTER of TRANSPORT (Mr. Oliver Stanley): I am afraid that at this late hour I cannot give, nor would the Committee expect me to give, an exhaustive account of the reasons that induced me to adopt this scale. In adopting the scale and fixing the amount for the non-petrol using vehicles I had two principles in mind. The first was that as far as possible they should receive no subsidy, that is, that by using a different fuel than that which is taxed and contributes to the revenue they should not escape the same share of the cost of road user as was borne by the petrol-driven vehicle. Secondly, having fixed that general principle, in particular cases variations could be made in order to make special allowances, and the scales could be altered one way or the other with respect to the user of roads by particular vehicles. It was for that reason that when the scales were drawn up I made a difference between the steam and the coal-gas vehicle, because I felt that there were certain limitations on the use of the steam vehicle which made it a less heavy user of the road than the coal-gas vehicle might possibly become. The heavy un-
  2214
  laden weight of the steam vehicle and the need for refuelling meant some handicap in its user of the roads.
  I admit that in comparison heavy oil seemed to enjoy more or less an advantage over coal-gas, and therefore I became a convert to the principles of the hon. Member for South Croydon (Mr. H. Williams) and gave coal-gas a certain measure of protection. It is true to say that facts have been brought to my notice Since the scales were first inserted in the Bill which make me believe that I took at that time too optimistic a view of the immediate potentialities of the coal-gas vehicle, and it appears that some of the rosy reports which were given of it are, when it comes to taxation on the basis of those reports, not quite so rosy as they appear, and that in fact they now fall rather into the category and under the limitations of steam vehicles than as being a really potential competitor of the petrol-driven vehicle. I should like hon. Members to understand that any alteration that it was possible for my right hon. Friend to make would be due to these existing handicaps, but that the situation would have to be reviewed if invention and the progress of science removed those handicaps. I am prepared between now and Report to consult with my right hon. Friend to see what possibility there is of meeting this less favourable view of the present capacity of these vehicles than I took in the first instance. With regard to the aggregate weight of the gas cylinders, I am afraid that I cannot accept that proposal. Cylinders which contain gas are in the same category as tanks which contain petrol, and if one is included in the weight of the vehicle there is no reason why the other should not be included also.
  Mr. CLARRY: I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  11.27 p.m.
  Sir ALAN McLEAN: I beg to move, in page 35, line 11, at the end, to insert the words:
  "and tractors which are used solely for the hauling of native timber from the place where it is felled."
  This Amendment and several later Amendments on the Order Paper deal

  2215
  with the question as to whether a limited class of timber tractors, vehicles which are normally used for the purpose of hauling timber from the place where it is felled, should be charged on the scale which is applicable to agricultural tractors or whether they should pay the higher scale of duty which is applicable to other tractors, and I would suggest that it would be convenient to discuss the Amendments all together.
  The CHAIRMAN: I think they really deal with one question. There are several Amendments, but they deal with the same point.
  Sir A. McLEAN: The question really is whether forestry can fairly be regarded as a branch of agriculture. From the point of view of nature operations in the woods of planting, cultivating and cutting timber are clearly very analogous to similar operations which are carried on in the fields. I will not labour that point at this late hour. Let me, however, tell the Committee how this matter has been regarded by Parliament in the various Acts which have been passed. A true reading of the Statutes is that the question as to how the matter is dealt with in any particular case depends on the particular aspect of the question before Parliament. In the Corn Production Acts of 1917 and 1921, we find that in the 1917 Act the term "agriculture" does include the use of land for woodlands, whereas in the 1921 Act agriculture does not include the use of land for woodlands. The reason for that distinction is very fine indeed; it depends on some other sections of the earlier Act. When we come to the Unemployment Insurance Act of 1920 we find that amongst the excepted employments is employment in agriculture, including horticultural and forestry work, and, in the same way, in the Agricultural Wages Act, 1924, agriculture includes the use of land as woodlands. It is clear that the reason why men employed on woodlands are given the same treatment as an agricultural labourer is because the operations they carry on are similar. In a much more recent Act, the Rating and Valuation Act, 1928, agricultural land includes land used for plantations, woods or the growth of underwood. Therefore, from the point of view of Statute law, forestry is included in agriculture. The real ques-
  2216
  tion the Committee has to decide is whether in the particular aspect we are now considering timber tractors, used for hauling timber, should receive the same treatment as agricultural tractors.
  Why was this original concession granted to agriculture? It was in the Finance Act of 1920 that the two scales of duty were first drawn up. In the earlier part of the Debate on that Act it was suggested that the scale of duty for agricultural vehicles was an unfair differentiation in favour of agriculture, but the hon. and learned Gentleman the Member for East Grinstead (Sir H. Caut-ley) made it clear that the taxes are imposed solely for the purpose of improving the roads, and that the theory of the taxes was that the heavier taxes should be put on the vehicles which were used on the roads most and the lighter taxes on those which were used least. The Minister of Transport at that time, Sir Eric Geddes, accepted that view, and said that the reason why agricultural vehicles had a light scale of duties was that they used the roads to a comparatively small extent.
  What is the position of timber tractors? Investigation will show that the timber traffic vehicles are used in just the same way to a large extent in the woodlands for the purpose of extracting timber from the places where it is felled. Therefore I suggest to the Minister that it would be fair to give to timber vehicles the same concession as agricultural vehicles have, on the ground that they are used very largely on the land instead of on the road. There is one other point. Some hon. Members may think that this preference in favour of agriculture has been given partly as a kind of help to agriculture. If that is so I suggest that timber production in this country is just as much a depressed industry as agriculture, that it is just as much of national importance, and that it ought to receive the same treatment. It has been recognised by the Forestry Commission that it is to the national advantage for the owners of land to plant land with timber. They get a grant to enable them to do that planting, and the material to plant.
  What has been suggested against the proposal? It has been suggested in the past that these timber lorries and

  2217
  waggons do a great deal of damage to the roads. There is a certain amount of confusion of thought about that. It is true that if you have a heavy timber lorry and compare it with a light vehicle used in another industry, the heavy lorry does, comparatively, a great deal of damage, but where is the evidence that a single ton of timber carried on a particular vehicle does more damage to a road than a ton of any other commodity? There is no evidence and there cannot be any. Another suggestion is that the timber vehicles do a great deal of damage to the roads because they use wheels shod with iron. That may have been a good argument in the past, but Since the Traffic Act of 1930 and the Order made under it, most timber vehicles have had rubber tyres. That has been so Since 1st January last.
  This Amendment strictly limits the concession to those vehicles which are used solely for the removal of native timber from the place where it is felled, and they ought to get the same relief as the agricultural vehicle gets when it takes corn from the farm where it is cut. I hope the Minister will accept the Amendment. If he cannot do so now, I ask him to consider the matter very carefully before the Report stage. The Amendment is not like many of the Amendments we have had moved to-night, where the proposal has been to reduce the existing scale of taxation. This is an Amendment dealing with a different proposition, where it is proposed to put an additional Duty on vehicles in future. If that Duty is once imposed many people will be hard hit by it. If a decision is deferred to another year it may be too late to save many people.
  11.35 p.m.
  Mr. SCRYMGEOUR-WEDDERBURN: I hope, if the Government cannot see their way to accept this new Clause, that they will consider whether something might not be done to modify these proposals between now and the Report stage. My hon. and gallant Friend the Mover has referred to the rather loose statement, frequently repeated, in discussions on this question, that more damage is done to roads by the haulage of timber than by any other form of transport. Of course there is no reason why the car-
  2218
  riage of 5 tons of timber should do more damage than the carriage of 5 tons of any other commodity. What sometimes happens is that, where a large area is felled all at once, the transport of the timber to the nearest station causes continuous traffic for a certain time and the road may be badly knocked about in consequence. But I ask the Committee to remember that, normally, timber is only felled after 70 years' growth; and that the owner of the wood and his predecessors had been paying rates towards the maintenance of the road for the previous 70 years, during which the demands of timber on road transport had been negligible, apart from a few occasional thinnings, and he and his successors will continue to pay rates for the subsequent 70 years until the new plantations mature. The justification for the Amendment is that there is no logical reason for drawing any distinction between the use of the soil for the production of timber and its use for the production of an agricultural crop. I have yet to hear any argument which will hold water for discriminating between one vegetable and another on the ground of longevity.
  There is one consideration which has not received sufficient attention from the House of Commons. It is that the State is now, by far the largest owner of woods in the United Kingdom. The Forestry Commission has already planted 220,000 acres and is continuing to plant at the rate of more than 20,000 acres a year. In one or two years from now, it will be necessary to begin the work of thinning the earlier plantations which are now 13 or 14 years old. It is easier for a Member who has no official connection with the Commission to speak with freedom on this subject. If this Schedule goes through in its present form, the loss of revenue to the State, resulting from inability of the Commission to market its timber at an economic price will be immeasurably greater than any trifling loss to the Exchequer which may result from the email concession we now ask. All sections of the Committee, I know, are anxious to encourage the progress of afforestation. Its economic value and social value to the country are so well known that it is unnecessary to emphasise them now. But it is not irrelevant to observe that the amount of direct employment afforded by the expenditure of

  2219
  the Commission is at the rate of one man employed to every £140 spent in the year, or about double the estimate given in the "Times" by Professor Keynes and 5 times the estimate given in the House of Commons by the Chancellor of the Exchequer of the normal amount of direct employment afforded by Government expenditure. It will be a calamity if this Committee does anything which will restrict and in many districts destroy the possibility of marketing British timber at economic prices.
  Some of my hon. friends have complained that no Minister is responsible for afforestation. I think the advantages of having afforestation conducted by a statutory body, independent of political change, are so great that no one would wish to alter that system but there is this inevitable disadvantage, that whenever we try to make any representations, such as we are making now, to the Government we find on the part of every Minister whom we approach the greatest zeal and promptitude in transferring over representations to some other Minister. We are tossed about like a shuttlecock from the Exchequer to the Board of Trade, from the Board of Trade to the Ministry of Agriculture, from the Ministry of Agriculture to the Ministry of Mines, which is supposed, by all other Departments, to know something about pit props, and, fiNaily and as a last resort, to the Scottish Office. I hope that tonight we may find a secure resting place in the generous bosom of the Minister of Transport, and I hope the Government will consider, collectively, whether this misfortune cannot be averted for the timber industry by the simple expedient of removing this false distinction between agriculture and forestry, which has no basis, either in equity or in common sense.
  11.41 p.m.
  Mr. STANLEY: I cannot offer myself as battledore to my hon. and learned Friend's shuttlecock. We all agree, as he says, that we wish to see an improvement in the condition of this industry, but he will realize that the larger aspects of industrial policy, not only of forestry but of other industries, is beyond my provInce, and all that I am concerned with is the road user of vehicles which
  2220
  these industries employ. My hon. and gallant Friend who moved the Amendment has tried to establish the principle that I should regard forestry and agriculture on an exactly similar footing, and in that he has been supported by my hon. and learned Friend who has just sat down. They appealed to me, first, on the ground of Nature, considering that, as vegetables, apparently, there is no difference between a larch and a leek, but I would remind my hon. Friends that I am not interested in the vegetables but in the carriage of those vegetables, and that while I have to consider whether there is a difference between agriculture and forestry, it is not what difference or similarity there is in the things that * grow, but what difference or similarity there is in the way in which those things are transported. The concession which was given some years ago to agriculture was not given on the ground of any particular circumstances of the agricultural industry itself or the state the industry was in; it was given on the ground that certain vehicles engaged in agriculture spent very little of their time upon the public roads and, therefore, were entitled to a concession in comparison with other vehicles employed by other industries, the Majority of whose time was spent upon the public roads. Of course, my hon. Friends will realize that when they talk about the concession to agriculture, it is not every agricultural vehicle that obtains the concession at all. It is very strictly hedged round with conditions intended, so far as possible, to restrict this concession to agricultural vehicles mainly used upon the land, but which may from time to time go upon the public roads.
  If we come now to consideration of this point alone, I think hon. Members will see at once what an immense difference there is between the transport of the product of forestry and the transport of the product of agriculture. The Amendment is practically without limitation at all. It is quite true that the vehicle which is to receive this concession is to start from the place where the timber is felled, but once it has fulfilled that condition, it can end its journey anywhere else in the United Kingdom—it can spend the whole of its time upon the roads—and when I am told that it

  2221
  is a fallacy to say that the transport of timber does more damage to the roads than does the transport of any other kind of commodity, I would remind my hon. Friends that I am not seeking to say that it does more damage and therefore asking the forestry wagon to pay more; I am only saying that it does as much damage and asking it, therefore, to pay on the same scale as other commodities which are transported along the road. I am afraid that much as I sympathise with the position in which the forestry industry is to-day, I cannot distinguish between its user of the roads and the user of other heavy industries which are equally depressed. In these circumstances, I regret that it is not possible for me to accept the Amendment.
  11.45 p.m.
  Colonel Sir GEORGE COURTHOPE: I have been authorised to express the view of the Forestry Commission on this matter. The Commission are far from happy about the present position of the English woodlands. Taking a long view, we attach the greatest importance to their restoration to proper conditions of silviculture for producing a reasonable amout of timber. Their economic position is very unsound and unsatisfactory, and we are afraid that, unless some concession is given in respect of the haulage of timber from the place where it is felled to the nearest sawmill or the nearest place where it can be put upon the rail, a great deal of the timber which is now mature and is ready for market will not be marketed at all. The result of that will be that a greater proportion than ever of our woodlands will become derelict, and will fail to be managed under proper silvicultural conditions to produce their proper share of timber.
  We are not suggesting that special facilities should be given to the haulage of timber by mechanical vehicles merely because it is a load of timber. We do not advocate the long range haulage of timber by mechanical means. I hold the view—I do not know whether it is supported by the Commission because it has not been discussed by them—that for State purposes the horse is still the cheapest form of road transport to the local station or the mill; but while that is true of the State, it is not true of the timber merchant who has to come from
  2222
  a distance. Whether it is more economical to use the horse or the tractor is not really material now. The fact is that a great many tractors and mechanically propelled vehicles are in use to-day for hauling timber which is mature to the railway station or the sawmill, and we fear that if anything interferes with that practice timber will fail to reach the market altogether. That will be very bad in the national interest. Therefore, without going so far as to support the Amendment, the Forestry Commission would like to join in the appeal to the Minister of Transport to consider whether in the national interest some concession might not be made so as to ensure that timber which is ripe for the market shall not fail to get there because of the imposition of these additional taxes.
  11.49 p.m.
  Sir HENRY CAUTLEY: I also regret that the Minister cannot do anything to help the old English industry of the timber merchant. By his own test I cannot but think that he has come to an absolutely wrong conclusion. I am not aware of anyone who sends by road timber butts cut from the round timber. It is never conveyed long distances in that way. It is taken from where it is felled—and this Amendment deals only with those vehicles employed in the removal of the timber from where it is felled—to the timber merchants where it is made into merchantable commodity. I do urge that the same consideration applies to that as applied to the agricultural vehicles to which exemption was given when we pointed out to the Minister in charge at that time that those vehicles were not on the roads for any comparatively long periods. The same thing happens here. I am speaking of English timber, with which I am acquainted, for I do not know about Scotland.
  I have seven or eight timber merchants in my own Division and I have had letters from one or two. One of them points out that the bulk of the work done by his tractor is in felling the trees to the ground and getting them out of the wood, and not on the roads at all. He estimates that his tractor has only been on the roads about 2½ hours each day. It does comparatively small damage to the roads. That is the test, and let us apply that test. The timber merchant asks for

  2223
  some exemption for what is an agricultural product. The timber is either taken direct from the place where it is felled to the railway station and sent by rail or it is taken to the timber merchants' saw mills. I do urge the Minister to reconsider this matter. It means that you are going to destroy one of our rural industries—goodness only knows, there are few enough of them, as it is—by excessive taxation which can do no good. I do beg the Minister to reconsider it before the Report stage and before he does this fatal injury to a very deserving industry.
  11.53 p.m.
  Captain CROOKS HANK: May I make an appeal? I agree with what the Minister said, but I think the situation has changed Since the hon. and gallant Member for Bye (Sir G. Courthope) spoke on the subject, because he speaks with great authority, and he has put the point of view of the Forestry Commission. The Committee should bear in mind that this House grants a very large sum of money for every year to the Forestry Commission, whose large-scale programme has been encouraged by every Government Since it started. If the policy which we are now embarking on is going, in the considered opinion of the Commission, to have a deleterious effect on their programme, it seems to me that we ought to look at this matter from a rather larger aspect than the small aspect of the roads, with which the Minister is primarily concerned. Therefore, while I agree with him when he says that the wording of the Amendment is not very good I should like to make an appeal to him that he should between now and the Report stage consider perhaps in consultation with the Forestry Commission or with his colleague the Minister of Agriculture, some limiting words that these vehicles should be considered agricultural in their office as between the forest areas all over the country and the nearest railhead or the nearest sawmill. After all, forests are not in the most accessible spots and it would be well if this could be limited even to that degree. I do not know whether it is even administratively possible, but I would urge the Minister, after what has been said, to consider the matter. I would not have made this appeal had it not been for what the hon.
  2224
  and gallant Member for Rye said, but I hope the Minister may find an opportunity to consult the people concerned in order to see if he cannot do something along these lines.
  11.55 p.m.
  Mr. STANLEY: I may tell my hon. and gallant Friend that I have already arranged to see both the representatives of the Forestry Commission and of the Timber Trades Association between now and the Report stage. I am sure that my hon. and gallant Friend the Member for Rye (Sir G. Courthope), who speaks with such authority on these matters will not think it wrong of me to remind him and the Committee that in 1926, when a similar Amendment was moved, he spoke against the Amendment and held very strongly the view which I am putting before the Committee tonight that forestry has no right to be treated on the same basis as agriculture and should not, therefore, enjoy the same privileges and exemptions.
  Sir A. McLEAN: In view of the Minister's statement I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  THE CHAIRMAN: Capt. Strickland.
  Lieut.-Colonel MOORE-BRABAZON: May I call your attention, Sir Dennis, to my Amendment—In page 37 to leave out lines 33 to 53—That Amendment deals with the exemption of electric vehicles. A lot was said by the Minister with regard to various types of vehicles, but I hope you are not under the impression that electric vehicles were mentioned, because I have been "kangarooed" very unjustifiably.
  The CHAIRMAN: The hon. and gallant Member is mistaken. I have no option in the matter, because his Amendment is not in Order, as it would create a charge.
  Lieut.-Colonel MOORE-BRABAZON: It is to exempt vehicles from taxation, and is certainly in Order. It does not increase the charge.
  The CHAIRMAN: I am quite right. If the hon. and gallant Member left out those lines higher duties would be payable.
  11.57 p.m.
  Captain STRICKLAND: I beg to move, in page 38, line 41, to leave out from the second word "exceeding" to the end of line 46, and to insert instead thereof the words:

  £

  s.

  d.

  £

  s.

  d.

  "3½ tone in weight unladen

  41

  0

  0

  54

  13

  4

  Exceeding 3½ tons but not exceeding 4 tons in weight unladen

  47

  0

  0

  62

  13

  4

  Exceeding 4 tons in weight unladen—

  for the first 4 tons

  47

  0

  0

  62

  13

  4

  for each additional half ton or part of half ton

  6

  0

  0

  8

  0

  0"

  I shall have to try to compress my remarks on this very important subject into a very few sentences, but it is going to be extremely difficult to bring my arguments into the compass of the time which the Committee will be willing to concede to me at this hour. My Amendment deals with the proposed taxation of motor vehicles and the form in which that appears in the Schedule. It was only reasonable to expect that the old scale of charges which had only visualised vehicles of the unladen weight of 5 tons and above that weight made no additional charge, would give place to a new scale which would impose a heavier charge on vehicles above that weight. No one would object to that principle being carried out. This Amendment is moved more to secure an adjustment than to criticise the action of the Government in placing heavier duties on these heavier vehicles which have been evolved under our system of road transport. The objection I have is based on two grounds. The first is that already, before these extra duties are put on, the motor trade is paying more than double the cost of the roads of this country. Therefore, we have some right to ask why it is that the motor trade should have been particularly selected in this Budget as the one instrument for obtaining further revenue; provided that it is not being abstracted from that trade on account of the damage which it might be held that those vehicles do to the roads.
  The second great objection we have, and perhaps it is the more important one, is based on the effect which this additional taxation is bound to have on the general trade and industry of the country. When the Royal Commission went into this matter, it came to the very
  2226
  definite conclusion that vehicles of between nine and ten ton unladen weight should not be called upon to pay a higher tax than £120 per annum for the use that they made of the roads. The Government have departed from that principle. Although we hear many allusions, when theories have to be supported, to what the Salter Conference or the Royal Commission recommended, the Government certainly cannot advance the theory in this case that they have followed the advice of the Royal Commission. I am aware that the Salter Conference advised a higher rate of duty, but I am basing my remarks upon the Royal Commission, which was a Commission held in public with public evidence, and not the secret type of evidence upon which the Salter Report was based.
  Under our proposal, the nine-ton vehicle would pay just about £119, thereby bringing it into line with the taxation that was suggested by the Royal Commission. That would apply only to pneumatic-tyred vehicles; the heavy-tyred ones would pay 33⅓ more than that. The taxation has one very bad feature— its very sudden rises. The difference in taxation between one ton and another is going to cost not less than £20. Hon. Members will see by that what a burden is being put upon the industry. It has been stated that the Lord tempers the wind to the shorn lamb, but I am bound to think that the wind will not be less inclined to blow upon the face of the trader who is suddenly faced with this additional burden.
  We ask that the duty should be graded in half-ton steps. It is no new proposal. The Government recognised the system some years ago, when they graded the steps of the light-weighted vehicles. I presume that they made that grading because they realised the vast difference that it would make in encouraging motor manufacturers to produce engines for carrying heavy goods. That taxation is in such moderate rises that men would not hesitate between the purchase of one vehicle and another. Half-ton steps at present only rise up to the four-ton unladen weight. Above that, one is suddenly faced with a £20 rise per ton as one goes up the scale. Those half-ton rises are very greatly appreciated by motor manufacturers, and there is no question that it helps them very considerably.

  2227
  My first point is that the Government should consider making the rises by half-ton unladen-weight, instead of by steps of one ton. That would be conferring a tremendous advantage upon the motor manufacturing industry which would not have to try to cut down the efficiency of their engines, in order to bring the vehicle just under the tonnage instead of rising, say a hundredweight or two, above it, and then finding no market for the vehicle because the extra hundredweight in unladen weight would mean an extra £20 upon the annual cost of running that type of vehicle. What will happen will be that there will be the lightest possible tonnage in the vehicle, which will then be loaded with the heaviest possible weight that it is capable, within reason, of carrying. Experience has shown that this probably would not lead to loss of revenue. In 1923 the average horsepower of motor vehicles in this country was 17, and in 1933 the figure had dropped to 13; so that, at £l per horsepower, the average revenue per car, instead of being £17, as in 1933, is now £13. If this concession could be made, it would have the effect of increasing rather than decreasing the revenue. It would not affect the proposed scale for the lighter vehicles, but it would affect the scale for the heavier vehicles, and at first sight it might be thought that it would lead to a heavy loss of revenue; but I am sure the Minister's experience will show that in this country the largest part of the revenue from motor taxation comes from vehicles of 2 and 2½ tons, and that at 3 or 4 tons unladen weight there is a drop of nearly half in the revenue from the taxation, showing that the revenue would be made up by the acceptance by motor users of the duties proposed by the Government for vehicles of lower weight.
  I have investigated the probable effect on the revenue if this Amendment were accepted, and I find that, whereas the revenue under the old system would be just over £8,000,000, and the estimated revenue under the new system would be £10,000,000, under the proposal of this Amendment it would be just over £9,000,000; so that, even on the basis of last year's tonnage rates, the Government, if they accepted my Amendment, would receive just over £1,000,000 more,
  2228
  but they would, of course, be short by something less than £1,000,000 as compared with the rates they now propose. On the ground, first, of the efficiency of the vehicles and the effect on the manufacturing trade, and, consequently, on employment, and, secondly, of the enormous and steep rise proposed by the Government this year, I would ask the Government to consider the adoption of a half-ton rise at the rate of £6 per half-ton, which would have the effect of encouraging the motor trade and of helping the general trade and industry of the country,
  12.9 a.m.
  Sir A. STEEL-MAITLAND: This Amendment applies to the ordinary petrol-driven vehicle, which is the most important and most typical class. The Royal Commission were of opinion that up to five tons unladen weight vehicles of this class were paying enough in taxation, and that above five tons £120 ought to be the maximum licence duty. What those vehicles pay is partly licence duty and partly petrol duty, and the two together form the burden that they pay in taxation. At that time petrol was taxed at 4d. a gallon. Now it is taxed at 8d. a gallon. That part of the burden has been doubled. Consequently, from the point of view of the Royal Commission, most of these vehicles are already paying too high taxation. The scale of duties in. the Schedule, instead of being modified, is being considerably raised and the burden made heavier. I should like the Minister to tell us on what principle the Government acted in devising that scale. The Chancellor of the Exchequer in his Budget speech told us it was not based On the Salter Report nor on the principle of the motors paying for the roads, and it is certainly not based on the Report of the Royal Commission. In the light of criticism that has appeared Since, many people will say that in certain definite respects the Salter Report was quite clearly mistaken, but even judged by that report the taxation is too high. In that report it was proposed that the licence duty should be increased so as: to cover the whole cost of the roads. The cost of the roads has gone down and, therefore, there is no justification, even on the lines of that report, for increas-

  2229
  ing the licence duty to the extent proposed.
  The Minister of Transport might say it is the need for money. I do not say for a moment that it is the intention of the Government but it is a fact that one industry is penalised when it is in competition with another. It would be no more unjust to get money for the Exchequer by taxing electricity and leaving gas free or vice versa. If a burden has to be imposed, it should be imposed upon industries alike so as to leave the field free as between them for fair competition. I trust that the principle of half ton rises may be accepted, which would be a very great relief to the industry, and that on reconsideration of the whole policy that underlies this transport question my right hon. Friends will see their way to mitigate the burden that will be placed on the industry.
  12.15 a.m.
  Mr. STANLEY: I do not think the Committee at this time of night will want an elaborate explanation of the reasons which led me to adopt this scale. My right hon. Friend and his friends had the opportunity at an earlier stage in the discussions of this Bill and failed to take advantage of it. I was not quite able to follow the reference he made to the reduction in the cost of the roads. He seemed to think that because the cost of the roads had been reduced that in itself made my scale inequitable. But he will notice that my scale has been reduced in comparison with the Salter scale, and the reduction in road costs might be one of the reasons which have led to this particular scale rather than to the actual figures proposed in the Salter Report. This Amendment is twofold, and both folds of it would cost money. One is the old plea for a half-ton scale. In itself, that is not harmful, and in fact it might be an advantageous proposal. It would add a certain amount of administrative difficulty, but that might not be much in comparison with certain advantages it would give the manufacturer. It is, of course, extremely expensive also, and would result in a large loss to the revenue. The second part is merely a frank reduction of the scales proposed to a level not merely far below the proposals of the Salter Conference but far below the reduced Scales I pro-
  2230
  pose in this Schedule. The total effect of the Amendment would be to deprive the revenue of some £675,000. But this Amendment deals only with petrol-driven vehicles. If either the half-ton step or the scaling down of the general Schedule were accepted for petrol-driven vehicles, it would be impossible in equity to refuse the same consideration for vehicles driven by some other form of fuel, and the consequential loss to the revenue would then be greater. In these circumstances, having already largely reduced the scales from those proposed by the Salter Conference which was composed not only of representatives of the railway companies but of road users as well —and having by that reduction conferred an advantage on road users, it would be impossible to accept this further reduction and deprive the revenue and the Road Fund of this large sum of money.
  12.19 a.m.
  Mr. LESLIE BOYCE: This Amendment, as the Minister has said, is avowedly designed to whittle down the proposed licence duties on the heavy type of goods road vehicle. I was very glad to hear him say he could not accept it. I would beg him to bear in mind throughout these discussions that it is only because it is a firmly-established custom that no motion can be made to augment these duties except by a Minister of the Crown that there are not a very large number of amendments on the Order Paper in a contrary sense to that which we are now discussing. I believe that if the Committee were to have a free vote on the question whether these proposed licence duties should be increased or decreased, there would be an overwhelming Majority in favour of an increase.
  The Minister has told us that after months of careful consideration and examination, with the able assistance of officials of the Ministry of Transport, the Salter Conference, with its equal representation of road and rail interests, made unanimous recommendations on the amounts to be paid by different classes of goods road vehicles. In every case the licence duties proposed in this Bill fall short of those unanimous recommendations. The Salter Report recommended the payments for the different classes of vehicles so as to ensure that each should pay its proper share towards road costs.

  2231
  Any proposals which fall short of these payments leave that class of vehicle in the position of receiving a subsidy, and any Amendment which seeks to reduce the payments still further would increase the amount of that subsidy. I wish to see justice done not only between road and rail transport, but also between one class of road vehicle and another. Under the duties proposed in this Bill, the heavier classes of road vehicles are greatly favoured in comparison with the lighter classes. A fair basis of comparison would be by the gross-ton-mile unit, which is a measure of the weight of traffic which passes over the road. On this basis the lightest class of road vehicles will pay at the rate of .901 pence per gross-ton-mile, whereas the 10-ton vehicle will pay at the rate of .229 pence. The result is that if moving a given weight over a given distance, the light vehicle will pay four times as much in licence duty as the heavy vehicle. If equity is to be established between one class of road vehicle and another, the licence duties on the heavier vehicles as proposed in the Bill would need to be substantially increased. If this Amendment to reduce the licence duties in respect of heavy vehicles had been accepted this discrepancy would have been still further widened. It would have meant that the light vehicle would still have to pay at the rate of .901 pence per gross-ton-mile, against only .193 pence paid by the 10-ton vehicle. The ratio of disadvantage to the light vehicle under the Bill is 4 to 1, and under the Amendment it would be increased to 5 to 1. I beg the Minister to continue his resistance to this Amendment. The Government, as I said in the Debate on the Second Reading of the Finance Bill, have in my opinion taken a step in the right direction. This is the first attempt yet made by any Government to place goods road transport on anything approaching a self-supporting basis.
  12.25 a.m.
  Mr. G. PETO: If nothing else had induced me to rise the speech we have just heard would have done so. The railway companies have nothing better to offer for the assistance of industry than the increased taxation of road traffic. The only scheme the railways have to put forward is to tax other forms of trans-
  2232
  port out of existence. My constituency is very much interested, not only in road traffic, but in trade and industry as a whole, and traders believe they are entitled to have their goods carried in the cheapest and most efficient way. Another reason why I rise to speak is that the Minister, I thought, made a very regrettable sneer, unusual from him, with regard to our not having spoken on the Budget Resolutions. To a back-bencher like myself, who spent three days getting up in the hope of being able to catch the Speaker's eye in the Budget debates, it is very annoying to find a Frontbencher who has ample opportunities to speak, sneering because we failed to get in. Quite unexpectedly the debate collapsed one evening, and the particular Resolution was rushed through. With the Majority the Government have I think they might have been more generous in this matter and express some desire to discuss this very important piece of taxation. It is not our fault that it is being discussed at this time of night.
  Mr. LANSBURY: Why do you not make them give you another day?
  Mr. PETO: I should be very glad to have another day. The Black Country feels very disappointed, because after 18 months of the National Government we had hoped to find some reduction of taxation. Instead we find a very heavy oil tax suddenly imposed, and a very heavy and crippling motor tax, coupled with the Minister's Bill to fetter road traffic. All these burdens are hurled down on the unfortunate Black Country, and we are asked at this hour of the night to keep quiet, go to bed and say nothing. It is very unfair and very unreasonable. I hope the Minister in his calmer moments will think over some of the Clauses and Amendments which we have not been allowed to discuss to-day. His object is to put a tax on heavy vehicles because they destroy the roads. That his is argument, so far as he was gracious enough to give up any argument to-night.
  There is an Amendment down, which was not called, to reduce the duty on six-wheeled vehicles. If such a proposal were accepted, manufacturers would immediately tend to increase the number of wheels on a vehicle, and this would reduce the destruction of the roads. Will the

  2233
  Minister consider that proposal before Report stage? This Amendment regarding the half-ton step is obviously desirable in the interests of good design. The Ministry have fettered our designs for years with their obsolete formulas, and it is time they took a different view. When in 1926 the right hon. Gentleman the Member for Epping (Mr. Churchill) introduced the present tax, the Ministry of Transport could not imagine that anybody would ever make a vehicle above five tons in weight. Now they try to wipe out these heavier vehicles by colossal and stupendous taxation. It is highly unfair. I ask them to exercise more imagination and to consider the suggested Amendments which have been put forward. They have been very carefully drawn up. We have not had an opportunity to discuss them to-night. I hope that on the Report stage the Minister of Transport will show some desire, not merely to destroy the roads and help the railways, but to help manufacturers generally by improving transport throughout the country.
  12.31 a.m.
  Sir S. CRIPPS: The hon. Gentleman who has just spoken has a just cause for indignation and we desire to help him in every way. The nascent revolution should be encouraged, and we propose to go into the Lobby with him, provided he and his friends appoint the Tellers.
  Question put, "That the words proposed to be left out stand part of the Schedule."
  The Committee proceeded to a Division.
  Commander Southby and Dr. Morris-Jones were appointed Tellers for the Ayes; but there being no Member willing to act as Teller for the Noes, the CHAIRMAN declared that the Ayes had it.
  12.34 a.m.
  Mr. GROVES: I beg to move, in page 39, line 42, column 1, after the word "vehicles," to insert the words:
  "(other than goods vehicles described in the heading to paragraph (b) of this Table)."
  I wish to put my point of view in the first Amendment, and it may not be necessary for me to move the second Amendment which appears on the Order Paper. I have to express my thanks to the Minister for his courtesy. I feel
  2234
  that he has seen our point of view. He has followed the recommendations of the Salter Conference for the purpose of increasing taxation. Some of us feel that these recommendations with regard to the utilization of trailers had ovErieoked the case of the showman, and the Minister now proposes to increase the taxation on trailers considerably. The showmen have only eighteen tractors of the lower weight, but over five tons they have a large number. The hon. Gentleman, I feel sure, will see that the proposed increase, exceeding forty per cent. upon the showmen who are running the heavier vehicles, will mean that they will not really be able to pay it. These people, we all know, have a very precarious living. One or two of us have put their views to the Minister, and he might, before the Report stage, endeavour to see if the proposals at present made really do not impose undue hardship on those who run vehicles, especially on those who run vehicles over five tons. If he does that, his action will be appreciated not only by the showmen but by many Members of this House. We are not putting this Amendment forward in any carping spirit. The manner in which we were received by the Minister has earned our Sincere appreciation. The Minister, I feel sure, will on behalf of the showmen apply himself to this Amendment between now and the Report stage, and we trust that he will be able to meet us by putting forward some proposition to adjust the tax to the circumstances of these people. If I obtain any such promise, I shall be able to withdraw the Amendment.
  12.38 a.m.
  Mr. STANLEY: The position with regard to these showmen's trailers is that under the old scale the payment they made was £6 without regard to the weight of the vehicles which drew them. They have suffered a basic increase, and a further increase in proportion to the increased weight of the vehicle which draws them, with the trailer included. The showmen's trailers may now have to pay as much as £20. I have had the advantage of representations from the hon. Gentleman and some of his friends in private, and I have also had the advantage of his speech to-night. Although I think that the claim he makes for the showmen that they should be

  2235
  allowed to stay on the old basis, and that they alone should not suffer any increase in this general scaling up of taxes, is one which cannot be sustained, I think, as these trailers are not in use as goods vehicles, but as living houses, that there should be a scale not exactly on the same scale as the old, but between that and that which it is now proposed to charge. Before the Report stage I hope, with my hon. Friend's assistance, to put down an appropriate scale between the low scale asked for and the scale at present in the Bill.
  Amendment, by leave, withdrawn.
  Mr. STANLEY: I beg to move, in page 40, line 4, at the end, to insert the words:
  "Where a vehicle used for drawing a trailer has the trailer attached to it by partial superimposition, the vehicle and trailer shall, for the purpose of determining the amount of duty chargeable under this paragraph, be treated as if they together formed a single vehicle, and the vehicle shall not be chargeable with duty under sub-paragraph (d) of this paragraph."
  This Amendment is intended to meet a point made in a new Clause put down by the hon. Member for Nuneaton (Mr. North). It deals with articulated vehicles, which consist of the ordinary vehicle and trailer, but, owing to the particular mechanical design, the trailer is superimposed direct on to the vehicle, and there is no connecting link between the two as in the ordinary case. It was found in previous Finance Acts that this might be a way of evading taxation, and it was therefore laid down that both the weight of the vehicle and of the superimposed trailer should be aggregated and taken as the weight on which taxation should be paid. But, in addition, the trailer, as well as being aggregated in the total weight, had to pay a separate duty. I feel that, in view of the fact not only that the taxation has been considerably increased but also that the weight has to be paid for additioNaily on the superimposed portion, it would
  2236
  impose an undue burden upon a form of vehicle which, from the point of view of road user, is rather to be encouraged than discouraged. The effect of this Amendment would be to exempt these articulated vehicles from payment of the separate duty for the trailer, leaving, of course, the taxation on the aggregate weight of the vehicle and the superimposed trailer.
  Amendment agreed to.
  Schedule, as amended, agreed to.
  EIGHTH SCHEDULE.—(Enactments Repealed.)
  Amendments made: In page 41, line 6, at the end, insert the words:

  "8 & 9 Geo. 5, c. 40.

  The Income Tax Act, 1918.

  Sub - section (4) of Sect. Thirty-nine." — [Mr. Hore-Belisha.]

  In line 14,at the end, insert the words:

  "18 & 19Geo.'V. c. 17.

  The Finance Act, 1928.

  Section thirteen as from the first day of January, nineteen hundred and thirty four."— [Mr. Stanley.]

  In line 15, column 3, after the word "section" insert the wosds:
  "three, as from the first day of January, nineteen hundred and thirty-four; section." —[Mr. Stanley.']
  Schedule, as amended, agreed to.
  Bill reported; as amended, to be considered upon Tuesday, 13th June, and to be printed.—[Bill 117.]
  The remaining Orders were read, and postponed.
  It being after Half-past Eleven of the Clock upon Thursday evening, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
  Adjourned at Fourteen Minutes before One o'clock.